This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

4399

Vol. 63, No. 19

Thursday, January 29, 1998

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Parts 406 and 457

Nursery Crop Insurance Regulations;

Common Crop Insurance Regulations;

and Nursery Crop Insurance

Provisions

AGENCY: Federal Crop Insurance

Corporation, USDA.

ACTION: Proposed rule.

SUMMARY: The Federal Crop Insurance

Corporation (FCIC) proposes to revise

and reissue the Nursery Crop Insurance

Provisions. The intended effect of this

action is to provide policy changes to

better meet the needs of insureds, and

to restrict the effect of the Nursery Crop

Insurance Regulations (7 CFR part 406)

to the 1995 and prior crop years.

DATES: Written comments and opinions

on this proposed nursery rule will be

accepted until the close of business

March 16, 1998 and will be considered

when the rule is to be made final. The

comment period for information

collections under the Paperwork

Reduction Act of 1995 continues

through March 30, 1998.

ADDRESSES: Interested persons are

invited to submit written comments to

the Director, Product Development

Division, Federal Crop Insurance

Corporation, United States Department

of Agriculture, 9435 Holmes Road,

Kansas City, MO 64131. A copy of each

response will be available for public

inspection and copying from 7 a.m. to

4:30 p.m., EDT, Monday through Friday,

except holidays, at the above address.

FOR FURTHER INFORMATION CONTACT: Rob

Cerda, Insurance Management

Specialist, Research and Evaluation

Division, Federal Crop Insurance

Corporation, at the Kansas City, MO,

address listed above, telephone (816)

926–6343.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

The Office of Management and Budget

(OMB) has determined this rule to be

not significant and, therefore, this rule

has not been reviewed by OMB.

Paperwork Reduction Act of 1995

This rule proposes to amend the

information collection requirements

previously approved by OMB under

OMB control number 0563–0053

through October 31, 2000. This rule

increases the producer (respondent)

audience participation due to expanded

coverage to include in-ground plants

and ornamental nurseries; to insure

plants that produce edible berries or

nuts as long as the fruits or nuts are not

intended for sale; and to offer a Peak

Inventory Endorsement and Optional

Unit Endorsement. All of the forms

cleared under OMB control number

0563–0053 represent the minimum

requirement for information to

determine eligibility and losses

qualifying for payment due to nursery

coverage.

Revised reporting estimates and

requirements for usage of OMB control

number 0563–0053 will be submitted to

OMB for approval under the provisions

of 44 U.S.C., chapter 35. The comment

period for information collections under

the Paperwork Reduction Act of 1995

continues through March 30, 1998.

The FCIC is seeking comments on the

following Information Collection

Request (ICR).

Title: Multiple Peril Crop Insurance.

Respondents/Affected Entities: Parties

affected by the information collection

requirements included in this rule are

nursery producers.

Abstract: This rule proposes to

expand nursery coverage to include inground plants and ornamental nurseries;

to insure plants that produce edible

berries or nuts as long as the fruits or

nuts are not intended for sale; and to

offer a Peak Inventory Endorsement and

Optional Unit Endorsement. FCIC

believes the proposed policy will

increase participation in the nursery

program and offer a better commodity to

nursery producers.

Estimate of Burden: Public reporting

burden for this collection of information

is estimated at 68.7 minutes per

participant because of the high degree of

automation associated with the data

collection.

Respondents: Nursery growers.

Estimated Number of Respondents:

1,689.

Estimated Number of Responses Per

Respondent: 1.7.

Estimated Total Annual Burden on

Respondents: 1,935 hours.

FCIC is requesting comments on the

following: (a) Whether the proposed

collection of information is necessary

for the proper performance of the

functions of the agency, including

whether the information has practical

utility; (b) the accuracy of the agency’s

estimate of the burden of the proposed

collection of information; (c) ways to

enhance the quality, utility, and clarity

of the information to be collected; and

(d) ways to minimize the burden of the

collection of information on

respondents, including through the use

of automated collection techniques or

other forms of information gathering

technology.

Comments regarding paperwork

reduction should be submitted to the

Desk Officer for Agriculture, Office of

Information and Regulatory Affairs,

Office of Management and Budget,

Washington, DC 20503.

The Office of Management and Budget

(OMB) is required to make a decision

concerning the collections of

information contained in this rule

between 30 and 60 days after

submission to OMB. Therefore, a

comment to OMB is best assured of

having full effect if OMB receives it

within 30 days of publication. This does

not affect the deadline for the public to

comment on the rule.

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 implication to
4400 Federal Register / Vol. 63, No. 19 /Thursday, January 29, 1998 / Proposed Rules

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.

New provisions included in this rule

will not impact small entities to a

greater extent than large entities. Under

the current regulations, a producer is

required to complete an application and

a report of plant inventory. If the crop

is damaged or destroyed, the insured is

required to give notice of loss and

provide the necessary information to

complete a claim for indemnity. This

regulation does not alter those

requirements. The amount of work

required of the insurance companies

and insured may actually decrease

because the plant inventory report has

been simplified and insureds no longer

have to report all their plants. 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 against

FCIC for judicial review may be brought.

Environmental Evaluation

This action is not expected to have a

significant impact on the quality of the

human environment, health, and safety.

Therefore, neither an Environmental

Assessment nor an Environmental

Impact Statement is needed.

National Performance Review

This regulatory action is being taken

as part of the National Performance

Review Initiative to eliminate

unnecessary or duplicative regulations

and improve those that remain in force.

Background

FCIC proposes to revise and reissue

the nursery crop insurance provisions

found at 7 CFR 457.114. The new

provisions will be effective for the 1999

and succeeding crop years. FCIC also

proposes to amend 7 CFR part 406 to

limit its effect to the 1995 and prior crop

years.

This rule makes minor editorial and

format changes to improve the Nursery

Crop Insurance Provisions. In addition,

FCIC is proposing substantive changes

in the provisions for insuring nursery as

follows:

1. Section 1—Adds definitions for the

terms ‘‘amount of insurance,’’

‘‘brownout,’’ ‘‘crop year,’’ ‘‘crop year

deductible,’’ ‘‘eligible plant listing,’’

‘‘field grown,’’ ‘‘in-ground fabric bag,’’

‘‘irrigated practice,’’ ‘‘largest

dimension,’’ ‘‘nursery,’’ ‘‘occurrence

deductible,’’ ‘‘plant inventory value

report,’’ ‘‘plant price schedule,’’ ‘‘policy

renewal date,’’ ‘‘price level,’’ ‘‘sales

closing date,’’ and ‘‘stock plants.’’

The definition of ‘‘crop year loss

deductible,’’ has been changed to ‘‘crop

year deductible’’ for clarification.

Revised the definitions of ‘‘standard

nursery containers,’’ ‘‘field market value

A,’’ and ‘‘field market value B’’ for

clarification.

2. Section 2—Changed ‘‘Unit

Division’’ guidelines to permit only one

unit per county but allows for optional

units by endorsement. Optional units

will generally be by plant type unless

otherwise provided in the Special

Provisions.

3. Section 4—Change the contract

change date to March 31 of the crop year

for policies with a policy renewal date

after July 1. Producers with policy

renewal dates between March 31 and

June 30 can elect to delay the effect of

contract changes until the next crop

year.

4. Section 5—Change the cancellation

and termination dates to the day

preceding the policy renewal dates. This

change will give the insured year-round

coverage.

5. Section 6(b)—Specify that the

nursery plant inventory value report

must be submitted with the application

or not later than the policy renewal date

for subsequent crop years in order to

determine the amount of insurance

before insurance attaches for the next

crop year.

6. Section 6(c)—Add provisions to

clarify the nursery inventory will be

valued according to the plant price

schedule in order to standardize prices

and make the program more fair and

equitable to all producers and reduce

the risk of fraud.

7. Section 6(h)—Specify that the

insured must ensure the full value of the

insurable nursery plant inventory.

8. Section 7(a)—Add provisions to

specify that the ‘‘annual premium’’ for

each unit will be calculated by

multiplying the amount of insurance by

the appropriate premium rate listed on

the actuarial documents by the insured

share.

9. Section 8(b)—Add provisions to

expand coverage to include the

ornamental nursery industry as required

by the Federal Agricultural

Improvement and Reform Act of 1996.

10. Section 8(c)—Add provisions to

expand coverage to include plants that

produce edible berries or nuts as long as

the fruits or nuts are not intended for

sale.

11. Section 9—Add provisions

specifying that insurance coverage

commences on each unit 30 days after

the application is signed and submitted,

provided the premium has been paid,

and at 12:01 a.m. of each subsequent

annual policy renewal date. Currently,

coverage begins on each unit or part of

a unit on the later of October 1 or the

date the insurance inventory is

accepted. This provision will allow time

for the insurance provider to inspect

and accept or deny the insurance

inventory.

12. Section 10(b)—Add provisions to

exclude insects and plant disease as an

insurable cause of loss, unless a disease

or insect infestation occurs for which no

approved control measures exists, or

coverage is specifically provided by the

Special Provisions.

13. Section 12—Add provisions

clarifying indemnity calculations.

14. Section 13—Add provisions

making the late and prevented planting

provisions in the Basic Provisions not

applicable to nursery.

15. Add a new section to include the

Nursery Peak Inventory Endorsement.

List of Subjects in 7 CFR Parts 406 and

457

Crop insurance, Nursery, Reporting

and record keeping requirements.

Proposed Rule

Accordingly, as set forth in the

preamble, the Federal Crop Insurance

Corporation hereby proposes to amend

the Nursery Crop Insurance Regulations
Federal Register / Vol. 63, No. 19 /Thursday, January 29, 1998 / Proposed Rules 4401

(7 CFR part 406) and revise and reissue

the Common Crop Insurance

Regulations (7 CFR part 457), effective

for the 1999 and succeeding crop years,

to read as follows:

PART 406—NURSERY CROP

INSURANCE REGULATIONS FOR THE

1989 THROUGH THE 1995 CROP

YEARS

1. The authority citation for 7 CFR

part 406 is revised to read as follows:

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

2. The part heading is revised to read

as set forth above.

3. The subpart heading ‘‘Subpart—

Regulations for the 1989 and succeeding

crop years’’ is removed.

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(1), 1506(p).

4a. The part heading is revised as set

forth above.

5. Section 457.114 is revised to read

as follows:

§ 457.114 Nursery crop insurance

provisions.

The Nursery 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:

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Nursery 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.

Amount of insurance. The value reported

on the plant inventory value report

(including any revised report accepted by us)

multiplied by the coverage level percentage

you elect, multiplied by the price level you

elect, and multiplied by your share.

Crop year. In lieu of the definition in the

Basic Provisions, the 12 month period

beginning the day we accept the insurance

inventory and extending until 11:59 p.m. of

the day preceding the policy renewal date

and designated by the year in which the

insurance period ends.

Crop year deductible. The greater of: (1)

The value reported on the plant inventory

value report times 100 percent minus your

coverage level percentage; or (2) field market

value A times 100 percent minus your

coverage level percentage.

Eligible plant listing. A listing published by

FCIC that specifies the plants eligible for

insurance as well as insurability

requirements for such plants.

Field grown. Nursery plants planted and

grown in the ground without the use of any

artificial root containment device. In-ground

fabric bags will not be considered as an

artificial root containment device.

Field market value A. The value of the

insurable plants, based on the plant prices

contained in the plant price schedule, in the

unit immediately prior to the occurrence of

any loss.

Field market value B. The value of the

insurable plants, based on the plant prices

contained in the plant price schedule, in the

unit following the occurrence of a loss, as

determined by our appraisal of the crop, plus

any loss in value due to an uninsured cause.

In-ground fabric bag. Also called a grow

bag or a root control bag, is a porous fabric

bag made of a nonbiodegradable material

such as polypropylene, that typically has a

plastic bottom, and is used for growing

woody plants in the ground.

Irrigated practice. In lieu of the definition

in the Basic Provisions the application of

water, using appropriate systems and at the

proper times, to provide the quantity of water

needed to maintain your insured plant

inventory.

Nursery. A business enterprise that

produces nursery plant materials, a majority

of which are sold in the wholesale market.

Plant inventory value report. Your report

that declares the value of insurable plants in

accordance with section 6.

Plant price schedule. A listing provided by

FCIC of the maximum amount we will pay

for insurable plants.

Policy renewal date. The policy renewal

date is each anniversary of the original

beginning of the insurance coverage (e.g. if

insurance begins on October 1, 1998, the first

policy renewal date is October 1, 1999).

Price level. The percentage of the plant

price schedule price, up to 100 percent, that

you elect and that is used to determine the

amount of insurance and any indemnity.

Standard nursery containers. Rigid

containers not less than 3 inches across the

largest interior dimension at the top of the

container, and which are appropriate in size

and have drainage holes appropriate for the

plant. In-ground fabric bags, trays, and

cellpacks with individual cells less than 3

inches across the largest dimension, and

burlap are not considered standard nursery

containers under these crop provisions.

Stock plants. Plants used solely for

propagation that are not intended for sale

during the crop year.

2. Unit Division.

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

contained in section 1 of the Basic

Provisions, a basic unit consists of all

insurable plant inventory in the county in

which you have a share.

(b) Inventory that would otherwise be one

basic unit may be divided by electing an

optional unit endorsement when you submit

your application or prior to the policy

renewal date for any subsequent crop year.

(c) The optional unit provisions in the

Basic Provisions are not applicable.

3. Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities.

(a) The production reporting requirements

contained in section 3 of the Basic Provisions

are not applicable.

(b) In lieu of the requirement in section

3(b) of the Basic Provisions that specifies that

changes to the coverage level, price, or

amount of insurance must be made by the

sales closing date, you must give us written

notice of such changes not later than 15 days

prior to the policy renewal date.

4. Contract Changes.

In accordance with section 4 of the Basic

Provisions:

(a) The contract change date is March 31

of each year.

(b) If your policy renewal date is on or after

July 1, your insurance coverage will be in

accordance with the policy, as changed, if

any, by the March 31 contract change date.

If your policy renewal date is between March

31 and June 30 inclusive, you may elect to

convert your policy to the changed policy or

keep your current policy for one year. For the

subsequent crop year, the changed policy

terms will apply. The election must be made

on our form by June 30 and the elected policy

terms will be effective July 1.

5. Cancellation and Termination Dates.

In accordance with section 2 of the Basic

Provisions, the cancellation and termination

dates are the day preceding the policy

renewal date.

6. Plant Inventory Value Report.

(a) Section 6 of the Basic Provisions is not

applicable.

(b) You must submit a plant inventory

value report to us with your application not

later than the day preceding each subsequent

policy renewal date.

(c) The plant inventory value report must

include all growing locations, the value of

your inventory, and your share. At our

option, you will be required to provide

documentation in support of your plant

inventory value report including but not

limited to a detailed plant inventory listing

that includes each type of plant, the number

of each plant type, and the value of each

plant type; detailed individual sales and

purchases of plants for the 3 previous crop

years; sales totals for the previous 3 years;

purchases of plant material, etc., and your

ability to properly obtain and maintain

nursery stock.

(d) Your plant inventory value report will

be used to determine your premium and

amount of insurance. If you do not submit a

plant inventory value report or other

information that may be required under

section 6(c) by the date required, we will

determine the plant inventory value or deny

liability. Errors in reporting may be corrected

by us at the time of loss adjustment.

(e) Your inventory must be valued

according to the plant price schedule.

(f) You may revise your plant inventory

value report to correct or change the value

reported. If you wish to revise your plant

inventory value report to reflect an increase

in inventory value, you must notify us in

writing at least 14 days before the change in

inventory value will become effective. We
4402 Federal Register / Vol. 63, No. 19 /Thursday, January 29, 1998 / Proposed Rules

may inspect the inventory. Insurance will not

attach on any proposed increase in inventory

value until we accept the plant inventory in

writing.

(g) You may choose the optional Peak

Inventory Endorsement to cover temporary

increases in your inventory value.

(h) You must insure the full value of your

insurable plant inventory. Failure to insure

the full value of your insurable plant

inventory will result in the reduction of any

claim in accordance with section 12(b)(1).

7. Annual Premium.

In lieu of section 7 of the Basic Provisions:

(a) We will determine your premium for

the plant inventory value by multiplying the

amount of insurance by the appropriate

premium rate for basic units listed on the

actuarial documents and by your share.

(b) The annual premium will be earned in

full when insurance attaches. It is due and

payable as follows:

(1) Forty percent on the date we accept the

insurance inventory;

(2) If you apply or your policy renewal date

is between January 1 and June 30 inclusive,

you must pay the remaining premium by

September 30 of the same year; and

(3) If you apply, or your policy renewal

date is at any other time, you must pay the

remaining premium by March 31 of the

following year.

(c) Additional premium from an increase

in the plant inventory value report is due and

payable when the revised plant inventory

value report is accepted by us.

(d) Interest will accrue at the rate of one

and one-fourth percent simple interest per

calendar month, or any part thereof, on any

unpaid amount due us. For the purpose of

premium amounts due us, interest will start

on the first day of the month following the

premium due dates specified in paragraph

7(b) above.

(e) Premium will not be reduced due to a

decrease in the plant inventory value once

the insurance period has begun.

8. Insured Plants.

In lieu of the provisions of sections 8 and

9 of the Basic Provisions, the insured nursery

plant inventory will be all the nursery plants

in the county that:

(a) Are contained in the eligible plant

listing, unless a written agreement provides

otherwise:

(b) Are classified as woody, herbaceous or

foliage ornamental plants;

(c) Produce edible fruits or nuts, provided

the fruit or nuts are not intended for sale;

(d) Are determined by us to be acceptable;

(e) Are grown in a county for which a

premium rate is provided in the actuarial

documents;

(f) Are grown under an irrigation practice

for which you have adequate irrigation

equipment and water to carry out a good

irrigation practice at the time coverage

begins, unless otherwise provided by the

actuarial documents or written agreement.

(g) Are not stock plants;

(h) Are grown in accordance with the

production practices for which premium

rates have been established;

(i) Are grown in an appropriate medium;

and

(j) Are grown in nursery facilities or at

locations inspected by us and determined to

be acceptable.

9. Insurance Period.

In lieu of the provisions of section 11 of

the Basic Provisions, if you have paid your

premium in accordance with section 7(b)(1),

coverage begins 30 days after your

application is signed by you, or the date the

insurance inventory is accepted whichever is

later, and at 12:01 a.m. of each subsequent

policy renewal date as long as the policy

remains in force and your plant inventory

value report is received. Insurance ends at

the earliest of:

(a) The date of final adjustment of a loss

when the total indemnities paid equal the

amount of insurance; or

(b) 11:59 p.m. of the day preceding the

policy renewal date.

10. Causes of Loss.

(a) In accordance with the provisions of

section 12 of the Basic Provisions, insurance

is provided for unavoidable damage caused

only by the following causes of loss that

occur within the insurance period:

(1) Adverse weather conditions, except as

specified in section 10(b)(4);

(2) Fire, except where weeds and other

forms of undergrowth in the vicinity of the

plants or buildings on your insured site are

not controlled by chemical or mechanical

means or by removal;

(3) Wildlife;

(4) Earthquake;

(5) Volcanic eruption; or

(6) Failure of the irrigation water supply

due to a cause of loss specified in section

10(a)(1) through (5) that occurs within the

insurance period.

(b) In addition to the causes of loss

excluded in section 12 of the Basic

Provisions, we do not insure against any loss

caused by:

(1) Disease or insect infestation, unless:

(i) A disease or insect infestation occurs for

which no effective control measure exists; or

(ii) Coverage is specifically provided by the

Special Provisions.

(2) A failure of or a reduction in the power

supply, unless such failure is due to an

insurable cause of loss specified in section

10(a);

(3) The inability to market the nursery

plants as a direct result of quarantine,

boycott, or refusal of a buyer to accept

production;

(4) Frost or freeze, if frost or freeze

protection is shown as being required in the

eligible plant listing, unless:

(i) You have installed adequate frost or

freeze protection equipment or facilities and

there is a failure or breakdown that is directly

caused by an insurable cause of loss specified

in section 10(a). The insured plants must be

damaged by cold temperatures and the

damage must occur within 72 hours of the

failure of such equipment or facilities unless

you establish that repair or replacement was

not possible between the time of failure or

breakdown and the time the damaging

temperatures occurred; or

(ii) The lowest temperature reached

exceeded the ability of the required frost or

freeze protection equipment to keep the

insured plants from sustaining cold damage.

(5) Collapse or failure of buildings or

structures, unless the damage to the building

or structures results from a cause of loss

specified in section 10(a).

11. Duties in the Event of Damage or Loss.

In addition to your duties contained under

section 14 of the Basic Provisions, you must:

(a) Obtain our written consent prior to:

(1) Destroying, selling or otherwise

disposing of any plant inventory that is

damaged; or

(2) Changing or discontinuing your normal

growing practices with respect to care and

maintenance of the insured plant inventory.

(b) Failure to obtain our written consent

will result in the denial of your claim.

(c) Submit a claim for indemnity to us on

our form, not later than 60 days after the date

of your loss, but in no event later than 60

days after the end of the insurance period.

12. Settlement of Claim.

(a) If at the time of loss, field market value

A does not exceed the value on your

accepted plant inventory value report,

including any peak inventory endorsement,

your indemnity will be determined by us for

each unit as follows:

(1) Subtract field market value B from field

market value A;

(2) Subject to section 12(c), subtract the

crop year deductible from the result of

section 12(a)(1) to obtain the loss amount;

(3) If the result of section 12(a)(2) is greater

than zero, and subject to the limit of section

12(d), your indemnity equals the result of

multiplying the result of section 12(a)(2) by

your price level and by your share.

(b) If at the time of loss, field market value

A exceeds the amount shown on your

accepted plant inventory value report, we

will pay any indemnity in the following

manner:

(1) Divide the value shown on your

accepted plant inventory value report by

field market value A (rounded off to the

nearest hundredth);

(2) Subtract field market value B from field

market value A;

(3) Subject to section 12(c), subtract the

crop year deductible from the result in

section 12(b)(2) to obtain the loss amount;

and

(4) If the result of section 12(b)(3) is greater

than zero, and subject to the limit of section

12(d), your indemnity equals the result of

section 12(b)(3) multiplied by section

12(b)(1), multiplied by your price level, and

multiplied by your share.

(c) Individual insured losses occurring

during the crop year may be accumulated to

satisfy the crop year deductible if you timely

report each loss to us. Sections 12(a)(2) and

12(b)(3) will not apply to any subsequent

individual loss determinations when the total

amount of accumulated losses is equal to or

greater than the crop year deductible.

However, no indemnities will be paid for

subsequent losses after the crop year

deductible has been met unless the value of

the damaged plants exceeds the lesser of one

percent of your inventory value or $250.

(d) The total of all indemnities for the crop

year will not exceed the amount of insurance.

(e) The value of any insured plant

inventory will be determined on the basis of

our appraisals.
Federal Register / Vol. 63, No. 19 /Thursday, January 29, 1998 / Proposed Rules 4403

13. Late and prevented planting.

The late and prevented planting provisions

in the Basic Provisions are not applicable.

14. Written agreements.

(a) In lieu of section 18(g) of the Basic

Provisions each agreement must be applied

for by the insured in writing with the

application or not later than the policy

renewal date;

(b) In addition to the requirements of

section 18 of the Basic Provisions:

(1) Any written agreement is valid only

until 11:59 p.m. of the day preceding the

policy renewal date;

(2) Written agreements will not be

approved to insure container plants if the

container does not qualify as a standard

nursery container; and

(3) In lieu of section 18(c), an application

for a written agreement submitted after the

year of application for insurance or the

policy renewal date may be approved if you

demonstrate your physical inability to have

applied timely with your application for

insurance or provide by the policy renewal

date, and after physical inspection of the

nursery plant inventory, we determine that

the inventory will be salable at the value

shown in the plant inventory value report as

the actual date of the application.

Nursery Crop Insurance—Peak Inventory

Endorsement

This endorsement is not a continuous

contract.

In return for payment of premium for the

coverage contained herein, this endorsement

will be attached to and made part of the

Nursery Crop Insurance Policy, subject to the

terms and conditions described herein.

1. Definitions.

Coverage commencement date. The later of

the date you declare as the beginning of the

coverage or 30 days after a properly

completed peak inventory value report is

accepted by us.

Coverage term. The coverage term begins

on the coverage commencement date and

ends on the coverage termination date. It is

calculated in months (rounded to the nearest

tenth) by dividing the number of calendar

days in the coverage term by 30. The

minimum coverage term for premium

calculation purposes is one month.

Coverage termination date. The date you

declare that the peak amount of insurance for

your nursery insurance contract will cease.

This date cannot be later than the end of the

crop year.

Peak amount of insurance. The additional

value reported on the peak inventory value

report multiplied by the coverage level and

price level you elected under the Crop

Provisions, and multiplied by your share.

Peak inventory value report. A report that

declares the increase in aggregated wholesale

market value of insurable plants over the

value reported on the plant inventory value

report, the coverage commencement and

termination dates, and the other

requirements of section 6 of the Nursery Crop

Provisions.

2. Eligibility.

(a) You must have a Nursery crop

insurance policy in effect for the crop year

that this endorsement applies;

(b) You must have elected either the

limited or additional level of coverage. This

endorsement is not available if you have

elected the Catastrophic Risk Protection

Endorsement.

(c) You must submit a peak inventory

value report that will serve as the application

for coverage under this endorsement. We

may reject the peak inventory value report if

all requirements in this endorsement and the

Nursery Crop Provisions are not met.

3. Coverage.

(a) The amount of insurance provided

under the Nursery Crop Provisions is

increased by the peak amount of insurance

for the coverage term.

(b) Indemnities paid on the peak amount

of insurance will apply to your crop year

deductible in the same proportion as your

peak amount of insurance under this

endorsement has to your amount of

insurance under the Nursery Crop

Provisions.

(c) Except as provided herein, this

endorsement does not change, amend or

otherwise modify any other provision of your

Nursery Crop Insurance Policy.

4. Peak insurance period.

Coverage begins on the coverage

commencement date, provided you paid the

required premium in accordance with section

5, and ends on the coverage termination date.

5. Premium.

(a) The premium for this endorsement is

determined by multiplying the peak amount

of insurance times the appropriate premium

rate in the actuarial documents, times the

coverage term and times your share.

(b) The premium for this endorsement is

due and payable when the peak amount of

insurance becomes effective.

6. Reporting requirements.

(a) In addition to the reporting

requirements of section 6 of the Nursery Crop

Provisions, you must submit a peak

inventory value report on our form.

(b) If you have in effect an Optional Unit

Endorsement, you must submit a peak

inventory value report for each unit to which

such report is applicable.

7. Liability limit.

The peak amount of insurance is limited to

an amount equal to the amount of insurance

you declare under the Nursery Crop

Provisions.

Nursery Crop Insurance—Optional Unit

Endorsement

This is a continuous endorsement.

In return for payment of premium for the

coverage contained herein, this endorsement

will be attached to and made part of the Basic

Crop Insurance Policy and the Nursery Crop

Provisions subject to the terms and

conditions described herein.

1. Definitions.

Occurrence Deductible. Field market value

A times (100 percent minus your coverage

level election percentage.)

2. Eligibility.

(a) You must have a Nursery crop

insurance policy in effect for the crop year

that this endorsement applies.

(b) You must have elected either the

limited or additional level of coverage. This

endorsement is not available if you have

elected the Catastrophic Risk Protection

Endorsement.

3. Reports.

(a) In addition to information required

under section 6 of the Nursery Crop

Provisions, you must also provide the

maximum value of insurable plants for each

unit during the insurance period on the plant

inventory value report. We will use no more

than the value reported for each unit in

calculating a claim under section 12 of the

Nursery Crop Provisions.

(b) If you elect to obtain a Peak Inventory

Endorsement and you have optional units

under this endorsement, you must submit a

peak inventory value report for each optional

unit to which the Peak Inventory

Endorsement will apply.

4. Unit Division.

(a) Your indemnity will be determined for

each unit.

(b) This endorsement provides optional

units for each practice for which a separate

rate is established in the actuarial documents

and for each plant group listed in section

3(c).

(c) Plant Groups.

1. Deciduous Trees (Shade and Flower);

2. Broadleaf Evergreen Trees;

3. Coniferous Evergreen Trees;

4. Fruit and Nut Trees;

5. Deciduous Shrubs;

6. Broadleaf Evergreen Shrubs;

7. Coniferous Evergreen Shrubs;

8. Small Fruits;

9. Herbaceous Perennials;

10. Roses;

11. Ground Cover and Vines;

12. Annuals;

13. Foliage; and

14. In addition, other plant groupings as

listed in the Special Provisions, if the type

of plant would meet the criteria for more

than one of the plant groups specified in this

subsection, you must elect only one plant

group and all plants of that type must be

included in that group.

5. Premium.

In lieu of section 7(a) of the Nursery Crop

Provisions, your premium will be calculated

by multiplying the amount of insurance

determined under the Nursery Crop

Provisions by the appropriate premium rate

for basic units listed on the actuarial

documents, by the premium rate for optional

units listed on the actuarial documents, and

by your share.

6. Settlement of claim.

(a) In lieu of section 12(a)(2) of the Nursery

Crop Provisions, and subject to section 12(c),

subtract the occurrence deductible from the

result of section 12(a)(1).

(b) In lieu of section 12(b)(3) of the Nursery

Crop Provisions, and subject to section 12(c),

subtract the occurrence deductible from the

result of section 12(b)(2).

Signed in Washington, DC, on January 22,

1998.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance

Corporation.

[FR Doc. 98–2095 Filed 1–28–98; 8:45 am]

BILLING CODE 3410–08–P