I 

114TH CONGRESS 

1ST SESSION H. R. 3973 

To reform the Federal Crop Insurance Act and reduce Federal spending 

on crop insurance. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 5, 2015 

Mr. KIND (for himself and Mr. SENSENBRENNER) introduced the following 

bill; which was referred to the Committee on Agriculture 

A BILL 

To reform the Federal Crop Insurance Act and reduce 

Federal spending on crop insurance. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Assisting Family Farmers through Insurance Reform 

6 Measures Act’’ or the ‘‘AFFIRM Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Adjusted gross income and per person limitations on share of insurance 

premiums paid by Corporation. 

Sec. 3. Cap on overall rate of return for crop insurance providers. 


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Sec. 4. Cap on reimbursements for administrative and operating expenses of 

crop insurance providers. 

Sec. 5. Renegotiation of Standard Reinsurance Agreement. 

Sec. 6. Prohibition on premium subsidy for harvest price policies. 

Sec. 7. Crop insurance premium subsidies disclosure in the public interest. 

1 SEC. 2. ADJUSTED GROSS INCOME AND PER PERSON LIMI2 TATIONS ON SHARE OF INSURANCE PRE3 MIUMS PAID BY CORPORATION. 

4 Section 508(e)(1) of the Federal Crop Insurance Act 

5 (7 U.S.C. 1508(e)(1)) is amended— 

6 (1) by striking ‘‘For the purpose’’ and inserting 

7 the following: 

8 ‘‘(A) PAYMENT AUTHORITY.—For the pur9 pose’’; and 

10 (2) by adding at the end the following new sub11 paragraphs: 

12 ‘‘(B) ADJUSTED GROSS INCOME LIMITA13 TION.—The Corporation shall not pay a part of 

14 the premium for additional coverage for any 

15 person or legal entity that has an average ad16 justed gross income (as defined in section 

17 1001D of the Food Security Act of 1985 (7 

18 U.S.C. 1308–3a)) in excess of $250,000. 

19 ‘‘(C) PER PERSON LIMITATION.—The Cor20 poration shall not pay more than $40,000 per 

21 reinsurance year to any person or legal entity 

22 for premiums under this section.’’. 


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1 SEC. 3. CAP ON OVERALL RATE OF RETURN FOR CROP IN2 SURANCE PROVIDERS. 

3 Section 508(k)(3) of the Federal Crop Insurance Act 

4 (7 U.S.C. 1508(k)(3)) is amended— 

5 (1) by designating paragraph (3) as subpara6 graph (A) (and adjusting the margin two ems to the 

7 right); 

8 (2) by inserting before subparagraph (A) (as so 

9 designated) the following: 

10 ‘‘(3) RISK.—’’; and 

11 (3) by adding at the end the following new sub12 paragraph: 

13 ‘‘(B) CAP ON OVERALL RATE OF RE14 TURN.—The target rate of return for all the 

15 companies combined for the 2015 and subse16 quent reinsurance years shall be 8.9 percent of 

17 retained premium.’’. 

18 SEC. 4. CAP ON REIMBURSEMENTS FOR ADMINISTRATIVE 

19 AND OPERATING EXPENSES OF CROP INSUR20 ANCE PROVIDERS. 

21 Section 508(k)(4) of the Federal Crop Insurance Act 

22 (7 U.S.C. 1508(k)(4)) is amended by adding at the end 

23 the following new subparagraph: 

24 ‘‘(G) ADDITIONAL CAP ON REIMBURSE25 MENTS.—Notwithstanding subparagraphs (A) 

26 through (F), total reimbursements for adminisVerDate Sep 11 2014 00:32 Nov 10, 2015 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3973.IH H3973

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1 trative and operating costs for the 2015 insur2 ance year for all types of policies and plans of 

3 insurance shall not exceed $900,000,000. For 

4 each subsequent insurance year, the dollar 

5 amount in effect pursuant to the preceding sen6 tence shall be increased by the same inflation 

7 factor as established for the administrative and 

8 operating costs cap in the 2011 Standard Rein9 surance Agreement.’’. 

10 SEC. 5. RENEGOTIATION OF STANDARD REINSURANCE 

11 AGREEMENT. 

12 Section 508(k)(8) of the Federal Crop Insurance Act 

13 (7 U.S.C. 1508(k)(8)) is amended by striking subpara14 graph (F). 

15 SEC. 6. PROHIBITION ON PREMIUM SUBSIDY FOR HARVEST 

16 PRICE POLICIES. 

17 Section 508(e) of the Federal Crop Insurance Act (7 

18 U.S.C. 1508(e)) is amended by adding at the end the fol19 lowing: 

20 ‘‘(9) PROHIBITION ON PREMIUM SUBSIDY FOR

21 HARVEST PRICE POLICIES.—Notwithstanding any 

22 other provision of law and beginning with the 2016 

23 reinsurance year, the Corporation may not pay any 

24 amount of premium subsidy in the case of a policy 

25 or plan of insurance that is based on the actual marVerDate Sep 11 2014 00:32 Nov 10, 2015 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3973.IH H3973

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1 ket price of an agricultural commodity at the time 

2 of harvest.’’. 

3 SEC. 7. CROP INSURANCE PREMIUM SUBSIDIES DISCLO4 SURE IN THE PUBLIC INTEREST. 

5 Section 502(c)(2) of the Federal Crop Insurance Act 

6 (7 U.S.C. 1502(c)(2)) is amended— 

7 (1) by redesignating subparagraphs (A) and 

8 (B) as subparagraphs (C) and (D) respectively; and 

9 (2) by inserting before subparagraph (C) (as so 

10 redesignated) the following: 

11 ‘‘(A) DISCLOSURE IN THE PUBLIC INTER12 EST.—Notwithstanding paragraph (1) or any 

13 other provision of law, except as provided in 

14 subparagraph (B), the Secretary shall on an 

15 annual basis make available to the public— 

16 ‘‘(i)(I) the name of each individual or 

17 entity who obtained a federally subsidized 

18 crop insurance, livestock, or forage policy 

19 or plan of insurance during the previous 

20 fiscal year; 

21 ‘‘(II) the amount of premium subsidy 

22 received by the individual or entity from 

23 the Corporation; and 

24 ‘‘(III) the amount of any Federal por25 tion of indemnities paid in the event of a 


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1 loss during that fiscal year for each policy 

2 associated with that individual or entity; 

3 and 

4 ‘‘(ii) for each private insurance pro5 vider, by name— 

6 ‘‘(I) the underwriting gains 

7 earned through participation in the 

8 federally subsidized crop insurance 

9 program; and 

10 ‘‘(II) the amount paid under this 

11 subtitle for— 

12 ‘‘(aa) administrative and op13 erating expenses; 

14 ‘‘(bb) any Federal portion of 

15 indemnities and reinsurance; and 

16 ‘‘(cc) any other purpose. 

17 ‘‘(B) LIMITATION.—The Secretary shall 

18 not disclose information pertaining to individ19 uals and entities covered by a catastrophic risk 

20 protection plan offered under section 508(b).’’. 

Æ 


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