[Federal Register Volume 63, Number 19 (Thursday, January 29, 1998)]
[Proposed Rules]
[Pages 4399-4403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2095]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

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.

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

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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.

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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 
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. 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

[[Page 4400]]

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

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(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:


Sec. 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

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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.

[[Page 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