2000 Federal Register / Vol. 60, No. 4 / Friday, January 6, 1995 / Rules and Regulations

insurance contract will be voided and

not have been in effect for the crop year

for which the fee is due and will

terminate, and the person failing to pay

the fee will not be or have been eligible

for certain other USDA program benefits

as set out in § 400.656 and any of those

benefits received for the crop year must

be refunded.

(2) The administrative fee for

additional coverage is not refundable

and may not be waived.

(c) When obtaining catastrophic risk

protection, limited, or additional

coverage, an insured must provide

information regarding crop insurance

coverage on any crop previously

obtained at any other local USDA office

or from an approved insurance provider,

including the date such insurance was

obtained, and the amount paid in

administrative fees. If the insured has

paid in excess of the maximum

allowable amount in administrative

fees, the insured will receive a refund of

the excess fees paid from the local

USDA office or from the approved

insurance provider that collected the

excess amount.

§ 400.656 Eligibility for other program

benefits.

The insured must obtain at least the

catastrophic risk protection level of

coverage for each crop of economic

significance in the county in which the

insured has an interest, if insurance is

available in the county for the crop, to

be eligible for:

(a) Price support and production

adjustment programs, including

tobacco, rice, extra long staple cotton,

upland cotton, feed grains, wheat,

peanuts, oilseeds, and sugar;

(b) Loans or any other USDAprovided farm credit including

guaranteed and direct farm ownership

loans, operating loans, and emergency

loans under the Consolidated Farm and

Rural Development Act; and

(c) The Conservation Reserve

Program.

§ 400.657 Coverage for acreage that is

prevented from being planted.

(a) 1994 crop year prevented planting

for all crops of wheat, feed grain, cotton,

and rice:

(1) For the 1994 crop year only, an

insured may receive compensation for

acreage that was prevented from being

planted due to major, widespread

flooding in the Midwest, or excessive

ground moisture, that occurred prior to

the spring sales closing date for the 1994

crop year.

(2) To be eligible for compensation

the insured must have:

(i) Purchased a crop insurance policy

containing prevented planting

provisions prior to the spring sales

closing date for the 1994 crop year;

(ii) Had a reasonable expectation of

planting the insured crop on acreage

that was eligible for prevented planting

coverage under the terms of the crop

insurance contract, (if it is determined

that the acreage eligible for the

prevented planting coverage under the

terms of the crop insurance policy

would have drained sufficiently to plant

the crop except for additional moisture

that occurred in the spring, the insured

will be assumed to have had a

reasonable expectation of planting the

crop absent some other intervening

cause); and

(iii) Participated in a conserving use

program established for the 1994 crop of

wheat, feed grains, upland cotton, or

rice established under the Agricultural

Act of 1949, whichever is applicable.

(3) FCIC will pay as compensation

under the prevented planting provisions

of the crop insurance policy, the

difference between:

(i) The amount of any prevented

planting payment that would have been

due under the prevented planting

provision of the 1994 crop year crop

insurance policy (prevented planting

indemnity less premium); and

(ii) The amount paid under the

conserving use program for the same

crop and acreage.

(b) 1994 crop year prevented planting

for oilseeds:

(1) If the insured satisfies the

requirements of section (a)(2) (i) and (ii),

the insured will be eligible for a

prevented planting payment on the oil

seed crop.

(2) FCIC will pay as compensation

under this prevented planting provision

the amount payable under the prevented

planting provision of the applicable

1994 crop year crop insurance policy

(prevented planting indemnity less

premium).

(c) 1995 and succeeding crop year

prevented planting coverage:

Effective for the 1995 and subsequent

crop years, the insurance period for

prevented planting for those crop

insurance policies containing prevented

planting coverage shall be extended so

that prevented planting coverage begins:

(1) On the sales closing date for the

insured crop in the county for the crop

year the application for insurance is

accepted; or

(2) For any crop year following the

crop year the application for insurance

is accepted, or for any crop year the

insurance policy is transferred to a

different insurance provider, on the

sales closing for the insured crop in the

county for the previous crop year,

provided continuous coverage has been

in effect since that date. For example: If

the insured makes application and

purchases a corn crop insurance policy

for the 1995 crop year, prevented

planting coverage will begin on the 1995

sales closing date for corn in the county.

If the corn policy remains in effect for

the 1996 crop year (is not terminated or

cancelled during or after the 1995 crop

year), or is transferred to a different

insurance provider, prevented planting

coverage for the 1996 crop began on the

1995 sales closing date.

§ 400.658 Transitional yields for forage or

feed crops for the 1995 through 1997 crop

years

(a) For the 1995 through the 1997 crop

year, insureds who produce feed or

forage may be eligible for an adjustment

in the assigned yield available under

§ 400.55(b)(1) if:

(1) The feed or forage is primarily for

on-farm use in a livestock, dairy, or

poultry operation; and

(2) The insured derives at least fifty

percent (50%) of the insured’s net farm

income from the livestock, dairy, or

poultry operation.

(b) Insureds that qualify under (a) of

this section will receive an assigned

yield, if required, under § 400.55(b)(1) of

80 percent of the T or D-Yield.

Done in Washington, D.C., on December

21, 1994.

Suzette Dittrich,

Acting Manager, Federal Crop Insurance

Corporation.

[FR Doc. 95–358 Filed 1–3–95; 3:38 pm]

BILLING CODE 3410–08–U

7 CFR Part 402

RIN 0563–AB09

Catastrophic Risk Protection

Endorsement

AGENCY: Federal Crop Insurance

Corporation.

ACTION: Interim rule.

SUMMARY: The Federal Crop Insurance

Corporation (‘‘FCIC’’) hereby adds a new

part 402 to chapter IV of title 7 of the

Code of Federal Regulations (‘‘CFR’’).

The intended effect of this interim rule

is to provide a catastrophic risk

protection plan of insurance, the lowest

level of coverage required to be

purchased by a producer to be eligible

for certain other agricultural farm

program benefits, to comply with

statutory mandates of the Federal Crop

Insurance Act as amended by the

Federal Crop Insurance Reform Act of

1994.

DATES: This rule is effective January 6,

1995. Written comments, data, and
Federal Register / Vol. 60, No. 4 / Friday, January 6, 1995 / Rules and Regulations 2001

opinions on this rule will be accepted

until close of business March 7, 1995,

and will be considered when the rule is

to be made final.

ADDRESSES: Written comments, data,

and opinion on this interim rule should

be sent to Diana Moslak, Regulatory and

Procedural Development Staff, Federal

Crop Insurance Corporation, USDA,

Washington, D.C. 20250. Hand or

messenger delivery may be made to

Suite 500, 2101 L Street, N.W.,

Washington D.C. Written comments will

be available for public inspection and

copying in the Office of the Manager,

2101 L Street, N.W., 5th Floor,

Washington, D.C., during regular

business hours, Monday through Friday.

FOR FURTHER INFORMATION CONTACT:

For further information and a copy of

the Regulatory Impact Analysis to the

Catastrophic Risk Protection

Endorsement, contact Diana Moslak,

Federal Crop Insurance Corporation,

U.S. Department of Agriculture,

Washington, D.C. 20250. Telephone

(202) 254–8314.

SUPPLEMENTARY INFORMATION: This

action has been reviewed under United

States Department of Agriculture

(‘‘USDA’’) procedures established by

Executive Order 12866 and

Departmental Regulation 1512–1. This

action constitutes a review as to the

need, currency, clarity, and

effectiveness of these regulations under

those procedures. The sunset review

date established for these regulations is

December 1, 1999.

This rule has been determined to be

‘‘economically significant’’ for the

purposes of Executive Order 12866, and

therefore, has been reviewed by the

Office of Management and Budget

(‘‘OMB’’).

A Regulatory Impact Analysis has

been completed and is available to

interested persons at the address listed

above. In summary, the analysis finds

that crop insurance reform generally is

expected to result in net positive

benefits to producers, taxpayers, and

society. The effects on individual

producers compared to payments under

ad hoc disaster programs depends

primarily on the farm program payment

yield compared to the farm’s actual

yield and market prices. In general,

however, the reform is expected to

result in less volatility of producer’s

incomes and lesser risk of no income

due to adverse weather events. Rural

communities and farmers will benefit

from the certainty of payments in times

of catastrophic yield losses. The

Government and taxpayers will benefit

from a single disaster protection

program and consequent reduced

Federal outlays. Although some

producers (previous non-participants in

crop insurance) will have an added

burden to make application and report

yields and acreage, the benefits in terms

of greater risk protection outweigh the

costs.

This interim rule amends the existing

information collection as approved by

the Office of Management and Budget

(OMB) pursuant to the Paperwork

Reduction Act of 1980 (44 U.S.C. 3501

et seq.), under OMB control numbers

0563–0001, 0563–0003, and 0563–0029.

Due to the time constraints of

implementing the rule immediately, the

agency has requested emergency

clearance of this addendum from OMB.

Comments on the information collection

may be sent to the Office of Information

and Regulatory Affairs, Office of

Management and Budget, Room 10202,

NEOB, Washington, D.C. 20503.

Attention: Desk Officer for USDA.

It has been determined under section

6(a) of Executive Order 12612,

Federalism, that this rule does not have

sufficient federalism implication to

warrant the preparation of a Federalism

Assessment. The provisions and

procedures 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.

Under the Regulatory Flexibility Act

(5 U.S.C. 605), this regulation will not

have a significant impact on a

substantial number of small entities.

Producers will be able to certify to their

historical production levels at the time

of application based on existing records,

or they may elect to base their insurance

on assigned yields, which will not

require maintenance of production

records by the insurance agent. The

amount of data collected by the agent

for new insureds is not greater than the

amount of data collected for existing

insureds. Insureds may elect to keep

production records to increase the

amount of production covered by

insurance but such production is not

required to participate in the program.

The benefits in terms of risk reduction

and protection from severe losses will

out-weigh any record-keeping costs.

Therefore, this action is determined to

be exempt from the provisions of the

Regulatory Flexibility Act and no

Regulatory Flexibility Analysis was

prepared.

This program is listed in the Catalog

of Federal Domestic Assistance under

No. 10.450.

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.

The Office of the General Counsel has

determined that these regulations meet

the applicable standards provided in

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

Order 12778. 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

located at 7 CFR part 400, subpart J, and

for catastrophic risk protection contracts

of insurance delivered through local

USDA offices, the National Appeal

Division administrative appeal

provisions under the Department of

Agriculture Reorganization Act of 1994

must be exhausted before judicial action

may be brought.

This action is not expected to have

any significant impact on the quality of

the human environment, health, and

safety. Therefore, neither an

Environmental Assessment nor an

Environmental Impact Statement is

needed.

This interim rule implements

programs mandated by the amendments

to the Federal Crop Insurance Act by the

Federal Crop Insurance Reform Act of

1994. Those amendments required that

the statutory changes be implemented

for the 1995 crop year. All of the

contract change dates and many of the

sales closing dates for 1995 insured

crops have passed or will soon pass.

Many of the changes contained in these

regulations are mandated by statute.

Planting decisions for 1995 crops have

been or will shortly be made and it is

necessary that producers, lenders, and

suppliers know the parameters and

requirements of the program. Therefore,

it is impractical and contrary to the

public interest to publish this rule for

notice and comment prior to making the

rule effective. However, comments are

solicited for 60 days after the date of

publication in the Federal Register and

will be considered by FCIC before this

rule is made final.

On October 13, 1994, the amendments

to the Federal Crop Insurance Act, made

by the Federal Crop Insurance Reform

Act of 1994, were effective. This

regulation will provide the policy and

procedures to carry out catastrophic risk

protection insurance requirements of

the Reform Act.

Background

Upon publication of 7 CFR part 402,

this regulation will provide catastrophic

risk protection crop insurance through

an endorsement that amends new and

existing crop insurance policies,
2002 Federal Register / Vol. 60, No. 4 / Friday, January 6, 1995 / Rules and Regulations

endorsements, and provisions when

purchased by the insured. The

amendments are as follows:

1. Section 402.4, subsection 2.(b)

specifies that to be eligible for

catastrophic coverage a producer must

be a person as defined in the crop

policy.

2. Section 402.4, subsection 2.(c)

provides for the termination of this

endorsement if the insured fails to pay

the administrative fee, elects to

purchase limited or additional coverage,

or if the applicable crop policy is

terminated or cancelled.

3. Section 402.4, section 3 specifies

that a unit is all of the insurable acreage

of the insured crop in the county on the

date coverage begins for the crop year,

in which the insured has a 100 percent

(100%) share. Land which is owned by

one person and operated by another

person on a share basis is considered a

separate unit.

4. Section 402.4, subsection 4.(a)

specifies that for the 1995 through 1998

crop years, coverage will be equal to

fifty percent (50%) of the producer’s

approved yield indemnified at sixty

percent (60%) of the expected market

price, or a comparable coverage as

established by FCIC.

5. Section 402.4, subsection 4.(b)

specifies that for the 1999 and

subsequent crop years, coverage will be

equal to fifty percent (50%) of the

producer’s approved yield indemnified

at fifty-five percent (55%) of the

expected market price, or a comparable

coverage as established by FCIC.

6. Section 402.4, subsection 4.(d)

allows the insured the option of

selecting catastrophic risk coverage, on

a commodity-by-commodity basis, on

either an individual yield and loss basis

or an area yield and loss basis, if both

options are offered in the Actuarial

Table or Special Provisions.

7. Section 402.4, subsection 5.(a)

specifies that the insured will not be

responsible to pay a premium for

catastrophic coverage.

8. Section 402.4, subsection 5.(b)

requires the insured to pay an

administrative fee of $50 per crop per

county. Each type or variety specified in

subsections 6.(a) and (b) and crop

acreage specified in subsection 6.(c) will

be considered a separate crop to which

separate administrative fees apply. Total

administrative fees for all crops insured

under any combination of catastrophic

coverage and limited coverage will not

exceed $200 per producer per county,

up to a maximum of $600 for all

counties in which the producer has

crops insured.

9. Section 402.4, subsection 5.(c)

specifies that the administrative fee for

catastrophic coverage must be paid to

the insurance provider at the time of

application and will not be refunded if

the insured files a zero acreage report

the first crop year for which the

application is accepted. For subsequent

years, the administrative fee must be

paid annually by the acreage reporting

date, however, in subsequent years no

administrative fee is required if the

producer files a bona fide zero acreage

report on or before the acreage reporting

date. The administrative fee will be

waived for a limited resource farmer.

10. Section 402.4, subsection 5.(d)

specifies that the administrative fee will

be refunded if, after applying for

catastrophic coverage and paying the

administrative fee, the producer elects

to purchase additional coverage for such

crop. Administrative fees will be

refunded only if the producer has not

purchased catastrophic risk protection

and limited coverage in excess of the

maximum administrative fee to be paid

in the applicable situation.

11. Section 402.4, subsections 6.(a)

and (b) specify the insured crop is

provided in the applicable crop policy

documents, except that each specified

type of Stonefruit, Texas Citrus, Florida

Citrus, Arizona-California Citrus, Texas

Citrus Trees, and Guaranteed Tobacco,

and each grape variety grown in

California specified in the Special

Provisions, that the producer elects to

insure, will be insured as a separate

crop.

12. Section 402.4, subsection 6.(c)

specifies that if the producer purchased

limited or additional coverage for a

crop, the producer may separately

insure acreage that has been designated

as high risk by FCIC provided that the

producer has executed a high risk

exclusion option under that policy and

obtained a catastrophic risk protection

policy with the same approved

insurance provider and pays separate

administrative fees for each policy in

effect.

13. Section 402.4, section 7 specifies

that a replant payment will not be paid

whether or not replanting is required

under the policy.

14. Section 402.4, subsection 8.(a)

specifies that if a unit contains acreage

to which more than one expected

market price applies for a type, variety,

class, etc., that the dollar amount of

insurance and the dollar amount of

production to be counted will be

computed separately for each type,

variety, class, etc., that have separate

expected market prices, and then added

together to determine the total liability

for the unit.

15. Section 402.4, subsection 8.(b)

specifies that if the producer is eligible

to receive an indemnity under the

Catastrophic Risk Protection

Endorsement and is also eligible to

receive benefits for the same loss under

other USDA programs, the producer

must elect the program from which to

receive benefits. Only one payment or

program benefit will be allowed.

16. Section 402.4, section 9 specifies

that if a producer conceals or

misrepresents any material fact or

commits fraud, the policy will be

voided effective with the beginning of

the crop year for which such act or

omission occurred.

17. Section 402.4, subsection 10.(a)

specifies that any option or

endorsement which provides additional

coverage is not available, except for the

Late Planting Agreement Option.

Written agreements are not available

under the Catastrophic Risk Protection

Endorsement.

18. Section 402.4, subsection 10.(b)

specifies that hail and fire coverage and

land designated by FCIC as high-risk

may not be excluded under this

Endorsement.

19. Section 402.4, section 11 specifies

that a producer must obtain at least

catastrophic coverage for each crop of

economic significance to be eligible for

any price support or production

adjustment programs, loans or other

USDA provided farm credit, or the

Conservation Reserve Program. The

requirement that the producer obtain at

least catastrophic risk protection will

apply to all program benefits obtained

after October 13, 1994.

List of Subjects in 7 CFR Part 402

Catastrophic Risk Protection

Endorsement, insurance provisions.

Interim Rule

For the reasons set out in the

preamble, a part 402 is added to chapter

IV of title 7 of CFR, effective for the

1995 and succeeding crop years, to read

as follows:

PART 402—CATASTROPHIC RISK

PROTECTION ENDORSEMENT

Sec.

402.1 General Statement.

402.2 Applicability

402.3 OMB control numbers

402.4 Catastrophic Risk protection

endorsement

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

§ 402.1 General statement.

The Federal Crop Insurance Act as

amended by the Federal Crop Insurance

Reform Act of 1994 (the ‘‘Act’’) requires

the Federal Crop Insurance Corporation

(‘‘FCIC’’) to implement a catastrophic

risk protection plan of insurance which
Federal Register / Vol. 60, No. 4 / Friday, January 6, 1995 / Rules and Regulations 2003

provides a basic level of insurance

coverage to protect producers in the

event of a FCIC insured or reinsured

crop loss due to loss of yield or

prevented planting, if the crop loss or

prevented planting is due to an insured

cause of loss specified in the crop

insurance policy. This Catastrophic Risk

Protection Endorsement

(‘‘Endorsement’’) is a continuous

endorsement that is effective in

conjunction with an applicable crop

insurance policy. Catastrophic risk

protection coverage will be offered

through approved insurance providers

and through local offices of the

Consolidated Farm Service Agency,

USDA.

§ 402.2 Applicability.

This Endorsement is applicable to

each crop for which catastrophic risk

protection coverage is available and for

which the producer elects such

coverage. The terms and conditions of

the applicable crop insurance policy

remain in effect unless they have been

modified by this Endorsement.

§ 402.3 OMB control numbers.

The provisions set forth in this

interim rule contain new and revised

information collections that require

clearance by the Office of Management

and Budget (OMB) under the Paperwork

Reduction Act of 1980 (44 U.S.C. 3501

et seq.) and have been previously

assigned OMB numbers 0563–0001,

0563–0003, and 0563–0029. These

information collection requirements

have been submitted to OMB and are

not effective until approved by OMB.

§ 402.4 Catastrophic Risk Protection

Endorsement Provisions

The Catastrophic Risk Protection

Endorsement Provisions for the 1995

and succeeding crop years are as

follows:

Department of Agriculture

Federal Crop Insurance Corporation

Catastrophic Risk Protection Endorsement

(This is a continuous endorsement).

You should be aware that additional

coverage is available through an approved

insurance provider or through local offices of

the Consolidated Farm Service Agency,

USDA, when such provider is not available.

If a conflict exists between this

Endorsement and any of the policies

specified in subsection 2.(a) or the Special

Provisions for the insured crop, this

endorsement will control.

Terms and Conditions

1. Definitions

(a) Additional coverage—A plan of crop

insurance providing a level of coverage equal

to or greater than sixty-five percent (65%) of

your approved yield indemnified at one

hundred percent (100%) of the expected

market price or a comparable coverage as

established by FCIC.

(b) Administrative fee—The $50 fee the

policyholder must pay on a per crop and

county basis, with a maximum of $200 per

policyholder per county and $600 per

policyholder for catastrophic and limited

coverage on an annual basis.

(c) Approved insurance provider—A

private insurance company, including their

agents, that has been approved and reinsured

by FCIC to provide insurance coverage to

producers participating in the Federal crop

insurance program.

(d) Approved yield—The average amount

of production per acre obtained under FCIC’s

Actual Production History Program (7 CFR

Part 400, Subpart G) using production

records of the insured or yields assigned by

FCIC. At least four crop years of yields must

be averaged to obtain the approved yield.

(e) Catastrophic risk protection—The

minimal level of coverage offered by FCIC,

which is required before a person may

qualify for certain other United States

Department of Agriculture program benefits

(see subsections 4. (a) and (b) and subsection

11.(a)).

(f) CFSA—The Consolidated Farm Service

Agency of the United States Department of

Agriculture.

(g) County—The county or other political

subdivision shown on your accepted

application including land in an adjoining

county, provided such land is part of a field

that extends into the adjoining county and

the county boundary is not readily

discernable. For peanuts and quota tobacco,

the county will also include any land

identified by a CFSA farm serial number for

the county but physically located in another

county.

(h) Crop of economic significance—A crop

that has either contributed in the previous

crop year, or is expected to contribute in the

current crop year, ten percent (10%) or more

of the total expected value of your share of

all crops in which you have an insurable

share that are grown in the county. However,

notwithstanding the preceding sentence, if

the total expected liability under the

catastrophic risk protection endorsement is

equal to or less than the administrative fee

required for the crop, such crop will not be

considered a crop of economic significance.

(i) FCIC—The Federal Crop Insurance

Corporation, a wholly owned Government

Corporation within the Consolidated Farm

Service Agency, United States Department of

Agriculture.

(j) ‘‘Insurance is available’’—Means only

those crops for which the crop information

is contained in the county actuarial

documents.

(k) Limited coverage—A plan of insurance

offering coverage that is equal to or greater

than fifty percent (50%) of your approved

yield indemnified at one hundred percent

(100%) of the expected market price, or a

comparable coverage as established by FCIC

but less than sixty-five percent (65%) of your

approved yield indemnified at one hundred

percent (100%) of the expected market price,

or a comparable coverage as established by

FCIC.

(l) Limited resource farmer—A producer or

operator of a small or family farm, including

a new producer or operator, with an annual

gross income of less than $20,000 derived

from all sources of revenue for each of the

prior two years and who demonstrates a need

to maximize farm income. Notwithstanding

the preceding sentence, a producer on a farm

of less than 25 acres aggregated for all crops,

where the producer derives a majority of the

producer’s gross income from the farm but

the producer’s gross income from farming

operations does not exceed $20,000, will be

considered a limited resource farmer.

(m) Price election—In lieu of any provision

contained in any other policy document,

price election means sixty percent (60%) of

the expected market price for the 1995

through 1998 crop years, and fifty-five

percent (55%) of the expected market price

for the 1999 and subsequent crop years.

(n) Secretary—The Secretary of the United

States Department of Agriculture.

(o) Share—In lieu of any provision

contained in any other policy document,

your percentage of interest in the insured

crop as owner, operator, or tenant at the time

coverage begins. However, only for the

purpose of determining the amount of

indemnity, your share will not exceed your

share at the earlier of the time of loss or the

beginning of harvest. Unless the accepted

application clearly indicates that insurance is

requested for a partnership or joint venture,

insurance will only cover the crop share of

the person completing the application. The

share will not extend to any other person

having an interest in the crop except as may

otherwise be specifically allowed in this

endorsement. Any acreage or interest

reported by or for your spouse, child or any

member of your household may be

considered your share. Leases containing

provisions for both a cash or minimum

payment and a crop share will be considered

a crop share lease.

(p) USDA—The United States Department

of Agriculture.

2. Eligibility, Life of Policy, Cancellation, and

Termination

(a) You must have one of the following

policies in force to elect this Endorsement

and you must have made application for

catastrophic risk protection on or before the

sales closing date for the crop in the county:

(1) The General Crop Insurance Policy

(§ 401.8) and crop endorsement;

(2) The Common Crop Insurance Policy

(§ 457.8) and crop provisions;

(3) The Group Risk Plan Policy, if available

for catastrophic risk protection; or

(4) A specific named crop insurance

policy.

(b) You must be a person as defined in the

crop policy to be eligible for catastrophic risk

protection coverage.

(c) In addition to the provisions specified

in the applicable crop endorsement, crop

provision, and crop insurance policy, this

Endorsement will terminate for the crop year

for which:

(1) You fail to pay the applicable

administrative fee as specified in subsections

5.(b) and (c);

(2) You elect to purchase limited or

additional coverage for the insured crop; or
2004 Federal Register / Vol. 60, No. 4 / Friday, January 6, 1995 / Rules and Regulations

(3) The applicable crop policy, to which

this endorsement attaches, automatically

terminates (e.g. Macadamia Tree and Nut

Crop Insurance Policies must be renewed

each year).

3. Unit Division

(a) This section is in lieu of the unit

provisions specified in the applicable crop

endorsement, crop provisions, or crop

insurance policy.

(b) For catastrophic risk protection

coverage, a unit will be all insurable acreage

of the insured crop in the county on the date

coverage begins for the crop year:

(1) In which you have one hundred percent

(100%) crop share; or

(2) Which is owned by one person and

operated by another person on a share basis.

(Example: If, in addition to the land you own,

you rent land from five landlords, three on

a crop share basis and two on a cash basis,

you would be entitled to four units, one for

each crop share lease and one for the two

cash leases and the land you own.)

(c) Land rented for cash, a fixed

commodity payment, or any consideration

other than a share in the insured crop on

such land will be considered as owned by the

lessee.

(d) Any unit division other than stated in

subsection (b) above is not allowed under

this Endorsement.

4. Insurance Guarantees, Coverage Levels,

and Prices for Determining Indemnities

(a) Notwithstanding any provision

contained in any other policy document, for

the 1995 through 1998 crop years, coverage

will be equal to fifty percent (50%) of your

approved yield indemnified at sixty percent

(60%) of the expected market price, or a

comparable coverage as established by FCIC.

(b) Notwithstanding any provision

contained in any other policy document, for

the 1999 and subsequent crop years, coverage

will be equal to fifty percent (50%) of your

approved yield indemnified at fifty-five

percent (55%) of the expected market price,

or a comparable coverage as established by

FCIC.

(c) If the crop policy utilizes dollar

coverage or other alternative methods of

coverage, we will convert the dollar coverage

or alternative coverage to the amount of

coverage that would be available at fifty

percent (50%) of your approved yield

indemnified at sixty percent (60%) of the

expected market price through 1998 and fifty

percent (50%) of your approved yield

indemnified at fifty-five percent (55%) of the

expected market price for subsequent years.

(d) You may elect catastrophic coverage, on

a commodity-by-commodity basis, on either

an individual yield and loss basis, or an area

yield and loss basis, if both options are

offered in the Actuarial Table or Special

Provisions.

5. Annual Premium and Administrative Fees

(a) Notwithstanding any provision

contained in any other policy document, you

will not be responsible to pay a premium, nor

will the policy be terminated because the

premium has not been paid. FCIC will pay

a premium subsidy equal to the premium

established for the coverage provided under

this Endorsement.

(b) In return for catastrophic risk

protection, you must pay an administrative

fee of $50 per crop per county as follows:

(1) Each type or variety specified in

subsections 6.(a) and (b), and crop acreage

specified in subsection 6.(c) will be a

separate insured crop to which separate

administrative fees apply; and

(2) Total administrative fees for all crops

insured under any combination of

catastrophic coverage and limited coverage

will not exceed two hundred dollars ($200)

per county and six hundred dollars ($600) for

all counties in which you have crops insured.

(c) Administrative fees for catastrophic

coverage:

(1) Must be paid to the insurance provider

at the time of application (the fee will not be

refunded if you file a zero acreage report the

crop year for which the application is

accepted);

(2) Must be paid annually by the acreage

reporting date for the applicable crop for any

subsequent crop years that crop insurance is

in effect (the fee will not be required if you

file a bona fide zero acreage report on or

before the acreage reporting date); and

(3) Will be waived for a limited resource

farmer (see subsection 1.(l)).

(d) The administrative fee will be refunded

if, after applying for catastrophic risk

protection and paying the administrative fee,

you elect to purchase additional coverage for

such crop in the same county on or before

the sales closing date. Administrative fees

will be refunded only if you have not

purchased catastrophic risk protection and

limited coverage in excess of the maximum

administrative fee to be paid in the

applicable situation.

(e) If the administrative fee is not paid at

the time of application, or by the acreage

reporting date, whichever is applicable, the

crop insurance contract will not be in effect

for the crop year for which the fee is due and

will terminate, and you will not be eligible

for certain USDA programs as set out in

section 11.

6. Insured Crop

The crop insured is specified in the

applicable crop policy documents except as

indicated in (a), (b), and (c) below:

(a) You may elect to insure the crop by

type, as specified in the applicable policy

documents for Stonefruit, Texas Citrus,

Florida Citrus, Arizona-California Citrus,

Texas Citrus Trees, and Guaranteed Tobacco.

These individual crop types will be insured

as separate crops.

(b) You may elect to insure your grapes

grown in California by variety, as specified

in the Special Provisions. These individual

crop varieties will be insured as separate

crops.

(c) Notwithstanding any other policy

provision requiring insurance coverage on all

insurable acreage of the crop in the county,

if you purchase limited or additional

coverage for a crop, you may separately

insure acreage that has been designated as

high risk land by FCIC, provided that you

have executed a high risk land exclusion

option under that policy and obtained a

catastrophic risk protection policy with the

same approved insurance provider. If both

policies are in force, that acreage of the crop

covered under the limited or additional

coverage policy and the acreage covered

under the Catastrophic Risk Protection

Endorsement will be considered separate

crops.

7. Replanting Payment

Notwithstanding any provision contained

in any other crop insurance document, no

replant payment will be paid whether or not

replanting of the crop is required under the

policy.

8. Claim for Indemnity

(a) If two or more insured crop types,

varieties, or classes are insured within the

same unit, and multiple expected market

prices are applicable, the dollar amount of

insurance and the dollar amount of

production to be counted will be determined

separately for each type, variety, class, etc.,

that have separate expected market prices

and then added together to determine the

total liability for the unit.

(b) If you are eligible to receive an

indemnity under this Endorsement, and are

also eligible to receive benefits for the same

loss under any other USDA program, you

must elect the program from which you wish

to receive benefits. Only one payment or

program benefit will be allowed.

9. Concealment or Fraud

Notwithstanding any provision contained

in any other crop insurance document, your

policy may be voided on all crops, without

waiving any rights, including the right to

collect any amounts due:

(a) If at any time you conceal or

misrepresent any material fact or commit

fraud relating to this or any other contract

issued under the authority of the Federal

Crop Insurance Act with any insurance

provider; and

(b) The voidance will be effective as of the

beginning of the crop year with respect to

which such act or omission occurred. After

the policy has been voided, you must make

a new application to obtain catastrophic risk

protection coverage for subsequent crop

years.

10. Exclusion of Coverage

(a) Options or endorsements which provide

additional coverage and which are available

under any crop endorsement, crop provision

or crop policy offered by FCIC will not be

available under this Endorsement, except for

the Late Planting Agreement Option. Written

agreements are not available for any crop

insured under this Endorsement.

(b) Notwithstanding any provision

contained in any other crop insurance

document, hail and fire coverage and highrisk land may not be excluded for any crop

for which this Endorsement is in effect.

11. Eligibility for Other USDA Program

Benefits

(a) You must obtain at least the

catastrophic risk protection level of coverage

for each crop of economic significance in the

county in which you have an insurable share,

if insurance is available in the county for the

crop, to be eligible for:

(1) Price support and production

adjustment programs including, but not

limited to, those for tobacco, rice, extra long
Federal Register / Vol. 60, No. 4 / Friday, January 6, 1995 / Rules and Regulations 2005

staple cotton, upland cotton, feed grains,

wheat, peanuts, oilseeds, and sugar;

(2) Loans or any other USDA provided

farm credit including guaranteed and direct

farm ownership loans, operating loans, and

emergency loans under the Consolidated

Farm and Rural Development Act; and

(3) The Conservation Reserve Program.

(b) The requirement that you obtain

catastrophic risk protection will apply to all

new and amended applications, contracts

and loans obtained after October 13, 1994.

Done in Washington, D.C., on December

21, 1994

Suzette Dittrich,

Acting Manager, Federal Crop Insurance

Corporation.

[FR Doc. 95–356 Filed 1–3–95; 3:38 pm]

BILLING CODE 3410–08–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 94–NM–225–AD Amendment

39–9115; AD 95–01–04]

Airworthiness Directives; Boeing

Model 747–100 Series Airplanes

Equipped With Freighter Conversion

Modification Installed in Accordance

With Supplemental Type Certificate

(STC) SA2322SO

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule; request for

comments.

SUMMARY: This amendment adopts a

new airworthiness directive (AD) that is

applicable to certain Boeing Model 747–

100 series airplanes. This action

requires an inspection to detect

discrepancies of the lap joint in certain

fuselage stations, repair of any

discrepancies, and modification of a

certain lap joint. This amendment is

prompted by reports of holes in the lap

joints and longerons of these airplanes.

The actions specified in this AD are

intended to prevent reduced fatigue life

of the fuselage in the areas in which

holes are found.

DATES: Effective January 23, 1995.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of January 23,

1995.

Comments for inclusion in the Rules

Docket must be received on or before

March 7, 1995.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–103,

Attention: Rules Docket No. 94–NM–

225–AD, 1601 Lind Avenue, SW.,

Renton, Washington 98055–4056.

The service information referenced in

this AD may be obtained from GATX/

Airlog Company, Tulsa International

Airport, P.O. Box 582527, Tulsa,

Oklahoma 74158. This information may

be examined at the FAA, Transport

Airplane Directorate, 1601 Lind

Avenue, SW., Renton, Washington; or at

the Office of the Federal Register, 800

North Capitol Street, NW., suite 700,

Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Steven C. Fox, Aerospace Engineer,

Airframe Branch, ANM–120S, FAA,

Transport Airplane Directorate, Seattle

Aircraft Certification Office, 1601 Lind

Avenue, SW., Renton, Washington

98055–4056; telephone (206) 227–2777;

fax (206) 227–1181.

SUPPLEMENTARY INFORMATION: On July 3,

1990, the FAA issued AD 90–15–06,

amendment 39–6653 (55 FR 28600, July

12, 1990), applicable to certain Boeing

Model 747 series airplanes, to require

inspection to detect cracking and

corrosion of the skin lap joints in the

fuselage upper lobe, and repair, if

necessary. Recently, operators of Model

747–100 series airplanes have reported

finding ‘‘hidden’’ open fastener holes in

the middle row of the lap joint, as well

as misdrilled holes, elongated holes,

‘‘figure eight’’ holes, and short-edged

margins in the fastener holes of the

fuselage skin. Additionally, one

operator reported finding multiple open,

misdrilled, and ‘‘figure eight’’ fastener

holes in the structural longeron beneath

the lap joints. These holes were found

during inspections being performed in

accordance with AD 90–15–06. In each

case, these holes were found on Boeing

Model 747–100 series airplanes that had

been modified by GATX/Airlog

Company in accordance with

Supplemental Type Certificate (STC)

SA2322SO.

Fastener holes in the lap joint and

longeron of the fuselage, if not

corrected, could reduce the fatigue life

of the fuselage in the affected area.

GATX installed a main deck cargo

side door on these airplanes as part of

a conversion that reconfigured these

airplanes to freighters. The modification

includes installation of an external

doubler over portions of the lap joint of

the fuselage skin at stringer 4L between

fuselage stations 1660 and 2040. The

installation of the doubler makes it

impossible to perform the inspection

required by AD 90–15–06 without first

removing the doubler to perform the

inspection. The modification also

entails removal of the original lap joint

hat section stringer and replacement

with a ‘‘T’’ section longeron. This

longeron was designed to carry body

bending loads around the door

structure.

The FAA has reviewed and approved

GATX/Airlog Service Bulletin 94–MG–

1000–009, dated May 4, 1994, which

describes procedures for modification of

the longitudinal lap joint in the upper

body skin of stringer 4L, at fuselage

station (FS) 1689.5 to FS 1741.1, and FS

1961.1 to FS 2010.5. This modification

entails removal of two sections of the

lap joints in stringer 4L. These lap joints

currently are hidden by the

modification that was accomplished in

accordance with STC SA2322SO.

Removal of these sections of the lap

joint also constitutes terminating action

for the inspections required by AD 90–

15–06 for the lap joint section that was

removed.

Since an unsafe condition has been

identified that is likely to exist or

develop on other airplanes of the same

type design, this AD is being issued to

prevent reduced fatigue life of the

fuselage in the area in which holes are

found. This AD requires a one-time

detailed close visual inspection of the

lap joint of stringer 4L from fuselage

stations 1660 to 2040 to detect

discrepancies (such as corrosion,

cracking, open holes, misdrilled holes,

and any freeze plugs in the fuselage skin

and internal stringer or longerons). Any

discrepancy detected must be repaired

in accordance with a method approved

by the FAA. Additionally, this AD

requires that operators submit a report

of their findings, positive or negative, to

the FAA.

This AD also requires modification of

the longitudinal lap joint in the upper

body skin of stringer 4L at FS 1689.5 to

FS 1741.1, and FS 1961.1 to FS 2010.5.

The modification is required to be

accomplished in accordance with the

service bulletin described previously.

Accomplishment of this modification

terminates the inspections required by

AD 90–15–06 at this location only.

As a result of recent communications

with the Air Transport Association

(ATA) of America, the FAA has learned

that, in general, some operators may

misunderstand the legal effect of AD’s

on airplanes that are identified in the

applicability provision of the AD, but

that have been altered or repaired in the

area addressed by the AD. The FAA

points out that all airplanes identified in

the applicability provision of an AD are

legally subject to the AD. If an airplane

has been altered or repaired in the

affected area in such a way as to affect

compliance with the AD, the owner or

operator is required to obtain FAA

approval for an alternative method of