Common Crop Insurance Regulations; Cultivated Clam Crop Insurance Provisions, 61134-61140 [2017-27894]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Rules and Regulations]
[Pages 61134-61140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27894]



[[Page 61134]]

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

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-17-0003]
RIN 0563-AC59


Common Crop Insurance Regulations; Cultivated Clam Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule with request for comments.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends the 
Common Crop Insurance Regulations to provide Cultivated Clam insurance. 
The provisions will be used in conjunction with the Common Crop 
Insurance Policy Basic Provisions (Basic Provisions), which contain 
standard terms and conditions common to most crop programs. The 
intended effect of this action is to convert the Cultivated Clam pilot 
crop insurance program to a regulatory insurance program for the 2019 
and succeeding crop years.

DATES: Effective date: This final rule is effective December 27, 2017.
    Applicability date: The changes are applicable for the 2019 and 
succeeding crop years.
    Comment due date: FCIC will accept written comments on this final 
rule until close of business January 26, 2018. FCIC may consider the 
comments received and may conduct additional rulemaking based on the 
comments.

ADDRESSES: FCIC prefers that comments be submitted electronically 
through the Federal eRulemaking Portal. You may submit comments, 
identified by Docket
    ID No. FCIC-17-0003, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Director, Actuarial and Product Design Division, 
Risk Management Agency, United States Department of Agriculture, P.O. 
Box 419205, Kansas City, MO 64141-6205.
    FCIC will post all comments received, including those received by 
mail, without change to https://www.regulations.gov, including any 
personal information provided. Once these comments are posted to this 
website, the public can access all comments at its convenience from 
this website. All comments must include the agency name and docket 
number or Regulatory Information Number (RIN) for this rule. For 
detailed instructions on submitting comments and additional 
information, see https://www.regulations.gov. If interested persons are 
submitting comments electronically through the Federal eRulemaking 
Portal and want to attach a document, FCIC requests that the document 
attachment be in a text-based format. If interested persons want to 
attach a document that is a scanned Adobe PDF file, it must be scanned 
as text and not as an image, thus allowing FCIC to search and copy 
certain portions of the submissions. For questions regarding attaching 
a document that is a scanned Adobe PDF file, please contact the Risk 
Management Agency (RMA) Web Content Team at (816) 823-4694 or by email 
at [email protected].
    Privacy Act: Anyone is able to search the electronic form of all 
comments received for any dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the 
complete User Notice and Privacy Notice for Regulations.gov at https://www.regulations.gov/#!privacyNotice.

FOR FURTHER INFORMATION CONTACT: Ron Lundine, Director, Product 
Management, Actuarial and Product Design Division, Risk Management 
Agency, United States Department of Agriculture, Beacon Facility, Stop 
0812, Room 421, P.O. Box 419205, Kansas City, MO 64141-6205, telephone 
(816) 926-3854.

SUPPLEMENTARY INFORMATION:

Background

    FCIC offered a pilot crop insurance program for cultivated clams 
beginning with the 1999 crop year. The program is offered in nine 
counties in Massachusetts, South Carolina, and Virginia. After a 
program evaluation, in 2014 the FCIC's Board of Directors authorized 
the Cultivated Clam Pilot Crop Insurance Program to be converted from a 
pilot to a permanent program in Massachusetts, South Carolina, and 
Virginia. For the 2016 crop year, 42 policies were sold and 352,563,049 
clams were insured in Massachusetts, South Carolina, and Virginia. This 
rule will add the Cultivated Clam Program to the Code of Federal 
Regulations.
    The FCIC is issuing this final rule without opportunity for prior 
notice and comment. The Administrative Procedure Act (APA) exempts 
rules ``relating to agency management or personnel or to public 
property, loans, grants, benefits, or contracts'' from the statutory 
requirement for prior notice and opportunity for public comment (5 
U.S.C. 553(a)(2)). A Federal crop insurance policy is a contract and is 
thus exempt from APA notice-and-comment procedures. Previously, changes 
made to the Federal crop insurance policies codified in the Code of 
Federal Regulations were required to be implemented through the notice-
and-comment rulemaking process. Such action was not required by the 
APA, which exempts contracts. Rather, the requirement originated with a 
notice USDA published in the Federal Register on July 24, 1971 (36 FR 
13804), stating that the Department of Agriculture would, to the 
maximum extent practicable, use the notice-and-comment rulemaking 
process when making program changes, including those involving 
contracts. FCIC complied with this notice over the subsequent years. On 
October 28, 2013, USDA published a notice in the Federal Register (78 
FR 64194) rescinding the prior notice, thereby making contracts again 
exempt from the notice-and-comment rulemaking process. This exemption 
applies to the 30-day notice prior to implementation of a rule. 
Therefore, the policy changes made by this final rule are effective 
upon publication in the Federal Register.
    However, FCIC is providing a 30-day comment period and invites 
interested persons to participate in this rulemaking by submitting 
written comments. FCIC may consider the comments received and may 
conduct additional rulemaking based on the comments.

Executive Orders 12866, 13563, 13771 and 13777

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasized the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. Executive Order 13777, 
``Enforcing the Regulatory Reform Agenda,'' established a federal 
policy to alleviate unnecessary regulatory burdens on the American 
people. The Office of Management and Budget (OMB) designated this rule 
as not significant under Executive Order 12866, ``Regulatory Planning 
and Review,'' and therefore, OMB has not reviewed this rule. The rule 
is not subject to Executive Order 13771,

[[Page 61135]]

``Reducing Regulation and Controlling Regulatory Costs.''

Paperwork Reduction Act of 1995

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

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act of 2002, 
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.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    The Federal Crop Insurance Corporation has assessed the impact of 
this rule on Indian tribes and determined that this rule does not, to 
our knowledge, have tribal implications that require tribal 
consultation under E.O. 13175. If a Tribe requests consultation, the 
Federal Crop Insurance Corporation will work with the Office of Tribal 
Relations to ensure meaningful consultation is provided where changes, 
additions and modifications identified herein are not expressly 
mandated by Congress.

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 the indemnity amount for 
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 (FCIA) authorizes FCIC to waive collection of 
administrative fees from limited resource farmers. FCIC believes this 
waiver helps to ensure that small entities are given the same 
opportunities as large entities to manage their risks through the use 
of crop insurance. A Regulatory Flexibility Analysis has not been 
prepared since this regulation does not have a significant impact on a 
substantial number of 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 2 CFR part 415, subpart C.

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. With respect to any direct action taken by FCIC 
or action by FCIC directing the insurance provider to take specific 
action under the terms of the crop insurance policy, 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, or safety. Therefore, neither 
an Environmental Assessment nor an Environmental Impact Statement is 
needed.

List of Subjects in 7 CFR Part 457

    Crop insurance, Cultivated clam, Reporting and recordkeeping 
requirements.

Final Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation amends 7 CFR part 457, applicable for the 2019 
and succeeding crop years, as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

0
1. The authority citation for 7 CFR part 457 continues to read as 
follows:

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

0
2. Section 457.176 is added to read as follows:


Sec.  457.176   Cultivated clam crop insurance provisions.

    The cultivated clam crop provisions for the 2019 and succeeding 
crop years are as follows:
    FCIC policies:

United States Department of Agriculture

Federal Crop Insurance Corporation

Cultivated Clam Crop Provisions

1. Definitions.
    Amount of insurance. For each basic unit, your inventory value 
multiplied by the coverage level percentage you elect, and multiplied 
by your share. However, for catastrophic risk protection policies, 
amount of insurance is your inventory value multiplied by the coverage 
level percentage you elect (for CAT coverage the level is limited to 50 
percent), multiplied by your share, and multiplied by 55 percent. Your 
accumulated paid indemnities during the crop year for each basic or 
optional

[[Page 61136]]

unit may not exceed your amount of insurance.
    Basic unit value before loss. The stage value of all undamaged 
insurable clams, in the basic unit or, if elected, all optional units 
combined, immediately prior to the occurrence of any loss as determined 
by our appraisal. This allows the amount of insurance under the policy 
to be prorated among the individual units based on the actual value of 
the clams in the unit at the time of loss. It is also the basis for 
determining whether or not an indemnity is due. This value is used to 
ensure that you have not under-reported your clam inventory value.
    Clam. A cultivated Mercenaria mercenaria (quahog).
    Crop year. The twelve-month period beginning December 1 and 
extending through November 30 of the next calendar year, designated by 
the calendar year in which insurance ends.
    Crop year deductible. The deductible percentage multiplied by the 
sum of the inventory values within each basic unit. The crop year 
deductible will be increased for any increases in the inventory value 
on the inventory value report. The crop year deductible will be reduced 
by any previously incurred deductible if you timely report each loss to 
us.
    Deductible percentage. An amount equal to 100 percent minus the 
percent of coverage you select. The percentage is 50 percent for 
catastrophic risk protection coverage.
    Disease. Any pathogen or group of pathogens, parasitic infestation 
or plague verified by an aquaculture pathologist and shown to be a 
primary cause to the death of the insured clams.
    Freeze. The formation of ice in the cells of the animal caused by 
low air temperatures.
    Global Positioning System (GPS). A space based radio position, 
navigation, and time transfer system involving satellites and computers 
to determine the latitude and longitude of a receiver on Earth by 
computing the time difference for signals from different satellites to 
reach the receiver and referenced in the Special Provisions.
    Growing location. A lease parcel, permit or licensed area, whose 
boundaries are readily discernable above the water, and identified on a 
map that shows enough detail to distinguish seeded areas within the 
site.
    Growout bag. A mesh bag used throughout the growing season to 
contain clams when placed in the appropriate growing medium and as 
further defined by the Special Provisions.
    Harvest. Removal of marketable clams from the unit. Clams that are 
removed from the growing location but not of sufficient size to be 
marketable are not considered harvested if returned to the growing 
location.
    Ice floe. Floating ice formed in sheets on the sea surface.
    Inventory value. The total of the stage values from the inventory 
value report.
    Inventory value report. Your report that declares the stage values 
of insurable clams in accordance with section 6. See the Cultivated 
Clam Insurance Standards Handbook, Exhibit 5 for the inventory value 
report completion instructions and form.
    Land. The land under a body of water suitable for planting clams 
and the column of water above the land if designated and controlled by 
state law.
    Lease. A contract that grants use of land in or assigned to a 
county for a specified term and for a specified payment and provides 
the lessee with the exclusive use of the land to plant clams.
    Lease parcel. A legally identifiable tract or plot of land covered 
by a lease, permit, or license.
    License. Official or legal permission that grants use of land in or 
assigned to a county for a specified term and provides the licensee 
with the exclusive use of the land to plant clams.
    Non-contiguous. In lieu of the definition in the Basic Provisions, 
separately-named, high-density aquaculture lease sites or shellfish 
sites are considered non-contiguous, unless limited by the Special 
Provisions. Individual land parcels within such sites are not 
considered non-contiguous.
    Occurrence deductible.
    (a) This deductible allows a smaller deductible than the crop year 
deductible to be used when:
    (1) Inventory values are less than the reported basic unit value; 
or
    (2) You have elected optional units, if applicable.
    (b) The occurrence deductible is the lesser of:
    (1) The deductible percentage multiplied by the unit value before 
loss multiplied by the under-report factor; or
    (2) The crop year deductible.
    Permit. A document giving official or legal permission to use land 
in or assigned to a county for a specified term and provides the 
permittee with the exclusive use of the land to plant clams.
    Planting. The placing of seed clams into the appropriate growing 
medium for the practice specified.
    Pollution. The presence in the water of a substance that directly 
causes death of the clams. The substance shall not be parasitical, 
bacterial, fungal or viral, or any substance used by you for medicinal 
purposes. Pollution will also include any increase or decrease in the 
content of any normal soluble or insoluble constituent of water 
including mud and silt, feed residues, solid or liquid fish wastes, 
dissolved gases and any other substance normally present in the water 
of the lease parcel.
    Practical to replant. In lieu of the definition of ``Practical to 
replant'' contained in section 1 of the Basic Provisions, unless 
limited by the Special Provisions, practical to replant is defined as 
our determination, after loss or damage to the insured crop, based on 
factors including, but not limited to the causes of loss listed in 
section 10 of these provisions, that replanting the insured crop will 
allow the crop to develop normally during the remainder of the crop 
year. Unavailability of seed clams will not be considered a valid 
reason for failure to replant.
    Practice. The cultural methods of producing clams such as trays, 
mesh bags, round pens, lantern nets or bottom planting.
    Replant. Unless limited by the Special Provisions, performing the 
cultural practices necessary to prepare for replacement of insurable 
clams that were destroyed by an insurable cause of loss and then 
placing living insurable clams into mesh bags or pens, or seeding them 
into prepared growout beds, bottom culture, bottom trays, or floating 
trays on insurable acreage.
    Salinity. The dissolved solids (typically salts such as chloride, 
sodium, and potassium) in ocean water expressed as parts per thousand.
    Seed clam.
    (a) For clams placed in a field nursery or a nursery bag--a clam 
that is a minimum of 5 millimeters, measured at the longest shell 
distance that is parallel to the hinge.
    (b) For all others--a clam which is a minimum of 10 millimeters, 
measured at the longest shell distance that is parallel to the hinge.
    Separately named high-density aquaculture lease site. The submerged 
subdivided land under a body of water suitable for the cultivation of 
clams and identified and named separately by the Division of Marine 
Resources or similar regulatory agency.
    Shellfish harvest ban. A State or Federal order that prohibits 
harvesting clams for human food in areas where monitoring program data 
indicates that fecal material, pathogenic microorganisms, poisonous or 
deleterious substances, marine toxins, or radio nuclides have reached 
excessive concentrations.

[[Page 61137]]

    Stage. Clams that have attained the size or age specified for stage 
1, 2, 3, or 4 as defined in the Special Provisions.
    Stage value. The dollar value of the inventory of all insurable 
clams at each stage based on the survival factors and the prices shown 
in the actuarial documents for such stages, in each unit on your 
inventory value report, including any revision that increases the value 
of your insurable inventory.
    Storm surge. A significant increase or decrease in water depth 
relative to normal tides that is caused by a strong, continuous and 
prolonged strong flow of onshore or offshore winds.
    Survival factor. A factor shown on the actuarial documents that 
represents the expected percentage of clams that will normally survive. 
If you provide production records for three consecutive years, your 
records will be used in lieu of the factor contained in the actuarial 
document to determine the survival factor. The survival factor is 
applied at the time of inventory and is not applied a second time to 
the same inventory when a loss occurs. Clams that are seeded subsequent 
to the annual inventory value report must be adjusted by the survival 
factor.
    Tidal wave. A large water wave, wave train, or a series of waves, 
generated in a body of water by an impulsive disturbance that 
vertically displaces the water column or a destructive type of wave 
motion in seas and oceans, associated with either strong winds or 
underwater earthquakes.
    Under-report factor. The factor that adjusts your indemnity for 
under-reporting of inventory values. The factor is always used in 
determining any indemnities. The under-report factor is the lesser of: 
(a) 1.000; or (b) the sum of all stage values reported on all the 
inventory value reports, minus the total of all previous losses, as 
adjusted by any previous under-reporting factors, divided by the basic 
unit value before loss.
    Unit value after loss. The value of the remaining insurable clams 
in each basic or optional unit based on the percentage of the reference 
maximum dollar amount contained in the actuarial documents, immediately 
following the occurrence of a loss as determined by our appraisal, plus 
any reduction in value due to uninsured causes. This is used to 
determine the loss of value for each individual unit so that losses can 
be paid on an individual unit basis, optional or basic, as applicable.
    Unit value before loss. The stage value of undamaged insurable 
clams in the basic or optional unit, as applicable, immediately prior 
to the loss occurrence. The determined value will include the number of 
seeded and harvested clams and stages that existed on the date of the 
inventory value report, adjusted for changes in accordance with 
subparagraph 22A(2) of the Insurance Standards Handbook, including but 
not limited to; the reference maximum dollar amount contained in the 
actuarial documents; and the applicable survival factors. This allows 
the amount of insurance under the policy to be divided among the 
individual units in accordance with the value of the clams in the unit 
at the time of loss for determining whether you are entitled to an 
indemnity for insured losses in the unit, optional or basic, as 
applicable. Clams that are seeded subsequent to the annual inventory 
value report being submitted must be adjusted by the survival factor 
before they are added to the beginning inventory during the process of 
establishing the ``Unit value before loss.''
2. Unit Division
    (a) In addition to the definition of basic unit contained in 
section 1 of the Basic
    Provisions, a basic unit may be divided into optional units in 
accordance with section 2(b). Note that even if you elect optional unit 
coverage, amount of insurance, crop year deductible, under-report 
factor, premium, and the total amount of indemnity payable under this 
policy will be controlled by the basic unit value before loss.
    (b) If you elect the additional level of coverage, for an 
additional premium, inventory that would otherwise be a basic unit may, 
unless limited by the Special Provisions, be divided into optional 
units by non-contiguous lease parcels. Additional optional units may 
also be authorized in the Special Provisions. If you elect optional 
units, you must provide separate inventory reports for each unit and 
keep all records of seeding, harvest, and uninsured losses separately 
by unit.
    (c) Failure to keep or report separate records will result in all 
optional unit inventories under a basic unit being combined in a basic 
unit at loss time.
    (d) If you elect optional units, your amount of insurance will be 
divided among optional units in relation to unit value before loss of 
clams in each optional unit. If, at the time of loss, the aggregate 
value of the clams in your optional units exceeds your basic unit 
inventory value, you will be subject to the under-report factor 
provisions.
3. Amount of Insurance
    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may only select one coverage level percentage for all 
clams, regardless of their stage, insured under this policy.
    (b) Your amount of insurance will be reduced by the amount of any 
indemnity paid under this policy.
    (c) For an additional premium, you may increase your amount of 
insurance in accordance with section 6(d).
    (d) The production reporting requirements contained in section 3 of 
the Basic Provisions are not applicable.
    (e) For seeded clams, the amount of insurance is the product of the 
reference maximum dollar amount of insurance and the fraction of the 
maximum value associated with the applicable stage multiplied by the 
coverage level selected multiplied by your share.
4. Contract Changes
    In accordance with section 4 of the Basic Provisions, the contract 
change date is August 31 of each year, or as specified in the actuarial 
documents.
5. Cancellation and Termination Dates
    In accordance with section 2 of the Basic Provisions, the 
cancellation and termination dates are November 30, or as specified in 
the actuarial documents.
6. Clam Inventory Value Report
    In lieu of section 6 of the Basic Provisions:
    (a) For insurance to attach for the crop year, you must submit an 
inventory value report to us with your application and for each 
subsequent crop year, not later than November 30 preceding the crop 
year, or by the date specified in the Special Provisions.
    (b) The inventory value report must be submitted yearly and 
include, for each basic or optional unit all growing locations, the 
stages of the clams and the stage values, and your share by growing 
location.
    (1) The inventory value must also reflect the stages as shown in 
the Special Provisions.
    (2) At our option and at any time, you may be required to provide 
documentation in support of any of your reports, including, but not 
limited to, a detailed listing of growing locations, unit values, the 
numbers and the sizes of clams seeded or placed for grow-out; your 
share, sales of clams and purchases of seed clams for the 3 previous 
crop years, and of your ability to properly obtain and maintain clams.
    (3) For catastrophic level policies only, you must report your clam 
sales for the previous crop year on the clam inventory value report. 
You may be

[[Page 61138]]

required to provide documentation to support such sales.
    (c) Your inventory value report, including any revised report, will 
be used to determine your premium and amount of insurance.
    (d) If allowed for in the Special Provisions you may revise your 
inventory value report to increase the reported inventory value. We may 
inspect the inventory. Your revised inventory value report, if allowed 
by the Special Provisions, will be considered accepted by us and 
coverage will begin on any proposed increase in inventory value at the 
later of December 1, the date shown in the Special Provisions, or 30 
days after your written request is received by us, unless we reject the 
proposed increase in your inventory value in writing. We will reject 
any requested increase if a loss occurs before the later of December 1, 
the date shown in the Special Provisions, or within 30 days of the date 
the request is made.
    (e) Failure to report the full value of your stage value will 
result in the reduction of any claim in accordance with section 14(d).
    (f) For catastrophic insurance coverage only: Your inventory value 
report for all clams cannot exceed the lesser of the value from section 
6(b) or the percent shown on the actuarial documents of your previous 
year's sales of clams unless you provide acceptable records to prove 
your actual inventory value.
    (g) Your inventory value report must reflect your insurable clam 
inventory according to the prices contained in the actuarial documents. 
In no instance will we be liable for values greater than those 
contained in the actuarial documents.
    (h) You must report all clams on the unit including any clams owned 
or subleased by other individuals or entities.
    (i) No application or inventory value reports, except revisions, 
will be accepted after November 30, unless otherwise provided in the 
Special Provisions.
7. Premium
    (a) In lieu of section 7(c) of the Basic Provisions, we will 
determine your premium by multiplying the amount of insurance by the 
appropriate premium rate and by the premium adjustment factors listed 
on the actuarial documents.
    (b) Additional premium from an increase in the inventory value 
report is due and payable when we accept the revised inventory value 
report.
    (c) In addition to the provisions in section 7 of the Basic 
Provisions, the premium will be adjusted for partial crop years for the 
year of seeding and for clam leases you acquire. Premium will be 
charged for the entire month, as shown in the actuarial documents, for 
any month during which any amount of coverage is provided.
8. Insured Crop
    In lieu of the provisions of section 8 and section 9 of the Basic 
Provisions, the insured crop is all the clams in the county that:
    (a) Meet all the requirements for insurability and for which prices 
are provided in the actuarial documents;
    (b) Are acceptable to us;
    (c) Are grown by a person, who in at least three of the five 
previous crop years:
    (1) Grew clams for commercial sale; and
    (2) Participated in the management of a clam farming operation by 
at least exercising decision-making authority over all operational 
aspects of the farm.
    (d) Are grown in a county for which a premium rate is provided in 
the actuarial documents;
    (e) Are in a growing location acceptable to us and for which you 
provided GPS coordinates with your clam inventory value report in 
accordance with the Special Provisions; and
    (f) Use a practice that fixes the insurable clams to the land 
within the growing location.
9. Insurance Period
    (a) In accordance with section 11 of the Basic Provisions, coverage 
begins the later of:
    (1) The date the pre-acceptance inspection, if applicable, is 
complete unless we notify you that your inventory is not insurable; or
    (2) If your inventory is insurable:
    (i) On December 1 for new applications, when the application and 
the inventory value report are submitted by October 30;
    (ii) On the 31st day following the date of submission for new 
applications, when the application and the inventory value report are 
submitted between November 1 and 30;
    (iii) On December 1 for policies continued from the prior year if 
the inventory value report is submitted by October 30;
    (iv) On the 31st day following the date of submission of the 
inventory value report for policies continued from the prior year when 
the inventory value report is submitted between November 1 and 30; and
    (v) However, you acquire a financial interest in any insurable 
clams after coverage begins, but after December 1 of the crop year, and 
our inspection determines that the clams are acceptable, insurance will 
be considered to have attached to such clams 30 days after a revised 
inventory report is accepted by us indicating the stage value of the 
acquired clams; or
    (vi) On the date contained in the Special Provisions.
    (b) Insurance ends at the earliest of:
    (1) The date of final adjustment of a loss when the total 
indemnities due equal the amount of insurance;
    (2) November 30; or
    (3) A date specified in the Special Provisions. (c) Insurance 
ceases immediately on any clams removed from the unit.
10. Causes of Loss
    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided for the death of clams caused only by 
the following causes of loss that occur within the insurance period 
unless otherwise limited by the Special Provisions:
    (1) Oxygen depletion due to vegetation, microbial activity, harmful 
algae bloom, or high water temperature unless otherwise limited by the 
Special Provisions;
    (2) Disease, if medication does not exist for control of the 
disease;
    (3) Freeze;
    (4) Hurricane;
    (5) Decrease in salinity associated with a weather event verified 
by National Oceanic & Atmospheric Administration (NOAA) or United 
States Geologic Survey (USGS) or as otherwise defined in the Special 
Provisions;
    (6) Tidal wave;
    (7) Storm surge that is associated with a local weather event and 
verified by NOAA or USGS; or
    (8) Ice floe.
    (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) Your inability to market clams as a direct result of 
quarantine, shellfish harvest ban, boycott, or refusal of a buyer to 
accept production;
    (2) Collapse or failure of buildings or structures;
    (3) Loss of market value;
    (4) Vandalism;
    (5) Theft;
    (6) Pollution;
    (7) Predation (unless allowed by the Special Provisions);
    (8) Dredging;
    (9) Any cause of loss that occurred prior to or after the insurance 
period;
    (10) Any unexplained shortages or disappearance of inventory; or

[[Page 61139]]

    (11) Failure of the clam to grow to a marketable size.
11. Replanting Payments
    Unless otherwise stated in the Special Provisions:
    (a) In accordance with the provisions contained in section 13 of 
the Basic Provisions, a replanting payment is allowed for insurable 
clams if death of the clams was due to an insurable cause of loss.
    (b) The maximum amount of the replanting payment will be the lesser 
of your actual cost of replanting or the result obtained by multiplying 
the replanting payment amount contained in the Special Provisions by 
your insured share.
    (c) Notwithstanding the provisions of section 13 of the Basic 
Provisions, only one replanting payment will be made per lease parcel 
planted within the crop year.
    (d) You may not collect a replant payment and an indemnity for the 
same loss.
12. Duties in the Event of Damage or Loss
    In addition to your duties contained in section 14 of the Basic 
Provisions,
    (a) You must obtain our written consent prior to changing or 
discontinuing your normal practices with respect to care and 
maintenance of the insured clams. Failure to obtain our written consent 
will result in the denial of your claim.
    (b) If you are claiming disease as the cause of loss, you must 
prove at your own expense that the death of the clams was due to 
disease by isolating a sample of the clams and identifying the disease 
following histological or pathological examination conducted by a 
veterinarian who is a certified fish pathologist or a person approved 
by us.
13. Access to Insured Crop and Records, and Records Retention
    In addition to the requirements of section 21 of the Basic 
Provisions, you must permit us to inspect the insurable clams at any 
time and take samples of damaged and undamaged clams for inspection, 
testing, and analysis, and examine and make copies of your records.
14. Settlement of Claim
    We will determine indemnities for any unit as follows:
    (a) Determine the under-report factor for the basic unit;
    (b) Determine the occurrence deductible;
    (c) Subtract unit value after loss from unit value before loss;
    (d) Multiply the result of 14(c) by the under-report factor;
    (e) Subtract the occurrence deductible from the result in section 
14(d); and
    (f) If the result of section 14(e) is greater than zero, and 
subject to the limit of section 14(g);
    (1) For other than catastrophic risk protection coverage, your 
indemnity equals the result of section 14(e), multiplied by your share.
    (2) For catastrophic risk protection coverage, your indemnity 
equals the result of section 14(e) multiplied by 55 percent, multiplied 
by your share.
    (g) The total of all indemnities for the crop year will not exceed 
the amount of insurance.
15. Written Agreements
    The written agreement provisions in the Basic Provisions do not 
apply.
16. Late Planting
    Provisions of section 16 of the Basic Provisions do not apply.
17. Prevented Planting
    Provisions of section 17 of the Basic Provisions do not apply.
18. Loss Examples
Single Unit Loss Example
    Assume you have a 100 percent share, the inventory value reported 
by you is $100,000, and your coverage level is 75 percent. Your amount 
of insurance is $75,000 ($100,000 x .75). At the time of loss, unit 
value before loss is $95,000, unit value after loss is $30,000 and 
basic unit value before loss is $100,000. The deductible percentage is 
25 percent (100-75), the crop year deductible is $25,000 (.25 x 
$100,000). Your indemnity would be calculated as follows:
    Step (1) Determine the under-report factor; $100,000 / $95,000 = 
1.000;
    Step (2) Determine the occurrence deductible; .25 x $95,000 x 1.000 
= $23,750;
    Step (3) Calculate the difference between unit value before loss 
and unit value after loss; $95,000-$30,000 = $65,000;
    Step (4) Result of step 3 multiplied by the underreport factor 
(step 1); $65,000 x 1.000 = $65,000;
    Step (5) Result of step 4 minus the occurrence deductible; $65,000-
$23,750 = $41,250;
    Step (6) Result of step 5 multiplied by your share; $41,250 x 1.000 
= $41,250 indemnity payment.
Multiple Unit Multiple Loss Example
    Assume you have a 100 percent share, the inventory value reported 
by you is $100,000, and your coverage level is 75 percent. You have two 
optional units, unit 1 and unit 2. Your amount of insurance is $75,000 
($100,000 x .75). You have a loss on unit 1 and no loss on unit 2. At 
the time of loss, unit value before loss on unit 1 is $60,000, unit 
value after loss on unit 1 is $18,000 and basic unit value before loss 
is $125,000. The deductible percentage is 25 percent (100-75), the crop 
year deductible is $25,000 (.25 x $100,000). Your indemnity would be 
calculated as follows:
    Step (1) Determine the under-report factor; $100,000 / $125,000 = 
.80;
    Step (2) Determine the occurrence deductible; .25 x $60,000 x .80 = 
$12,000;
    Step (3) Calculate the difference between unit value before loss 
and unit value after loss; $60,000-$18,000 = $42,000;
    Step (4) Result of step 3 multiplied by the underreport factor 
(step 1); $42,000 x .80 = $33,600;
    Step (5) Result of step 4 minus the occurrence deductible; $33,600-
$12,000 = $21,600;
    Step (6) Result of step 5 multiplied by your share; $21,600 x 1.000 
= $21,600 indemnity payment.
    Your crop year deductible is reduced to $13,000 ($25,000-$12,000). 
Your amount of insurance is reduced to $53,400 ($75,000-$21,600). You 
do not restock unit 1 after the first loss. Values on unit 2 do not 
change from those measured at the time of the loss on unit 1. Assume 
you have a loss later in the crop year on unit 2. Unit value before 
loss on unit 2 is $65,000, unit value after loss on unit 2 is $0.00 and 
basic unit value before loss on the basic unit is $83,000. Your loss 
would be determined as follows:
    Step (1) Determine the remaining amount of insurance; $100,000-
$33,600 = $66,400;
    Step (2) Determine the under-report factor; $66,400 / $83,000 = 
.800;
    Step (3) Determine the occurrence deductible; $25,000-$12,000 = 
$13,000;
    Step (4) Calculate the difference between unit value before loss 
and unit value after loss; $65,000-$0.00 = $65,000;
    Step (5) Result of step 4 multiplied by the underreport factor 
(step 2); $65,000 x .800 = $52,000;
    Step (6) Result of step 5 minus the occurrence deductible; $52,000-
$13,000 = $39,000;
    Step (7) Result of step 6 multiplied by your share; $39,000 x 1.000 
= $39,000 indemnity payment.


[[Page 61140]]


    Signed in Washington, DC, on December 19, 2017.
Heather Manzano,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 2017-27894 Filed 12-26-17; 8:45 am]
 BILLING CODE 3410-08-P