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

33835

Vol. 63, No. 119

Monday, June 22, 1998

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 447 and 457

RIN 0563–AB48

Popcorn Crop Insurance Regulations;

and Common Crop Insurance

Regulations, Popcorn Crop Insurance

Provisions

AGENCY: Federal Crop Insurance

Corporation, USDA.

ACTION: Final rule.

SUMMARY: The Federal Crop Insurance

Corporation (FCIC) finalizes specific

crop provisions for the insurance of

popcorn. 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 popcorn crop insurance

regulations with the Common Crop

Insurance Policy for ease of use and

consistency of terms, and to restrict the

effect of the current popcorn crop

insurance regulations to the 1998 and

prior crop years.

EFFECTIVE DATE: July 22, 1998.

FOR FURTHER INFORMATION CONTACT:

Linda Williams, Insurance Management

Specialist, Research and Development,

Product Development Division, Federal

Crop Insurance Corporation, United

States Department of Agriculture, 9435

Holmes Road, Kansas City, MO 64131,

telephone (816) 926–7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be

exempt for the purposes of Executive

Order 12866 and, therefore, has not

been reviewed by the Office of

Management and Budget (OMB).

Paperwork Reduction Act of 1995

Pursuant to the Paperwork Reduction

Act of 1995 (44 U.S.C. chapter 35), the

collections of information have been

approved by the Office of Management

and Budget (OMB) under control

number 0563–0053 through October 31,

2000.

Unfunded Mandates Reform Act of

1995

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Public

Law 104–4, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local,

and tribal governments and the private

sector. This rule contains no Federal

mandates (under the regulatory

provisions of title II of the UMRA) for

State, local, and tribal governments or

the private sector. Therefore, this rule is

not subject to the requirements of

sections 202 and 205 of the UMRA.

Executive Order 12612

It has been determined under section

6(a) of Executive Order 12612,

Federalism, that this rule does not have

sufficient federalism implications to

warrant the preparation of a Federalism

Assessment. The provisions contained

in this rule will not have a substantial

direct effect on States or their political

subdivisions or on the distribution of

power and responsibilities among the

various levels of government.

Regulatory Flexibility Act

This regulation will not have a

significant economic impact on a

substantial number of small entities.

The amount of work required of the

insurance companies will not increase

because the information used to

determine eligibility is already

maintained at their office and the other

information now required is already

being gathered as a result of the present

policy. No additional actions are

required as a result of this action on the

part of either the insured or the

insurance companies. Additionally, this

regulation does not require any greater

action on the part of small entities than

is required on the part of large entities.

Therefore, this action is determined to

be exempt from the provisions of the

Regulatory Flexibility Act (5 U.S.C.

605), and no Regulatory Flexibility

Analysis was prepared.

Federal Assistance Program

This program is listed in the Catalog

of Federal Domestic Assistance under

No. 10.450.

Executive Order 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 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 for judicial

review of any determination made by

FCIC 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 Wednesday, April 9, 1997, FCIC

published a notice of proposed

rulemaking in the Federal Register at 62

FR 17103 to add to the Common Crop

Insurance Regulations (7 CFR part 457),

a new section, 7 CFR 457.126, Popcorn

Crop Insurance Provisions. The new

provisions will be effective for the 1999

and succeeding crop years. These

provisions will replace and supersede

the current provisions for insuring

popcorn found at 7 CFR part 447

(Popcorn Crop Insurance Regulations).

FCIC also amends 7 CFR part 447 to

limit its effect to the 1998 and prior crop

years.

Following publication of the proposed

rule, the public was afforded 30 days to
33836 Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 /Rules and Regulations

submit written comments and opinions.

A total of 31 comments were received

from an insurance service organization

and reinsured companies. The

comments received and FCIC’s

responses are as follows:

Comment: An insurance service

organization and two reinsured

companies asked whether, under the

definition of ‘‘good farming practices,’’

there may exist acceptable cultural

practices that are not necessarily

recognized (or possibly not known) by

the Cooperative State Research,

Education, and Extension Service. The

commenters recommended changing the

term ‘‘county’’ in the definition of ‘‘good

farming practices’’ to ‘‘area.’’ The

insurance service organization also

recommended adding the word

‘‘generally’’ before ‘‘recognized by the

Cooperative State Research, Education,

and Extension Service * * *’’

Response: The Cooperative State

Research, Education, and Extension

Service (CSREES) recognizes farming

practices that are considered acceptable

for producing popcorn. If a producer is

following practices currently not

recognized as acceptable by the

CSREES, such recognition can be sought

by interested parties. Use of the term

‘‘generally’’ will only make the

definition ambiguous and more difficult

to administer. Although the cultural

practices recognized by the CSREES

may only pertain to specific areas

within a county, the actuarial

documents are on a county basis.

However, the definition of ‘‘good

farming practices’’ has been moved to

the Basic Provisions.

Comment: A reinsured company

expressed concern about the definition

of ‘‘final planting date’’ because it infers

that coverage is provided after the final

planting date; however, there are no

provisions for ‘‘late planting.’’

Response: The definition of ‘‘late

planting’’ as well as provisions for late

and prevented planting coverages

common to most crops have been

moved to the Basic Provisions. FCIC has

added late planting provisions, section

14, and prevented planting provisions,

section 15, to these popcorn crop

provisions.

Comment: A reinsured company

recommended adding the words ‘‘and

quality’’ after the word ‘‘quantity’’ in the

definition of ‘‘irrigated practice.’’

Response: There are no clear criteria

regarding the quality of water necessary

to produce a crop. The highly variable

factors involved would make such

criteria difficult to develop and

administer. The provisions regarding

good farming practices can be applied in

situations in which the insured person

failed to exercise due care and

diligence. The definition of ‘‘irrigated

practice’’ has been moved to the Basic

Provisions.

Comment: An insurance service

organization and a reinsured company

stated the definition of ‘‘replanting’’ is

confusing and awkward. One of the

commenters recommended revising the

definition to specify ‘‘* * * growing a

successful popcorn crop.’’

Response: The definition of

‘‘replanting’’ clearly describes the steps

required to replant the crop. The

producer must first perform the cultural

practices needed to replant the seed

before replanting the seed. FCIC has

revised the definition to specify that the

crop be replanted with the expectation

of producing at least the guarantee. The

definition of ‘‘replanting’’ has been

moved to the Basic Provisions.

Comment: A reinsured company

recommended that the reference

contained in the definition of ‘‘written

agreement’’ should be section 14 rather

than section 15.

Response: The provisions for written

agreements have been moved to the

Basic Provisions with reference to the

correct section.

Comment: An insurance service

organization and a reinsured company

recommended amending section 2 of the

proposed rule to clarify whether

optional units may be established if the

processor contract stipulates the number

of contracted acres, or only if the

contract does not specify an amount of

production.

Response: FCIC has amended section

2 to specify that processor contracts that

stipulate a specific amount of

production to be delivered, the basic

unit will consist of all the acreage

planted to the insured crop in the

county that will be used to fulfill

contracts with each processor, and

optional units will not be established for

such production-based processor

contracts. The language in section 2 has

also been revised and reformatted to

clearly state the requirements for both

the acreage-based and production-based

processor contracts. In addition,

language in this section that is common

with other Crop Provisions has been

moved to the Basic Provisions.

Comment: An insurance service

organization recommended removal of

the opening phrase in section

2(b)(5)(iv)(B) that states ‘‘In addition to,

or instead of establishing optional units

by section, section equivalent, or FSA

Farm Serial Number, * * * ‘‘since

section 2(b)(5)(iv) specifies that ‘‘Each

optional unit must meet one or more of

the following criteria* * *.’’

Response: FCIC has revised the

language accordingly. However, the

optional unit provisions common to

most crops have been moved to the

Basic Provisions.

Comment: An insurance service

organization stated that the language in

section 3(a) which provides guidelines

for selection of price elections should be

moved to the Basic Provisions.

Response: The requirement that the

price election (for each type, varietal

group, etc.) have the same percentage

relationship to the maximum prices

does not apply to all crop policies.

However, this clause applies to a

sufficient number of policies so as to

make it an item for consideration

whenever 7 CFR part 457 is amended.

This recommendation will be

considered at that time, and no change

has been made to these popcorn

provisions.

Comment: An insurance service

organization expressed concern that the

November 30 contract change date is not

early enough for counties with a January

15 sales closing date.

Response: The January 15

cancellation and termination dates are

applicable only to counties in the most

southern part of Texas. The commenter

did not provide specific details as to

why the November 30 contract change

date is not sufficient. FCIC believes that

the 45 days between the contract change

date and the cancellation date allows an

ample period of time for the insured to

make a decision regarding subsequent

crop year coverages considering the

small number of policies and areas

involved. Therefore, no change has been

made.

Comment: An insurance service

organization stated that section 6 which

requires the producer to provide a copy

of the processor contract no later than

the acreage reporting date, could

provide a loophole by allowing

producers to wait until acreage

reporting time to decide if they want

coverage.

Response: There is no evidence that

allowing the producer to provide a copy

of the processor contract as late as the

acreage reporting date has resulted in

producers waiting to decide until the

acreage reporting date if they want

coverage. Popcorn producers will have

processor contracts much sooner to

ensure that they have a market before

expending the costs to plant the crop.

The requirement to provide a copy of

the processor contract with the acreage

report is also most convenient for the

producer. Language in section 6 has

been revised to clarify that a copy of all

processor contracts must be provided on

or before the acreage reporting date.
Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 /Rules and Regulations 33837

Comment: An insurance service

organization recommended changing

the word ‘‘before’’ in section 7(a)(3) to

‘‘by’’ or ‘‘on or before’’ the acreage

reporting date. This would allow for the

processor contract to be established that

day.

Response: FCIC has amended the

provision accordingly.

Comment: An insurance service

organization questioned whether any

processor contract would allow

interplanted popcorn or popcorn

planted into an established grass or

legume. The commenter further indicted

that consideration should be given to

inserting the language in section 7(a)(4)

into the Basic Provisions.

Response: Popcorn has seldom, if

ever, been interplanted with another

crop or planted into an established grass

or legume. However, production

practices are constantly evolving. FCIC

chooses to retain the provisions of

section 7(a)(4) to accommodate such

developments if they should occur. In

addition, interplanting provisions are

not the same among the crop policies

and, therefore, will be retained in the

Crop Provisions.

Comment: An insurance service

organization indicated that the

provisions contained in section 7(b) are

confusing and seem to indicate that only

a landlord would have a share in the

insured crop and that a tenant cannot

have a share since that person does not

retain possession of the acreage. The

commenter questioned whether the

provision in section 7(b) is already

covered in sections 7(a) (1) and (3).

Response: The language in section

7(b) was intended to cover producers

who have a crop share agreement, rent,

or owns acreage. The word ‘‘possession’’

has been changed to ‘‘control’’ for

clarification and FCIC has added that

the insured must have a risk of loss.

Section 7(a) specifies requirements for

insurance coverage on the crop, while

section 7(b) specifies requirements for

an insurable share in the crop.

Therefore, both provisions are

necessary.

Comment: Two comments from an

insurance service organization and one

from a reinsured company questioned

whether the provisions in section 9(b),

which state that the insurance period

ceases on the date sufficient production

is harvested to fulfill the producer’s

processor contract, conflicts with the

provisions in section 13(a), that states

‘‘We will determine your loss on a unit

basis.’’ The commenters questioned how

the insured will know enough

production has been harvested before

acceptance by the processor. One

commenter stated that the insured may

not be aware of discounts and

production modifications (e.g.,

shrinkage, foreign material, etc.) that

may be imposed by the processor. The

insured may believe the contracted

amount of production has been

harvested and later learn that the

amount harvested is short of the

production guarantee. The insurance

service organization asked if any

production in excess of the contracted

amount will be considered as

production to count for APH purposes,

or is the production only counted when

there is a processor settlement sheet?

The insurance service organization

recommended the language in section

9(b) be made similar to the language

contained in the sugar beet policy, such

as, ‘‘* * * the insurance period ends

when the production delivered to the

processor equals the amount of

production stated in the popcorn

processor contract.’’ The insurance

service organization also questioned

whether ‘‘delivered to’’ is the same as

‘‘accepted by’’ the processor and

suggested adding wording to include

‘‘whether delivered or not.’’

Response: Section 9(b) does not

conflict with section 13(a). For

processor contracts based on a stated

amount of production, FCIC is only

insuring the contracted amount, and the

producer can only establish one basic

unit per processor contract. Therefore,

once the contracted amount is fulfilled,

insurance ceases on the unit and there

is no payable loss. If the contract is not

fulfilled and there still is unharvested

production, any insurable cause of loss

is covered up to the contracted amount,

assuming it has not been abandoned.

With respect to the issue of when the

producer would know when the

processor contract was fulfilled, records

are kept as production is delivered to

the processor. As a result, both the

producer and processor are aware of the

amount of production that has been

delivered. All production from the unit,

including any in excess of the amount

stated in the contract, will be

considered as production to count when

determining the producer’s approved

yield. The claim settlement provisions

have been clarified to state that, for the

purposes of loss adjustment, the amount

shown on the settlement sheet, plus any

appraised or harvested production lost

due to uninsured causes that rendered

the production unacceptable to the

processor, will be included as

production to count. FCIC has also

revised section 9(b) to clarify that the

insurance period ceases when the

production accepted by the processor

equals the contracted amount of

production if the processor contract

stipulates a specific amount of

production to be delivered. However,

rejected production will be considered

as production to count unless it was

damaged by an insurable cause of loss

occurring during the insurance period.

Comment: An insurance service

organization questioned a discrepancy

between section 9(b), which states that

insurance ceases on ‘‘The date you

harvested sufficient production to fulfill

your processor contract,’’ and section

10(b)(3) of the proposed rule, which

states that loss of production will not be

insured due to ‘‘damage that occurs to

unharvested production after you

deliver the production required by the

processor contract.’’ The commenter

indicated that this provision is not

necessary since any damage occurring

after delivery would be outside the

insurance period as indicated in section

9(b).

Response: FCIC has deleted the

provision contained in section 10(b)(3)

accordingly.

Comment: An insurance service

organization stated that some crop

policies allow the entire replanting

payment to be paid to the person

incurring the entire expense (usually the

tenant) when landlord and tenant are

insured by the same company. However,

the commenter questioned why this

language is not contained in section 11

of the proposed Popcorn Crop

Provisions.

Response: It is true that a few crop

provisions allow the entire replanting

payment to be paid to the person

incurring the entire expense (usually the

tenant) when the landlord and tenant

are insured with the same company.

However, due to comments received on

other regulations, FCIC reevaluated this

provision and has concluded it is not

equitable to all insureds. Specifically, if

a landlord and tenant are insured with

one company, the provisions apply, but

if the landlord and tenant are insured

with different companies, the provisions

do not apply. Any Crop Provisions

containing these terms will be amended

to eliminate them. Therefore, no change

has been made.

Comment: An insurance service

organization suggested that language

contained in section 11(b) should

include 20 acres as a minimum qualifier

in addition to the others.

Response: The commenter

misunderstood the provisions contained

in section 11(b). Section 13 of the Basic

Provisions contains the 20 acre or 20

percent rule referenced by the

commenter which is applicable to this

policy. Section 11(b) of the Popcorn

Crop Provisions establishes the
33838 Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 /Rules and Regulations

maximum amount of the replanting

payment (20 percent of the production

guarantee or 150 pounds, multiplied by

the price election, multiplied by the

share). Therefore, no change has been

made.

Comment: An insurance service

organization stated the indemnity

calculation contained in section 13(b)

was wordy, difficult to follow, and

should be simplified for crops without

separate prices by type.

Response: Since some of the

calculations involved are not performed

in sequential order, it is necessary to

refer to specific section numbers.

Removal of the section reference would

make the provisions less clear.

However, an example has been added to

clarify section 13.

Comment: An insurance service

organization stated that section

13(c)(1)(iv) should not allow the insured

to defer settlement and wait for a later,

generally lower appraisal, especially on

crops that have a short ‘‘shelf life.’’

Response: This provision allows

deferment of a claim only if the

insurance provider agrees that

representative samples should be left or

if the insured elects to continue to care

for the entire crop in order to obtain a

more accurate determination of the

production to count for the unit. In

either case, if the insured does not

provide sufficient care for the crop or

crop samples, the original appraisal will

be used. Therefore, no change has been

made.

Comment: An insurance service

organization and two reinsured

companies recommended removal of the

requirement contained in section 15 that

a written agreement be renewed each

year if there are no significant changes

to the farming operation. Two of the

commenters stated a written agreement

should be continuous and the effective

period should be specified in the

written agreement.

Response: Written agreements are

intended to supplement policy terms or

permit insurance in unusual situations

that require modification of the

otherwise standard insurance

provisions. If such practices continue

year to year, they should be

incorporated into the policy or Special

Provisions. It is important to minimize

written agreement exceptions to ensure

that the insured is well aware of the

specific terms of the policy. The written

agreement provisions have been moved

to the Basic Provisions since they apply

to most crops.

Comment: An insurance service

organization and two reinsured

companies stated the proposed rule did

not contain provisions for late planting

and prevented planting coverages. The

commenters questioned whether

popcorn was intended to have late and

prevented planting coverages?

Response: Provisions for late and

prevented planting coverages are now

contained in the Basic Provisions which

are applicable to popcorn. FCIC has

added to the Popcorn Crop Provisions,

a new section 14, which specifies that

late planting provisions are applicable

to popcorn if written approval is

obtained from the processor by the

acreage reporting date. FCIC has also

added a new section 15, providing the

available prevented planting coverage.

In addition to the changes described

above, FCIC has made minor editorial

changes and has amended the following

Popcorn Crop Provisions:

1. Amended and clarified the

paragraph preceding section 1 to

include the Catastrophic Risk Protection

Endorsement.

2. Section 1—Amended the definition

of ‘‘planted acreage’’ to add a

requirement that popcorn must be

planted in rows far enough apart to

permit mechanical cultivation, unless

otherwise excepted. Amended the

definition of ‘‘practical to replant’’ to

clarify that it will not be considered

practical to replant unless production

from the replanted acreage can be

delivered under the terms of the

processor contract, or the processor

agrees in writing that it will accept the

production from the replanted acreage.

Clarified the definition of ‘‘processor

contract’’ to specify that multiple

contracts with the same processor, each

of which stipulates a specific amount of

production to be delivered under the

terms of the specified contract, will be

considered as a single processor

contract. Removed the definitions of

‘‘approved yield,’’ ‘‘days,’’ ‘‘FSA,’’

‘‘interplanted,’’ ‘‘production guarantee

(per acre),’’ and ‘‘timely planted’’

because these definitions now appear in

the Basic Provisions.

3. Section 2—Moved all the

provisions common to most crops to the

Basic Provisions.

4. Section 7(a)—Revised ‘‘actuarial

table’’ to ‘‘actuarial documents’’ to be

consistent with language in other crop

provisions.

5. Section 7(c)(2)—Amended and

clarified that the Board of Directors or

officers of the processor must, prior to

the sales closing date, execute and adopt

a resolution that contains the same

terms as an acceptable processor

contract.

6. Section 14—Revised provisions to

address only late planted acreage.

7. Section 15—Deleted provisions for

written agreements and added

provisions for prevented planting

coverage.

List of Subjects in 7 CFR Parts 447 and

457

Crop insurance, Popcorn.

Final Rule

Accordingly, as set forth in the

preamble, the Federal Crop Insurance

Corporation hereby amends the Popcorn

Crop Insurance Regulations (7 CFR part

447) and the Common Crop Insurance

Regulations (7 CFR part 457) as follows:

PART 447—POPCORN CROP

INSURANCE REGULATIONS FOR THE

1987 THROUGH THE 1998 CROP

YEARS

1. The authority citation for 7 CFR

part 447 is revised to read as follows:

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

Part Heading [Revised]

2. The part heading is revised as set

forth above.

Subpart Heading [Removed]

3. The part heading ‘‘Subpart—

Regulations for the 1987 and

Succeeding Crop Years is removed.

4. Section 447.7 is amended by

revising the introductory text of

paragraph (d) to read as follows:

§ 447.7 The application and policy.

* * * * *

(d) The application is found at

subpart D of part 400, General

Administrative Regulations (7 CFR

400.37, 400.38). The provisions of the

Popcorn Insurance Policy for the 1987

through 1998 crop years are as follows:

* * * * *

PART 457—COMMON CROP

INSURANCE REGULATIONS;

REGULATIONS FOR THE 1994 AND

SUBSEQUENT CROP YEARS

5. The authority citation for 7 CFR

part 457 continues to read as follows:

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

6. Section 457.126 is added to read as

follows:

§ 457.126 Popcorn Crop Insurance

Provisions.

The Popcorn Crop Insurance

Provisions for the 1999 and succeeding

crop years are as follows:

FCIC policies:

United States Department of Agriculture

Federal Crop Insurance Corporation

Reinsured policies:
Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 /Rules and Regulations 33839

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Popcorn Crop Insurance Provisions

If a conflict exists among the policy

provisions, the order of priority is as follows:

(1) The Catastrophic Risk Protection

Endorsement, if applicable; (2) the Special

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

the Basic Provisions with (1) controlling (2),

etc.

1. Definitions

Base contract price. The price stipulated

on the contract executed between you and

the processor before any adjustments for

quality.

Harvest. Removing the grain or ear from

the stalk either by hand or by machine.

Merchantable popcorn. Popcorn that meets

the provisions of the processor contract.

Planted acreage. In addition to the

definition contained in the Basic Provisions,

popcorn must initially be planted in rows far

enough apart to permit mechanical

cultivation, unless otherwise provided by the

Special Provisions, actuarial documents, or

by written agreement.

Pound. Sixteen (16) ounces avoirdupois.

Practical to replant. In addition to the

definition contained in the Basic Provisions,

it will not be considered practical to replant

unless production from the replanted acreage

can be delivered under the terms of the

popcorn processor contract, or the processor

agrees in writing that it will accept the

production from the replanted acreage.

Processor. Any business enterprise

regularly engaged in processing popcorn that

possesses all licenses, permits or approved

inspections for processing popcorn required

by the state in which it operates, and that

possesses facilities, or has contractual access

to such facilities, with enough equipment to

accept and process the contracted popcorn

within a reasonable amount of time after

harvest.

Processor contract. A written agreement

between the producer and a processor,

containing at a minimum:

(a) The producer’s commitment to plant

and grow popcorn, and to deliver the

popcorn production to the processor;

(b) The processor’s commitment to

purchase all the production stated in the

processor contract;

(c) A date, if specified on the processor’s

contract, by which the crop must be

harvested to be accepted; and

(d) A base contract price.

Multiple contracts with the same processor,

each of which stipulates a specific amount of

production to be delivered under the terms

of the processor contact, will be considered

as a single processor contract.

2. Unit Division

(a) For processor contracts that stipulate

the amount of production to be delivered:

(1) In lieu of the definition contained in the

Basic Provisions, a basic unit will consist of

all the acreage planted to the insured crop in

the county that will be used to fulfill

contracts with each processor;

(i) There will be no more than one basic

unit for all production contracted with each

processor contract;

(ii) In accordance with section 13 of these

Crop Provisions, all production from any

basic unit in excess of the amount under

contract will be included as production to

count if such production is applied to any

other basic unit for which the contracted

amount has not been fulfilled; and

(2) Provisions in the Basic Provisions that

allow optional units by section, section

equivalent, or FSA farm serial number and by

irrigated and non-irrigated practices are not

applicable.

(b) For any processor contract that

stipulates only the number of acres to be

planted, the provisions contained in section

34 of the Basic Provisions will apply.

3. Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities

In addition to the requirements of section

3 of the Basic Provisions, you may select only

one price election for all the popcorn 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 popcorn

type designated in the Special Provisions.

The price elections you choose for each type

must 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 must also choose 100 percent of the

maximum price election for all other types.

4. Contract Changes

In accordance with section 4 of the Basic

Provisions, the contract change date is

November 30 preceding the cancellation

date.

5. Cancellation and Termination Dates

In accordance with section 2 of the Basic

Provisions, the cancellation and termination

dates are:

State and county

Cancellation

and termination dates

Val Verde, Edwards, Kerr,

Kendall, Bexar, Wilson,

Karnes, Goliad, Victoria,

and Jackson counties

Texas, and all Texas counties lying south thereof.

January 15.

All other Texas counties and

all other states.

March 15.

6. Report of Acreage

In addition to the provisions of section 6

of the Basic Provisions, you must provide a

copy of all processor contracts to us on or

before the acreage reporting date.

7. Insured Crop

(a) In accordance with section 8 of the

Basic Provisions, the crop insured will be all

the popcorn in the county for which a

premium rate is provided by the actuarial

documents:

(1) In which you have a share;

(2) That is planted for harvest as popcorn;

(3) That is grown under, and in accordance

with the requirements of, a processor

contract executed on or before the acreage

reporting date and is not excluded from the

processor contract at any time during the

crop year; and

(4) That is 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) You will be considered to have a share

in the insured crop if, under the processor

contract, you retain control of the acreage on

which the popcorn is grown, you have a risk

of loss, and the processor contract provides

for delivery of popcorn under specified

conditions and at a stipulated base contract

price.

(c) A popcorn producer who is also a

processor may be able to establish an

insurable interest if the following

requirements are met:

(1) The producer must comply with these

Crop Provisions;

(2) The Board of Directors or officers of the

processor must, prior to the sales closing

date, execute and adopt a resolution that

contains the same terms as an acceptable

processor contract. Such resolution will be

considered a processor contract under this

policy; and

(3) Our inspection reveals that the

processing facilities comply with the

definition of a processor contained in these

Crop Provisions.

8. Insurable Acreage

In addition to the provisions of section 9

of the Basic Provisions, any acreage of the

insured crop damaged before the final

planting date, to the extent that the majority

of producers in the area would normally not

further care for the crop, must be replanted

unless we agree that it is not practical to

replant.

9. Insurance Period

In lieu of the provisions contained in

section 11 of the Basic Provisions, regarding

the end of the insurance period, insurance

ceases on each unit or part of a unit at the

earliest of:

(a) The date the popcorn:

(1) Was destroyed;

(2) Should have been harvested but was

not harvested;

(3) Was abandoned; or

(4) Was harvested;

(b) When the processor contract stipulates

a specific amount of production to be

delivered, the date the production accepted

by the processor equals the contracted

amount of production;

(c) Final adjustment of a loss; or

(d) December 10 immediately following

planting.

10. Causes of Loss

(a) In accordance with the provisions of

section 12 of the Basic Provisions, insurance

is provided only against the following causes

of loss that occur during the insurance

period:

(1) Adverse weather conditions;

(2) Fire;

(3) Insects, but not damage due to

insufficient or improper application of pest

control measures;

(4) Plant disease, but not damage due to

insufficient or improper application of

disease control measures;
33840 Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 /Rules and Regulations

(5) Wildlife;

(6) Earthquake;

(7) Volcanic eruption; or

(8) Failure of the irrigation water supply,

if caused by a cause of loss specified in

sections 10(a)(1) through (7) that occurs

during the insurance period.

(b) In addition to the causes of loss

excluded by section 12 of the Basic

Provisions, we do not insure against any loss

of production due to:

(1) Damage resulting from frost or freeze

after the date designated in the Special

Provisions; or

(2) Failure to follow the requirements

contained in the processor contract.

11. Replanting Payment

(a) In accordance with section 13 of the

Basic Provisions, a replanting payment is

allowed if the 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 20

percent of the production guarantee or 150

pounds, multiplied by your price election,

multiplied by your insured share.

(c) When popcorn is replanted using a

practice that is uninsurable as an original

planting, our liability for the unit will be

reduced by the amount of the replanting

payment. The premium amount will not be

reduced.

12. Duties in the Event of Damage or Loss

In accordance with the requirements of

section 14 of the Basic Provisions, the

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 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

acceptable production records:

(1) For any optional unit, we will combine

all optional units for which such production

records were not provided; or

(2) For any basic unit, we will allocate any

commingled production to such units in

proportion to our liability on the harvested

acreage for each unit.

(b) In the event of loss or damage covered

by this policy, we will settle your claim by:

(1) Multiplying the insured acreage for

each type, if applicable, by its respective

production guarantee;

(2) Multiplying the result of section

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

each type, if applicable;

(3) Totaling the results of section 13(b)(2)

if there is more than one type;

(4) Multiplying the total production to

count (see section 13(c)), of each type if

applicable, by its respective price election;

(5) Totaling the results of section 13(b)(4)

if there is more than one type;

(6) Subtracting the result of section 13(b)(4)

from the result in section 13(b)(2) if there is

only one type or subtracting the result of

section 13(b)(5) from the result of section

13(b)(3) if there is more than one type; and

(7) Multiplying the result of section

13(b)(6) by your share.

For example:

You have a 100 percent share in 100 acres of Type A popcorn in the unit, with a guarantee of 2,500 pounds per acre and a price election

of $.12 per pound. You are only able to harvest 150,000 pounds. Your indemnity would be calculated as follows:

1 ............. 100 acres × 2,500 pounds = 250,000 pound guarantee;

2 ............. 250,00 pounds × $.12 price election = $30,000 value of guarantee;

4 ............. 150,000 pounds production to count × $.12 price election = $18,000 value of production to count;

6 ............. $30,000¥$18,000 = $12,000 loss; and

7 ............. $12,000 × 100 percent share = $12,000 indemnity payment.

You also have a 100 percent share in 150 acres of type B popcorn in the same unit, with a guarantee of 2,250 pounds per acre and a price

election of $.10 per pound. You are only able to harvest 70,000 pounds. Your total indemnity for both popcorn types A and B would be

calculated as follows:

1 ............. 100 acres × 2,500 pounds = 250,000 guarantee for type A and 150 acres × 2,250 pounds = 337,500 pound guarantee for type B;

2 ............. 250,000 pound guarantee × $.12 price election = $30,000 value of guarantee for type A and 337,500 pound guarantee × $.10

price election = $33,750 value guarantee for type B;

3 ............. $30,000 + $33,750 = $63,750 total value guarantee;

4 ............. 150,000 pounds × $.12 price election = $18,000 value of production to count for type A and

70,000 pounds × $.10 price election = $7,000 value of production to count for type B;

5 ............. $18,000 + $7,000 = $25,000 total value of production to count;

6 ............. $63,750¥$25,000 = $38,750 loss; and

7 ............. $38,750 × 100 percent = $38,750 indemnity payment.

(c) The total 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

for acreage:

(A) That is abandoned;

(B) Put to another use without our consent;

(C) Damaged solely by uninsured causes; or

(D) For which you fail to provide

production records;

(ii) Unharvested production (mature

unharvested production may be adjusted for

quality deficiencies and excess moisture in

accordance with section 13(d));

(iii) Potential production on insured

acreage that you intend to put to another use

or abandon, if you and we agree on the

appraised amount of production. Upon such

agreement, the insurance period for that

acreage will end when you put the acreage

to another use or abandon the crop. If

agreement on the appraised amount of

production is not reached:

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

for the crop, we may give you consent to put

the acreage to another use if you agree to

leave intact, and provide sufficient care for,

representative samples of the crop in

locations acceptable to us (The amount of

production to count for such acreage will be

based on the harvested production or

appraisals from the samples at the time

harvest should have occurred. If you do not

leave the required samples intact, or fail to

provide sufficient care for the samples, our

appraisal made prior to giving you consent to

put the acreage to another use will be used

to determine the amount of production to

count); or

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

crop, the amount of production to count for

the acreage will be the harvested production,

or our reappraisal if additional damage

occurs and the crop is not harvested;

(2) All harvested production from the

insurable acreage in the unit;

(3) All harvested and appraised production

lost or damaged by uninsured causes; and

(4) For processor contracts that stipulate

the amount of production to be delivered, all

harvested popcorn production from any other

insurable unit that has been used to fulfill

your processor contract applicable to this

unit.

(5) Any production from yellow or white

dent corn will be counted as popcorn on a

weight basis and any production harvested

from plants growing in the insured crop may

be counted as popcorn production on a

weight basis.

(6) Any ear production for which we

cannot determine a shelling factor will be

considered to have an 80 percent shelling

factor.

(d) Mature popcorn may be adjusted for

excess moisture and quality deficiencies. If

moisture adjustment is applicable, it will be

made prior to any adjustment for quality.

(1) Production will be reduced by 0.12

percent for each 0.1 percentage point for

moisture in excess of 15 percent. We may

obtain samples of the production to

determine the moisture content.

(2) Popcorn production will be eligible for

quality adjustment if, due to an insurable

cause of loss that occurs within the insurance

period, it is not merchantable popcorn and is

rejected by the processor. The production

will be adjusted by:
Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 /Rules and Regulations 33841

(i) Dividing the value per pound of the

damaged popcorn by the base contract price

per pound for undamaged popcorn; and

(ii) Multiplying the result by the number of

pounds of such popcorn.

14. Late Planting

Late planting provisions in the Basic

Provisions are applicable for popcorn if you

provide written approval from the processor

by the acreage reporting date that it will

accept the production from the late planted

acres when it is expected to be ready for

harvest.

15. Prevented Planting

Your prevented planting coverage will be

60 percent of your production guarantee for

timely planted acreage. If you have limited or

additional levels of coverage, as specified in

7 CFR part 400, subpart T, and pay an

additional premium, you may increase your

prevented planting coverage to a level

specified in the actuarial documents.

Signed in Washington, D.C., on June 11,

1998.

Robert Prchal,

Acting Manager, Federal Crop Insurance

Corporation.

[FR Doc. 98–16147 Filed 6–19–98; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Docket No. 98–AAL–5]

Revision of Class E Airspace;

Kotzebue, AK

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This rule modifies Class E

airspace at Kotzebue, AK. The

establishment of Global Positioning

system (GPS) instrument approaches to

runway (RWY) 8 and RWY 26 at

Kotzebue, AK, made this action

necessary. The intended effect of this

action is to provide adequate controlled

airspace for Instrument Flight Rules

(IFR) operations at Kotzebue, AK.

EFFECTIVE DATE: 0901 UTC, August 13,

1998.

FOR FURTHER INFORMATION CONTACT:

Robert van Haastert, Operations Branch,

AAL–538, Federal Aviation

Administration, 222 West 7th Avenue,

Box 14, Anchorage, AK 99513–7587;

telephone number (907) 271–5863; fax:

(907) 271–2850; email:

Robert.van.Haastert@faa.dot.gov.

Internet address: http://

www.alaska.faa.gov/at or at address

http://162.58.28.41/at.

SUPPLEMENTARY INFORMATION:

History

On April 10, 1998, a proposal to

amend part 71 of the Federal Aviation

Regulations (14 CFR part 71) to revise

the Class E airspace at Kotzebue, AK,

was published in the Federal Register

(63 FR 17743). The proposal was

necessary due to the establishment of

GPS instrument approaches to RWY 8

and RWY 26.

Interested parties were invited to

participate in this rulemaking

proceeding by submitting written

comments on the proposal to the FAA.

No public comments to the proposal

were received, thus the rule is adopted

as written.

The area will be depicted on

aeronautical charts for pilot reference.

The coordinates for this airspace docket

are based on North American Datum 83.

The Class E airspace areas designated as

700/1200 foot transition areas are

published in paragraph 6005 of FAA

Order 7400.9E, Airspace Designations

and Reporting Points, dated September

10, 1997, and effective September 16,

1997, which is incorporated by

reference in 14 CFR 71.1 (62 FR 52491;

October 8, 1997). The Class E airspace

designations listed in this document

will be revised and published

subsequently in the Order.

The Rule

This amendment to 14 CFR part 71

revises the Class E airspace at Kotzebue,

AK, due to the establishment of GPS

instrument approaches to RWY 8 and

RWY 26. The intended effect of this

proposal is to provide adequate

controlled airspace for IFR operations at

Kotzebue, AK.

The FAA has determined that these

proposed regulations only involve an

established body of technical

regulations for which frequent and

routine amendments are necessary to

keep them operationally current. It,

therefore —(1) is not a ‘‘significant

regulatory action’’ under Executive

Order 12866; (2) is not a ‘‘significant

rule’’ under DOT Regulatory Policies

and Procedures (44 FR 11034; February

26, 1979); and (3) does not warrant

preparation of a regulatory evaluation as

the anticipated impact is so minimal.

Since this is a routine matter that will

only affect air traffic procedures and air

navigation, it is certified that this rule,

when promulgated, will not have a

significant economic impact on a

substantial number of small entities

under the criteria of the Regulatory

Flexibility Act.

List of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference,

Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the

Federal Aviation Administration

amends 14 CFR part 71 as follows:

PART 71— DESIGNATION OF CLASS

A, CLASS B, CLASS C, CLASS D, AND

CLASS E AIRSPACE AREAS;

AIRWAYS; ROUTES; AND REPORTING

POINTS

1. The authority citation for 14 CFR

part 71 continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of Federal Aviation

Administration Order 7400.9E, Airspace

Designations and Reporting Points,

dated September 10, 1997, and effective

September 16, 1997, is amended as

follows:

Paragraph 6005 Class E airspace areas

extending upward from 700 feet or more

above the surface of the earth.

* * * * *

AAL AK E5 Kotzebue, AK [Revised]

Kotzebue, Ralph Wien Memorial Airport, AK

(Lat. 66°53′05′′ N., long. 162°35′55′′ W.)

Kotzebue VOR/DME

(Lat. 66°53′08′′ N., long. 162°32′24′′ W.)

Hotham NDB

(Lat. 66°54′05′′ N., long. 162°33′52′′ W.)

That airspace extending upward from 700

feet above the surface within a 6.8 mile

radius of the Ralph Wien Memorial Airport

and within 14 miles of the Kotzebue VOR/

DME extending clockwise from the 206°

radial to the 130° radial and within 4 miles

southeast and 8 miles northwest of the

Hotham NDB 039° bearing extending from

the NDB to 16 miles northeast of the NDB

and within 4 miles north and 8 miles south

of the Kotzebue VOR/DME 278° radial

extending from the VOR/DME to 20 miles

west of the VOR/DME; and that airspace

extending upward from 1,200 feet above the

surface within 18 miles of the Kotzebue

VOR/DME clockwise from the 020° radial to

the 130° radial and within 38 miles of the

Kotzebue VOR/DME clockwise from the 130°

radial to the 314° radial and within 4.3 miles

each side of the Kotzebue VOR/DME 103°

radial extending from the VOR/DME to 34

miles east of the VOR/DME; and that airspace

extending upward from 5,500 feet MSL

within 4.3 miles each side of the Kotzebue

VOR/DME 103° radial extending from 34

miles east of the VOR/DME to 51.3 miles east

of the VOR/DME; and that airspace extending

upward from 7,500 feet MSL within 4.3 miles

each side of the Kotzebue VOR/DME 103°

radial at 51.3 miles east of the Kotzebue

VOR/DME widening to 7.4 miles each side of

the 103° radial at 96 miles east of the

Kotzebue VOR/DME.

* * * * *