[Federal Register Volume 78, Number 147 (Wednesday, July 31, 2013)]
[Rules and Regulations]
[Pages 46249-46255]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18414]



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Rules and Regulations
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Federal Register / Vol. 78, No. 147 / Wednesday, July 31, 2013 / 
Rules and Regulations

[[Page 46249]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-12-0008]
RIN 0563-AC38


Common Crop Insurance Regulations; Arizona-California Citrus Crop 
Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the 
Common Crop Insurance Regulations, Arizona-California Citrus 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 insured producers, and to reduce vulnerability to program 
fraud, waste, and abuse. The changes will be effective for the 2015 and 
succeeding crop years.

DATES: This rule is effective August 30, 2013.

FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, Director, Product 
Administration and Standards 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) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not-significant for the 
purposes of Executive Order 12866 and, therefore, it has not been 
reviewed by the Office of Management and Budget.

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 approved by OMB under control number 0563-0053.

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.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. The review reveals that this regulation will not have 
substantial and direct effects on Tribal governments and will not have 
significant Tribal implications.

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 amount of 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 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 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 final 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, or 7 CFR part 400, 
subpart J for determinations of good farming practices, as applicable, 
must be exhausted before any action against FCIC for judicial review 
may be brought.

[[Page 46250]]

Environmental Evaluation

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

Background

    This rule finalizes changes to the Common Crop Insurance 
Regulations (7 CFR part 457), Arizona-California Citrus Crop Insurance 
Provisions that were published by FCIC on April 21, 2013, as a notice 
of proposed rulemaking in the Federal Register at 78 FR 17606-17611. 
The public was afforded 30 days to submit comments after the regulation 
was published in the Federal Register.
    A total of 35 comments were received from 5 commenters. The 
commenters were insurance providers, an insurance service organization, 
and a grower organization.
    The public comments received regarding the proposed rule and FCIC's 
responses to the comments are as follows:

General

    Comment: In reference to the proposed addition of the term 
``agricultural commodity'' to replace the term ``crop'' in sections 1, 
3, and 7, a few commenters questioned if it is appropriate to use the 
term ``agricultural commodity'' because it is a broader term that can 
be something other than a crop. The commenters stated that changing 
this term could change the meaning of the provisions where it is used. 
The commenters questioned if this proposed change leaves the door open 
to perennial ``agricultural commodities'' other than what has been 
understood as perennial ``crops.'' The commenters questioned if there 
is any reason the term ``crop'' cannot be used and what purpose is 
served by making this change.
    Response: The reason for the proposed change is to provide 
consistency in terminology. The term ``agricultural commodity'' is a 
more precise term than ``crop'' because it is defined in the Basic 
Provisions, while ``crop'' is not. However, the term must be read in 
the context of the Crop Provisions, which clearly specifies that an 
interplanted agricultural commodity must be a perennial for the citrus 
fruit commodity to be insured. Further, the term ``agricultural 
commodity'' is defined in section 518 of the Federal Crop Insurance 
Act, which also limits the context in which it the term is used. 
Therefore, while it could be interpreted slightly more expansive than 
``crop'' it does not change the meaning of the provisions. No change 
has been made in the final rule.

Section 1--Definitions

    Comment: A few commenters stated the proposed addition of the 
definitions of ``citrus fruit commodity,'' ``citrus fruit group,'' and 
``commodity type'' to replace the terms ``crop'' and ``variety'' and 
other related revisions are part of the Acreage Crop Reporting 
Streamlining Initiative (ACRSI) and are similar to what was done in the 
2014 Florida Citrus Fruit proposed rule. Some of the concerns that were 
expressed in comments to the Florida Citrus Fruit proposed rule were 
addressed in the final rule responses, so these proposed changes are 
better understood this time around, though this is still a ``work in 
progress.'' The commenters stated the chart on page 17608 of the 
Arizona-California Citrus proposed rule is helpful in showing the 
expected groupings of commodity types.
    Response: FCIC appreciates the comment. Many of the comments that 
were received on the Florida Citrus Fruit proposed rule were considered 
when drafting the Arizona-California Citrus proposed rule. FCIC has 
made a concerted effort to address concerns and clarify the changes 
related to ACRSI.
    Comment: A few commenters suggested adding the phrase ``citrus 
fruit'' prior to the term ``commodity'' in the two places the term 
appears in the definition of ``commodity type.''
    Response: FCIC agrees with the commenters' suggestion because the 
proposed edit provides for consistency in terminology. The suggested 
changes have been made in the final rule.
    Comment: A few commenters stated the definitions of the terms 
``graft,'' ``interstock,'' ``scion,'' and ``topwork'' are proposed to 
be added because of the proposed provision in section 6(f)(2). The 
commenters stated it appears an ``interstock'' can be grafted to a 
``rootstock'' while a bud or ``scion'' can be grafted to either an 
``interstock'' or a ``rootstock.'' However, ``topworking'' (as defined) 
applies only to ``scions'' grafted onto ``a pruned scaffold limb of an 
interstock'' and apparently not to any scaffold limb or any other limbs 
of a ``rootstock.'' The commenters questioned if this is correct and if 
the definition of ``topworking'' needs to be clarified.
    Response: FCIC agrees with the commenters that clarification needs 
to be made in the definition of ``topwork.'' Topwork can be done to any 
scaffold limb whether it is part of the interstock or the original 
rootstock. Therefore, FCIC has revised the definition of ``topwork'' in 
the final rule by removing the phrase, ``of an interstock.''
    Comment: A commenter stated that the definition of ``dehorning'' is 
proposed to be removed, but the term ``dehorned'' is still used in 
section 3(c)(1).
    Response: FCIC agrees with the commenter that the definition of 
``dehorning'' is still used in section 3(c)(1). Therefore, the 
definition of ``dehorning'' has been retained in the final rule.
    Comment: A few commenters stated the definition of ``rootstock'' is 
not defined, but perhaps corresponds to the term ``trunk'' used in the 
definition of ``scaffold limb.'' According to Merriam-Webster, 
``rootstock'' is ``1: a rhizomatous underground part of a plant; 2: a 
stock for grafting consisting of a root or a piece of root.'' The 
commenters stated that neither of these definitions appear to be 
entirely correct for citrus trees where the grafting is unlikely to be 
done at the underground root level, although the meaning is generally 
understood for crop insurance purposes.
    Response: FCIC agrees with the commenters that ``rootstock'' is not 
defined and that the meaning for crop insurance purposes is not the 
same as the definition from Merriam-Webster provided by the commenter. 
Although a definition of ``rootstock'' was not proposed to be added, 
FCIC believes a definition should be added to prevent confusion from a 
potential conflict between the meaning for crop insurance purposes and 
definitions from other sources. FCIC has revised section 1 in the final 
rule by adding a definition of ``rootstock.''
    Comment: A few commenters stated that ``scaffold limb'' is defined 
as ``A major limb attached directly to the trunk.'' The commenters 
questioned if this means no grafting is involved, does it mean that it 
is part of the original ``rootstock,'' or does the word ``attached'' 
imply that it also has been grafted onto the ``rootstock,'' as 
indicated by the reference in the definition of ``topwork'' to a 
``scaffold limb of an interstock.''
    Response: A ``scaffold limb'' could be part of the original 
rootstock or part of an interstock. The term attached does not 
specifically mean it has been grafted, although it would include any 
major limbs that have been grafted onto the trunk. As stated in 
response to a prior comment, FCIC has revised the definition of 
``topwork'' in the final rule by removing the phrase, ``of an 
interstock.''

[[Page 46251]]

Section 2--Unit Division

    Comment: A commenter stated that the Basic Provisions references 
the ``insured crop'' and defines ``insured crop'' as the crop in the 
county for which coverage is available under your policy as shown on 
the application accepted by us. The commenter questioned if it would 
improve clarity if the definition of ``insured crop'' was expanded in 
the Crop Provisions to say, ``In addition to section 1 of the Basic 
Provisions, the insured crop will be each citrus fruit group for which 
coverage is available under your policy as shown on the application 
accepted by us.''
    Response: FCIC disagrees that the definition of ``insured crop'' 
should be further modified through the Crop Provisions. The proposed 
language in section 6 already states that ``the insured crop will be 
all the acreage in the county of each citrus fruit group you elect to 
insure and for which a premium rate is provided by the actuarial 
documents.'' Therefore, there is no need to repeat this in a 
definition. No change has been made in the final rule.
    Comment: A commenter questioned whether optional units by commodity 
type can further be broken down by non-contiguous land.
    Response: If the Special Provisions allows optional units by 
commodity type, the optional units may be established by commodity type 
in addition to or instead of by non-contiguous land provided all other 
requirements, such as separate production records, are met.
    Comment: A few commenters stated the proposed revision of the 
second sentence of section 2(b) reads: ``Optional units may be 
established by commodity type if allowed by the Special Provisions or 
if each optional unit is located on non-contiguous land, unless 
otherwise allowed by written agreement.'' According to the explanation 
in the background section of proposed rule, the added phrase is 
intended to allow optional units by commodity type (if allowed by the 
Special Provisions) in addition to optional units by non-contiguous 
land or by written agreement. However, the commenters stated that as 
written, it could be taken to mean that except when allowed by written 
agreement, optional units are allowed only by commodity type, with two 
``ifs'' involved: Either the commodity type is in the Special 
Provisions, or it is on non-contiguous land. The commenters suggested 
it might be clearer to subdivide (b): ``Optional units may be 
established: (1) By commodity type, if allowed by the Special 
Provisions; (2) If each optional unit is located on non-contiguous 
land; and (3) As otherwise allowed by written agreement.''
    Response: FCIC agrees that the proposed wording could be 
misinterpreted. Therefore, FCIC has revised the section 2(b) in the 
final rule to clarify that, unless otherwise allowed by written 
agreement, optional units may only be established if each optional unit 
meets one or more of the following: (1) The optional unit is located on 
non-contiguous land; and (2) in addition to or instead of establishing 
optional units by non-contiguous land, optional units may be 
established by commodity type if allowed by the Special Provisions.
    Comment: A commenter stated the background section of the proposed 
rule states that adding optional units by commodity type if allowed by 
the Special Provisions ``. . . will give FCIC the flexibility to allow 
optional units by commodity type for some citrus fruit commodities or 
citrus fruit groups where it may be appropriate, but not for others.'' 
But according to the expected division into commodity types and citrus 
fruit groups provided, the only citrus fruit group that is subdivided 
into commodity types is Mandarins/Tangerines, with separate commodity 
types for Clementines, W. Murcott, and All Other. The commenter stated 
the other commodity types listed are each set up as a separate citrus 
fruit group and, therefore, qualify as separate basic units, including 
the Minneola and Orlando types of Tangelos. The commenter questioned 
what further subdivision might be considered that would require this 
``flexibility.''
    Response: The commenter is correct that under the proposed 
restructuring of the citrus fruit crops (into citrus fruit 
commodities), the only resulting commodity types that would be eligible 
for optional units are the commodity types under the citrus fruit 
commodity Mandarin/Tangerines. All of the other citrus fruit 
commodities are anticipated to only have one commodity type per citrus 
fruit group. For those citrus fruit groups containing only one 
commodity type, optional units by commodity type does not provide any 
additional benefit. However, while FCIC does not currently have plans 
to further subdivide or add new commodity types, it is possible 
commodity types could be further subdivided or added in the future. 
While it is not possible to predict what, if any, commodity types might 
be subdivided or added, allowing optional units by commodity type, only 
if allowed by the Special Provisions, allows FCIC the flexibility to 
identify some commodity types that are eligible for optional units and 
not others, as appropriate.

Section 3--Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities

    Comment: A few commenters stated that the proposed revision to 
remove the specific years from the example in section 3(b) does not add 
any clarity and may actually be more confusing. The commenters 
suggested updating the provision with contemporary dates or removing 
the example altogether.
    Response: FCIC agrees that an example containing actual crop years 
may be easier to understand than the proposed revisions. FCIC has 
revised the example in section 3(b) to include contemporary dates.
    Comment: A few commenters stated that according to the background 
section of the proposed rule the definition of ``dehorning'' is 
proposed to be deleted because the term is no longer used. Therefore, 
the commenters stated that section 3(c)(1) needs to be revised since it 
currently begins: ``The number of trees damaged, dehorned or removed . 
. .''
    Response: As stated in a response to a previous comment, FCIC has 
retained the definition of ``dehorning'' in the final rule because it 
is still used in section 3(c)(1).
    Comment: A few commenters recommended revising section 3(d) by 
removing the word ``such'' prior to the phrase ``situation listed in 
section 3(c).''
    Response: FCIC agrees that the term ``such'' should be removed from 
the first sentence of section 3(d). The term is not necessary and its 
removal does not change the meaning of the provision. This change has 
been made in the final rule.

Section 6--Insured Crop

    Comment: A commenter stated the proposed amendment to section 6(f) 
provides an age requirement for topworked acreage, but does not 
specifically address grafted acreage. Producers are unsure of the age 
requirements for grafted acreage, specifically, at what age acreage is 
insurable after it has been grafted. Even though the term ``graft'' is 
used in the definition of topwork, it would be appropriate to clarify 
the age requirement for grafted acreage in section 6 of the Crop 
Provisions. The current age is the sixth growing season after acreage 
is set out, or the fifth growing season after topwork. The commenter 
suggested that if grafted acreage follows the same guidelines as 
topworked acreage, FCIC should include the following language in 
6(f)(2) that is

[[Page 46252]]

specific to grafting: ``The fifth growing season after topwork or 
grafting.''
    Response: FCIC agrees with the commenter that the proposed 
provision does not specifically address all grafted trees such as scion 
that may be grafted to rootstock shortly after set out. FCIC's 
intention was to include grafted trees with topworked trees. However, 
as worded the proposed provision only includes trees that have grafting 
done to scaffold limbs. FCIC has revised section 6(f)(2) in the final 
rule to incorporate the suggested language with the caveat that the 
provision only applies if topwork or grafting occurs after set out. If 
topwork or grafting occurs prior to set or does not occur after set 
out, the timeframe for when insurability will be based upon when the 
trees were set out. Additionally, FCIC has revised section 6(f) to 
eliminate redundant language.
    Comment: A commenter asked why underage citrus (grown on trees that 
have not reached the sixth growing season after being set out, or the 
fifth growing season after topwork) requires a written agreement to be 
insured, rather than a Regional Office Determined Yield as is the case 
with other California crops (e.g. stonefruit, grapes, almonds, etc.).
    Response: FCIC strives to maintain some degree of consistency 
between the various crop insurance programs. However, due to the 
inherent differences among the crops insured by FCIC it is not possible 
for all crops to operate under the same set of rules, which is why 
there are different policies for different crops. One major difference 
between citrus and many of the other perennial crops insured in 
California, such as stonefruit, grapes, and almonds, is that citrus 
trees are less tolerant of freezing temperatures. Young citrus trees 
are especially susceptible to freeze injury. Fruit yields from young 
citrus trees damaged by freeze are often affected for multiple growing 
seasons. Requiring written agreements for Arizona-California Citrus 
allows policies to be processed prior to the period of risk for freeze, 
which protects against adverse selection.

Section 8--Insurance Period

    Comment: A few commenters stated the proposed language in section 
8(a)(2)(i)(B) is to clarify which counties are considered ``Southern 
California'' for purposes of determining the calendar date for the end 
of the insurance period for lemons, by listing the counties: ``Southern 
California lemons (Imperial, Orange, Riverside, San Bernardino, San 
Diego, and Ventura Counties).'' The commenters stated that maybe no one 
will read this as meaning ``Southern California lemons'' is a separate 
citrus fruit commodity that will be identified as such in the actuarial 
documents, but as an alternative, perhaps consider stating ``Lemons in 
the Southern California counties of Imperial, . . .'' The commenters 
stated that if this change is made, section 8(a)(2)(iii) might need to 
be revised to ``July 31 for lemons in counties outside Southern 
California, and all other citrus fruit commodities.''
    Response: FCIC agrees with the commenter that the proposed language 
could be misinterpreted to mean that ``Southern California Lemons'' is 
the name of a separate citrus fruit commodity. Therefore, FCIC has made 
the suggested revisions to section 8(a)(2).
    Comment: A commenter recommended that San Diego and Ventura 
counties be separated from the proposed list of ``Southern California'' 
counties and put with San Luis Obispo County into a ``Coastal 
Counties'' group with a separate insurance period. According to the 
commenter, these Coastal counties produce lemons that bloom up to three 
times per year due to their moderate growing temperatures, so the 
insurance period should be extended to December of the year following 
bloom. This may not be enough time to allow the grower to harvest all 
three bloom periods, but it would at least extend the insurance period 
out to allow for the first bloom that occurs in the spring of the crop 
year.
    Response: The changes suggested by the commenter were not included 
in the proposed rule and the comment does not address a conflict or 
vulnerability. Therefore, FCIC cannot consider the requested change 
because the public was not given the opportunity to comment. No change 
has been made in the final rule. However, FCIC has noted the concerns 
of the commenter and will consider this change the next time the Crop 
Provisions are revised.
    Comment: A commenter stated the California citrus industry 
recognizes the value of crop insurance with more than 90 percent of the 
acreage insured through the crop insurance program, of which 49 percent 
of the acreage is covered through ``buy-up'' policies. The addition of 
the quarantine endorsement for ``buy-up'' policies is very valuable to 
the citrus industry. The commenter suggested revising section 8(b) of 
the Crop Provisions to clarify that if a policy has a quarantine 
endorsement that the crop is covered against the loss of production due 
to the inability to market the citrus due to quarantine. The commenter 
stated that the way it is currently written, it doesn't acknowledge 
policies with the endorsement.
    Response: FCIC appreciates the commenter's support for the Arizona-
California Crop Insurance program and the Quarantine Endorsement. 
However, the changes suggested by the commenter were not included in 
the proposed rule and the comment does not address a program conflict 
or vulnerability. Therefore, FCIC cannot consider the requested change 
because the public was not given the opportunity to comment. No change 
has been made in the final rule.
    Comment: A commenter recommended including the language from the 
``Insurance Period'' section 9(d)(3)(i)-(iii) of the 2012 ARH Citrus 
Pilot Crop Provisions [``If you anticipate destroying the trees on any 
acreage prior to harvest . . .''] in the AZ-CA Citrus Crop Provisions. 
The commenter stated this would allow both policies to be treated the 
same, eliminating potential confusion for insurance providers, agents, 
and policyholders. The policy has a 15-month insurance period with 13 
of those months remaining after the acreage reporting date. The 
commenter stated this change will allow policyholders to make farming 
decisions based on the best interest of their farming operations and 
not on the language in their crop insurance policy.
    Response: The changes suggested by the commenter were not included 
in the proposed rule and the comment does not address a conflict or 
vulnerability. Therefore, FCIC cannot consider the requested change 
because the public was not given the opportunity to comment. No change 
has been made in the final rule.

Section 10--Duties in the Event of Damage or Loss

    Comment: A commenter stated the proposed addition of section 10(a) 
states that ``In accordance with the requirements of section 14 of the 
Basic Provisions, you must leave representative samples in accordance 
with our procedures.'' The commenter stated that the explanation was 
given that this requirement applies only if specified in the Crop 
Provisions. However, the commenter stated that this seems unwarranted 
without more detail either in the Crop Provisions or in the referenced 
``procedures.'' For example, there does not appear to be any other 
reference to ``representative samples'' in the proposed Crop 
Provisions, unless maybe it is part of 10(b)(2) notification 
requirement to allow the insurance provider to do an inspection. 
Therefore, the commenter questioned when this might be needed. The 
commenter stated

[[Page 46253]]

section 14(c)(3) of the Basic Provisions requires that the samples 
``must be 10 feet wide and extend the entire length of the rows, if the 
crop is planted in rows, or if the crop is not planted in rows, the 
longest dimension of the field.'' The commenter asked if these 
dimensions work for citrus grown on trees, or should there be specific 
requirements for this or anything else in this regard added in the Crop 
Provisions.
    Response: In accordance with section 14(c)(1) of the Common Crop 
Insurance Policy Basic Provisions, section 10(b)(2) is the notice that 
policyholders are required to leave representative samples of the 
unharvested crop intact. Because policyholders are not provided FCIC 
procedures as part of their policy, FCIC has revised the proposed 
language in section 10(a) to state that representative samples must be 
left. FCIC has also added provisions that clarify that the insurance 
provider will notify the policyholder of which trees must remain 
unharvested as the representative sample and inspected in accordance 
with FCIC procedures. FCIC procedures will specify the criteria for 
identifying trees that should be selected for obtaining representative 
samples.
    In addition to the changes described above, FCIC has made minor 
editorial changes.

List of Subjects in 7 CFR Part 457

    Crop insurance, Arizona-California citrus, Reporting and 
recordkeeping requirements.

Final Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation amends 7 CFR part 457 effective for the 2015 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. Amend Sec.  457.121 as follows:
0
a. In the introductory text by removing ``2000'' and adding ``2015'' in 
its place;
0
b. By removing the undesignated paragraph immediately preceding section 
1;
0
c. In section 1:
0
i. By revising the definition of ``carton'';
0
ii. By removing the definitions of ``crop'' and ``variety'';
0
iii. By adding in alphabetical order the definitions of ``citrus fruit 
commodity,'' ``citrus fruit group,'' ``commodity type,'' ``graft,'' 
``interstock,'' ``rootstock,'' ``scion,'' and ``topwork'';
0
iv. In the definition of ``crop year'' by removing the term ``citrus'' 
and adding the term ``insured'' in its place;
0
v. In the definition of ``direct marketing'' by adding the term 
``insured'' directly preceding the term ``crop'' in the second 
sentence; and
0
vi. In the definition of ``interplanted'' by removing the term 
``crops'' and adding the term ``agricultural commodities'' in its 
place;
0
d. Revise section 2;
0
e. In section 3:
0
i. By revising paragraph (a);
0
ii. In paragraph (b) by removing the number ``1998'' and adding the 
number ``2015'' in its place and by removing the number ``1996'' and 
adding the number ``2013'' in its place;
0
iii. In paragraph (c) introductory text by removing the phrase 
``(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities)'' and by adding the term ``commodity'' directly preceding 
the term ``type'';
0
iv. In paragraph (c)(4) by removing the phrase ``crop, and anytime'' 
and adding the phrase ``agricultural commodity and any time'' in its 
place;
0
v. In paragraph (c)(4)(i) by removing the phrase ``crop, and type'' and 
adding the phrase ``agricultural commodity and commodity type'' in its 
place;
0
vi. By designating the undesignated paragraph following paragraph 
(c)(4)(iii) as paragraph (d); and
0
vii. By revising the newly designated paragraph (d);
0
f. In section 4 by removing the phrase ``(Contract Changes)'';
0
g. In section 5 by removing the phrase ``(Life of Policy, Cancellation, 
and Termination)'';
0
h. In section 6;
0
i. By revising the introductory text;
0
ii. In paragraph (b) by adding the phrase ``grown on rootstock and 
trees'' following the phrase ``That is''; and
0
iii. By revising paragraph (f);
0
i. Revise section 7;
0
j. In section 8:
0
i. In paragraph (a) introductory text by removing the phrase 
``(Insurance Period)'';
0
ii. In paragraph (a)(1) by removing the space between the number ``10'' 
and the term ``day'' and adding a hyphen in its place and by adding the 
term ``insured'' directly preceding the phrase ``crop or to determine 
the condition of the grove'';
0
iii. By revising paragraphs (a)(2)(i) and (iii); and
0
iv. In paragraph (b) introductory text by removing the phrase 
``(Insurance Period)'';
0
k. In section 9:
0
i. In paragraph (a) introductory text by removing the phrase ``(Cause 
of Loss)'';
0
ii. In paragraph (a)(5) by removing the term ``or'' after the 
semicolon;
0
iii. In paragraph (a)(6) by removing the period at the end of the 
sentence and adding a semicolon in its place;
0
iv. By adding new paragraphs (a)(7) and (8); and
0
v. By revising paragraph (b);
0
l. In section 10:
0
i. By redesignating the introductory text, paragraph (a), and paragraph 
(b) as paragraphs (b) introductory text, (b)(1), and (b)(2) 
respectively;
0
ii. By adding a new paragraph (a);
0
iii. In the newly designated paragraph (b) introductory text by 
removing the phrase ``(Duties in the Event of Damage or Loss)''; and
0
iv. By revising the newly designated paragraph (b)(2);
0
m. In section 11:
0
i. In paragraph (b)(1) by removing the phrase ``crop, or variety if 
applicable,'' and adding the term ``commodity type'' in its place;
0
ii. In paragraph (b)(2) by removing the phrase ``crop, or variety, if 
applicable'' and adding the phrase ``commodity type'' in its place;
0
iii. In paragraph (b)(4) by removing the phrase ``variety, if 
applicable'' and adding the phrase ``commodity type'' in its place;
0
iv. In paragraph (c)(1)(iv) by removing the term ``crop'' in all three 
places it appears and adding the term ``insured crop'' in its place; 
and
0
v. By revising paragraph (f).
    The revisions and additions read as follows:


Sec.  457.121  Arizona-California citrus crop insurance provisions.

* * * * *
1. * * *
    Carton. The standard container for marketing the fresh packed 
citrus fruit commodity, as shown below, unless otherwise provided in 
the Special Provisions. In the absence of marketing records on a carton 
basis, production will be converted to cartons on the basis of the 
following average net pounds of packed fruit in a standard packed 
carton, unless otherwise provided in the Special Provisions.

[[Page 46254]]



------------------------------------------------------------------------
                                       Citrus fruit
          Container size                commodity            Pounds
------------------------------------------------------------------------
Container 58............  Oranges............                38
Container 58............  Lemons.............                40
Container 59............  Grapefruit.........                32
Container 63............  Mandarins/                         25
                                    Tangerines.
Container 63............  Tangelos...........                25
------------------------------------------------------------------------

    Citrus fruit commodity. Citrus fruit as follows:
    (1) Oranges;
    (2) Lemons;
    (3) Grapefruit;
    (4) Mandarins/Tangerines;
    (5) Tangelos; and
    (6) Any other citrus fruit commodity designated in the actuarial 
documents.
    Citrus fruit group. A designation in the Special Provisions used to 
identify commodity types within a citrus fruit commodity that may be 
grouped together for the purposes of electing coverage levels and 
identifying the insured crop.
    Commodity type. A specific subgroup of a citrus fruit commodity 
having a characteristic or set of characteristics distinguishable from 
other subgroups of the same citrus fruit commodity.
* * * * *
    Graft. To unite a bud or scion with a rootstock or interstock in 
accordance with recommended practices to form a living union.
* * * * *
    Interstock. The area of the tree that is grafted to the rootstock.
    Rootstock. The root and stem portion of a tree to which a scion can 
be grafted.
* * * * *
    Scion. A detached living portion of a plant joined to a rootstock 
or interstock in grafting.
* * * * *
    Topwork. Grafting a scion onto a pruned scaffold limb.
2. Unit Division
    (a) Basic units will be established in accordance with section 1 of 
the Basic Provisions.
    (b) Provisions in the Basic Provisions that allow optional units by 
section, section equivalent, or FSA farm serial number and by irrigated 
and non-irrigated practices are not applicable. Unless otherwise 
allowed by written agreement, optional units may only be established if 
each optional unit meets one or more of the following:
    (1) The optional unit is located on non-contiguous land; and
    (2) In addition to or instead of establishing optional units by 
non-contiguous land, optional units may be established by commodity 
type if allowed by the Special Provisions.
3. * * *
    (a) In addition to the requirements of section 3 of the Basic 
Provisions, you may select only one price election and coverage level 
for each citrus fruit group you elect to insure. The price election you 
choose for each citrus fruit group need not bear the same percentage 
relationship to the maximum price offered by us for each citrus fruit 
group. For example, if you choose one hundred percent (100%) of the 
maximum price election for the citrus fruit group for Valencia oranges, 
you may choose seventy-five percent (75%) of the maximum price election 
for the citrus fruit group for Navel oranges. However, if separate 
price elections are available by commodity type within each citrus 
fruit group, the price elections you choose for each commodity type 
must have the same percentage relationship to the maximum price offered 
by us for each commodity type within the citrus fruit group.
* * * * *
    (d) We will reduce the yield used to establish your production 
guarantee as necessary, based on our estimate of the effect of any 
situation listed in section 3(c) that may occur. If you fail to notify 
us of any situation in section 3(c), we will reduce your production 
guarantee as necessary, at any time we become aware of the 
circumstance. If the situation in 3(c) occurred:
    (1) Before the beginning of the insurance period, the yield used to 
establish your production guarantee will be reduced for the current 
crop year regardless of whether the situation was due to an insured or 
uninsured cause of loss;
    (2) After the beginning of the insurance period and you notify us 
by the production reporting date, the yield used to establish your 
production guarantee will be reduced for the current crop year only if 
the potential reduction in the yield used to establish your production 
guarantee is due to an uninsured cause of loss; or
    (3) After the beginning of the insurance period and you fail to 
notify us by the production reporting date, an amount equal to the 
reduction in the yield will be added to the production to count 
calculated in section 11(c) due to uninsured causes. We may reduce the 
yield used to establish your production guarantee for the subsequent 
crop year to reflect any reduction in the productive capacity of the 
trees.
* * * * *
6. * * *
    In accordance with section 8 of the Basic Provisions, the insured 
crop will be all the acreage in the county of each citrus fruit group 
you elect to insure and for which a premium rate is provided by the 
actuarial documents:
* * * * *
    (f) That, unless otherwise provided in the Special Provisions or if 
we inspect and approve a written agreement to insure such acreage, is 
grown on trees that have reached at least:
    (1) The sixth growing season after being set out; or
    (2) The fifth growing season after topwork or grafting, if topwork 
or grafting occurs after set out.
7. Insurable Acreage
    In lieu of the provisions in section 9 of the Basic Provisions that 
prohibit insurance attaching to interplanted acreage, citrus 
interplanted with another perennial agricultural commodity is insurable 
unless we inspect the acreage and determine it does not meet the 
requirements contained in your policy.
8. * * *
    (a) * * *
    (2) * * *
    (i) August 31 for:
    (A) Navel oranges; and
    (B) Lemons in the Southern California counties of Imperial, Orange, 
Riverside, San Bernardino, San Diego, and Ventura;
* * * * *
    (iii) July 31 for lemons in all other counties and for all other 
citrus fruit commodities.
* * * * *
9. * * *
    (a) * * *
    (7) Insects, but not damage due to insufficient or improper 
application of pest control measures; or
    (8) Plant disease, but not damage due to insufficient or improper 
application of disease control measures.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic

[[Page 46255]]

Provisions, we will not insure against damage or loss of production due 
to the inability to market the citrus for any reason other than actual 
physical damage from an insurable cause of loss 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. * * *
    (a) In accordance with the requirements of section 14 of the Basic 
Provisions, you must leave representative samples. In lieu of section 
14(c)(3) of the Basic Provisions, we will determine which trees must 
remain unharvested as your representative sample so that we may inspect 
them in accordance with procedures.
    (b) * * *
    (2) If you intend to claim an indemnity on any unit, you must 
notify us at least 15 days prior to the beginning of harvest or 
immediately if damage is discovered during harvest so that we may have 
an opportunity to inspect unharvested trees. You must not sell or 
dispose of the damaged insured crop until after we have given you 
written consent to do so. If you fail to meet the requirements of this 
section, all such production will be considered undamaged and included 
as production to count.
* * * * *
11. * * *
    (f) If you elect the frost protection option and we determine that 
frost protection equipment, as specified in the Special Provisions, was 
not properly utilized or not properly reported, the indemnity for the 
unit will be reduced by the percentage of premium reduction allowed for 
frost protection equipment. You must, at our request, provide us 
records showing the start-stop times by date for each period the frost 
protection equipment was used.
* * * * *

    Signed in Washington, DC, on July 25, 2013.
Brandon Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2013-18414 Filed 7-30-13; 8:45 am]
BILLING CODE 3410-08-P