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Federal Register / Vol. 72, No.

108 / Wednesday, June 6, 2007 / Proposed Rules 31199

(1) 100 acres × 400 pounds = 40,000 (d) Mature green weight for appraised option for the 2008 and subsequent crop
pound guarantee; or harvested production will be years.
(2) 40,000 pounds × $1.00/pound multiplied by the recovery percentage DATES: Written comments and opinions
price election = $40,000 value of subject to the following: on this proposed rule will be accepted
guarantee; (1) We may obtain samples of the until close of business August 6, 2007
(3) 20,000 pounds × $1.00/pound production to determine the recovery and will be considered when the rule is
price election = $20,000 value of percentage. to be made final.
production to count; (2) The determined recovery ADDRESSES: Interested persons are
(4) $40,000¥$20,000 = $20,000 loss; percentage will be used to calculate invited to submit comments, titled
and your loss only if: ‘‘Coverage Enhancement Option
(5) $20,000 × 100 percent share = (i) All determined recovery Insurance Provisions’’, by any of the
$20,000 indemnity payment. percentages are established using
(c) The total production (finished following methods:
samples of green weight production • By Mail to: Director, Product
weight) to count from all insurable obtained by us or by the processor for Administration and Standards Division,
acreage on the unit will include: sold or processed production; and
(1) All appraised production as Risk Management Agency, United States
(ii) The samples are analyzed by an Department of Agriculture, 6501 Beacon
follows: approved laboratory.
(i) Not less than the production Drive, Stop 0812, Room 421, Kansas
(3) If the conditions of section 11(d)(2) City, MO 64133–4676.
guarantee for acreage: are not met, the standard recovery
(A) That is abandoned; • E-mail: DirectorPDD@rma.usda.gov.
percentage will be used. • Federal eRulemaking Portal: http://
(B) Put to another use without our
consent; 12. Late Planting www.regulations.gov. Follow the
(C) Damaged solely by uninsured instructions for submitting comments.
The provisions of section 16 of the A copy of each response will be
causes; or Basic Provisions are not applicable.
(D) For which you fail to provide available for public inspection from 7
records of production that are 13. Prevented Planting a.m. to 4:30 p.m., CDT, Monday through
acceptable to us; Friday except holidays at the above
The provisions of section 17 of the address.
(ii) Production lost due to uninsured Basic Provisions are not applicable.
causes; FOR FURTHER INFORMATION CONTACT:
(iii) Unharvested production (mature Signed in Washington, DC, on May 30,
William Klein, Risk Management
unharvested green weight production 2007.
Specialist, Product Management,
must be adjusted in accordance with Eldon Gould,
Product Administration and Standards
section 11(d)); and Manager, Federal Crop Insurance Division, Risk Management Agency, at
(iv) Potential production on insured Corporation.
the Kansas City, MO, address listed
acreage that you intend to put to another [FR Doc. E7–10824 Filed 6–5–07; 8:45 am] above, telephone (816) 926–7730.
use or abandon, if you and we agree on BILLING CODE 3410–08–P
SUPPLEMENTARY INFORMATION:
the appraised amount of production.
Upon such agreement, the insurance Executive Order 12866
period for that acreage will end when DEPARTMENT OF AGRICULTURE
The Office of Management and Budget
you put the acreage to another use or (OMB) has determined that this rule is
abandon the crop. If agreement on the Federal Crop Insurance Corporation
non-significant for the purpose of
appraised amount of production is not Executive Order 12866 and, therefore, it
reached: 7 CFR Part 457
has not been reviewed by OMB.
(A) If you do not elect to continue to
RIN 0563–AC01 Paperwork Reduction Act of 1995
care for the crop, we may give you
consent to put the acreage to another Common Crop Insurance Regulations; Pursuant to the provisions of the
use if you agree to leave intact, and Coverage Enhancement Option Paperwork Reduction Act of 1995 (44
provide sufficient care for, U.S.C. chapter 35), the collections of
representative samples of the crop in AGENCY: Federal Crop Insurance information in this rule have been
locations acceptable to us (The amount Corporation, USDA. previously approved by OMB under
of production to count for such acreage ACTION: Proposed rule with request for control number 0563–0053 through
will be based on the harvested comments. November 30, 2007.
production or appraisals from the
samples at the time harvest should have SUMMARY: The Federal Crop Insurance E-Government Act Compliance
occurred. If you do not leave the Corporation (FCIC) proposes to add to 7 FCIC is committed to complying with
required samples intact, or fail to CFR part 457 a new § 457.172 Coverage the E-Government Act, to promote the
provide sufficient care for the samples, Enhancement Option (CEO) that use of the Internet and other
our appraisal made prior to giving you provides additional coverage to information technologies to provide
consent to put the acreage to another applicable crop provisions. The CEO increased opportunities for citizen
use will be used to determine the will be used in conjunction with the access to Government information and
amount of production to count); or Common Crop Insurance Policy Basic services, and for other purposes.
(B) If you elect to continue to care for Provisions, which contain standard
the crop, the amount of production to terms and conditions common to most Unfunded Mandates Reform Act of
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count for the acreage will be the crops and with the crop provisions for 1995
harvested production, or our reappraisal which it is approved. At this time, RMA Title II of the Unfunded Mandates
if additional damage occurs and the has no plans to expand CEO to crops Reform Act of 1995 (UMRA) establishes
crop is not harvested; and other than Texas Citrus Trees. The requirements for Federal agencies to
(2) All harvested production from the intended effect of this action is to assess the effects of their regulatory
insurable acreage. convert the pilot CEO to a permanent actions on State, local, and tribal

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31200 Federal Register / Vol. 72, No. 108 / Wednesday, June 6, 2007 / Proposed Rules

governments and the private sector. officials. See the Notice related to 7 CFR coverage levels available are from 55
This rule contains no Federal mandates part 3015, subpart V, published at 48 FR percent through 85 percent, in 5 percent
(under the regulatory provisions of title 29115, June 24, 1983. increments.
II of the UMRA) for State, local, and To be eligible for the program,
Executive Order 12988 producers must have an additional
tribal governments or the private sector.
Therefore, this rule is not subject to the This proposed rule has been reviewed coverage level MPCI policy in force,
requirements of sections 202 and 205 of in accordance with Executive Order with a price election of 100 percent for
UMRA. 12988 on civil justice reform. The the insured crop and select the CEO by
provisions of this rule will not have a the sales closing date. They must choose
Executive Order 13132 retroactive effect. The provisions of this a CEO coverage level of at least 5
It has been determined under section rule will preempt State and local laws percent higher than the MPCI base
1(a) of Executive Order 13132, to the extent such State and local laws coverage level up to the maximum
Federalism, that this rule does not have are inconsistent herewith. With respect available CEO coverage level of 85
sufficient implications to warrant to any direct action taken by FCIC or to percent.
consultation with the States. The require the insurance provider to take An indemnity does not trigger under
provisions contained in this rule will specific action under the terms of the CEO until the deductible of the
not have a substantial direct effect on crop insurance policy, the underlying MPCI policy is met. For
States, or on the relationship between administrative appeal provisions example, if the MPCI coverage level is
the national government and the States, published at 7 CFR part 11 or 7 CFR part 50 percent and the CEO option coverage
or on the distribution of power and 400, subpart J for the informal level is 85 percent, the insured would
responsibilities among the various administrative review process of good have to sustain damage on the crop in
levels of government. farming practices as applicable, must be excess of 50 percent before an
exhausted before any action against indemnity would be paid under CEO.
Regulatory Flexibility Act FCIC may be brought. RMA contracted for a review of CEO
FCIC certifies that this regulation will three years after it was implemented,
not have a significant economic impact Environmental Evaluation and the contractor’s final evaluation
on a substantial number of small This action is not expected to have a report was submitted on December 10,
entities. Program requirements for the significant economic impact on the 2003. There were 25 crops approved for
Federal crop insurance program are the quality of the human environment, CEO, more than two-thirds of which
same for all producers regardless of the health, and safety. Therefore, neither an were citrus tree and fruit crops insured
size of their farming operation. For Environmental Assessment nor an in California, Florida, and Texas. Seven
instance, all producers are required to Environmental Impact Statement is crops, most with minimal participation,
submit an application and acreage needed. had no losses since CEO was a pilot
report to establish their insurance program, sixteen crops had minimal
Background
guarantees, and compute premium CEO participation and losses, and two
amounts, and all producers are required The Pilot Coverage Enhancement crops had no CEO participation.
to submit a notice of loss and Option (CEO) was implemented Nationwide, the percentage of acreage
production information to determine an beginning with the 2000 crop year for insured under CEO between 2000 and
indemnity payment in the event of an all counties for apples and grapes in 2003 was low, except for Texas citrus
insured cause of crop loss. Whether a Pennsylvania and Washington; canola trees, which had a high participation
producer has 10 acres or 1000 acres, in North Dakota; citrus Trees in Texas; rate but no losses. The contractor
there is no difference in the kind of cranberries in Massachusetts; potatoes determined apples, canola, grapes,
information collected. To ensure crop in Idaho, Maine and Pennsylvania; rice potatoes, and rice had sufficient CEO
insurance is available to small entities, in Arkansas, Louisiana, and Mississippi; participation and loss experience for a
the Federal Crop Insurance Act stonefruit in California; and walnuts in meaningful analysis. A comparison of
authorizes FCIC to waive collection of California. For the 2001 crop year, CEO the CEO losses relative to the non-CEO
administrative fees from limited was expanded to citrus fruit in Florida losses for these crops analyzed
resource farmers. FCIC believes this and Texas. Citrus and stonefruit policies indicated a possible increase of poor or
waiver helps to ensure small entities are define additional ‘‘crops’’ by fruit type, high-risk producers using CEO to obtain
given the same opportunities to manage for example, stonefruit includes fresh a higher amount of coverage, especially
their risks through the use of crop apricots, fresh peaches etc., so for for apples and rice. The final report
insurance. A Regulatory Flexibility insurance purposes, CEO was approved indicated further review was needed in
Analysis has not been prepared since for 25 crops. order to draw a conclusion as to
this regulation does not have an impact CEO was developed because whether or not CEO is a greater
on small entities and therefore, this producers expressed concern that the insurance risk.
regulation is exempt from the provisions crop insurance program does not, in The contractor’s recommendation was
of the Regulatory Flexibility Act (5 some cases, provide an adequate to terminate CEO for all crops except
U.S.C. 605). amount of coverage. The 75 percent Texas citrus trees, due in part to the
coverage level, for many crops, is the high level of CEO participation in the
Federal Assistance Program highest coverage level offered, and some Texas citrus tree crop insurance
This program is listed in the Catalog producers believed the cost for that program. The contractor found that CEO
of Federal Domestic Assistance under coverage level was too expensive. They for Texas Citrus Trees provides
No. 10.450. expressed a desire for higher amounts of additional coverage at a reasonable cost
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coverage, without proportional for a crop where the opportunity for


Executive Order 12372 premium rate increases affiliated with adverse selection is limited by the
This program is not subject to the higher coverage levels. The CEO design of the underlying policy. The
provisions of Executive Order 12372, premium rate is set at the same rate as contractor’s recommendation was
which require intergovernmental that of the underlying multiple peril supported by the Federal Crop
consultation with State and local crop insurance (MPCI) policy. CEO Insurance Corporation Board of

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Federal Register / Vol. 72, No. 108 / Wednesday, June 6, 2007 / Proposed Rules 31201

Directors on July 29, 2004. At that time, the coverage level under the MPCI FCIC is proposing to revise the
continuance of the CEO was approved policy from the MPCI coverage level to indemnity formula in section 7 to
for Texas citrus trees through the 2008 the option coverage level once a loss has remove the references to determining
crop year. In order for CEO to be been triggered under the MPCI policy. the option dollar amount of insurance
available for to Texas citrus tree FCIC is also proposing to add a and the option coverage factor because
producers for the 2009 crop year, it definition of ‘‘total value of the insured FCIC is proposing to revise the
needs to be made permanent before the crop,’’ which states that the total value definition of option dollar amount of
August 31, 2008, contract change date is the MPCI dollar amount of insurance insurance to include a means to
for Texas citrus trees. While the latest divided by the MPCI coverage level. calculate the amount.
date RMA must convert CEO to a This will determine what is the actual FCIC also made technical changes for
permanent program is August 31, 2008, potential value of an undamaged crop clarity but such changes do not change
RMA has targeted August 31, 2007, for and measure the total amount the the coverage provided under the option.
conversion to a permanent program. producer will lose if there is a total loss. FCIC proposes to amend the Common
For the 2006 crop year, there were a FCIC is proposing to add a new Crop Insurance Regulations (7 CFR part
total of 809 policies under the Texas section 2 to clarify that the option is 457) by adding 7 CFR 457.172 (Coverage
Citrus Tree Crop Insurance Provisions, only available for those insured crops Enhancement Option) to make the CEO
714 buy-up and 95 Catastrophic Risk that contain option coverage levels on a permanent option, thus remaining
Protection (CAT) policies. There were the actuarial documents. This change is available for Texas Citrus Tree
333 producers with CEO options, needed because the option will not be policyholders and to allow for use in
accounting for $45.2 million in liability available in all areas where it was other appropriate crop programs as
and $2.4 million in premium. Forty-one available as a pilot program. Therefore, determined by FCIC. The proposed
percent of all Texas citrus tree insureds producers must check the actuarial changes are as follows:
opted for CEO, accounting for 68 documents to see if the option is
percent of the insured acreage for Texas available in their area. The subsequent List of Subjects in 7 CFR Part 457
citrus trees, 74 percent of the liability, sections are redesignated as sections 3 Crop insurance, Coverage
and 75 percent of the premium. through 7. enhancement option.
FCIC is proposing to make changes to FCIC is proposing to revise
redesignated section 4 to clarify that the Proposed Rule
the pilot CEO policy. In section 1, FCIC
is proposing to revise the definitions of option is now continuous and will Accordingly, as set forth in the
‘‘MPCI dollar amount of insurance,’’ remain in effect for as long as the preamble, the Federal Crop Insurance
‘‘MPCI indemnity factor,’’ ‘‘option producer continues to have a MPCI Corporation proposes to amend 7 CFR
dollar amount of insurance,’’ and policy in effect for the insured crop, an part 457, Common Crop Insurance
‘‘option coverage level.’’ Previously, the option coverage level percent is Regulations effective for the 2008 and
definition of ‘‘MPCI dollar amount of contained in the actuarial documents, or succeeding crop years, to read as
insurance’’ did not explain how the it is cancelled by the producer or follows:
value was determined for policies that terminated by the approved insurance
are based on the actual production provider on or before the cancellation or PART 457—COMMON CROP
history so this will be clarified in the termination date, as applicable. INSURANCE REGULATIONS
proposed definition. Further, the FCIC is proposing to revise 1. The authority citation for 7 CFR
definition of ‘‘MPCI indemnity factor’’ redesignated section 6 to clarify the part 457 continues to read as follows:
did not explain that such factor is coverage provided under the option. It
necessary to prorate losses in those effectively offers coverage that causes a Authority: 7 U.S.C. 1506(l), 1506(p).
cases where the producer does not portion of the deductible to disappear 2. Section 457.172 is added to read as
suffer a total loss to the crop. The under the MPCI portion of the policy follows:
definition of ‘‘option dollar amount of once the deductible has been met.
However, the deductible disappears § 457.172 Coverage enhancement option
insurance’’ did not accurately reflect
proportional to the amount of the loss, insurance provisions.
how such amounts are calculated. FCIC
is proposing to revise the provision to less the deductible required for the This option is available for the 2008
specify that such amount is determined option coverage level (cannot exceed 85 and succeeding years.
percent, which creates a secondary The Coverage Enhancement Option
by multiplying the option coverage level
by the total value of the crop and deductible to 15 percent). This means insurance provisions for the 2008 and
subtracting the MPCI dollar amount of that if the loss were 100 percent, the succeeding crop years are as follows:
producer would receive an indemnity FCIC policies:
insurance (for example, if the coverage
option selected is 80 percent and the under the MPCI policy and option equal United States Department of Agriculture
MPCI dollar amount of insurance is to the option coverage level times the
Federal Crop Insurance Corporation
$10,000 at the 50 percent coverage level, total value of the crop (In the above
the option dollar coverage level would stated example, this would equate to Reinsured policies:
be $6,000 ($10,000 × 2 = $20,000 total $16,000, a complete loss) but if the (Appropriate Title for Insurance
value of the crop × .80 option coverage losses were less than 100 percent, less Provider)
level = $16,000 combined MPCI and of the deductible is covered.
option dollar amounts of insurance— FCIC is proposing to add a new Both FCIC and reinsured policies:
$10,000 MPCI dollar amount of section 6(c) that clarifies that an Coverage Enhancement Option
insurance). In addition, the definition of indemnity is not payable under this Insurance Provisions
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‘‘option coverage level’’ failed to discuss option until after the underlying MPCI
the relationship between the MPCI deductible (1—MPCI coverage level) is 1. Definitions
coverage level and the option coverage met, triggering an MPCI indemnity. The MPCI—Multiple Peril Crop Insurance,
level. FCIC is proposing to revise the previous redesignated sections 6(c) and the plan of insurance offered by the
definition to specify that the effect of (d) are now designated as sections 6(d) Federal Crop Insurance Corporation as
the option coverage level is to increase and (e). published at 7 CFR part 457.

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31202 Federal Register / Vol. 72, No. 108 / Wednesday, June 6, 2007 / Proposed Rules

MPCI coverage level—The coverage documents, or it is cancelled by you or (b) .33333 MPCI indemnity factor ×
level percentage you selected in the terminated by us on or before the $84,000 option dollar amount of
underlying MPCI policy to which this cancellation or termination date, as insurance = $28,000 indemnity under
option is attached. applicable. this option.
MPCI dollar amount of insurance— 5. This option is not available if you Note: The total unit indemnity is $68,000
The value of the insurance coverage for have chosen the Catastrophic Risk ($40,000 MPCI indemnity plus $28,000
the unit provided under the MPCI Protection (CAT) level of coverage or a option indemnity)
policy (the amount of insurance selected price election less than 100 percent.
by you for dollar or similar plans of 6. If you elect this option and a MPCI Signed in Washington, DC, on May 30,
insurance or the amount determined by 2007.
indemnity is paid on any unit, your
multiplying the production guarantee deductible will disappear in proportion Eldon Gould,
(per acre) times the price election, times to the amount of such loss and Manager, Federal Crop Insurance
the number of acres in the unit, times indemnity paid. For example, if you Corporation.
the MPCI coverage level you selected). selected a 50 percent MPCI coverage [FR Doc. E7–10825 Filed 6–5–07; 8:45 am]
MPCI indemnity—The indemnity level, select an 85 percent option BILLING CODE 3410–08–P
determined for each unit under the coverage level, and had a total loss, the
MPCI policy to which this option is amount of indemnity paid under both
attached, not including replant and the MPCI policy and this option would DEPARTMENT OF TRANSPORTATION
prevented planting indemnities or any be equal to 85 percent of the total value
indemnity payable under this option. of the insured crop. The amount of the Federal Aviation Administration
MPCI indemnity factor—A factor additional indemnity and related terms
determined by dividing the MPCI and conditions are described below: 14 CFR Part 39
indemnity by the MPCI dollar amount of (a) All acreage of the insured crop [Docket No. FAA–2007–28355; Directorate
insurance for a unit. This factor is used insured under your MPCI policy will be Identifier 2007–NM–062–AD]
to ensure that the indemnity paid under covered under this option;
this option is proportional to the RIN 2120–AA64
(b) The amount of any replant or
amount of loss and indemnity paid prevented planting payment that is Airworthiness Directives; Boeing
under the MPCI policy. payable under the MPCI policy will not
Option Dollar Amount of Insurance— Model 737–600, –700, –700C, –800 and
be affected by this option. –900 Series Airplanes
The value of the additional insurance (c) An indemnity will be payable
coverage for the unit provided by this under this option only after the AGENCY: Federal Aviation
option, which is determined by underlying MPCI deductible is met and Administration (FAA), Department of
multiplying the option coverage level by an MPCI indemnity is paid. Transportation (DOT).
the total value of the crop and (d) The total indemnity for each unit ACTION: Notice of proposed rulemaking
subtracting the MPCI dollar amount of (MPCI coverage plus this option) cannot (NPRM).
insurance. exceed the combination of both the
Option Coverage Level—The coverage SUMMARY: The FAA proposes to adopt a
MPCI and option dollar amounts of new airworthiness directive (AD) for
level percentage selected under this
insurance. certain Boeing Model 737–600, –700,
option. This percentage effectively
(e) Your premium will be determined –700C, –800 and –900 series airplanes.
becomes the coverage level under the
by: This proposed AD would require
MPCI policy when the losses under
(i) Totaling the MPCI dollar amount of inspecting ground blocks GD261 and
such policy exceed the deductible and
insurance and the option dollar amount GD264 for corrosion, measuring the
an indemnity is owed.
Total value of the insured crop—The of insurance; and electrical bond resistance between the
value of the crop that is determined by (ii) Multiplying the result of section ground blocks and the airplane
dividing the MPCI dollar amount of 6(e)(i) by the premium rate for the structure, separating the ground wires
insurance by the MPCI coverage level. insured crop applicable to your MPCI for the fuel boost pump circuit between
2. This option is only available for coverage level. ground blocks GD261 and GD264, and
insured crops that contain an option 7. In addition to the settlement of doing corrective actions if necessary.
coverage level percent in the actuarial claim section for the applicable Crop This proposed AD results from a report
documents. Provisions, your indemnity will be of random flashes of the six fuel pump
3. To be eligible for this coverage, you computed on a unit basis as follows: low pressure lights and intermittent
must have an MPCI policy in force for (a) Determine the MPCI indemnity operation of the fuel boost pumps. We
the insured crop (or for citrus fruit, factor; are proposing this AD to prevent the
citrus trees, and stone fruit, as (b) Multiply the MPCI indemnity simultaneous malfunction of all six fuel
applicable, the insured type) in factor times the Option Dollar Amount boost pumps, which could cause the
accordance with the applicable Crop of Insurance to determine the indemnity engines to operate on suction feed and
Provisions for the insured crop. You under this option. potentially flame out.
must choose an option coverage level Example: Assume a policy with one unit; DATES: We must receive comments on
percentage that is shown in the actuarial an MPCI coverage level of 50 percent and an this proposed AD by July 23, 2007.
documents, by the sales closing date. option coverage level of 85 percent; 100% ADDRESSES: Use one of the following
4. You must elect this option in share; a $120,000 MPCI dollar amount of
addresses to submit comments on this
writing on or before the crop sales insurance; and a $40,000 payable indemnity
proposed AD.
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under the MPCI portion of the policy.


closing date for the crop insured. This • DOT Docket Web site: Go to
option is continuous and will remain in Your indemnity would be calculated http://dms.dot.gov and follow the
effect for as long as you continue to for each unit as follows: instructions for sending your comments
have a MPCI policy in effect for the (a) $40,000 loss ÷ by $120,000 MPCI electronically.
insured crop, an option coverage level dollar amount of insurance = .33333 • Government-wide rulemaking Web
percent is contained in the actuarial MPCI indemnity factor. site: Go to http://www.regulations.gov

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