Nursery Crop Insurance Regulations; Common Crop Insurance Regulations; and Nursery Crop Insurance Provisions

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

[[Page 4401]]

(7 CFR part 406) and revise and reissue the Common Crop Insurance

Regulations (7 CFR part 457), effective for the 1999 and succeeding

crop years, to read as follows:

PART 406--NURSERY CROP INSURANCE REGULATIONS FOR THE 1989 THROUGH

THE 1995 CROP YEARS

1. The authority citation for 7 CFR part 406 is revised to read as

follows:

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

2. The part heading is revised to read as set forth above.

3. The subpart heading ``Subpart--Regulations for the 1989 and

succeeding crop years'' is removed.

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

1994 AND SUBSEQUENT CONTRACT YEARS

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

follows:

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

4a. The part heading is revised as set forth above.

5. Section 457.114 is revised to read as follows:

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