Common Crop Insurance Regulations, Texas Citrus Tree Crop Insurance Provisions; and Texas Citrus Tree Endorsement

SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes

specific crop provisions for the insurance of Texas citrus trees. The

provisions will be used in conjunction with the Common Crop Insurance

Policy Basic Provisions, which contain standard terms and conditions

common to most crops. The intended effect of this action is to provide

policy changes to better meet the needs of the insured, include the

current Texas citrus tree endorsement with the Common Crop Insurance

Policy for ease of use and consistency of terms, and to restrict the

effect of the current Texas citrus tree endorsement to the 1997 and

prior crop years.

EFFECTIVE DATE: January 29, 1997.

FOR FURTHER INFORMATION CONTACT: Louise Narber, Program Analyst,

Research and Development, Product Development Division, Federal Crop

Insurance Corporation, United States Department of Agriculture, 9435

Holmes Road, Kansas City, MO 64131, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

This action has been reviewed under United States Department of

Agriculture (USDA) procedures established by Executive Order No. 12866.

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 August 3, 2002.

This rule has been determined to be exempt for the purposes of

Executive Order No. 12866 and, therefore, has not been reviewed by the

Office of Management and Budget (OMB).

Paperwork Reduction Act of 1995

Following publication of the proposed rule, the public was afforded

60 days to submit comments, data, and opinions on information

collection requirements previously approved by OMB under OMB control

number 056-0003 through September 30, 1998. No public comments were

received.

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) of

State, local, and tribal governments or the private sector. Thus, this

rule is not subject to the requirements of sections 202 and 205 of the

UMRA.

Executive Order No. 12612

It has been determined under section 6(a) of Executive Order No.

12612, Federalism, that this rule does not have sufficient federalism

implications to warrant the preparation of a Federalism Assessment. The

provisions contained in this rule will not have a substantial direct

effect on States or their political subdivisions, or on the

distribution of power and responsibilities among various levels of

government.

Regulatory Flexibility Act

This regulation will not have a significant 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, all producers are required to complete an

application and acreage report. If the trees are damaged or destroyed,

insureds are 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 delivering and servicing these policies will not increase

significantly from the amount of work currently required. This rule

does not have any greater or lesser impact on the producer. 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 No. 12372

This program is not subject to the provisions of Executive Order

No. 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 No. 12778

The Office of the General Counsel has determined that these

regulations meet the applicable standards provided in sections 2(a) and

2(b)(2) of Executive Order No. 12778. The provisions of this rule will

not have a retroactive effect prior to the effective date. The

provisions of this rule will preempt State and local laws to the extent

such State and local laws are inconsistent herewith. The administrative

appeal provisions published at 7 CFR part 11 must be exhausted before

any action for judicial review may be brought.

Environmental Evaluation

This action is not expected to have a significant impact on the

quality of the human environment, health, and safety. Therefore,

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review Initiative to eliminate unnecessary or duplicative

regulations and improve those that remain in force.

Background

On Thursday, August 29, 1996, FCIC published a proposed rule in the

[[Page 4116]]

Federal Register at 61 FR 45369-45373 to add to the Common Crop

Insurance Regulations (7 CFR part 457), a new section, 7 CFR

Sec. 457.106 Texas Citrus Tree Crop Insurance Provisions. The new

provisions will be effective for the 1998 and succeeding crop years.

These provisions will replace and supercede the current provisions for

insuring Texas citrus trees found at 7 CFR Sec. 401.134 (Texas Citrus

Tree Endorsement). FCIC also amends 7 CFR 401.134 to limit its effect

to the 1997 and prior crop years. FCIC will later publish a regulation

to remove and reserve Sec. 401.134.

Following publication of the proposed rule, the public was afforded

60 days to submit written comments, data, and opinions. A total of 20

comments were received from the crop insurance industry and FCIC. The

comments received and FCIC's responses are as follows:

Comment: A representative of FCIC suggested that the word ``type''

be changed to ``crop'' throughout the provisions where appropriate

since the citrus type designations used in the past will be replaced

with individual crop codes beginning with the 1998 crop year.

Response: FCIC agrees and has made this change and has also deleted

the definition of type.

Comment: The crop insurance industry suggested that the definition

of ``deductible'' be defined in the Basic Provisions rather than the

crop provisions.

Response: ``Deductible'' must be defined in the crop provisions

until the Basic Provisions are revised. No change has been made to the

provisions.

Comment: The crop insurance industry questioned the definition of

``dehorning.'' They stated that the definition previously was ``The

cutting back of each scaffold limb * * *''; the proposed rule stated

``* * * one or more scaffold limbs * * *.'' This affects the amount of

insurance per acre. The commenters questioned if the intent was to

limit the amount of insurance per acre to 33 percent for any tree with

only one scaffold limb dehorned.

Response: FCIC agrees that the definition of ``dehorning'' as

published in the proposed rule is confusing. The definition has been

revised to read ``Cutting all scaffold limbs to a length not longer

than \1/4\ the height of the tree before such cutting.''

Comment: The crop insurance industry recommended that the

definition of ``irrigated practice'' should also address the quality of

the water being applied.

Response: FCIC disagrees. There are no established criteria

regarding the quality of water necessary to produce a crop. Such

criteria would be difficult to develop and administer due to the

complexity of the factors involved. No change has been made in the

definition.

Comment: The crop insurance industry suggested defining ``root

stock.''

Response: FCIC agrees and has added a definition of ``root stock.''

Comment: The crop insurance industry stated that section 2(f) needs

to be revised to say ``Each optional unit must meet one of the

following criteria, as applicable * * *'' instead of ``* * * one or

more of the following * * *'' so that the policyholder may choose to

have optional units either by non-contiguous land or by legal

description but not by both.

Response: FCIC agrees and has made the recommended change. Also,

the phrase ``In lieu of establishing optional units by section, section

equivalent or FSA Farm Serial Number,'' has been deleted from section

2(f)(2) for clarification.

Comment: The crop insurance industry questioned if there should be

some reference to type in section 3(b) in regard to amount of insurance

for each population density.

Response: FCIC agrees that the per acre amount of insurance for

each variety or population density within a crop must bear the same

relationship to the maximum amount of insurance available for each

variety and population density of the crop as specified in the

Actuarial Table. This change has been made.

Comment: The crop insurance industry suggested clarifying section

3(b)(4) by adding the phrase ``the premium and'' before the phrase

``any indemnity will be based is $1,700 ($2,000 multiplied by 0.85).''

Response: FCIC agrees and has made the recommended change.

Comment: The crop insurance industry suggested changing ``and'' to

``or'' in section 7(b)(1) because items 1 and 2 are two separate

conditions.

Response: FCIC agrees and has made the change.

Comment: The crop insurance industry questioned whether there were

any guidelines to exclude or limit coverage on any acreage that was not

insured the previous year.

Response: The M8-Texas Citrus Tree Handbook contains provisions for

excluding or limiting the amount of insurance on Texas citrus trees.

Comment: The crop insurance industry stated that since the term

``excess moisture'' is not defined in the provisions whereas the term

``excess precipitation'' was defined in the existing regulation, they

assumed that excess moisture would be determined on a case by case

basis.

Response: ``Excess moisture'' was an insurable cause of loss in the

Texas Citrus Tree Endorsement published in 7 CFR Sec. 401.134 for the

1989 and subsequent crop years and in the proposed rule for these crop

provisions. However, the term was not defined. The term is changed to

``excess precipitation'' and is defined as ``An amount of precipitation

sufficient to directly damage the tree.''

Comment: The crop insurance industry stated that the covered peril

of ``failure of the irrigation water supply'' basically has been

eliminated and they questioned if this was the intent and, if so, if

the premium would be adjusted accordingly.

Response: It was not the intent to eliminate the covered peril of

``failure of the irrigation water supply'' due to drought. This

provision has been revised consistent with the Texas Citrus Fruit Crop

Insurance Provisions. It now reads ``Failure of the irrigation water

supply if caused by an insured peril or drought that occurs during the

insurance period.''

Comment: The crop insurance industry suggested deleting the word

``actual'' in section 12(a)(1) because sections 12(b)(2) and 12(c) may

adjust the actual percentages.

Response: FCIC believes that the provisions are clearly stated. No

changes have been made.

Comment: The crop insurance industry stated that the existing

provisions established the condition that any grove sustaining more

than 80 percent actual damage would be considered 100 percent damaged,

but the proposed rule establishes this condition on an individual tree

basis. If this is an intended change it must be identified as such.

Response: When appraising damage, a sample of trees is selected.

Damage to individual scaffold limbs on each tree is assessed to

establish the percent of damage for the unit. FCIC has not changed the

procedure. These crop provisions have been revised to more accurately

identify the process with the addition of the following sentence: ``If

this percent of damage is more that 80 percent, the unit will be

considered 100 percent damaged.''

Comment: The crop insurance industry questioned whether a tree that

has 85 percent actual damage is considered to be 100 percent damaged.

They wondered which figure is used

[[Page 4117]]

when calculating the average percentage of damage for the unit.

Response: Any tree that sustains more than 80 percent damage

following the year of set out will be considered 100 percent damaged.

The percent of damage on the unit will be determined by computing the

average of the determinations made for the individual trees within each

sample, thus any tree with over 80 percent of damage will be regarded

as having 100 percent of damage. If the total samples have an average

of more than 80 percent damage, the damage will be determined to be 100

percent for the unit.

Comment: The crop insurance industry stated that they believe the

written agreement should be continuous if no substantive changes occur

from one year to the next.

Response: Written agreements are, by design, temporary and intended

to address unusual circumstances. If the conditions for which a written

agreement is needed exists each crop year, the policy or Special

Provisions should be amended to reflect this condition. Therefore, no

change will be made to the provisions.

Comment: The crop insurance industry suggested combining the

provisions contained in section 13(e) with the provisions in section

13(a).

Response: FCIC believes that the current provisions are clearly

stated and has not opted to combine them.

Comment: The crop insurance industry suggested addressing the

extended insurance period for the 1998 crop year in the 1998 Special

Provisions or an amendatory endorsement, instead of 3 references in

these crop provisions.

Response: The policy itself is the best place to notify the insured

of the insurance period to avoid any confusion. FCIC believes that

these provisions are clearly stated and the provisions have not been

changed.

In addition to the changes described above, FCIC has made the

following minor editorial changes to the Texas Citrus Tree Provisions:

1. Section 1--Added a definition for ``crop'' and amended the

definitions of ``crop year,'' ``deductible,'' ``destroyed,'' ``excess

wind,'' ``FSA,'' ``good farming practices,'' ``interplanted,'' and

``written agreement'' for clarification.

2. Section 9--Revised the provisions to allow all insureds to

obtain coverage for the extended 1998 crop year. Previously new

insureds would not have had an opportunity to insure their crop from

June 1 through November 20, which may have resulted in some losses paid

under the crop insurance policy and others under the noninsured crop

disaster assistance program.

3. Section 12--Clarified how an indemnity is computed by adding a

statement to specify that the result of subtracting the insured's

deductible from the percent of damage for the unit must be greater than

zero to receive an indemnity. Deleted the provision specifying that any

percent of damage paid previously in the same crop year be subtracted.

These provisions do not allow an initial payment prior to the final

indemnity.

Good cause is shown to make this rule effective upon publication in

the Federal Register and without the 30-day period required by the

Administrative Procedure Act. This rule improves the Texas citrus tree

insurance coverage and brings it under the Common Crop Insurance Policy

Basic Provisions for consistency among policies. This rule will allow

optional unit division by section, section equivalent, or FSA Farm

Serial Number; or by non-contiguous land, but not by both. The unit

structure will now be the same for both the Texas Citrus Tree

Provisions and the Texas Citrus Fruit Provisions.

List of Subjects in 7 CFR Parts 401 and 457

Crop insurance, Texas citrus tree, Texas citrus tree endorsement.

Final Rule

Accordingly, for the reasons set forth in the preamble, the Federal

Crop Insurance Corporation hereby amends 7 CFR parts 401 and 457 as

follows:

PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE

1988 AND SUBSEQUENT CONTRACT YEARS

1. The authority citation for 7 CFR part 401 continues to read as

follows:

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

2. The introductory text of Sec. 401.134 is revised to read as

follows:

Sec. 401.134 Texas Citrus Tree Endorsement.

The provisions of the Texas Citrus Tree Endorsement for the 1989

through 1997 crop years are as follows:

* * * * *

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE

1994 AND SUBSEQUENT CONTRACT YEARS

3. The authority citation for 7 CFR part 457 continues to read as

follows:

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

4. 7 CFR part 457 is amended by adding a new Sec. 457.106 to read

as follows:

Sec. 457.106 Texas Citrus Tree Crop Insurance Provisions.

The Texas Citrus Tree Crop Insurance Provisions for the 1998 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:

Texas Citrus Tree Crop Provisions

If a conflict exists among the Basic Provisions (Sec. 457.8),

these crop provisions, and the Special Provisions; the Special

Provisions will control these crop provisions and the Basic

Provisions; and these crop provisions will control the Basic

Provisions.

1. Definitions

Bud union--The location on the tree trunk where a bud from one

tree variety is grafted onto root stock of another variety.

Crop--Specific groups of citrus fruit trees as listed in the

Special Provisions.

Crop year--For the 1998 crop year only, a period of time that

begins on June 1, 1997, and ends on November 20, 1998. For all other

crop years, a period of time that begins on November 21 of the

calendar year prior to the year the trees normally bloom, and ends

on November 20 of the following calendar year. The crop year is

designated by the year in which the insurance period ends.

Days--Calendar days.

Deductible--The amount determined by subtracting the coverage

level percentage you choose from 100 percent. For example, if you

elected a 65 percent coverage level, your deductible would be 35

percent (100%-65% = 35%).

Dehorning--Cutting all scaffold limbs to a length not longer

than \1/4\ the height of the tree before such cutting.

Destroyed--Trees damaged to the extent that removal is

necessary.

Excess precipitation--An amount of precipitation sufficient to

directly damage the tree.

Excess wind--A natural movement of air that has sustained speeds

in excess of 58 miles per hour recorded at the U.S. Weather Service

reporting station nearest to the crop at the time of crop damage.

Freeze--The formation of ice in the cells of the trees caused by

low air temperatures.

FSA--The Farm Service Agency, an agency of the United States

Department of Agriculture or a successor agency.

Good farming practices--The cultural practices generally in use

in the county for the trees to have normal growth and vigor and

recognized by the Cooperative State Research, Education, and

Extension Service as compatible with agronomic and weather

conditions in the county.

Interplanted--Acreage on which two or more crops are planted in

any form of alternating or mixed pattern.

Irrigated practice--A method by which the normal growth and

vigor of the insured trees is maintained by artificially applying

adequate quantities of water during the

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growing season using the appropriate irrigation systems at the

proper times.

Non-contiguous land--Any two or more tracts of land whose

boundaries do not touch at any point, except that land separated

only by a public or private right-of-way, waterway, or an irrigation

canal will be considered as contiguous.

Root stock--A root or a piece of a root of one tree variety onto

which a bud from another tree variety is grafted.

Scaffold limbs--Major limbs attached directly to the trunk.

Set out--Transplanting the tree into the grove.

Written agreement--A written document that alters designated

terms of this policy in accordance with section 13.

2. Unit Division

(a) A unit as defined in section 1 (Definitions) of the Basic

Provisions (Sec. 457.8), will be divided into additional basic units

by each citrus crop designated in the Special Provisions.

(b) Unless limited by the Special Provisions, these basic units

may be divided into optional units if, for each optional unit, you

meet all the conditions of this section or if a written agreement to

such division exists.

(c) Basic units may not be divided into optional units on any

basis including, but not limited to, production practice, type, and

variety, other than as described in this section.

(d) If you do not comply fully with these provisions, we will

combine all optional units that are not in compliance with these

provisions into the basic unit from which they were formed. We will

combine the optional units at any time we discover that you have

failed to comply with these provisions. If failure to comply with

these provisions is determined to be inadvertent, and the optional

units are combined into a basic unit, that portion of the additional

premium paid for optional units that have been combined will be

refunded to you for the units combined.

(e) All optional units you selected for the crop year must be

identified on the acreage report for that crop year.

(f) Each optional unit must meet one of the following criteria,

as applicable:

(1) Optional Units by Section, Section Equivalent, or FSA Farm

Serial Number: Optional units may be established if each optional

unit is located in a separate legally identified section. In the

absence of sections, we may consider parcels of land legally

identified by other methods of measure including, but not limited to

Spanish grants, railroad surveys, leagues, labors, or Virginia

Military Lands, as the equivalent of sections for unit purposes. In

areas that have not been surveyed using the systems identified

above, or another system approved by us, or in areas where such

systems exist but boundaries are not readily discernible, each

optional unit must be located in a separate farm identified by a

single FSA Farm Serial Number; or

(2) Optional Units on Acreage Located on Non-Contiguous Land:

Optional units may be established if each optional unit is located

on non-contiguous land.

3. Insurance Guarantees, Coverage Levels, and Prices for Determining

Indemnities

(a) In lieu of the requirement of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8), that prohibits you from

selecting more than one coverage level for each insured crop, you

may select a different coverage level for each crop designated in

the Special Provisions that you elect to insure.

(b) In addition to the requirements of section 3 (Insurance

Guarantees, Coverage Levels, and Prices for Determining Indemnities)

of the Basic Provisions (Sec. 457.8):

(1) If you insure trees within a crop which are either of a

different variety or are planted at a different population density,

the per acre amount of insurance for each variety or population

density for the crop must bear the same relationship to the maximum

amount of insurance available for each variety and population

density of the crop as specified in the Actuarial Table. For

example, if you elect 100 percent of the maximum amount of insurance

for a variety within a population density for the crop, you must

select 100 percent of the maximum amount of insurance for that

variety for all population densities for the crop. The amount of

insurance for each variety and population density must be multiplied

by any applicable factor contained in section 3(b)(2).

(2) The amount of insurance per acre will be the product

obtained by multiplying the reference maximum dollar amount of

insurance that is shown in the Actuarial Table for the applicable

population density by the percentage for the level of coverage you

select and by:

(i) Thirty-three percent (0.33) for the year of set out, the

year following dehorning, or the year following grafting of a set

out tree. (Insurance will be limited to this amount until trees that

are set out are one year of age or older on the first day of the

crop year);

(ii) Sixty percent (0.60) for the first growing season after

being set out, the second year following dehorning, or the second

year following grafting of a set out tree;

(iii) Eighty percent (0.80) for the second growing season after

being set out, the third year following dehorning, or the third year

following grafting of a set out tree; or

(iv) Ninety percent (0.90) for the third growing season after

being set out, the fourth year following dehorning, or the fourth

year following grafting of a set out tree.

(3) The amount of insurance per acre for each population

density, or factor as appropriate, will be multiplied by the

applicable number of insured acres. These results will then be added

together to determine the amount of insurance for the unit.

(4) The amount of insurance will be reduced proportionately for

any unit on which the stand is less than 90 percent, based on the

original planting pattern. For example, if the amount of insurance

you selected is $2,000 and the remaining stand is 85 percent of the

original stand, the amount of insurance on which the premium and any

indemnity will be based is $1,700 ($2,000 multiplied by 0.85).

(5) If any insurable acreage of trees is set out after the first

day of the crop year, and you elect to insure such acreage during

that crop year, you must report the acreage, practice, crop, number

of trees, date set out is completed, and your share to us within 72

hours after set out is completed for the unit.

(6) Production reporting requirements contained in section 3

(Insurance Guarantees, Coverage Levels, and Prices for Determining

Indemnities) of the Basic Provisions (Sec. 457.8), are not

applicable.

(7) You must report, by the sales closing date contained in the

Special Provisions, by type if applicable:

(i) Any damage, removal of trees, change in practices, or any

other circumstance that may reduce the amount of insurance, and the

number of affected acres;

(ii) The number of trees on insurable and uninsurable acreage;

(iii) The date of original set out and the planting pattern;

(iv) The date of replacement or dehorning, if more than 10

percent of the trees on any unit have been replaced or dehorned in

the previous 5 years; and

(v) For the first year of insurance for acreage interplanted

with another perennial crop, and anytime the planting pattern of

such acreage is changed:

(A) The age of the interplanted crop, and type if applicable;

(B) The planting pattern; and

(C) Any other information that we request in order to establish

your amount of insurance.

We will reduce the amount of insurance as necessary, based on

our estimate of the effect of interplanting a perennial crop;

removal of trees; damage; change in practices and any other

circumstance on the potential of the insured crop. If you fail to

notify us of any circumstance that may reduce the potential for the

insured crop, we will reduce your amount of insurance as necessary

at any time we become aware of the circumstance.

4. Contract Changes

In accordance with section 4 (Contract Changes) of the Basic

Provisions (Sec. 457.8), the contract change date is August 31

preceding the cancellation date.

5. Cancellation and Termination Dates

In accordance with section 2 (Life of Policy, Cancellation, and

Termination) of the Basic Provisions (Sec. 457.8), the cancellation

and termination dates are November 20.

6. Annual Premium

In addition to the provisions of section 5 (Annual Premium) of

the Basic Provisions (Sec. 457.8), for the 1998 crop year, the

premium amount otherwise payable for the 1998 crop year will be

increased by 46 percent as a result of the additional six months of

coverage for that crop year.

7. Insured Crop

(a) In accordance with section 8 (Insured Crop) of the Basic

Provisions (Sec. 457.8), the crop insured will be all of each citrus

tree crop designated in the Special Provisions in the county for

which a premium rate is provided by the actuarial table that you

elect to insure:

(1) In which you have an ownership share;

(2) That is adapted to the area;

[[Page 4119]]

(3) That is set out for the purpose of growing fruit to be

harvested for the commercial production of fresh fruit or for juice;

(4) That is irrigated; and

(5) That have the potential to produce at least 70 percent of

the county average yield for the crop and age, unless a written

agreement is approved to insure the trees with lesser potential.

(b) In addition to section 8 (Insured Crop) of the Basic

Provisions (Sec. 457.8), we do not insure any citrus trees:

(1) During the crop year the application for insurance is filed,

unless we inspect the acreage and consider it acceptable; or

(2) That have been grafted onto existing root stock or nursery

stock within the one-year period prior to the date insurance

attaches.

(c) We may exclude from insurance or limit the amount of

insurance on any acreage that was not insured the previous year.

8. Insurable Acreage

In lieu of the provisions in section 9 (Insurable Acreage) of

the Basic Provisions (Sec. 457.8), that prohibit insurance attaching

to a crop planted with another crop, citrus trees interplanted with

another perennial crop are insurable, unless we inspect the acreage

and determine that it does not meet the requirements contained in

your policy.

9. Insurance Period

In lieu of the provisions of section 11 (Insurance Period) of

the Basic Provisions (Sec. 457.8):

(a) The insurance period is as follows:

(1) For the 1998 crop year only, coverage will begin on June 1,

1997, and will end on November 20, 1998.

(2) For all subsequent crop years, coverage begins on November

21 of the calendar year prior to the year the insured crop normally

blooms, except that for the year of application, if your application

is received after November 11 but prior to November 21, insurance

will attach on the 10th day after your properly completed

application is received in our local office, unless we inspect the

acreage during the 10 day period and determine that it does not meet

the requirements for insurability contained in your policy. You must

provide any information that we require for the crop or to determine

the condition of the grove.

(3) The calendar date for the end of the insurance period for

each crop year is November 20.

(b) If you acquire an insurable share in any insurable acreage

after coverage begins but on or before the acreage reporting date

for the crop year, and after an inspection we consider the acreage

acceptable, insurance will be considered to have attached to such

acreage on the calendar date for the beginning of the insurance

period.

(c) If you relinquish your insurable share on any insurable

acreage of citrus trees on or before the acreage reporting date for

the crop year, insurance will not be considered to have attached to

and no premium or indemnity will be due for such acreage for that

crop year unless:

(1) A transfer of coverage and right to an indemnity, or a

similar form approved by us, is completed by all affected parties;

(2) We are notified by you or the transferee in writing of such

transfer on or before the acreage reporting date; and

(3) The transferee is eligible for crop insurance.

10. Causes of Loss

In accordance with the provisions of section 12 (Causes of Loss)

of the Basic Provisions (Sec. 457.8), insurance is provided only

against the following causes of loss that occur within the insurance

period:

(a) Excess precipitation;

(b) Excess wind;

(c) Fire, unless weeds and other forms of undergrowth have not

been controlled or pruning debris has not been removed from the

grove;

(d) Freeze;

(e) Hail;

(f) Tornado; or

(g) Failure of the irrigation water supply if caused by an

insured peril or drought that occurs during the insurance period.

11. Duties In The Event of Damage or Loss

In addition to the requirements of section 14 (Duties in the

Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), in

case of damage or probable loss, if you intend to claim an indemnity

on any unit, you must allow us to inspect all insured acreage before

pruning, dehorning, or removal of any damaged trees.

12. Settlement of Claim

(a) In the event of damage covered by this policy, we will

settle your claim on a unit basis by:

(1) Determining the actual percent of damage for the unit in

accordance with sections 12 (b), (c), and (d);

(2) Subtracting your deductible from the percent of damage for

the unit (this result must be greater than zero to receive an

indemnity);

(3) Dividing the result of section 12(a)(2) by your coverage

level percentage;

(4) Multiplying the result of section 12(a)(3) by the amount of

insurance per acre determined in accordance with section 3(b)(2);

(5) Multiplying the result of section 12(a)(4) by the number of

insured acres; and

(6) Multiplying the result of section 12(a)(5) by your share.

(b) The percent of damage for any tree will be determined as

follows:

(1) For damage occurring during the year of set out (trees that

have not been set out for at least one year at the time insurance

attaches):

(i) One-hundred percent (100%) whenever there is no live wood

above the bud union;

(ii) Ninety percent (90%) whenever there is less than 12 inches

of live wood above the bud union; or

(iii) The tree will be considered undamaged whenever there is

more than 12 inches of live wood above the bud union; or

(2) For damage occurring in any year following the year of set

out:

(i) The percentage of damage will be determined by dividing the

number of scaffold limbs damaged in an area from the trunk to a

length equal to one-fourth (\1/4\) the height of the tree, by the

total number of scaffold limbs before damage occurred. Whenever this

percentage exceeds 80 percent, the tree will be considered as 100

percent damaged.

(ii) The percent of damage for the unit will be determined by

computing the average of the determinations made for the individual

trees. If this percent of damage exceeds 80 percent, the unit will

be considered 100 percent damaged.

(c) The percent of damage on the unit will be reduced by the

percentage of damage due to uninsured causes.

13. Written Agreement

Designated terms of this policy may be altered by written

agreement in accordance with the following:

(a) You must apply in writing for each written agreement no

later than the sales closing date, except as provided in section

13(e);

(b) The application for a written agreement must contain all

variable terms of the contract between you and us that will be in

effect if the written agreement is not approved;

(c) If approved, the written agreement will include all variable

terms of the contract, including, but not limited to, crop type or

variety, the guarantee, premium rate, and price election;

(d) Each written agreement will only be valid for one year (If

the written agreement is not specifically renewed the following

year, insurance coverage for subsequent crop years will be in

accordance with the printed policy); and

(e) An application for a written agreement submitted after the

sales closing date may be approved if, after a physical inspection

of the acreage, it is determined that no loss has occurred and the

crop is insurable in accordance with the policy and written

agreement provisions.

Signed in Washington, D.C., on January 22, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

[FR Doc. 97-2040 Filed 1-28-97; 8:45 am]

BILLING CODE 3410-FA-P