103D CONGRESS

2D SESSION H. R. 4217

AN ACT

To reform the Federal crop insurance program, and for

other purposes.

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, AND DEFI4 NITIONS.

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

6 ‘‘Federal Crop Insurance Reform Act of 1994’’.

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

8 this Act is as follows:

Sec. 1. Short title, table of contents, and definitions.

Sec. 2. Members of Board of Directors of Federal Crop Insurance Corporation.

Sec. 3. General powers of Corporation.

Sec. 4. Personnel.

Sec. 5. General authority to offer crop insurance.

Sec. 6. Catastrophic risk protection, buy-up levels, premiums, and yield determinations.

Sec. 7. Preparation of policies, claims, and reinsurance.

Sec. 8. Authorization of appropriations and crop insurance fund.

Sec. 9. Advisory Committee.

Sec. 10. Noninsured crop disaster assistance.

Sec. 11. Crop insurance requirements under price support programs.

Sec. 12. Elimination of gender references.

Sec. 13. GAO crop insurance provider study.

Sec. 14. Effective date.

9 (c) DEFINITIONS.—Section 502 of the Federal Crop

10 Insurance Act (7 U.S.C. 1502) is amended—
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1 (1) by striking the section heading and ‘‘SEC.

2 502.’’ and inserting the following:

3 ‘‘SEC. 502. PURPOSE AND DEFINITIONS.

4 ‘‘(a) PURPOSE.—’’; and

5 (2) by adding at the end the following new sub6 section:

7 ‘‘(b) DEFINITIONS.—For purposes of this title:

8 ‘‘(1) SECRETARY.—The term ‘Secretary’ means

9 the Secretary of Agriculture.

10 ‘‘(2) CORPORATION.—The term ‘Corporation’

11 means the Federal Crop Insurance Corporation es12 tablished under section 503.

13 ‘‘(3) BOARD.—The term ‘Board’ means the

14 Board of Directors of the Corporation established

15 under section 505(a).

16 ‘‘(4) LOSS RATIO.—The term ‘loss ratio’ means

17 the ratio of all sums paid by the Corporation as in18 demnities under all crop insurance policies to that of

19 the premiums designated for anticipated losses and

20 a reasonable reserve, not including the portion of the

21 premiums designated for operating and administra22 tive expenses.

23 ‘‘(5) TRANSITIONAL YIELD.—The term ‘transi24 tional yield’ means the maximum average production

25 per acre or equivalent measure that is assigned to
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1 acreage for a crop year by the Corporation in ac2 cordance with its regulations whenever the producer

3 fails—

4 ‘‘(A) to certify that acceptable documenta5 tion of production and acreage for that crop

6 year is in the producer’s possession; or

7 ‘‘(B) to present such acceptable docu8 mentation upon the demand of the Corporation

9 or an insurance company reinsured by the Cor10 poration.’’.

11 (d) CONFORMING AMENDMENTS.—The Federal Crop

12 Insurance Act (7 U.S.C. 1501 et seq.) is amended—

13 (1) in section 503 (7 U.S.C. 1503), by striking

14 ‘‘(herein called the Corporation)’’; and

15 (2) in section 505(a) (7 U.S.C. 1505(a)), by

16 striking ‘‘(hereinafter called the ‘Board’)’’.

17 SEC. 2. MEMBERS OF BOARD OF DIRECTORS OF FEDERAL

18 CROP INSURANCE CORPORATION.

19 Section 505(a) of the Federal Crop Insurance Act (7

20 U.S.C. 1505(a)) is amended in the second sentence—

21 (1) by striking ‘‘or Assistant Secretary’’ the

22 first place it appears; and

23 (2) by striking ‘‘the Under Secretary or Assist24 ant Secretary of Agriculture responsible for the farm

25 credit programs of the Department of Agriculture’’
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1 and inserting ‘‘one additional Under Secretary of

2 Agriculture (as designated by the Secretary of Agri3 culture)’’.

4 SEC. 3. GENERAL POWERS OF CORPORATION.

5 (a) CLAIMS SETTLEMENT.—Section 506 of the Fed6 eral Crop Insurance Act (7 U.S.C. 1506) is amended—

7 (1) by redesignating subsections (j), (k), (l),

8 (m), and (n) as subsections (k), (l), (m), (n), and

9 (o), respectively; and

10 (2) by inserting after subsection (i) the follow11 ing new subsection:

12 ‘‘(j) CLAIMS SETTLEMENT.—The Corporation shall

13 have the authority to make final and conclusive settlement

14 and adjustment of any claims made by or against the Cor15 poration or the accounts of its fiscal officers.’’.

16 (b) REGULATIONS; PREEMPTION.—Subsection (e) of

17 such section is amended—

18 (1) by striking ‘‘governing’’ and inserting ‘‘to

19 carry out this title and to govern’’; and

20 (2) by adding at the end the following new sen21 tence: ‘‘State and local laws or rules shall not apply

22 to rules and regulations adopted by the Corporation

23 to the extent that such rules and regulations so pro24 vide or to the extent that State and local laws or
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1 rules are inconsistent with such rules and regula2 tions.’’.

3 (c) DEFINITION OF SUBSTANTIAL BENEFICIAL IN4 TEREST.—Subsection (m) of such section (as redesignated

5 by subsection (a)(1)) is amended in paragraph (4) by

6 striking ‘‘5 percent’’ and inserting ‘‘10 percent’’.

7 (d) PENALTY FOR FALSE INFORMATION.—Sub8 section (n) of such section (as redesignated by subsection

9 (a)(1)) is amended in paragraph (1) by striking subpara10 graph (B) and inserting the following new subparagraph:

11 ‘‘(B) disqualify the person—

12 ‘‘(i) from purchasing catastrophic risk

13 protection under section 508(b) or partici14 pating in the noninsured assistance pro15 gram under section 519 for a period not to

16 exceed 2 years; and

17 ‘‘(ii) from receiving any other benefit

18 under this title for a period not to exceed

19 10 years.’’.

20 (e) ACTUARIAL SOUNDNESS.—Subsection (o) of such

21 section (as redesignated by subsection (a)(1)) is amend22 ed—

23 (1) in paragraph (1), by striking ‘‘beginning

24 farmers from obtaining adequate Federal crop insur25 ance, as determined by the Corporation’’ and insert-
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1 ing ‘‘beginning farmers, as determined by the Sec2 retary, from obtaining Federal crop insurance’’;

3 (2) in paragraph (3), by striking ‘‘and’’ at the

4 end of the paragraph;

5 (3) by redesignating paragraph (4) as para6 graph (5); and

7 (4) by inserting after paragraph (3) the follow8 ing new paragraph:

9 ‘‘(4) establishing a database that contains social

10 security numbers or employee identification numbers

11 of insurance agents and adjusters and using the

12 numbers to identify agents and adjusters who are

13 high risk for actuarial purposes, and for other pur14 poses permitted by law; and’’.

15 (f) REGULATORY AND PAPERWORK REDUCTION.—

16 Such section is further amended by adding at the end the

17 following new subsection:

18 ‘‘(p) REGULATORY AND PAPERWORK REDUCTION.—

19 ‘‘(1) CATASTROPHIC RISK PROTECTION.—In de20 veloping and carrying out the policies and proce21 dures for catastrophic risk protection under section

22 508(b), the Corporation shall minimize, to the maxi23 mum extent practicable, the paperwork required and

24 the complexity and costs of procedures governing the
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1 application for, and the processing and servicing of,

2 catastrophic risk protection.

3 ‘‘(2) OTHER PLANS.—To the extent that the

4 policies and procedures developed under paragraph

5 (1) may be applied to other plans of insurance of6 fered under this title without jeopardizing the actu7 arial soundness or integrity of the crop insurance

8 program under this title, the Corporation shall apply

9 the policies and procedures to the other plans of in10 surance within a reasonable period of time (as deter11 mined by the Corporation) after the effective date of

12 this paragraph.

13 ‘‘(3) SOLICITATION OF COST INFORMATION AND

14 COST-REDUCTION PROPOSALS.—

15 ‘‘(A) COST INFORMATION.—The Corpora16 tion shall solicit from private insurance provid17 ers and agents information regarding—

18 ‘‘(i) their average cost per policy of

19 complying with requirements, regulations,

20 procedures, and processes under this title;

21 and

22 ‘‘(ii) the data upon which such costs

23 are determined.

24 ‘‘(B) COST-REDUCTION PROPOSALS.—The

25 Corporation shall also solicit from private insur-
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1 ance providers and agents proposals for modify2 ing or altering the requirements, regulations,

3 procedures, and processes under this title to re4 duce their total average cost per policy.

5 ‘‘(C) REPORT.—By June 1, 1995, the Cor6 poration shall submit a report to Congress con7 taining the information received under subpara8 graph (A) and an evaluation of the cost-reduc9 tion proposals received under subparagraph

10 (B).

11 ‘‘(4) COST REDUCTION PLAN.—

12 ‘‘(A) PLAN REQUIRED.—Subject to the

13 condition that the Corporation maintain the in14 tegrity of the crop insurance program under

15 this title, the Corporation shall include in the

16 report required under paragraph (3) a plan to

17 reduce the average cost per policy incurred by

18 private insurance providers and agents to com19 ply with requirements, regulations, procedures,

20 and processes under this title. To the extent

21 practicable, the Corporation shall set a target

22 percentage by which such costs should be re23 duced.

24 ‘‘(B) IMPLEMENTATION OF PLAN.—Not

25 later than 60 days after submitting the report
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1 required under paragraph (3), and in accord2 ance with the plan contained in the report, the

3 Corporation shall adopt such measures consist4 ent with maintaining the integrity of the crop

5 insurance program under this title as the Cor6 poration determines are appropriate—

7 ‘‘(i) to improve Corporation liaison

8 with policyholders and private insurance

9 providers; and

10 ‘‘(ii) to reduce the average cost per

11 policy to meet the target percentage set by

12 the Corporation.’’.

13 (g) IMPROVED PROGRAM COMPLIANCE.—Such sec14 tion is further amended by inserting after subsection (p)

15 (as added by subsection (f)) the following new subsection:

16 ‘‘(q) PROGRAM COMPLIANCE.—

17 ‘‘(1) TIMELINESS.—The Corporation shall work

18 actively with private insurance providers to address

19 program compliance and integrity issues as such is20 sues develop.

21 ‘‘(2) NOTIFICATION OF COMPLIANCE PROB22 LEMS.—The Corporation shall notify in writing any

23 private insurance provider with whom the Corpora24 tion has an agreement under this title of any error,

25 omission, or failure to follow Corporation regulations
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1 or procedures for which the private insurance pro2 vider may be responsible and which may result in a

3 debt owed the Corporation. Such notice shall be

4 given within 3 years of the end of the insurance pe5 riod during which the error, omission, or failure is

6 alleged to have occurred, except that such time limit

7 shall not apply with respect to errors, omissions, or

8 procedural violations that are willful or intentional.

9 The failure to timely provide the notice required

10 under this subsection shall relieve the private insur11 ance provider from the debt owed the Corporation.’’.

12 SEC. 4. PERSONNEL.

13 Section 507 of the Federal Crop Insurance Act (7

14 U.S.C. 1507) is amended—

15 (1) in subsection (a), by striking ‘‘, and county

16 crop insurance committeemen’’;

17 (2) in subsection (c), by striking ‘‘, in which

18 case the agent or broker’’ in the first sentence and

19 all that follows through the period at the end of the

20 second sentence and inserting the following: ‘‘, ex21 cept that the rate established by the Board to reim22 burse approved insurance providers and agents for

23 their administrative and operating costs shall not ex24 ceed, for the 1997 crop year, 29 percent of the pre25 mium used to define loss ratio under section 502,
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1 and for the 1998 and 1999 crops, such reimburse2 ment rate shall not exceed 28 percent of the pre3 mium used to define loss ratio under section 502.

4 Consistent with the provisions of section 506(p), the

5 Board shall provide regulatory relief to such ap6 proved insurance providers and agents in an amount

7 proportional to the reduction in the reimbursement

8 rate established by the Board for the 1997, 1998,

9 and 1999 crop years. No action shall be taken which

10 would jeopardize program integrity, enhance oppor11 tunities for fraud or abuse, hinder program expan12 sion or diminish quality of service to customers.’’;

13 (3) in subsection (d), by striking ‘‘, except

14 that’’ and all that follows through the period at the

15 end of the subsection and inserting a period; and

16 (4) by adding at the end the following new sub17 section:

18 ‘‘(g) SPECIALTY CROPS COORDINATOR.—The Cor19 poration shall establish a senior-level position to be known

20 as the Specialty Crops Coordinator. The Specialty Crops

21 Coordinator shall have primary responsibility for address22 ing the needs of specialty crop producers and for providing

23 information and advice in connection with the Corpora24 tion’s activities to improve and expand the insurance pro25 gram for specialty crops. In carrying out such responsibil-
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1 ity, the Specialty Crops Coordinator shall act as the Cor2 poration’s liaison with representatives of specialty crop

3 producers and provide the Corporation with the producers’

4 knowledge, expertise, and familiarity with risk manage5 ment and production issues pertaining to specialty crops.

6 The Specialty Crops Coordinator shall also use informa7 tion collected from Corporation field office directors in

8 States in which specialty crops have a significant economic

9 effect and from other sources, including the extension

10 service and colleges and universities.’’.

11 SEC. 5. GENERAL AUTHORITY TO OFFER CROP INSURANCE.

12 (a) GENERAL AUTHORITY TO OFFER INSURANCE.—

13 Subsection (a) of section 508 of the Federal Crop Insur14 ance Act (7 U.S.C. 1508) is amended to read as follows:

15 ‘‘(a) AUTHORITY TO OFFER INSURANCE.—

16 ‘‘(1) GENERAL AUTHORITY AND LOSSES COV17 ERED.—If sufficient actuarial data are available, as

18 determined by the Board, the Corporation may in19 sure (or provide reinsurance for insurers of) produc20 ers of agricultural commodities grown in the United

21 States under any plan or plans of insurance deter22 mined by the Board to be adapted to the agricul23 tural commodity involved. To qualify for coverage

24 under these plans of insurance, the losses of the in25 sured commodity shall be due to drought, flood, or
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1 other natural disaster, as determined by the Sec2 retary.

3 ‘‘(2) PERIOD OF COVERAGE.—Except in the

4 case of tobacco, insurance shall not extend beyond

5 the period the insured commodity is in the field. For

6 the purpose of the foregoing sentence, in the case of

7 aquacultural species, the term ‘field’ means the envi8 ronment in which the commodity is produced.

9 ‘‘(3) EXCLUSIONS.—Insurance provided under

10 this section shall not cover losses—

11 ‘‘(A) due to the neglect or malfeasance of

12 the producer;

13 ‘‘(B) due to the failure of the producer to

14 reseed to the same crop in those areas and

15 under such circumstances where it is customary

16 to reseed; or

17 ‘‘(C) due to the failure of the producer to

18 follow good farming practices, as determined by

19 the Corporation.

20 ‘‘(4) EXPANSION TO OTHER AREAS OR SINGLE

21 PRODUCERS.—

22 ‘‘(A) AREA EXPANSION.—The Corporation

23 may offer plans of insurance or reinsurance for

24 production of agricultural commodities in the

25 Commonwealth of Puerto Rico, the Virgin Is-
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1 lands of the United States, Guam, American

2 Samoa, the Commonwealth of the Northern

3 Mariana Islands, and the Trust Territory of the

4 Pacific Islands in the same manner as provided

5 in this section for production of agricultural

6 commodities in the United States.

7 ‘‘(B) PRODUCER EXPANSION.—In areas in

8 the United States or specified in subparagraph

9 (A) where crop insurance is not available for a

10 particular agricultural commodity, the Corpora11 tion may offer to enter into a written agree12 ment with an individual producer operating in

13 that area for insurance coverage under this title

14 if the producer has actuarially sound data relat15 ing to the producer’s production of that com16 modity and such data is acceptable to the Cor17 poration.

18 ‘‘(5) DISSEMINATION OF CROP INSURANCE IN19 FORMATION.—The Corporation shall make available

20 to producers through local offices of the Department

21 of Agriculture—

22 ‘‘(A) current and complete information on

23 all aspects of Federal crop insurance; and
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1 ‘‘(B) a listing of insurance agents and

2 companies offering to sell crop insurance in

3 their area.

4 ‘‘(6) ADDITION OF NEW AND SPECIALTY

5 CROPS.—

6 ‘‘(A) DATA COLLECTION.—Not later than

7 6 months after the date of the enactment of

8 this paragraph, the Secretary shall issue guide9 lines for publication in the Federal Register for

10 data collection to assist the Corporation in for11 mulating crop insurance policies for new and

12 specialty crops.

13 ‘‘(B) ADDITION OF NEW CROPS.—Not later

14 than 1 year after the date of the enactment of

15 this paragraph, and annually thereafter, the

16 Corporation shall report to Congress on the

17 progress and expected timetable for expanding

18 crop insurance coverage under this title to new

19 and specialty crops.

20 ‘‘(C) ADDITION OF DIRECT SALE PERISH21 ABLE CROPS.—Not later than 1 year after the

22 date of the enactment of this paragraph, the

23 Corporation shall report to Congress on the fea24 sibility of offering a crop insurance program de25 signed to meet the needs of specialized produc-
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1 ers of vegetables and other perishable crops who

2 market through direct marketing channels.’’.

3 (b) REPORT ON IMPROVING DISSEMINATION OF

4 CROP INSURANCE INFORMATION.—Not later than 6

5 months after the date of the enactment of this Act, the

6 Federal Crop Insurance Corporation shall submit a report

7 to Congress containing a plan to implement a sound pro8 gram for producer education regarding the crop insurance

9 program and for the dissemination of crop insurance infor10 mation to producers, as required by section 508(a)(5) of

11 the Federal Crop Insurance Act. Subsequent reports on

12 the progress of the implementation of the program shall

13 be submitted to Congress in 1996 and 1997.

14 SEC. 6. CATASTROPHIC RISK PROTECTION, BUY-UP COV15 ERAGE, PREMIUMS, AND YIELD DETERMINA16 TIONS.

17 (a) IN GENERAL.—Section 508 of the Federal Crop

18 Insurance Act (7 U.S.C. 1508) is amended—

19 (1) by striking subsections (c), (e), (f), (g), (h),

20 (i), (l), (m), and (n);

21 (2) by redesignating subsections (b) and (d) as

22 subsections (h) and (i), respectively; and

23 (3) by inserting after subsection (a) the follow24 ing new subsections:

25 ‘‘(b) CATASTROPHIC RISK PROTECTION.—
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1 ‘‘(1) CATASTROPHIC RISK PROTECTION RE2 QUIRED.—The Corporation shall offer to producers

3 of agricultural commodities grown in the United

4 States a catastrophic risk protection plan to indem5 nify a producer for crop losses due to loss of yield

6 or prevented planting resulting from drought, flood,

7 or other natural disaster, as determined by the Sec8 retary, if the producer is unable to plant other crops

9 for harvest on that acreage for that crop year.

10 ‘‘(2) AMOUNT OF COVERAGE.—

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (B), under catastrophic risk protection,

13 the Corporation shall offer producers—

14 ‘‘(i) coverage equal to 50 percent loss

15 in yield (determined on an area or individ16 ual yield basis as described in subsection

17 (g)) indemnified at 60 percent of the ex18 pected market price of the commodity (as

19 determined by the Corporation); or

20 ‘‘(ii) other coverage established by the

21 Corporation that is comparable to the cov22 erage described in clause (i).

23 ‘‘(B) REDUCTION IN ACTUAL PAYMENT.—

24 The amount paid to a producer on a claim

25 under catastrophic risk protection may reflect a
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1 reduction that is proportional to the out-of2 pocket expenses that are not incurred by the

3 producer as a result of not planting, growing,

4 or harvesting the crop for which the claim is

5 made, as determined by the Corporation.

6 ‘‘(3) YIELD AND LOSS BASIS.—Producers shall

7 have the option of purchasing catastrophic risk pro8 tection based on either an individual yield and loss

9 basis or on an area yield and loss basis, as described

10 in subsection (g), when both options are offered by

11 the Corporation.

12 ‘‘(4) APPLICATION.—To participate in cata13 strophic risk protection, producers shall submit an

14 application at the local office of the Department of

15 Agriculture or to a private insurance provider ap16 proved by the Corporation.

17 ‘‘(5) ADMINISTRATIVE FEE.—

18 ‘‘(A) FEE REQUIRED.—Producers shall

19 pay an administrative fee for catastrophic risk

20 protection. The administrative fee for each pro21 ducer shall be $50 per crop per county, but not

22 to exceed $200 per producer per county up to

23 a maximum of $600 per producer for all coun24 ties in which a producer has insured crops. The

25 administrative fee shall be paid by the producer
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1 at the time the producer applies for cata2 strophic risk protection.

3 ‘‘(B) WAIVER OF FEE.—The Corporation

4 shall waive the administrative fee for limited re5 source farmers, as defined by the Corporation.

6 ‘‘(C) USE OF FEES.—There are authorized

7 to be appropriated from fees required under

8 subparagraph (A) such sums as may be nec9 essary for operating and administrative ex10 penses incurred for the delivery of catastrophic

11 risk protection.

12 ‘‘(6) COVERAGE OF ALL CROPS.—To be eligible

13 for benefits under any commodity price support, pro14 duction adjustment, or conservation program admin15 istered by the Department of Agriculture, or for the

16 farmer loan programs of the Farmers Home Admin17 istration or any successor of that agency, a producer

18 must obtain at least catastrophic risk protection for

19 each crop of economic significance produced on each

20 farm in any county in which the producer has an in21 terest, if insurance is available in the county for

22 those crops. For purposes of this paragraph, the

23 term ‘crop of economic significance’ means a crop

24 that has contributed, or is expected to contribute, 10
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1 percent or more of the total expected value of all

2 crops grown by the producer.

3 ‘‘(7) COVERAGE UNDER ONE POLICY.—If a pro4 ducer applies for catastrophic risk protection for a

5 crop produced by the producer in a county, the pro6 ducer shall be required to secure such protection

7 under a single policy.

8 ‘‘(8) AUTHORITY TO LIMIT CATASTROPHIC RISK

9 PROTECTION.—The Board may limit the availability

10 of catastrophic risk protection in any county or area,

11 or on any farm, on the basis of the insurance risk

12 involved.

13 ‘‘(9) TRANSITIONAL COVERAGE FOR 1995

14 CROPS.—Effective only for the 1995 crops and for

15 which the sales period for crop insurance expires be16 fore the date of the enactment of the Federal Crop

17 Insurance Reform Act of 1994, the Corporation

18 shall allow producers of such crops until at least the

19 end of the 6-month period beginning on such date

20 to obtain catastrophic risk protection for such crops.

21 Upon the enactment of such Act, producers who

22 made timely purchases of a crop insurance policy be23 fore the date of the enactment of such Act, under

24 the provisions then in effect, shall be eligible for the

25 same benefits to which a producer would be entitled
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1 under comparable buy-up coverage under subsection

2 (c).

3 ‘‘(c) COVERAGE LEVELS GREATER THAN CATA4 STROPHIC RISK PROTECTION.—

5 ‘‘(1) BUY-UP COVERAGE GENERALLY.—The

6 Corporation shall offer to producers of agricultural

7 commodities grown in the United States plans of

8 crop insurance providing levels of coverage greater

9 than that available under catastrophic risk protec10 tion under subsection (b). Plans of insurance under

11 this subsection shall be known as ‘buy-up coverage’.

12 Producers shall apply to private insurance providers

13 approved by the Corporation for purchase of buy-up

14 coverage if such coverage is available from private

15 insurance providers. If buy-up coverage is unavail16 able privately, the Corporation may offer buy-up cov17 erage plans of insurance directly to producers. If a

18 producer applies for catastrophic risk protection at

19 an office of the Department of Agriculture but then

20 elects to purchase buy-up coverage under this sub21 section, the insurance file for that producer shall be

22 transferred to the approved private insurance pro23 vider servicing the buy-up coverage policy.

24 ‘‘(2) ADMINISTRATIVE FEE.—
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1 ‘‘(A) FEE REQUIRED.—If a producer elects

2 to purchase buy-up coverage for a crop at a

3 level less than 65 percent of the recorded or ap4 praised average yield indemnified at 100 per5 cent of the expected market price, or an equiva6 lent coverage, the producer shall pay an admin7 istrative fee for such buy-up coverage. Sub8 section (b)(5) shall apply in determining the

9 amount and use of the administrative fee or in

10 determining whether to waive the administra11 tive fee.

12 ‘‘(B) EXCEPTION.—If a producer elects to

13 purchase buy-up coverage for a crop equal to

14 65 percent or more of the recorded or appraised

15 average yield indemnified at 100 percent of the

16 expected market price, or an equivalent cov17 erage, the producer shall not be subject to the

18 administrative fee required by this paragraph or

19 subsection (b)(5). If the producer has already

20 paid the administrative fee for a lower level of

21 coverage for that crop, the administrative fee

22 shall be refunded to the producer unless the re23 fund would reduce to less than $200 the total

24 amount of the administrative fees paid by the

25 producer for 2 or more crops in the same coun-
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1 ty for which a lower level of coverage is ob2 tained.

3 ‘‘(3) YIELD AND LOSS BASIS.—Producers shall

4 have the option of purchasing buy-up coverage based

5 on either an individual yield and loss basis or on an

6 area yield and loss basis, as described in subsection

7 (g), when both options are offered by the Corpora8 tion.

9 ‘‘(4) YIELD ELECTIONS.—Yield coverage shall

10 be made available to the producer on the basis of

11 any yield election that equals or is less than 85 per12 cent of the individual yield or 95 percent of the area

13 yield, as determined by the Corporation.

14 ‘‘(5) PRICE LEVELS.—

15 ‘‘(A) IN GENERAL.—The Corporation shall

16 establish a price level for each commodity on

17 which buy-up coverage is offered that—

18 ‘‘(i) shall not be less than the ex19 pected market price for the commodity, as

20 determined by the Corporation; or

21 ‘‘(ii) at the discretion of the Corpora22 tion, may be based on the actual market

23 price at the time of harvest, as determined

24 by the Corporation.
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1 ‘‘(B) SPECIAL RULE FOR MALTING BAR2 LEY.—For malting barley covered by a contract

3 between a producer and a processor, the Cor4 poration may offer a plan of insurance that al5 lows the producer to select the contract price as

6 the price election if—

7 ‘‘(i) the contract is definite as to the

8 quantity and the price;

9 ‘‘(ii) the producer submits a copy of

10 the contract with the application for insur11 ance prior to the sales closing date for the

12 crop;

13 ‘‘(iii) coverage does not exceed the

14 quantity contained in the contract;

15 ‘‘(iv) the contracted quantity does not

16 exceed the production guarantee;

17 ‘‘(v) the contract is usual and cus18 tomary in form and content for the area;

19 ‘‘(vi) the processor is completely inde20 pendent from the producer; and

21 ‘‘(vii) the processor does not have an

22 insurable interest in the crop.

23 ‘‘(6) PRICE ELECTIONS.—Subject to paragraph

24 (10), insurance coverage shall be made available to
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1 the producer on the basis of any price election that

2 equals or is less than that established by the Board.

3 ‘‘(7) LEVEL OF COVERAGE.—Not later than the

4 beginning of the 1996 crop year, the level of cov5 erage shall be quoted in terms of dollars per acre.

6 ‘‘(8) REDUCTION IN ACTUAL PAYMENT.—The

7 amount paid to a producer on a claim under buy-up

8 coverage may reflect a reduction that is proportional

9 to the out-of-pocket expenses that are not incurred

10 by the producer as a result of not planting, growing,

11 or harvesting the crop for which the claim is made,

12 as determined by the Corporation.

13 ‘‘(9) FIRE AND HAIL COVERAGE.—For levels of

14 buy-up coverage equal to 65 percent or more of the

15 recorded or appraised average yield indemnified at

16 100 percent of the expected market price, or an

17 equivalent coverage, the producer may elect to delete

18 from the buy-up coverage any coverage against dam19 age caused by fire and hail if the producer obtains

20 an equivalent or greater dollar amount of coverage

21 for damage caused by fire and hail from a private

22 insurance provider. Upon written notice of such elec23 tion to the company issuing the policy providing

24 buy-up coverage and submission of evidence of sub25 stitute coverage on the commodity insured, the pro-
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1 ducer’s premium shall be reduced by an amount de2 termined by the Corporation to be actuarially appro3 priate, taking into account the actuarial value of the

4 remaining coverage provided by the Corporation. In

5 no event shall the producer be given credit for an

6 amount of premium determined to be greater than

7 the actuarial value of the protection against losses

8 caused by fire and hail that is included in the buy9 up coverage for the crop.

10 ‘‘(10) LIMITATIONS ON BUY-UP COVERAGE.—

11 The Board may limit the availability of buy-up cov12 erage under this subsection in any county or area,

13 or on any farm, on the basis of the insurance risk

14 involved. The Board shall not offer buy-up coverage

15 equal to less than 50 percent of the recorded or ap16 praised average yield indemnified at 100 percent of

17 the expected market price, or an equivalent coverage.

18 ‘‘(d) PREMIUMS.—

19 ‘‘(1) PREMIUMS REQUIRED.—The Corporation

20 shall fix adequate premiums for all its plans of in21 surance at such rates as the Board deems actuari22 ally sufficient to attain an expected loss ratio of not

23 greater than 1.1.

24 ‘‘(2) PREMIUM AMOUNTS.—The premium

25 amounts for catastrophic risk protection under sub-
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1 section (b) and buy-up coverage under subsection (c)

2 shall be fixed as follows:

3 ‘‘(A) In the case of catastrophic risk pro4 tection, the amount of the premium shall be

5 sufficient to cover anticipated losses and a rea6 sonable reserve.

7 ‘‘(B) In the case of buy-up coverage below

8 65 percent of the recorded or appraised average

9 yield indemnified at 100 percent of the expected

10 market price, or an equivalent coverage, but

11 greater than 50 percent of the recorded or ap12 praised average yield indemnified at 100 per13 cent of the expected market price, or an equiva14 lent coverage, the amount of the premium

15 shall—

16 ‘‘(i) be sufficient to cover anticipated

17 losses and a reasonable reserve; and

18 ‘‘(ii) include an amount for operating

19 and administrative expenses, as determined

20 by the Corporation, that is less than the

21 amount established for coverage at 65 per22 cent of the recorded or appraised average

23 yield indemnified at 100 percent of the ex24 pected market price, or an equivalent cov25 erage.
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1 ‘‘(C) In the case of buy-up coverage equal

2 to or greater than 65 percent of the recorded

3 or appraised average yield indemnified at 100

4 percent of the expected market price, or an

5 equivalent coverage, the amount of the premium

6 shall—

7 ‘‘(i) be sufficient to cover anticipated

8 losses and a reasonable reserve; and

9 ‘‘(ii) include an amount for operating

10 and administrative expenses, as determined

11 by the Corporation, on an industry-wide

12 basis as a percent of the amount of the

13 premium used to define loss ratio under

14 section 502.

15 ‘‘(3) PREMIUM REDUCTION.—If a private insur16 ance provider determines that it may provide insur17 ance more efficiently than the expense reimburse18 ment amount established by the Corporation, the

19 private insurance provider may reduce, subject to

20 the approval of the Corporation, the premium

21 charged the insured by an amount corresponding to

22 such efficiency. The private insurance provider shall

23 apply to the Corporation for authority to reduce the

24 premium before making such a reduction, and the
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1 reduction shall be subject to the rules, limitations,

2 and procedures established by the Corporation.

3 ‘‘(4) INDIVIDUAL AND AREA CROP INSURANCE

4 COVERAGE.—The Corporation shall allow approved

5 insurance providers to offer to producers a plan of

6 insurance that combines both individual yield cov7 erage and area yield coverage at a premium rate de8 termined by the provider, subject to the following

9 conditions:

10 ‘‘(A) The individual yield coverage shall be

11 equal to or greater than catastrophic risk pro12 tection, as described in subsection (b).

13 ‘‘(B) The combined policy shall include

14 area yield coverage that is offered by the Cor15 poration or similar area coverage, as deter16 mined by the Corporation.

17 ‘‘(C) The Corporation shall provide rein18 surance on the area yield portion of the com19 bined policy at the request of the provider, ex20 cept that the provider shall agree to pay to the

21 producer any portion of the area yield and loss

22 indemnity payment received from the Corpora23 tion or a commercial reinsurer that exceeds the

24 individual indemnity payment made by the pro25 vider to the producer.
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1 ‘‘(D) The Corporation shall pay a part of

2 the premium equivalent to—

3 ‘‘(i) the amount authorized under sub4 section (e)(2) (except provisions regarding

5 operating and administrative expenses);

6 and

7 ‘‘(ii) the amount of operating and ad8 ministrative expenses authorized by the

9 Corporation for the area yield coverage

10 portion of the combined policy.

11 ‘‘(E) The provider shall provide all under12 writing services for the combined policy, includ13 ing the determination of individual yield cov14 erage premium rates, the terms and conditions

15 of the policy, and the acceptance and classifica16 tion of applicants into risk categories, subject to

17 subparagraph (F).

18 ‘‘(F) The Corporation shall approve the

19 combined policy unless the Corporation deter20 mines that the policy is not actuarially sound or

21 that the interests of producers are not ade22 quately protected.’’.

23 ‘‘(e) PAYMENT OF PORTION OF PREMIUM BY COR24 PORATION.—
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1 ‘‘(1) IN GENERAL.—For the purpose of encour2 aging the broadest possible participation of produc3 ers in the catastrophic risk protection provided

4 under subsection (b) and the buy-up coverage pro5 vided under subsection (c), the Corporation shall pay

6 a part of the premium in the amounts provided in

7 this subsection.

8 ‘‘(2) AMOUNT OF PAYMENT.—The amount of

9 the premium to be paid by the Corporation shall be

10 as follows:

11 ‘‘(A) In the case of catastrophic risk pro12 tection, the amount shall be equivalent to the

13 premium established for catastrophic risk pro14 tection under subsection (d)(2)(A).

15 ‘‘(B) In the case of coverage below 65 per16 cent of the recorded or appraised average yield

17 indemnified at 100 percent of the expected mar18 ket price, or an equivalent coverage, but greater

19 than 50 percent of the recorded or appraised

20 average yield indemnified at 100 percent of the

21 expected market price, or an equivalent cov22 erage, the amount shall be equivalent to the

23 amount of premium established for catastrophic

24 risk protection coverage and the amount of op-
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1 erating and administrative expenses established

2 under subsection (d)(2)(B).

3 ‘‘(C) In the case of coverage equal to or

4 greater than 65 percent of the recorded or ap5 praised average yield indemnified at 100 per6 cent of the expected market price, or an equiva7 lent coverage, on an individual or area basis,

8 the amount shall be equivalent to an amount

9 equal to the premium established for 50 percent

10 loss in yield indemnified at 75 percent of the

11 expected market price and the amount of oper12 ating and administrative expenses established

13 under subsection (d)(2)(C).

14 ‘‘(3) STATE SUBSIDY AUTHORIZED.—The

15 Board may enter into agreements with any State or

16 agency of a State under which the State or agency

17 may pay to the approved insurance provider an addi18 tional premium subsidy to further reduce the portion

19 of the premium paid by producers in the State.

20 ‘‘(f) ELIGIBILITY REQUIREMENTS.—

21 ‘‘(1) PERSONS ELIGIBLE.—Except as otherwise

22 provided in this title, no producer may be denied in23 surance under this section if the producer meets the

24 definition of person, as defined by the Secretary. In

25 the case of plans of insurance under this title other
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1 than catastrophic risk protection, the definition of

2 person shall include a producer who is over 18 years

3 of age or older and has a bona fide insurable inter4 est in a crop as an owner, owner-operator, landlord,

5 tenant, or sharecropper.

6 ‘‘(2) SALES CLOSING DATE.—A producer who

7 desires to obtain catastrophic risk protection under

8 subsection (b) or buy-up coverage under subsection

9 (c) for a crop shall submit an application by the

10 sales closing date for the crop. The Corporation

11 shall establish sales closing dates to maximize con12 venience to producers in obtaining benefits under

13 commodity price support and production adjustment

14 programs of the Department whenever feasible; ex15 cept that, in establishing such dates, the Corporation

16 shall ensure that the goal of actuarial soundness for

17 the crop insurance program under this title is met.

18 Beginning with the 1995 crop year, the Corporation

19 shall establish for each insurable crop a sales closing

20 date that is 30 days earlier than the corresponding

21 sales closing date that was established for the 1994

22 crop year.

23 ‘‘(3) RECORDS AND REPORTING.—To obtain

24 catastrophic risk protection under subsection (b) or
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1 buy-up coverage under subsection (c), a producer

2 shall—

3 ‘‘(A) provide, to the extent required by the

4 Corporation, records acceptable to the Corpora5 tion of historical acreage and production of the

6 crops for which the insurance is sought or ac7 cept a yield determined by the Corporation; and

8 ‘‘(B) report acreage planted and prevented

9 from planting by the designated acreage report10 ing date for that crop and location as estab11 lished by the Corporation.

12 ‘‘(4) LIMITATION ON MULTIPLE BENEFITS FOR

13 SAME LOSS.—If a producer who is eligible to receive

14 benefits under catastrophic risk protection under

15 subsection (b) or noninsured crop disaster assistance

16 under section 519 is also eligible to receive assist17 ance for the same loss under any other program ad18 ministered by the Secretary, the producer shall be

19 required to elect whether to receive benefits under

20 this title or under such other program, but not both.

21 A producer who purchases buy-up coverage under

22 subsection (c) may also receive assistance for the

23 same loss under other programs administered by the

24 Secretary, except that the amount received for the

25 loss under the buy-up coverage together with the
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1 amount received under such other programs may not

2 exceed the amount of the producer’s actual loss.

3 ‘‘(g) YIELD COVERAGE DETERMINATIONS.—

4 ‘‘(1) IN GENERAL.—The Corporation shall im5 plement crop insurance underwriting rules that en6 sure that yield coverage, as specified in this sub7 section, is provided to eligible producers obtaining

8 catastrophic risk protection under subsection (b) or

9 buy-up coverage under subsection (c).

10 ‘‘(2) INDIVIDUAL YIELD BASIS.—

11 ‘‘(A) ACTUAL PRODUCTION HISTORY.—The

12 Corporation shall determine yield coverage

13 using the producer’s actual production history

14 over a period of not less than the 4 previous

15 consecutive crop years and not more than 10

16 consecutive crop years. Subject to subparagraph

17 (B), the yield for insurance purposes for the

18 year for which insurance is sought shall be

19 equal to the average of the producer’s actual

20 production history during the period considered.

21 ‘‘(B) ASSIGNMENT OF YIELD.—Except as

22 provided in subparagraphs (C) and (D), if a

23 producer does not submit adequate documenta24 tion of production history to determine crop

25 yield under subparagraph (A), the Corporation
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1 shall assign to the producer a yield equal to not

2 less than 65 percent of the transitional yield of

3 the producer (adjusted to reflect actual produc4 tion reflected in the records acceptable to the

5 Corporation for continuous years), as specified

6 in regulations issued by the Corporation based

7 on production history requirements.

8 ‘‘(C) PILOT PROGRAM OF ASSIGNED

9 YIELDS FOR NEW PRODUCERS.—

10 ‘‘(i) PROGRAM REQUIRED.—For each

11 of the 1995 and 1996 crop years, the Cor12 poration shall carry out a pilot program to

13 assign to eligible new producers higher as14 signed yields than would otherwise be as15 signed to such producers under subpara16 graph (B). The Corporation shall include

17 in the pilot program 30 counties that are

18 determined by the Corporation to be ade19 quate to provide a comprehensive evalua20 tion of the feasibility, effectiveness, and de21 mand among new producers for increased

22 assigned yields.

23 ‘‘(ii) INCREASED ASSIGNED YIELDS.—

24 In the case of an eligible new producer

25 participating in the pilot program, the Cor-
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1 poration shall assign to the new producer

2 a yield equal to not less than 110 percent

3 of the transitional yield otherwise estab4 lished by the Corporation.

5 ‘‘(iii) ELIGIBLE NEW PRODUCER.—

6 The Secretary shall establish a definition

7 of new producer for purposes of determin8 ing eligibility to participate in the pilot

9 program.

10 ‘‘(D) ALTERNATIVE ASSIGNED YIELDS FOR

11 PRODUCERS OF FEED OR FORAGE.—

12 ‘‘(i) FEED OR FORAGE YIELDS.—For

13 the first crop year for which an eligible

14 producer described in clause (ii) obtains

15 catastrophic risk protection under sub16 section (b) or buy-up coverage under sub17 section (c) for a feed or forage crop, the

18 Corporation shall assign to the producer a

19 yield equal to not less than 80 percent of

20 the transitional yield established by the

21 Corporation (adjusted to reflect the actual

22 production history of the producer) if the

23 producer does not provide satisfactory evi24 dence of the yield under subparagraph (A).

25 For not more than three additional years,
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1 the Corporation shall provide the producer

2 with a yield based on the greater of—

3 ‘‘(I) the producer’s actual pro4 duction history for the preceding year

5 (or years if available); and

6 ‘‘(II) the assigned yield deter7 mined under this clause.

8 ‘‘(ii) ELIGIBLE PRODUCERS.—An eli9 gible producer referred to in clause (i) is a

10 producer that, as determined by the Sec11 retary—

12 ‘‘(I) grows the insured feed or

13 forage crop primarily for on-farm use

14 in a livestock, dairy, or poultry oper15 ation; and

16 ‘‘(II) derives over 50 percent of

17 the producer’s gross farm income

18 from the livestock, dairy, or poultry

19 operation.

20 ‘‘(iii) TERMINATION OF AUTHORITY.—

21 The authority provided by this subpara22 graph shall apply only during the 1995

23 through 1998 crop years.

24 ‘‘(3) AREA YIELD BASIS.—The Corporation may

25 offer a crop insurance plan based on an area yield
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1 that allows an insured producer to qualify for an in2 demnity if a loss occurs in an area, as specified by

3 the Corporation, in which the farm of the producer

4 is located. Under an area yield plan, an insured pro5 ducer shall be allowed to select the level of area pro6 duction at which an indemnity will be paid consist7 ent with the terms and conditions established by the

8 Corporation.

9 ‘‘(4) COMMODITY-BY-COMMODITY BASIS.—A

10 producer may choose between either individual yield

11 or area yield coverage, where available, on a com12 modity-by-commodity basis.’’.

13 (b) CONFORMING AMENDMENTS.—

14 (1) REPEAL OF EXISTING CROP INSURANCE

15 YIELD COVERAGE.—Section 508A of the Federal

16 Crop Insurance Act (7 U.S.C. 1508A) is repealed.

17 (2) PREEMPTION.—Section 511 of such Act (7

18 U.S.C. 1511) is amended by adding at the end the

19 following sentence: ‘‘The Corporation’s contracts of

20 insurance and the contracts of insurance reinsured

21 by the Corporation shall be exempt from taxation

22 imposed by any State, municipality, or local taxing

23 authority.’’.

24 (3) PERSONS UNDER 21 YEARS OF AGE.—Sec25 tion 520 of such Act (7 U.S.C. 1520) is repealed.
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1 SEC. 7. PREPARATION OF POLICIES, CLAIMS, AND REIN2 SURANCE.

3 (a) SUBMISSION OF POLICIES.—Subsection (h) of

4 section 508 of the Federal Crop Insurance Act (7 U.S.C.

5 1508), as redesignated by section 6(a)(2), is amended—

6 (1) in paragraph (1), by striking ‘‘subsection

7 (a)’’ and inserting ‘‘subsection (c)’’; and

8 (2) by striking paragraphs (2), (3), and (4) and

9 inserting the following new paragraphs:

10 ‘‘(2) SUBMISSION OF POLICIES.—A policy or

11 other material submitted to the Board under this

12 subsection may be prepared without regard to the

13 limitations contained in this title, including the re14 quirements concerning the levels of coverage and

15 rates and the requirement that a price level for each

16 commodity insured must equal the expected market

17 price for the commodity as established by the Board.

18 In the case of such a policy, the payment by the

19 Corporation of a portion of the premium of the pol20 icy may not exceed the amount that would otherwise

21 be authorized under subsection (e).

22 ‘‘(3) REVIEW AND APPROVAL BY THE BOARD.—

23 A policy or other material submitted to the Board

24 under this subsection shall be reviewed by the Board

25 and, if the Board finds that the interests of produc26 ers are adequately protected and that any premiums
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1 charged to such producers are actuarially appro2 priate, shall be approved by the Board for reinsur3 ance and for sale to producers as an additional

4 choice at actuarially appropriate rates and under ap5 propriate terms and conditions. The Corporation

6 may enter into more than one reinsurance agree7 ment with the private insurance provider simulta8 neously to facilitate the offering of such new policies.

9 ‘‘(4) GUIDELINES FOR SUBMISSION AND RE10 VIEW.—The Corporation shall issue regulations to

11 establish guidelines for the submission and Board

12 review of policies or other material submitted to the

13 Board under this subsection. At a minimum, the

14 guidelines shall ensure the following:

15 ‘‘(A) Proposals submitted to the Board

16 under this subsection shall be considered as

17 confidential commercial or financial information

18 for purposes of section 552(b)(4) of title 5,

19 United States Code, until approved by the

20 Board. Proposals disapproved by the Board

21 shall remain confidential commercial or finan22 cial information.

23 ‘‘(B) The Board shall provide an applicant

24 with the opportunity to present the proposal to

25 the Board in person if the applicant so desires.
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1 ‘‘(C) The Board shall provide an applicant

2 with notification of intent to disapprove a pro3 posal not later than 30 days prior to taking

4 such action. An applicant that receives such no5 tification may modify such application, and

6 such modification shall be considered an origi7 nal application for purposes of this paragraph.

8 ‘‘(D) Specific guidelines shall deal with the

9 timing of submission of proposals under this

10 subsection and timely consideration by the

11 Board so that any approved proposal may be

12 made available to all persons reinsured by the

13 Corporation in a manner permitting them to

14 participate, if they so desire, in offering such a

15 proposal in the first crop year in which it is ap16 proved by the Board for reinsurance, premium

17 subsidy, or other support offered by this title.

18 ‘‘(5) REQUIRED PUBLICATION.—Any policies,

19 provisions of policies, and rates approved under this

20 subsection shall be published as a notice in the Fed21 eral Register and made available to all persons con22 tracting with or reinsured by the Corporation under

23 the same terms and conditions as between the Cor24 poration and the person originally submitting the

25 policy or other material.’’.
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1 (b) CLAIMS FOR LOSSES AND REINSURANCE.—Sec2 tion 508 of the Federal Crop Insurance Act (7 U.S.C.

3 1508) is further amended—

4 (1) by redesignating subsections (j) and (k) as

5 subsections (l) and (m), respectively; and

6 (2) inserting after subsection (i), as redesig7 nated by section 6(a)(2), the following new sub8 sections:

9 ‘‘(j) CLAIMS FOR LOSSES.—

10 ‘‘(1) IN GENERAL.—Under rules prescribed by

11 the Corporation, the Corporation may provide for

12 adjustment and payment of claims for losses. The

13 rules prescribed by the Corporation shall establish

14 standards to ensure that all claims for losses are ad15 justed, to the extent practicable, in a uniform and

16 timely manner.

17 ‘‘(2) DENIAL OF CLAIMS.—

18 ‘‘(A) IN GENERAL.—Subject to subpara19 graph (B), if a claim for indemnity is denied by

20 the Corporation, an action on the claim may be

21 brought against the Corporation or Secretary

22 only in the United States district court for the

23 district in which the insured farm is located.

24 ‘‘(B) STATUTE OF LIMITATIONS.—A suit

25 on the claim may be brought not later than 1
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1 year after the date on which written notice of

2 denial of the claim is provided to the claimant.

3 ‘‘(3) INDEMNIFICATION.—The Corporation shall

4 provide private insurance providers with indemnifica5 tion, including costs and reasonable attorney fees in6 curred by the private insurance provider, due to er7 rors or omissions on the part of the Corporation.

8 ‘‘(k) REINSURANCE.—Notwithstanding any other

9 provision of this title, the Corporation shall, to the maxi10 mum extent practicable, provide reinsurance to insurers

11 approved by the Corporation that insure producers of any

12 agricultural commodity under a plan or plans acceptable

13 to the Corporation. Such reinsurance shall be provided

14 upon such terms and conditions as the Board may deter15 mine to be consistent with subsections (b) and (c) and

16 sound reinsurance principles. The Corporation’s reinsur17 ance agreements with the reinsured companies shall re18 quire the reinsured companies to bear a sufficient share

19 of any potential loss under such agreement so as to ensure

20 that the reinsured company will sell and service policies

21 of insurance in a sound and prudent manner, taking into

22 consideration the financial condition of the reinsured com23 panies and the availability of private reinsurance.’’.

24 (c) CROSS REFERENCES.—
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1 (1) CLAIMS FOR LOSSES.—Section 506(d) of

2 the Federal Crop Insurance Act (7 U.S.C. 1506(d))

3 is amended in the first sentence by striking ‘‘section

4 508(f)’’ and inserting ‘‘section 508(j)’’.

5 (2) SUBMISSION OF MATERIALS TO BOARD.—

6 Section 507(c) of such Act (7 U.S.C. 1507(c)) is

7 amended in the last sentence by striking ‘‘section

8 508(b)’’ and inserting ‘‘section 508(h)’’.

9 (3) DEFINITION OF AGRICULTURAL COMMOD10 ITY.—Section 518 of such Act (7 U.S.C. 1518) is

11 amended by striking ‘‘or (k)’’ and inserting ‘‘or

12 (m)’’.

13 SEC. 8. AUTHORIZATION OF APPROPRIATIONS AND CROP

14 INSURANCE FUND.

15 Section 516 of the Federal Crop Insurance Act (7

16 U.S.C. 1516) is amended to read as follows:

17 ‘‘SEC. 516. FUNDING.

18 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS FOR COR19 PORATION SALARIES AND AGENT COMMISSIONS.—There

20 are hereby authorized to be appropriated such sums as

21 are necessary to cover the salaries and administrative ex22 penses of the Corporation and the administrative and op23 erating expenses of the Corporation for the sales commis24 sions of agents.

25 ‘‘(b) CROP INSURANCE FUND.—
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1 ‘‘(1) ESTABLISHMENT.—There is hereby estab2 lished an insurance fund for deposit of premiums

3 collected under section 508(d), income from reinsur4 ance operations, and appropriations made available

5 under paragraph (2).

6 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—

7 There are hereby authorized to be appropriated such

8 sums as may be necessary to carry out the purposes

9 of the insurance fund.

10 ‘‘(c) PURPOSES OF INSURANCE FUND.—In such ag11 gregate amount as is provided in advance in appropria12 tions Acts, the Corporation may use amounts in the insur13 ance fund to pay the following:

14 ‘‘(1) Beginning with the 1998 crop year, the

15 administrative and operating expenses of approved

16 insurance providers, other than expenses for which

17 funds are authorized to be appropriated under sub18 section (a).

19 ‘‘(2) All other expenses of the Corporation

20 (other than expenses for which funds are authorized

21 to be appropriated under subsection (a)), including

22 all premium subsidies and indemnities.

23 ‘‘(3) For the 1995, 1996, and 1997 crop years,

24 all administrative and expense reimbursements due
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1 under a reinsurance agreement with an approved

2 private insurance provider.

3 ‘‘(4) Expenses incurred by the Corporation to

4 carry out research and development.

5 ‘‘(d) PURCHASE OF AMERICAN-MADE EQUIPMENT

6 AND PRODUCTS.—

7 ‘‘(1) SENSE OF CONGRESS.—It is the sense of

8 the Congress that, to the greatest extent practicable,

9 all equipment and products purchased by the Cor10 poration using funds made available to the Corpora11 tion should be American-made.

12 ‘‘(2) NOTICE REQUIREMENT.—In providing fi13 nancial assistance to, or entering into any contract

14 with, any entity for the purchase of equipment and

15 products to carry out this title, the Corporation, to

16 the greatest extent practicable, shall provide to such

17 entity a notice describing the statement made in

18 paragraph (1) by the Congress.’’.

19 SEC. 9. ADVISORY COMMITTEE.

20 The Federal Crop Insurance Act is amended by in21 serting after section 514 (7 U.S.C. 1514) the following

22 new section:
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1 ‘‘SEC. 515. ADVISORY COMMITTEE FOR FEDERAL CROP IN2 SURANCE.

3 ‘‘(a) ESTABLISHMENT AND TERMINATION.—The

4 Secretary may establish within the Department of Agri5 culture an advisory committee to be known as the Advisory

6 Committee for Federal Crop Insurance. If established, the

7 Advisory Committee shall remain in existence until Sep8 tember 30, 1998.

9 ‘‘(b) PRIMARY RESPONSIBILITY.—The primary re10 sponsibility of the Advisory Committee shall be to advise

11 the Secretary on the implementation of this title and on

12 other issues related to crop insurance, as determined by

13 the Manager.

14 ‘‘(c) MEMBERSHIP.—The Advisory Committee shall

15 be composed of the Manager of the Corporation, the Sec16 retary (or a designee of the Secretary), and not less than

17 12 members representing organizations and agencies in18 volved in the provision of crop insurance under this title.

19 Not less than 3 of the members of the Advisory Committee

20 shall be representatives of the specialty crops industry.

21 The organizations or agencies represented by members on

22 the Advisory Committee may include insurance companies,

23 insurance agents, farm producer organizations, experts on

24 agronomic practices, and banking and lending institutions.

25 ‘‘(d) ADMINISTRATIVE PROVISIONS.—
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1 ‘‘(1) TERMS.—Members of the Advisory Com2 mittee shall be appointed by the Secretary for a

3 term of up to 2 years from nominations made by the

4 organizations and agencies specified in subsection

5 (c). The terms of the members shall be staggered.

6 ‘‘(2) CHAIRPERSON.—The Advisory Committee

7 shall be chaired by the Manager of the Corporation.

8 ‘‘(3) MEETINGS.—The Advisory Committee

9 shall meet at least annually. The meetings of the

10 Advisory Committee shall be publicly announced in

11 advance and shall be open to the public. Appropriate

12 records of the activities of the Advisory Committee

13 shall be kept and made available to the public on re14 quest.

15 ‘‘(e) REPORTS.—Not later than June 30 of each year,

16 the Advisory Committee shall submit to the Secretary a

17 report specifying its conclusions and recommendations re18 garding—

19 ‘‘(1) the progress toward implementation of the

20 provisions of this title;

21 ‘‘(2) the actuarial soundness of the Federal

22 crop insurance program;

23 ‘‘(3) the rate of producer participation in both

24 catastrophic risk protection under section 508(b)

25 and buy-up coverage under section 508(c); and
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1 ‘‘(4) the progress toward improved crop insur2 ance coverage for new and specialty crops.’’.

3 SEC. 10. NONINSURED CROP DISASTER ASSISTANCE.

4 (a) IN GENERAL.—Section 519 of the Federal Crop

5 Insurance Act (7 U.S.C. 1519) is amended to read as fol6 lows:

7 ‘‘SEC. 519. NONINSURED CROP DISASTER ASSISTANCE PRO8 GRAM.

9 ‘‘(a) ESTABLISHMENT OF PROGRAM.—

10 ‘‘(1) ESTABLISHMENT.—In the case of an eligi11 ble crop described in paragraph (2), the Corporation

12 shall establish a noninsured crop disaster assistance

13 program to provide coverage equivalent to the cata14 strophic risk protection otherwise available under

15 section 508(b).

16 ‘‘(2) ELIGIBLE CROPS.—

17 ‘‘(A) IN GENERAL.—For purposes of this

18 section, the term ‘eligible crop’ means each

19 commercial crop or other agricultural commod20 ity (except livestock)—

21 ‘‘(i) for which catastrophic risk pro22 tection under section 508(b) is not avail23 able; and

24 ‘‘(ii) which is produced for food or

25 fiber.
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1 ‘‘(B) CROPS SPECIFICALLY INCLUDED.—

2 The term ‘eligible crop’ shall include floricul3 tural, ornamental nursery, and Christmas tree

4 crops and turfgrass sod.

5 ‘‘(3) CAUSE OF LOSS.—To qualify for assist6 ance under this section, the losses of the noninsured

7 commodity shall be due to drought, flood, or other

8 natural disaster, as determined by the Secretary.

9 ‘‘(b) APPLICATION FOR NONINSURED CROP DISAS10 TER ASSISTANCE.—

11 ‘‘(1) TIMELY APPLICATION.—To be eligible for

12 assistance under this section, producers shall submit

13 an application for noninsured crop disaster assist14 ance at a local office of the Department of Agri15 culture. The application shall be in such form, con16 tain such information, and be submitted at such

17 time as the Corporation may require.

18 ‘‘(2) RECORDS AND REPORTS.—To obtain

19 noninsured crop disaster assistance, a producer

20 shall—

21 ‘‘(A) provide records acceptable to the Cor22 poration of historical acreage and production of

23 the eligible crops for which assistance is sought

24 or accept a yield determined by the Corpora25 tion; and
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1 ‘‘(B) report acreage planted and prevented

2 from planting by the designated acreage report3 ing date for that crop and location as estab4 lished by the Corporation.

5 ‘‘(3) EXCLUSIONS.—Noninsured crop disaster

6 assistance under this section shall not cover losses

7 due to—

8 ‘‘(A) the neglect or malfeasance of the pro9 ducer;

10 ‘‘(B) the failure of the producer to reseed

11 to the same crop in those areas and under such

12 circumstances where it is customary to reseed;

13 or

14 ‘‘(C) the failure of the producer to follow

15 good farming practices, as determined by the

16 Corporation.

17 ‘‘(4) REVENUE LIMITATION.—A person who has

18 qualifying gross revenues in excess of $2,000,000

19 annually, as determined by the Secretary, shall not

20 be eligible to receive any noninsured crop disaster

21 assistance payments. For purposes of this section,

22 the term ‘qualifying gross revenues’ means—

23 ‘‘(A) if a majority of the person’s gross

24 revenue is received from farming, ranching, and

25 forestry operations, the gross revenue from the
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1 person’s farming, ranching, and forestry oper2 ations; and

3 ‘‘(B) if less than a majority of the person’s

4 gross revenue is received from farming, ranch5 ing, and forestry operations, the person’s gross

6 revenue from all sources.

7 ‘‘(c) LOSS REQUIREMENTS.—

8 ‘‘(1) REQUIRED AREA LOSS.—A producer of an

9 eligible crop shall not receive noninsured crop disas10 ter assistance unless the average yield for that crop,

11 or an equivalent measure in the event yield data are

12 not available, in an area falls below 65 percent of

13 the expected area yield, as established by the Cor14 poration.

15 ‘‘(2) PREVENTED PLANTING.—Subject to para16 graph (1), the Corporation shall make a prevented

17 planting noninsured crop disaster assistance pay18 ment if the producer is prevented from planting

19 more than 35 percent of the acreage intended for

20 the eligible crop because of drought, flood, or other

21 natural disaster, as determined by the Secretary.

22 ‘‘(3) REDUCED YIELDS.—Subject to paragraph

23 (1), the Corporation shall make a reduced yield

24 noninsured crop disaster assistance payment if the

25 total quantity of the eligible crop that a producer is
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1 able to harvest on any farm is, because of drought,

2 flood, or other natural disaster as determined by the

3 Secretary, less than 50 percent of the expected indi4 vidual yield for the crop, as determined by the Cor5 poration, factored for the producer’s interest for the

6 crop.

7 ‘‘(d) PAYMENTS.—

8 ‘‘(1) REDUCED YIELDS.—If the producer is eli9 gible for reduced yield noninsured crop disaster as10 sistance, payments shall be made for farm losses in

11 excess of 50 percent of the established farm yield for

12 the eligible crop indemnified at 60 percent of the av13 erage market price for that crop, or a comparable

14 coverage as determined by the Corporation. Any eli15 gible crop that is produced with significant and vari16 able, post-planting expenses, the payment shall be

17 reduced to reflect reduced production costs and har18 vesting costs if the crop is not harvested.

19 ‘‘(2) PREVENTED PLANTING.—If the producer

20 is eligible for a prevented planting payment under

21 this section, the amount paid to the producer on a

22 claim under this section may reflect a reduction that

23 is proportional to the out-of-pocket expenses that are

24 not incurred by the producer as a result of not

25 planting, growing, or harvesting the crop for which
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1 the claim is made, as determined by the Corpora2 tion.

3 ‘‘(e) YIELD DETERMINATIONS.—

4 ‘‘(1) ESTABLISHMENT.—The Corporation shall

5 establish farm yields for purposes of providing

6 noninsured crop disaster assistance under this sec7 tion.

8 ‘‘(2) ACTUAL PRODUCTION HISTORY.—The Cor9 poration shall determine yield coverage using the

10 producer’s actual production history over a period of

11 not less than the 4 previous consecutive crop years

12 and not more than 10 consecutive crop years. Sub13 ject to paragraph (3), the yield for the year in which

14 noninsured crop disaster assistance is sought shall

15 be equal to the average of the producer’s actual pro16 duction history during the period considered.

17 ‘‘(3) ASSIGNMENT OF YIELD.—If a producer

18 does not submit adequate documentation of produc19 tion history to determine a crop yield under para20 graph (2), the Corporation shall assign to the pro21 ducer a yield equal to not less than 65 percent of

22 the transitional yield of the producer (adjusted to re23 flect actual production reflected in the records ac24 ceptable to the Corporation for continuous years), as
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1 specified in regulations issued by the Corporation

2 based on production history requirements.

3 ‘‘(4) PROHIBITION ON ASSIGNED YIELDS IN

4 CERTAIN COUNTIES.—If the acreage of a crop in a

5 county has increased by more than 100 percent

6 since the 1987 crop year, a producer who produces

7 that crop on a farm located in that county may not

8 obtain an assigned yield under paragraph (3). In9 stead, the producer must provide detailed docu10 mentation of production costs, acres planted, and

11 yield (as required by the Corporation) to become eli12 gible for a noninsured assistance payment.

13 ‘‘(5) LIMITATION ON RECEIPT OF SUBSEQUENT

14 ASSIGNED YIELD.—A producer who receives an as15 signed yield for the current year of a natural disas16 ter because required production records were not

17 submitted to the local office of the Department shall

18 not be eligible for an assigned yield for the year of

19 the next natural disaster unless the required produc20 tion records of the previous 1 or more years (as ap21 plicable) are provided to the local office.

22 ‘‘(6) YIELD VARIATIONS DUE TO DIFFERENT

23 FARMING PRACTICES.—The Corporation shall ensure

24 that noninsured crop disaster assistance accurately

25 reflects significant yield variations due to different
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1 farming practices, such as between irrigated and

2 nonirrigated acreage.

3 ‘‘(f) PAYMENT OF LOSSES.—Payments for

4 noninsured crop disaster assistance losses under this sec5 tion shall be made from the insurance fund established

6 under section 516. Such losses shall not be included in

7 calculating the premiums charged to producers for insur8 ance under section 508.

9 ‘‘(g) PAYMENT LIMITATIONS.—The total amount of

10 payments that a person shall be entitled to receive annu11 ally under this section may not exceed $100,000. For pur12 poses of applying this limitation, the Secretary shall issue

13 regulations defining the term ‘person’ that shall conform,

14 to the extent practicable, to the regulations defining ‘per15 son’ issued under section 1001 of the Food Security Act

16 of 1985 (7 U.S.C. 1308).’’.

17 (b) CONFORMING AMENDMENTS.—

18 (1) EXISTING EMERGENCY CROP LOSS ASSIST19 ANCE PROGRAM.—Effective July 1, 1995, chapter 3

20 of subtitle B of title XXII of the Food, Agriculture,

21 Conservation, and Trade Act of 1990 (7 U.S.C.

22 1421 note) is amended by striking subchapter A.

23 (2) EMERGENCY APPROPRIATIONS.—Effective

24 July 1, 1995, the Balanced Budget and Emergency

25 Deficit Control Act of 1985 is amended—
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1 (A) in section 251(b)(2)(D)(i) (2 U.S.C.

2 901(b)(2)(D)(i)), by adding at the end the fol3 lowing new sentence: ‘‘The preceding sentence

4 shall not apply to appropriations to cover agri5 cultural crop disaster assistance.’’; and

6 (B) in section 252(e) (2 U.S.C. 902(e)), by

7 adding at the end the following new sentence:

8 ‘‘The preceding sentence shall not apply to di9 rect spending provisions to cover agricultural

10 crop disaster assistance.’’.

11 SEC. 11. CROP INSURANCE REQUIREMENTS UNDER PRICE

12 SUPPORT PROGRAMS.

13 (a) RICE.—Section 101B(c) of the Agricultural Act

14 of 1949 (7 U.S.C. 1441–2(c)) is amended—

15 (1) by striking paragraph (1)(F); and

16 (2) by striking paragraph (2) and inserting in

17 lieu thereof the following:

18 ‘‘(2) CROP INSURANCE REQUIREMENT.—As a

19 condition of receiving any benefit (including pay20 ments) under this section, a producer must obtain at

21 least catastrophic risk protection insurance coverage

22 under section 508(b) of the Federal Crop Insurance

23 Act for the crop and crop year in which the benefit

24 is sought, if such coverage is offered by the Federal

25 Crop Insurance Corporation.’’.
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1 (b) EXTRA LONG STAPLE COTTON.—Section 103(h)

2 of the Agricultural Act of 1949 (7 U.S.C. 1444(h)) is

3 amended—

4 (1) by redesignating paragraph (16) as para5 graph (17) and moving the margin 2 ems to the left;

6 and

7 (2) by inserting after paragraph (15) the fol8 lowing new paragraph:

9 ‘‘(16) CROP INSURANCE REQUIREMENT.—As a con10 dition of receiving any benefit (including payments) under

11 this section, a producer must obtain at least catastrophic

12 risk protection insurance coverage under section 508(b)

13 of the Federal Crop Insurance Act for the crop and crop

14 year in which the benefit is sought, if such coverage is

15 offered by the Federal Crop Insurance Corporation.’’.

16 (c) UPLAND COTTON.—Section 103B(c) of the Agri17 cultural Act of 1949 (7 U.S.C. 1444–2(c)) is amended—

18 (1) by striking paragraph (1)(F); and

19 (2) by striking paragraph (2) and inserting in

20 lieu thereof the following:

21 ‘‘(2) CROP INSURANCE REQUIREMENT.—As a

22 condition of receiving any benefit (including pay23 ments) under this section, a producer must obtain at

24 least catastrophic risk protection insurance coverage

25 under section 508(b) of the Federal Crop Insurance
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1 Act for the crop and crop year in which the benefit

2 is sought, if such coverage is offered by the Federal

3 Crop Insurance Corporation.’’.

4 (d) FEED GRAINS.—Section 105B(c) of the Agricul5 tural Act of 1949 (7 U.S.C. 1444f(c)) is amended—

6 (1) by striking paragraph (1)(G); and

7 (2) by striking paragraph (2) and inserting in

8 lieu thereof the following:

9 ‘‘(2) CROP INSURANCE REQUIREMENT.—As a

10 condition of receiving any benefit (including pay11 ments) under this section, a producer must obtain at

12 least catastrophic risk protection insurance coverage

13 under section 508(b) of the Federal Crop Insurance

14 Act for the crop and crop year in which the benefit

15 is sought, if such coverage is offered by the Federal

16 Crop Insurance Corporation.’’.

17 (e) TOBACCO.—Section 106 of the Agricultural Act

18 of 1949 (7 U.S.C. 1445) is amended by striking sub19 section (e) and inserting in lieu thereof the following:

20 ‘‘(e) CROP INSURANCE REQUIREMENT.—As a condi21 tion of receiving any benefit (including payments) under

22 this section, a producer must obtain at least catastrophic

23 risk protection insurance coverage under section 508(b)

24 of the Federal Crop Insurance Act for the crop and crop
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1 year in which the benefit is sought, if such coverage is

2 offered by the Federal Crop Insurance Corporation.’’.

3 (f) WHEAT.—Section 107B(c) of the Agricultural Act

4 of 1949 (7 U.S.C. 1444b–3a(c)) is amended—

5 (1) by striking paragraph (1)(G); and

6 (2) by striking paragraph (2) and inserting in

7 lieu thereof the following:

8 ‘‘(2) CROP INSURANCE REQUIREMENT.—As a

9 condition of receiving any benefit (including pay10 ments) under this section, a producer must obtain at

11 least catastrophic risk protection insurance coverage

12 under section 508(b) of the Federal Crop Insurance

13 Act for the crop and crop year in which the benefit

14 is sought, if such coverage is offered by the Federal

15 Crop Insurance Corporation.’’.

16 (g) PEANUTS.—Section 108B of the Agricultural Act

17 of 1949 (7 U.S.C. 1445c–3) is amended—

18 (1) by redesignating subsection (h) as sub19 section (i); and

20 (2) by inserting after subsection (g) the follow21 ing new subsection:

22 ‘‘(h) CROP INSURANCE REQUIREMENT.—As a condi23 tion of receiving any benefit (including payments) under

24 this section, a producer must obtain at least catastrophic

25 risk protection insurance coverage under section 508(b)
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1 of the Federal Crop Insurance Act for the crop and crop

2 year in which the benefit is sought, if such coverage is

3 offered by the Federal Crop Insurance Corporation.’’.

4 (h) OILSEEDS.—Section 205 of the Agricultural Act

5 of 1949 (7 U.S.C. 1446f) is amended—

6 (1) by redesignating subsection (n) as sub7 section (o); and

8 (2) by inserting after subsection (m) the follow9 ing new subsection:

10 ‘‘(n) CROP INSURANCE REQUIREMENT.—As a condi11 tion of receiving any benefit (including payments) under

12 this section, a producer must obtain at least catastrophic

13 risk protection insurance coverage under section 508(b)

14 of the Federal Crop Insurance Act for the crop and crop

15 year in which the benefit is sought, if such coverage is

16 offered by the Federal Crop Insurance Corporation.’’.

17 (i) SUGAR.—Section 206 of the Agricultural Act of

18 1949 (7 U.S.C. 1446g) is amended—

19 (1) by redesignating subsection (j) as sub20 section (k); and

21 (2) by inserting after subsection (i) the follow22 ing new subsection:

23 ‘‘(j) CROP INSURANCE REQUIREMENT.—As a condi24 tion of receiving any benefit (including payments) under

25 this section, a producer must obtain at least catastrophic
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1 risk protection insurance coverage under section 508(b)

2 of the Federal Crop Insurance Act for the crop and crop

3 year in which the benefit is sought, if such coverage is

4 offered by the Federal Crop Insurance Corporation.’’.

5 (j) HONEY.—Section 207 of the Agricultural Act of

6 1949 (7 U.S.C. 1446h) is amended—

7 (1) by redesignating subsection (j) as sub8 section (k); and

9 (2) by inserting after subsection (i) the follow10 ing new subsection:

11 ‘‘(j) CROP INSURANCE REQUIREMENT.—As a condi12 tion of receiving any benefit (including payments) under

13 this section, a producer must obtain at least catastrophic

14 risk protection insurance coverage under section 508(b)

15 of the Federal Crop Insurance Act for the crop and crop

16 year in which the benefit is sought, if such coverage is

17 offered by the Federal Crop Insurance Corporation.’’.

18 (k) DISASTER PAYMENTS.—Section 208 of the Agri19 cultural Act of 1949 (7 U.S.C. 1446i) is repealed.

20 SEC. 12. ELIMINATION OF GENDER REFERENCES.

21 (a) MANAGEMENT OF CORPORATION.—Section 505

22 of the Federal Crop Insurance Act (7 U.S.C. 1505) is

23 amended—

24 (1) in subsection (a), by striking the third sen25 tence and inserting ‘‘The Board shall be appointed
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1 by, and hold office at the pleasure of, the Secretary.

2 The Secretary shall not be a member of the Board.’’;

3 and

4 (2) in subsection (d)—

5 (A) by striking ‘‘upon him’’; and

6 (B) by striking ‘‘He shall be appointed

7 by,’’ and inserting ‘‘The manager shall be ap8 pointed by,’’.

9 (b) PERSONNEL.—Section 507 of such Act (7 U.S.C.

10 1507) is amended—

11 (1) in subsection (a), by striking ‘‘as he may

12 determine: Provided, That’’ and inserting ‘‘as the

13 Secretary may determine appropriate. However,’’;

14 and

15 (2) in subsection (d), by striking ‘‘as he may re16 quest’’ and inserting ‘‘that the Secretary requests’’.

17 (c) INDEMNITIES EXEMPT FROM LEVY.—Section

18 509 of such Act (7 U.S.C. 1509) is amended by striking

19 ‘‘or his estate’’ and inserting ‘‘or the estate of the in20 sured’’.

21 SEC. 13. GAO CROP INSURANCE PROVIDER STUDY.

22 (a) The General Accounting Office shall, within 2

23 years of enactment, investigate the contractual relation24 ships between the Federal Crop Insurance Corporation

25 and approved insurance providers to determine the qual-
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1 ity, costs and efficiency of the provision of multiperil crop

2 insurance to producers of agricultural commodities cov3 ered under the Federal Crop Insurance Act. The study

4 shall be completed in two parts. The first, to be completed

5 within one year of enactment, shall examine the currently

6 available data to make the determinations required by this

7 section. The second part shall examine the changes that

8 occur because of expansion of the program as participation

9 increases.

10 (b) This study shall include, but not be limited to,

11 an investigation of providers’ actual cost of delivery of

12 multiperil crop insurance for which providers receive reim13 bursement from the Corporation, cost differences for dif14 ferent provider firm sizes, and changes in cost resulting

15 from expansion of the program. The study shall also com16 pare delivery costs of multiperil crop insurance to other

17 insurance coverage that the provider may sell and identify

18 any cross-subsidization from federally reimbursed delivery

19 to delivery costs of other insurance coverage.

20 (c) The study shall assess, to the extent practicable,

21 alternative methods of reimbursing delivery costs to pro22 viders. In addition, the study shall identify unnecessary

23 expenditure, if any, required by the Corporation for com24 pliance and program integrity.
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1 (d) In addition, the study shall include, but not be

2 limited to, the provisions of the standard reinsurance

3 agreement between the Corporation and approved provid4 ers including the risk transferred to Corporation under the

5 terms of the agreement, the return on providers’ capital,

6 a determination of the return on capital relative to dif7 ferences in provider firm size, and a determination of the

8 return on providers’ capital in multiperil crop insurance

9 relative to other insurance coverage.

10 (e) The study shall assess, to the extent practicable,

11 the potential for provider firm concentration in the

12 multiperil crop insurance industry and any economic dis13 tortions that might occur from such concentration.

14 (f) In conducting this study, the General Accounting

15 Office shall maintain the privacy of provider proprietary

16 information. The General Accounting Office shall have full

17 powers to subpoena any required information from any

18 provider firm.

19 SEC. 14. EFFECTIVE DATE.

20 Except as provided in section 10(b) and section 13,

21 this Act and the amendments made by this Act shall take

22 effect on the date of the enactment of this Act and shall

23 apply to the provision of crop insurance under the Federal

24 Crop Insurance Act (7 U.S.C. 1501 et seq.) beginning

25 with the 1995 crop year. With respect to the 1994 crop
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1 year, the Federal Crop Insurance Act (as in effect on the

2 day before the date of the enactment of this Act) shall

3 continue to apply.

Passed the House of Representatives August 4,

1994.

Attest:

Clerk.
103D CONGRESS

2D SESSION H. R. 4217

AN ACT

To reform the Federal crop insurance program, and

for other purposes.