[Federal Register Volume 64, Number 89 (Monday, May 10, 1999)]
[Rules and Regulations]
[Pages 24931-24933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11595]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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to and codified in the Code of Federal Regulations, which is published
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Federal Register / Vol. 64, No. 89 / Monday, May 10, 1999 / Rules and
Regulations
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
Common Crop Insurance Regulations; Grape Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes
specific crop provisions for the insurance of grapes. The intended
effect of this action is to provide policy changes to better meet the
needs of the insured by adding provisions that allow grape producers in
Idaho, Oregon, and Washington to select one price election and one
coverage level for each varietal group specified in the Special
Provisions and provide year-round coverage in California, Idaho,
Mississippi, Oregon, Texas, and Washington for insureds with no break
in coverage from the prior crop year to be effective for the 2000 and
subsequent crop year.
EFFECTIVE DATE: June 9, 1999.
FOR FURTHER INFORMATION CONTACT: Stephen Hoy, Insurance Management
Specialist, Product Development Division, Federal Crop Insurance
Corporation, United States Department of Agriculture, 9435 Holmes Road,
Kansas City, MO, 64131, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be exempt for the purposes of
Executive Order 12866 and, therefore, has not been reviewed by the
Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter
35), the collections of information in this rule have been approved by
the Office of Management and Budget (OMB) under control number 0563-
0053 through April 30, 2001.
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 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 12612
It has been determined under section 6(a) of Executive Order 12612,
Federalism, that this rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on States or their political subdivisions or on the distribution
of power and responsibilities among the various levels of government.
Regulatory Flexibility Act
This regulation will not have a significant economic impact on a
substantial number of small entities. The amount of work required of
the insurance companies will not increase because the information used
to determine eligibility must already be collected under the present
policy. No additional work is required as a result of this action on
the part of either the insured or the insurance companies.
Additionally, the regulation does not require any action on the part of
small entities than is required on the part of large entities.
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 for judicial
review of any determination made by 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.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicate
regulations and improve those that remain in force.
Background
On Wednesday, September 2, 1998, FCIC published a notice of
proposed rulemaking in the Federal Register at 63 FR 46706-46708 to
revise 7 CFR 457.138, Grape Crop Insurance Provisions, effective for
the 2000 and succeeding crop years.
Following publication of the proposed rule, the public was afforded
30 days to submit written comments and opinions. A total of six
comments were received from an insurance service organization, two
reinsured companies, a producer association, and a representative of a
producer association. The producer association and one reinsured
company concurred with the proposed changes
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made to the regulation. The comments received and FCIC's responses are
as follows:
Comment: An insurance service organization suggested issuing an
amendatory endorsement, rather than reissuing the entire Grape Crop
Provisions, to minimize cost for companies that provide insurance for
grapes.
Response: The crop insurance policy is contractual in nature and
the subject matter is complicated and difficult to read and understand.
Use of an amendatory endorsement attached to a complicated policy, part
of which is no longer in effect, may cause confusion and
misunderstanding. This is especially true if a major change, such as a
provision for year-round coverage, is made to the policy. FCIC has been
attempting to construct crop insurance policies that are easier to
understand by using common terms, provisions, and policy format.
Reissuing a complete policy when major changes are made is necessary to
achieve this goal.
Comment: A reinsured company questioned whether rates will reflect
the increased exposure resulting from the extended coverage and
suggested that they should.
Response: FCIC will determine if the extended insurance period
results in additional risk not reflected in the current premium rate
structure for grapes. Premium rates will be adjusted to reflect any
increased risk.
Comment: A reinsured company suggested that an insured would have
nothing to lose by applying for increased coverage prior to the sales
closing date but following a cause of loss that could or would reduce
the yield of the insured crop. The commenter questioned how the
provision will be administered and objected to the proposed changes if
expenses for delivery of the program will increase. The commenter also
questioned when coverage would begin for a newly written policy.
Response: Under the terms of the policy, if the potential exists
for grape yields to be affected, the coverage level or ratio of the
price election to the maximum price election cannot be increased by the
insured. All grape producers are required to annually complete a
worksheet to certify if damage (e.g., disease, hail, freeze) occurred
to the vines or if cultural practices used will reduce the insured's
crop production from previous levels. Agents will also be able to
access weather and crop information; therefore, insurance providers
should be able to determine if damage exists.
The extended period of coverage for grapes is during the period of
dormancy when the risk of loss is generally low, especially in
California where winter damage is minimal. FCIC believes that
occurrences of insured causes of loss during the extended period of
coverage will be infrequent; therefore, expenses resulting from
administration of the additional coverage should be minimal. Coverage
for new insureds will not attach until the day following the sales
closing date unless the application is received on or within 8 days
prior to the sales closing date. Insurance will then attach on the 10th
day after the properly completed application is received in the crop
insurance provider's office, unless the acreage is inspected during the
10 day period and does not meet insurability requirements. For existing
policies, coverage will begin with the 2000 crop year and will not
provide coverage retroactively to cover the uninsured period in the
1999 crop year.
Comment: A representative of a producer association recommended
that, in addition to the proposed changes, sections 2 and 3 of the
Grape Crop Provisions be revised to permit grape producers in the State
of Oregon to: (1) Establish basic units by variety; (2) establish
optional units only if each optional unit is located on non-contiguous
land, unless otherwise allowed by written agreement; (3) select only
one price election and coverage level for each grape variety in the
county specified in the Special Provisions; and (4) apply for a written
agreement to establish a price election if the Special Provisions do
not provide a price election for a specific variety that is insured.
Response: Revising the Grape Crop Provisions to provide coverage by
variety in the State of Oregon requires extensive, detailed production
and price information data on the varieties produced. This coverage is
available in California because detailed data is available by crush
district from the California Department of Food and Agriculture. FCIC
is revising the Grape Crop Provisions to allow grape producers in
Idaho, Oregon, and Washington to select one coverage level and one
price election for each varietal group designated in the Special
Provisions because it has obtained sufficient data. Currently, FCIC has
access to only limited statewide data from the National Agriculture and
Statistic Service on grape varieties produced in Oregon. Additional
data on grape variety production, acreage, price, and critical
temperatures in each county or district are necessary to provide
coverage and price elections based on grape varieties in Oregon. If
data are available, FCIC will work with grape producers in Oregon and
other states to determine if different coverage and price elections can
be provided by grape variety.
In addition to the changes described above and minor editorial
changes, FCIC has made the following change to the Grape Crop
Provisions:
Section 3--Amended section 3(f) of the proposed rule for
clarification. The phrase ``after coverage begins'' that followed ``* *
* you may not increase your elected or assigned coverage level or the
ratio of your price election to the maximum price election we offer. *
* *'' was removed. The phrase is unnecessary and may cause confusion.
List of Subjects in 7 CFR Part 457
Crop insurance, Grape.
Final Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation amends the Common Crop Insurance Regulations (7
CFR part 457) by amending 7 CFR 457.138, for the 2000 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 457.138 is revised by amending the introductory text to
read as follows:
Sec. 457.138 Grape crop insurance provisions.
The grape crop insurance provisions for the 2000 and succeeding
crop years are as follows:
* * * * *
3. In Sec. 457.138, sections 3(b) and 3(c) are revised and a new
section 3(f) is added at the end of section 3 to read as follows:
3. Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities.
* * * * *
(b) In Idaho, Oregon, and Washington, you may select only one price
election and coverage level for each grape varietal group specified in
the Special Provisions.
(c) In all states except California, Idaho, Oregon, and Washington,
you may select only one price election and coverage level for all the
grapes in the county insured under this policy unless the Special
Provisions provide different price elections by varietal group, in
which case you may select one price
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election for each varietal group designated in the Special Provisions.
The price elections you choose for each varietal group must have the
same percentage relationship to the maximum price offered by us for
each varietal group. For example, if you choose 100 percent of the
maximum price election for one varietal group, you must also choose 100
percent of the maximum price election for all other varietal groups.
* * * * *
(f) In California, Idaho, Mississippi, Oregon, Texas, and
Washington, you may not increase your elected or assigned coverage
level or the ratio of your price election to the maximum price election
we offer if a cause of loss that could or would reduce the yield of the
insured crop is evident prior to the time that you request the
increase.
4. In Sec. 457.138, section 9(a)(2) is redesignated as 9(a)(3) and
a new section 9(a)(2) is added to read as follows:
9. Insurance Period.
(a) * * *
(1) * * *
(2) In California, Idaho, Mississippi, Oregon, Texas, and
Washington, for each subsequent crop year that the policy remains
continuously in force, coverage begins on the day immediately following
the end of the insurance period for the prior crop year. Policy
cancellation that results solely from transferring to a different
insurance provider for a subsequent crop year will not be considered a
break in continuous coverage.
* * * * *
Signed in Washington, DC on April 6, 1999.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 99-11595 Filed 5-7-99; 8:45 am]
BILLING CODE 3410-08-P
