Common Crop Insurance Regulations; Florida Citrus Fruit Crop Insurance Provisions, 60439-60444 [E6-16635]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 71, Number 198 (Friday, October 13, 2006)]
[Proposed Rules]
[Pages 60439-60444]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-16635]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 71, No. 198 / Friday, October 13, 2006 / 
Proposed Rules

[[Page 60439]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC01


Common Crop Insurance Regulations; Florida Citrus Fruit Crop 
Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
replace the provisions currently found at 7 CFR 457.107 with a new 
Florida Citrus Fruit Crop Insurance Provisions. The intended effect of 
this action is to provide policy changes, and clarify existing policy 
provisions to better meet the needs of insureds and to restrict the 
effect of the current Florida Citrus Fruit Crop Insurance Provisions to 
the 2007 and prior crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business November 27, 2006 and will be 
considered when the rule is to be made final.

ADDRESSES: Interested persons are invited to submit comments, titled 
``Florida Citrus Fruit Crop Insurance Provisions'', by any of the 
following methods:
     By Mail to: Director, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, 6501 Beacon Drive, Stop 0812, Room 421, Kansas City, MO 
64133-4676.
     E-mail: DirectorPDD@rma.usda.gov.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
    A copy of each response will be available for public inspection 
from 7 a.m. to 4:30 p.m., c.s.t. Monday through Friday except holidays 
at the above address.

FOR FURTHER INFORMATION CONTACT: William Klein, Risk Management 
Specialist, Product Management, Product Administration and Standards 
Division, Risk Management Agency, at the Kansas City, MO, address 
listed above, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule is not significant for the purpose of Executive Order 12866 and, 
therefore, it has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Pursuant to the provisions of the Paperwork Reduction Act of 1995 
(44 U.S.C. chapter 35), the collections of information in this rule 
have been previously approved by OMB under control number 0563-0053 
through November 30, 2007.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
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 UMRA.

Executive Order 13132

    It has been determined under section 1(a) of Executive Order 13132, 
Federalism, that this rule does not have sufficient implications to 
warrant consultation with the States. The provisions contained in this 
rule will not have a substantial direct effect on States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.

Regulatory Flexibility Act

    FCIC certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. Program 
requirements for the Federal crop insurance program are the same for 
all producers regardless of the size of their farming operation. For 
instance, all producers are required to submit an application and 
acreage report to establish their insurance guarantees, and compute 
premium amounts, and all producers are required to submit a notice of 
loss and production information to determine an indemnity payment in 
the event of an insured cause of crop loss. Whether a producer has 10 
acres or 1000 acres, there is no difference in the kind of information 
collected. To ensure crop insurance is available to small entities, the 
Federal Crop Insurance Act authorizes FCIC to waive collection of 
administrative fees from limited resource farmers. FCIC believes this 
waiver helps to ensure small entities are given the same opportunities 
to manage their risks through the use of crop insurance. A Regulatory 
Flexibility Analysis has not been prepared since this regulation does 
not have an impact on small entities and therefore, this regulation is 
exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 
605).

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 proposed 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. With respect to any direct action taken by FCIC 
or to require the insurance provider to take specific action under the 
terms of the

[[Page 60440]]

crop insurance policy, the administrative appeal provisions published 
at 7 CFR part 11 or 7 CFR part 400, subpart J for the informal 
administrative review process of good farming practices as applicable, 
must be exhausted before any action against FCIC may be brought.

Environmental Evaluation

    This action is not expected to have a significant economic impact 
on the quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR 
part 457) by revising 7 CFR 457.107 (Florida Citrus Fruit Crop 
Insurance Provisions) to clarify existing policy provisions and to 
improve the program for producers by making the program dates 
consistent with the Nursery Crop Provisions; adding ``other diseases, 
if specified in the Special Provisions,'' as a cause of loss; and 
making other policy modifications to better meet the needs of insureds. 
The proposed changes are as follows:
    1. Section 1--Definitions--FCIC is proposing to revise the 
definition ``amount of insurance (per acre)'' to clarify that the 
Reference Maximum Dollar Amount of Insurance shown on the actuarial 
documents is specified by fruit type and age of trees. Different citrus 
fruit types have different values and the age of the fruit tree has an 
impact on its ability to produce the fruit. The different amounts of 
insurance reflect the different values for insurable fruit. FCIC is 
proposing to revise the definition of ``box'' to allow FCIC to make the 
determination if the situation ever arises where the information is not 
contained in the State of Florida Citrus Fruit Laws. FCIC is also 
proposing to revise the definition ``citrus fruit type'' to ``citrus 
fruit crop,'' and redesignated the crops from ``Type'' to ``Citrus.'' A 
term ``Citrus Fruit Crop Type (Fruit Type)'' is also added. These 
changes are necessary because what was previously designated as a 
citrus fruit type is further broken down into the individual citrus 
fruits for the purposes of determining the amount of insurance. Since 
insurance is now provided by category of citrus, it makes more sense to 
refer to the categories as citrus crops and the individual citrus 
fruits as types, under a citrus crop. FCIC is also proposing to add a 
new category to allow additional citrus fruit crops to be designated in 
the Special Provisions to be consistent with section 3(a). FCIC is 
proposing to move Navel Oranges from Citrus IV to a new crop ``Citrus 
VIII--Navel Oranges,'' because producers have requested navel oranges 
be designated as a separate crop since navel oranges as a citrus fruit 
type do not fit well within a crop that includes tangelos and 
tangerines. Also, FCIC is proposing to revise the definition of 
``potential production'' to move those provisions regarding undamaged 
potential production previously contained in section 10(b)(2)(i) 
through (iii) to the definition of potential production because 
potential production was intended to include all production from the 
unit, whether damaged or undamaged. This change will place all the 
provisions in one place and eliminate a potential conflict between 
potential production and undamaged potential production, because the 
production used to determine the percent of damage must include all 
production, including lost and damaged production, to avoid skewing the 
percent of damage. FCIC is also revising the definition to ensure the 
amount of potential production is converted to boxes so that the 
calculation of the percentage of damage uses the same basis for the 
damaged and potential production. FCIC is proposing to add definitions 
for the terms ``scion'' and ``top worked'' because the term ``top 
worked'' is now used in section 6 and the term ``scion'' is used in the 
definition of ``top worked'' to define the criteria for a tree to be 
considered ``top worked.'' FCIC is proposing to remove the terms ``good 
farming practices'' and ``interplanted'' because these terms are 
defined in the Common Crop Insurance Policy, Basic Provisions and no 
changes to these definitions are required for the purpose of insurance 
for Florida citrus fruit.
    2. Section 3--FCIC is proposing to move the sales closing date from 
April 30 to May 1 in the Special Provisions to be consistent with the 
Florida Fruit Tree pilot crop insurance policy and the Nursery Crop 
Provisions. These crops are all grown in the same areas of Florida and 
are subject to the same perils so it would greatly ease the 
administration of these policies to have their terms and conditions be 
the same where practical. FCIC is also proposing to add provisions for 
carryover policies providing that for the 2008 and succeeding crop 
years, coverage changes must be requested on or before the May 1 sales 
closing date and that such charges will take effect on June 1 unless a 
loss occurs prior to May 31. FCIC has also added provisions to specify 
that if the request for increased coverage is rejected the previous 
year's coverage will remain in effect. This change prevents producers 
from increasing their coverage levels when they have information that a 
potential cause of loss is likely to occur. Premium rating depends on 
the fact causes of loss are random and the producer will not have any 
more information regarding the probability of a cause of loss than the 
person calculating the rates. This thirty day window before the changes 
take effect will effectively eliminate the possibility of producer's 
forecasting disasters and adversely affecting program integrity, while 
still providing insureds with a specific time frame, that unless 
notified otherwise, their requested changes will become effective. 
Again, this makes Florida Citrus Fruit crop insurance policy 
requirements consistent with Nursery Crop Provisions and the Florida 
Fruit Tree Pilot crop insurance policies for ease of administration.
    3. Section 4--FCIC is proposing to move the contract change date to 
January 31, preceding the cancellation date. Previously the contract 
change date was March 15, but with an April 30 sales closing date, it 
was believed that this was too short of a period of time for approved 
insurance providers to fully disseminate information so producers could 
make informed buying decisions. RMA believes the proposed 3-month 
period between January 31 and May 1 is adequate time for approved 
insurance providers to timely familiarize themselves with program 
changes, modify automated systems if necessary, and train sales agents 
and loss adjustment personnel. Additionally, this makes the Florida 
Citrus Fruit crop insurance policy requirements consistent with the 
Nursery Crop Provisions and Florida Fruit Tree Pilot crop insurance 
policies for ease of administration.
    4. Section 5--FCIC is proposing to move the cancellation and 
termination dates from April 30 to May 31. This makes the Florida 
Citrus Fruit crop insurance policy requirements consistent with the 
Nursery Crop Provisions and Florida Fruit Tree Pilot crop insurance 
policies for ease of administration.
    5. Section 6--FCIC is proposing to add provisions to specify when 
the first year after set out can be considered a growing season. 
Previously there has been confusion whether the year of set out is 
considered the first growing season and the provision now clarifies 
that such year is only considered a growing season if the set out 
occurred before May 1. FCIC is also proposing to

[[Page 60441]]

specify that if any citrus fruit is damaged prior to the start of the 
insurance period, the amount of insurance will be reduced commensurate 
with the amount of damage. This will ensure that the policy only 
indemnifies losses that occur during the insurance period. As stated 
above, FCIC also proposes to add provisions regarding the insurability 
of citrus fruit produced on trees that have been top worked. Such trees 
are not insurable until the third crop year after top working.
    6. Section 7--FCIC is proposing to add provisions to clarify 
acreage for interplanted crops will be prorated according to the 
insurable land acres occupied by the crops interplanted, and that 
insured land acreage cannot exceed the physical land acreage. These 
provisions were added in response to questions RMA has received 
regarding acreage determination when trees are interplanted
    7. Section 8--FCIC is proposing to modify provisions to specify 
insurance attaches on June 1, including requests to increase coverage, 
beginning with the 2008 crop year, unless the approved insurance 
provider inspects the acreage and determines it does not meet the 
insurability requirements contained in the policy or a damage occurred 
prior to the start of the insurance period. This thirty day window 
before coverage attaches will ensure that producers do not obtain 
insurance just because they have information that an insurable cause of 
loss is likely to occur. This makes the Florida Citrus Fruit crop 
insurance policy requirements consistent with the Nursery and Florida 
Fruit Tree Pilot crop insurance policies for ease in administration. 
FCIC also proposes to modify the provisions to move the calendar date 
for the end of the insurance period for tangelos from April 30 to 
January 31 for Orlando Tangelos and February 28 for all other tangelos; 
to March 31 for Mid Season and Temple Oranges, and to April 30 for 
Murcott Honey Oranges. The revised dates more accurately reflect the 
maturity dates for these fruit types.
    8. Section 9--FCIC is proposing to add diseases as a cause of loss 
if specified in the Special Provisions. This allows RMA to respond more 
rapidly to diseases affecting citrus fruit when it is determined 
feasible and appropriate to provide insurance coverage for an existing 
or new disease.
    9. Section 10--FCIC is proposing to remove provisions addressing 
citrus fruit considered undamaged potential production and placed it 
more appropriately under the definition of ``potential production'' in 
section 1. As stated above, there was previously a potential conflict 
between the definition of potential production and undamaged potential 
production and placing all the provisions in the definition removes any 
potential conflict. FCIC has also replaced the designation of ``Type'' 
with ``Citrus'' to be consistent with previous revisions. FCIC is 
proposing to clarify damage to fresh fruit is determined on an 
individual fruit-by-fruit basis and then converted to boxes so that the 
number of boxes of damaged citrus fruit can be compared to the number 
of boxes of potential production to obtain the percent of damage. 
Calculating damage based on the individual citrus fruit prevents the 
confusion of considering damage on a ``lot'' basis, i.e. a load or 
other container of fresh fruit, especially when the lot is rejected, 
even though there may be a significant amount of undamaged fresh fruit 
in the lot. FCIC is also proposing to add provisions to specify fresh 
fruit types damaged by wind caused by a hurricane or tornado that do 
not meet the standard for packing as fresh fruit will be considered 100 
percent damaged.
    RMA considered adding Asiatic Citrus Canker (ACC) as a cause of 
loss, based on requests from growers and grower groups. However, due to 
the significant spread of ACC resulting from numerous hurricanes over 
the last several years, the citrus industry is transitioning away from 
an ACC eradication program to various measures and initiatives aimed at 
management of the disease. Before RMA can determine whether an 
insurance program can be developed to address fruit production losses 
due to ACC, the ACC situation needs to stabilize. This would include 
agreed upon rules and regulations, consistent inspection and 
verification processes, and agreed upon measures to be carried out when 
ACC is discovered. Once an effective ACC management plan is 
implemented, RMA is willing to consider insurance coverage for loss of 
fruit production due to ACC. RMA seeks input or comments regarding 
potential ACC coverage on fruit, key features to cover, and potential 
pitfalls or other aspects of ACC's affect on fruit that must be 
considered.

List of Subjects in 7 CFR Part 457

    Crop insurance, Florida citrus fruit.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend 7 CFR part 457, Common Crop 
Insurance Regulations effective for the 2008 and succeeding crop years, 
to read as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

    1. The authority citation for 7 CFR part 457 continues to read as 
follows:

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

    2. Section 457.107 is revised to read as follows:


Sec. 457.107  Florida citrus fruit crop insurance provisions.

    The Florida citrus fruit crop insurance provisions for the 2008 and 
succeeding crop years are as follows:

1. Definitions

    Amount of insurance (per acre). The dollar amount determined by 
multiplying the Reference Maximum Dollar Amount shown on the actuarial 
documents for each fruit type and age of trees, within a citrus fruit 
crop, times the coverage level percent that you elect, times your 
share.
    Box. A standard field box as prescribed in the State of Florida 
Citrus Fruit Laws or contained in standards issued by FCIC.
    Citrus fruit crop. Any of the following:
    (1) Citrus I--Early and mid-season oranges;
    (2) Citrus II--Late oranges juice;
    (3) Citrus III--Grapefruit for which freeze damage will be adjusted 
on a juice basis;
    (4) Citrus IV--Tangelos and Tangerines;
    (5) Citrus V--Murcott Honey Oranges (also known as Honey 
Tangerines) and Temple Oranges;
    (6) Citrus VI--Lemons and Limes;
    (7) Citrus VII--Grapefruit for which freeze damage will be adjusted 
on a fresh fruit basis, and late oranges fresh;
    (8) Citrus VIII--Navel Oranges; and
    (9) Any other citrus fruit crop designated in the Special 
Provisions.
    Citrus fruit crop type (fruit type). Any of the separate citrus 
fruit listed in the actuarial documents and contained within one of the 
citrus fruit crops shown as Roman Numerals I through VIII.
    Freeze. The formation of ice in the cells of the fruit caused by 
low air temperatures.
    Harvest. The severance of mature citrus fruit from the tree by 
pulling, picking, shaking, or any other means, or collecting the 
marketable citrus fruit from the ground.
    Hurricane. A windstorm classified by the U.S. Weather Service as a 
hurricane.
    Potential production. The amount, converted to boxes, of citrus 
fruit that would have been produced had damage not occurred, including 
citrus fruit that:
    (1) Was harvested before damage occurred;

[[Page 60442]]

    (2) Remained on the tree after damage occurred;
    (3) Was lost or damaged from either an insured or uninsured cause;
    (4) Was marketed or could be marketed as fresh citrus fruit;
    (5) Was harvested prior to inspection by us; or
    (6) Was harvested within 7 days after a freeze;
    But not including citrus fruit that:
    (1) Was lost before insurance attached for any crop year;
    (2) Was lost by normal dropping; or
    (3) Any tangerines that normally would not meet the 210 pack size 
(2 and \4/16\ inch minimum diameter) under United States Standards by 
the end of the insurance period for tangerines.
    Scion. A detached living portion of a plant joined to a stock in 
grafting.
    Top worked. A buckhorned citrus tree with a new scion grafted onto 
the interstock.

2. Unit Division

    (a) A basic unit, as defined in section 1 of the Basic Provisions, 
will be divided into additional basic units by each citrus fruit crop 
designated in the Special Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
irrigated and non-irrigated practices are not applicable.
    (c) In addition to establishing optional units by section, section 
equivalent, or FSA farm serial number, 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

    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may select only one coverage level for each citrus fruit 
crop shown in section 1 of these Crop Provisions, or designated in the 
Special Provisions, that you elect to insure. If different amounts of 
insurance are available for fruit types within a citrus fruit crop, you 
must select the same coverage level for each fruit type. For example, 
if you choose the 75 percent coverage level for one fruit type, you 
must also choose the 75 percent coverage level for all other fruit 
types within that citrus fruit crop.
    (b) In lieu of the production reporting date contained in section 3 
of the Basic Provisions, potential production for each unit will be 
determined during loss adjustment.
    (c) For the first year of insurance for acreage interplanted with 
another citrus fruit crop, and anytime the planting pattern of such 
acreage is changed, you must report, by the sales closing date, the 
following:
    (1) The age and fruit type of the interplanted citrus trees, as 
applicable;
    (2) The planting pattern; and
    (3) Any other information we request in order to establish your 
amount of insurance.
    (d) We will reduce acreage or the amount of insurance or both, as 
necessary, based on our estimate of the effect of the interplanted 
citrus fruit trees on the insured citrus fruit crop. If you fail to 
notify us of any circumstance that may reduce the acreage or amount of 
insurance, we will reduce the acreage or amount of insurance or both as 
necessary any time we become aware of the circumstance.
    (e) For carryover policies:
    (1) For the 2008 and succeeding crop years, any changes to your 
coverage must be requested on or before the sales closing date;
    (2) Requested changes will take effect on June 1, the first day of 
the crop year unless we reject the requested increase because a loss 
occurs on or before May 31 (Rejection can occur at any time we discover 
a loss has occurred on or before May 31); and
    (3) If the increase is rejected, coverage will remain at the same 
level as the previous crop year.
    (f) If your citrus fruit was damaged prior to the beginning of the 
insurance period, your amount of insurance (per acre) will be reduced 
by the amount of damage that occurred.

4. Contract Changes

    In accordance with section 4 of the Basic Provisions, the contract 
change date is January 31 preceding the cancellation date.

5. Cancellation and Termination Dates

    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are May 31.

6. Insured Crop

    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all acreage of each citrus fruit crop that you elect to 
insure, in which you have a share, that is grown in the county shown on 
the application, and for which a premium rate is quoted in the 
actuarial documents.
    (b) In addition to the citrus fruit not insurable in section 8 of 
the Basic Provisions, we do not insure any citrus fruit:
    (1) That cannot be expected to mature each crop year within the 
normal maturity period for the fruit type;
    (2) Produced by citrus trees that have not reached the fifth 
growing season after being set out, unless otherwise provided in the 
Special Provisions or by a written agreement to insure such citrus 
fruit (In order for the year of set out to be considered as a growing 
season, citrus trees must be set out on or before May 1 of the calendar 
year);
    (3) Of ``Meyer Lemons'' and oranges commonly known as ``Sour 
Oranges'' or ``Clementines'';
    (4) Of the Robinson tangerine variety, for any crop year in which 
you have elected to exclude such tangerines from insurance (You must 
elect this exclusion prior to the crop year for which the exclusion is 
to be effective, except that for the first crop year you must elect 
this exclusion by the later of the sales closing date or the time you 
submit the application for insurance); or
    (5) That is produced on citrus trees that have been topworked until 
the third crop year after topworking. The Special Provisions will 
specify the appropriate rate class for trees insurable following 
topworking, but that have not reached full production.
    (c) Prior to the date insurance attaches, and upon our approval, 
you may elect to insure or exclude from insurance any insurable citrus 
acreage that has a potential production of less than 100 boxes per 
acre. If you elect to:
    (1) Insure such acreage, we will consider the potential production 
to be 100 boxes per acre when determining the amount of loss; or
    (2) Exclude such acreage, we will disregard the acreage for all 
purposes related to this policy.
    (d) In addition to the provisions in Section 6 of the Basic 
Provisions, if you fail to notify us of your election to insure or 
exclude citrus acreage, and the potential production from such acreage 
is 100 or more boxes per acre, we will determine the percent of damage 
on all of the insurable acreage for the unit, but will not allow the 
percent of damage for the unit to be increased by including such 
acreage.

7. Insurable Acreage

    In lieu of the provisions in section 9 of the Basic Provisions, 
that prohibit insurance attaching to a crop planted with another crop:
    (a) Citrus fruit from trees interplanted with another crop is 
insurable unless we inspect the acreage and determine it does not meet 
the requirements contained in your policy.
    (b) If the citrus fruit is from trees interplanted with another 
crop, acreage will be prorated according to the percentage of the acres 
occupied by each of the interplanted crops (For example, if grapefruit 
have been interplanted with oranges on 100 acres and the grapefruit 
trees are on 50 percent of the acreage, grapefruit will be

[[Page 60443]]

considered planted on 50 acres and oranges will be considered planted 
on 50 acres).
    (c) The combination of the citrus fruit acreage and the 
interplanted crop acreage cannot exceed the physical amount of acreage.

8. Insurance Period

    (a) In accordance with the provisions of section 11 of the Basic 
Provisions:
    (1) Coverage begins on June 1 of each crop year, beginning with the 
2008 crop year, unless:
    (i) We inspect the acreage and determine it does not meet the 
requirements for insurability contained in your policy (You must 
provide any information we require for the crop, so we may determine 
the condition of the grove to be insured); or
    (ii) You report additional citrus acreage, or a greater share, such 
that the amount of insurance will increase by more than 10 percent and 
we notify you all or a part of your citrus acreage is not insurable.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) January 31 for early and navel oranges, Orlando tangelos and 
tangerines;
    (ii) February 28 for all other tangelos;
    (iii) March 31 for mid-season and temple oranges;
    (iv) April 30 for lemons, limes, and murcott honey oranges; and
    (v) June 30 for grapefruit and late season oranges.
    (b) In addition to the provisions of section 11 of the Basic 
Provisions:
    (1) If you acquire an insurable share in any insurable acreage of 
citrus fruit after coverage begins, but on or before acreage reporting 
date of any crop year, and if after inspection we consider the acreage 
acceptable, then insurance will be considered to have attached to such 
acreage on the calendar date for the beginning of the insurance period.
    (2) If you relinquish your insurable share on any insurable acreage 
of citrus fruit on or before the acreage reporting date of any crop 
year, insurance will not be considered to have attached, no premium 
will be due, and no indemnity payable, for such acreage for that crop 
year unless:
    (i) A transfer of coverage and right to an indemnity, or a similar 
form approved by us, is completed by all affected parties;
    (ii) We are notified by you or the transferee in writing of such 
transfer on or before the acreage reporting date; and
    (iii) The transferee is eligible for crop insurance.

9. Causes of Loss

    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss to citrus fruit that occur within the insurance period:
    (1) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the grove;
    (2) Freeze;
    (3) Hail;
    (4) Hurricane;
    (5) Tornado; or
    (6) Diseases, only if specified in the Special Provisions.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to:
    (1) Damage to the blossoms or trees; or
    (2) Inability to market the citrus fruit for any reason other than 
actual physical damage from an insurable cause specified in this 
section. For example, we will not pay you an indemnity if you are 
unable to market due to quarantine, boycott, or refusal of any person 
to accept production.

10. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional units, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic units, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for the units.
    (b) If any citrus fruit within a unit is damaged by an insurable 
cause of loss, we will settle your claim by:
    (1) Calculating the amount of insurance for the unit by multiplying 
the number of acres by the respective dollar amount of insurance per 
acre for the fruit type and multiplying that result by your share;
    (2) Calculating the average percent of damage to the citrus fruit 
within each respective fruit type, rounded to the nearest tenth of a 
percent (0.1%) (The percent of damage will be the amount of damaged 
citrus fruit, converted to boxes, damaged from an insured cause, 
divided by the undamaged potential production);
    (3) Subtracting the deductible from the result of section 
(10)(b)(2); and
    (4) If the result of section (10)(b)(3) is positive, dividing this 
result by the coverage level percentage;
    (5) Multiplying the result of section (10)(b)(4) by the amount of 
insurance for the unit for the respective fruit type, to determine the 
value of all damage.
    (6) Totaling all such results of section (10)(b)(5) for all fruit 
types and subtracting any indemnities paid for the current crop year to 
determine the amount payable for the unit.
    (For example, assume a unit sustains late season damage on the 55 
acres. No previous damage has occurred on the 55 acres during the crop 
year and no fruit has been harvested. The producer elects the 75 
percent coverage level and has a 100 percent share. The amount of 
insurance is $1,180 per acre, based on the 75 percent coverage level 
for the citrus type and age of trees. The amount of potential 
production is 24,530 boxes and the amount of damaged production is 
17,171 boxes. The loss would be calculated as follows:
    1. 55 acres x $1,180 = $64,900 amount of insurance for the unit;
    2. 17,171 / 24,530 = 70 percent average percent of damage;
    3. 70 percent damage-25 percent deductible (100 percent-75 percent) 
= 45 percent;
    4. 45 percent / 75 percent = 60 percent adjusted damage; and
    5. 60 percent x $64,900 = $38,940 indemnity.
    (c) Citrus fruit crops IV, V, VII, and VIII, that are seriously 
damaged by freeze, as determined by a fresh-fruit cut of a 
representative sample of fruit in the unit in accordance with the 
applicable provisions of the State of Florida Citrus Fruit Laws, or 
contained in standards issued by FCIC, and that are not or could not be 
marketed as fresh fruit, will be considered damaged to the following 
extent:
    (1) If less than 16 percent of the fruit in a sample shows serious 
freeze damage, the fruit will be considered undamaged; or
    (2) If 16 percent or more of the fruit in a sample shows serious 
freeze damage, the fruit will be considered 50 percent damaged, except 
that:
    (i) For tangerines of Citrus IV, damage in excess of 50 percent 
will be the actual percent of damaged fruit; and
    (ii) Citrus IV (except tangerines), V, VII, and VIII, if it is 
determined that the juice loss in the fruit exceeds 50 percent, such 
percent will be considered the percent of damage.
    (d) Notwithstanding the provisions of section 10(c) of these crop 
provisions as to citrus fruit of Citrus IV, V, VII, and VIII, in any 
unit that is mechanically separated using the specific-gravity 
(floatation) method into undamaged and freeze-damaged fruit, the amount 
of damage will be the actual percent of freeze-damaged fruit not to 
exceed 50 percent and will not be affected by

[[Page 60444]]

subsequent fresh-fruit marketing. However, the 50 percent limitation on 
mechanically separated, freeze-damaged fruit will not apply to 
tangerines of Citrus IV.
    (e) Any citrus fruit of Citrus I, II, III, and VI damaged by 
freeze, but that can be processed into products for human consumption, 
will be considered as marketable for juice. The percent of damage will 
be determined by relating the juice content of the damaged fruit to:
    (1) The average juice content of the fruit produced on the unit for 
the three previous crop years based on your records, if they are 
acceptable to us; or
    (2) The following juice content, if acceptable records are not 
furnished:
    (i) Citrus I--52 pounds of juice per box;
    (ii) Citrus II--54 pounds of juice per box;
    (iii) Citrus III--45 pounds of juice per box; and
    (iv) Citrus VI--43 pounds of juice per box;
    (f) Any individual citrus fruit on the ground that is not collected 
and marketed will be considered as 100 percent damaged if the damage 
was due to an insured cause.
    (g) Any individual citrus fruit that is unmarketable either as 
fresh fruit or as juice because it is immature, unwholesome, 
decomposed, adulterated, or otherwise unfit for human consumption due 
to an insured cause will be considered as 100 percent damaged.
    (h) Individual citrus fruit of Citrus IV, V, VII, and VIII, that 
are unmarketable as fresh fruit due to serious damage from hail as 
defined in the applicable United States Standards for Grades of Florida 
fruit, or wind damage from a hurricane or tornado that results in the 
fruit not meeting the standards for packing as fresh fruit, will be 
considered 100 percent damaged.

11. Late and Prevented Planting

    The late and prevented planting provisions of the Basic Provisions 
are not applicable.

    Signed in Washington, DC, on September 29, 2006.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
[FR Doc. E6-16635 Filed 10-12-06; 8:45 am]
BILLING CODE 3410-08-P