Calendar No. 507

103D CONGRESS

2D SESSION S. 2095

[Report No. 103–301]

A BILL

To reform the Federal crop insurance program, and

for other purposes.

JULY 1 (legislative day, JUNE 7), 1994

Reported with an amendment
II

Calendar No. 507

103D CONGRESS

2D SESSION S. 2095

[Report No. 103–301]

To reform the Federal crop insurance program, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 10 (legislative day, MAY 2), 1994

Mr. LEAHY (for himself, Mr. KERREY, Mr. DURENBERGER, and Mr.

DASCHLE) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry

JULY 1 (legislative day, JUNE 7), 1994

Reported by Mr. LEAHY, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

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.

4 This Act may be cited as the ‘‘Federal Crop Insur5 ance Reform Act of 1994’’.
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1 SEC. 2. CROP INSURANCE AMENDMENTS.

2 (a) Section 505(a) of title V of the Agricultural

3 Adjustment Act of 1938 (7 U.S.C. 1505) is amended—

4 (1) by striking ‘‘the’’ after ‘‘Federal crop insur5 ance program,’’ and inserting ‘‘one additional’’; and

6 (2) by striking ‘‘responsible for the farm credit

7 programs of the Department of Agriculture’’ and in8 serting ‘‘as designated by the Secretary of Agri9 culture’’.

10 (b) Section 506 of title V of the Agricultural Adjust11 ment Act of 1938 (7 U.S.C. 1506) is amended—

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

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

14 (o), respectively;

15 (2) by inserting after subsection (i) the follow16 ing new subsection:

17 ‘‘(j) SETTLING CLAIMS.—The Corporation shall have

18 the authority to make final and conclusive settlement and

19 adjustment of any claims by or against the Corporation

20 or the account of its fiscal officers.’’;

21 (3) in subsection (1) (as redesignated), by strik22 ing ‘‘contracts or agreements’’ each place it appears

23 and inserting ‘‘contracts, agreements, or regula24 tions’’;
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1 (4) in subsection (n)(1) (as redesignated), by

2 striking paragraph (B) and inserting the following

3 new paragraph:

4 ‘‘(B) disqualify the person from purchasing

5 catastrophic risk protection or receiving

6 noninsured assistance for a period not to exceed

7 2 years and from receiving any other benefit

8 under this title for a period not to exceed 10

9 years.’’;

10 (5) in subsection (o) (as redesignated), by strik11 ing paragraph (1) and inserting the following new

12 paragraph:

13 ‘‘(1) instituting appropriate requirements for

14 documentation of the actual production history of in15 sured producers to establish recorded or appraised

16 yields for Federal crop insurance coverage that more

17 accurately reflect the associated actuarial risk. The

18 Corporation may not carry out this paragraph in a

19 manner that would prevent beginning farmers, as

20 determined by the Secretary, from obtaining Federal

21 crop insurance.’’; and

22 (6) by adding at the end thereof the following

23 new subsections:
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1 ‘‘(p) REGULATIONS.—The Secretary and the Cor2 poration, respectively, are authorized to issue regulations

3 as may be necessary to carry out this title.

4 ‘‘(q) SOURCE OF FUNDING.—There is hereby appro5 priated, without fiscal year limitation, such sums as may

6 be necessary to carry out the purpose of the insurance

7 fund.’’.

8 (c) Section 507 of title V of the Agricultural Adjust9 ment Act of 1938 (7 U.S.C. 1507) is amended—

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

11 crop insurance committeemen’’;

12 (2) in subsection (c), by striking the words be13 ginning with ‘‘, in which case the agent or broker’’

14 through ‘‘the agent or broker has caused the error

15 or omission’’; and

16 (3) in subsection (d), by replacing the comma

17 with a period after the words ‘‘section 516 of this

18 Act’’, and by deleting the remainder of the sub19 section.

20 (d) Section 508 of title V of the Agricultural Adjust21 ment Act of 1938 (7 U.S.C. 1508) is amended—

22 (1) by striking subsection (a) and inserting the

23 following new subsection:

24 ‘‘(a) AUTHORITY TO OFFER INSURANCE.—
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1 ‘‘(1) If sufficient actuarial data are available, as

2 determined by the Board, the Corporation may in3 sure or provide reinsurance for insurers of producers

4 of agricultural commodities grown in the United

5 States under any plan or plans of insurance deter6 mined by the Board to be adapted to the agricul7 tural commodity involved. To qualify for coverage

8 under these plans of insurance, the losses of the in9 sured commodity shall be due to drought, flood or

10 other natural disaster as determined by the Sec11 retary. Except in the case of tobacco, insurance shall

12 not extend beyond the period the insured commodity

13 is in the field. For the purpose of the foregoing sen14 tence, in the case of aquacultural species, the term

15 ‘field’ means the environment in which the commod16 ity is produced. Insurance provided under this sub17 section shall not cover losses due to—

18 ‘‘(A) the neglect or malfeasance of the pro19 ducer;

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

21 to the same crop in those areas and under such

22 circumstances where it is customary to so re23 seed; or
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1 ‘‘(C) the failure of the producer to follow

2 good farming practices, as determined by the

3 Corporation.’’;

4 (2) by striking subsections (c), (e), (g), (l) and

5 (n);

6 (3) by redesignating subsections (b), (d), (f),

7 (h), (i), (j), (k), and (m) as subsections (g), (h), (i),

8 (j), (k), (l), (m), and (n), respectively;

9 (4) by inserting after subsection (a) the follow10 ing new subsections:

11 ‘‘(b) CATASTROPHIC RISK PROTECTION.—

12 ‘‘(1) The Corporation shall offer a catastrophic

13 risk protection plan to indemnify producers for crop

14 loss due to loss of yield and prevented planting when

15 the producer is unable because of drought, flood or

16 other natural disaster, as determined by the Sec17 retary, to plant other crops for harvest on that acre18 age for that crop year.

19 ‘‘(2) Catastrophic risk protection shall offer the

20 producer 50 percent loss in yield coverage, on an

21 area or individual yield basis, indemnified at 60 per22 cent of the expected market price or a comparable

23 coverage, as determined by the Corporation.

24 ‘‘(3) Producers shall have the option of basing

25 their catastrophic coverage on either an individual
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1 yield and loss basis or on an area yield and loss

2 basis when both options are offered by the Corpora3 tion.

4 ‘‘(4) For catastrophic risk protection, producers

5 shall pay an administrative fee. The administrative

6 fees shall be $50 per crop per county, not to exceed

7 $100 per producer per county. The administrative

8 fee shall be paid at the service point—the United

9 States Department of Agriculture office or the ap10 proved private insurance provider—at the time of

11 application. This administrative fee shall be waived

12 for limited resource farmers, as defined by the Cor13 poration, or if the producer elects to purchase addi14 tional protection at 65 percent or more of the re15 corded or appraised average yield and 100 percent

16 of the expected market price, or an equivalent cov17 erage, offered by approved crop insurance providers.

18 Funds collected as administrative fees shall be avail19 able, subject to appropriations, for salaries and ex20 penses.

21 ‘‘(5) Participation in the catastrophic risk cov22 erage for any producer’s crop on any land in the

23 county requires participation for that producer’s

24 crop on all insurable land of the producer in the

25 county.
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1 ‘‘(6) To be eligible for any price support, pro2 duction adjustment, or conservation program admin3 istered by the United States Department of Agri4 culture for any crop, or for loans under any program

5 of the Farmers Home Administration or any succes6 sor agency, the producer must obtain at least the

7 catastrophic level of insurance for all crops of eco8 nomic significance grown on all farms in the county

9 in which the producer has an interest, if insurance

10 is available in the county for those crops. The term

11 ‘economic significance’ shall mean any crop that has

12 contributed, or is expected to contribute, 10 percent

13 or more of the total expected value of all crops

14 grown by the producer.

15 ‘‘(7) The Board may limit insurance in any

16 county or area, or on any farm, on the basis of the

17 insurance risk involved.

18 ‘‘(c) COVERAGE LEVELS GENERALLY.—

19 ‘‘(1) The Corporation shall offer plans of insur20 ance providing levels of coverage greater than that

21 available under catastrophic risk protection. Produc22 ers may only purchase there other plans from ap23 proved private insurance providers, if such private

24 insurance is available. Nothing contained herein re25 stricts the Corporation from offering insurance if
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1 coverage from private insurance providers is unavail2 able. If the producer has already applied for cata3 strophic risk protection at the United States Depart4 ment of Agriculture office and elects to purchase ad5 ditional coverage, the insurance file for that pro6 ducer shall be transferred to the approved private

7 insurance provider servicing the additional coverage

8 policy and the administrative fee for the crop for

9 which additional coverage at 65 percent or more of

10 the recorded or appraised average yield and 100 per11 cent of the expected market price, or an equivalent

12 coverage, is obtained shall be refunded to the in13 sured.

14 ‘‘(2) Producers shall have the option of pur15 chasing additional coverage based on either an indi16 vidual yield and loss basis or on an area yield and

17 loss basis when both options are offered by the Cor18 poration.

19 ‘‘(3) The level of coverage shall be dollar de20 nominated and may be purchased at any level not to

21 exceed 85 percent of the individual yield or 95 per22 cent of the area yield, as determined by the Corpora23 tion.
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1 ‘‘(4) The Corporation shall establish a price

2 level for each commodity on which insurance is of3 fered that—

4 ‘‘(A) shall not be less than the projected

5 market price for the commodity as determined

6 by the Corporation; or

7 ‘‘(B) at the discretion of the Corporation,

8 may be based on the actual market price at the

9 time of harvest, as determined by the Corpora10 tion.

11 ‘‘(5) Insurance coverage shall be made available

12 to the producer on the basis of any price election

13 that equals or is less than that established by the

14 Board and the coverage shall be quoted in terms of

15 dollars per acre: Provided, That the Corporation

16 may establish minimum price elections below which

17 levels of insurance shall not be offered.

18 ‘‘(6) For levels of coverage 65 percent or more

19 of the recorded or appraised average yield and 100

20 percent of the expected market price, or an equiva21 lent coverage, the producer may elect to delete from

22 the insurance coverage provided under this title cov23 erage against damage caused by fire and hail, pro24 vided an equivalent or greater dollar amount of cov25 erage for damage caused by fire and hail is obtained
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1 from a private hail/fire insurance provider. Upon

2 written notice of such election to the company issu3 ing the policy providing coverage under this title and

4 submission of evidence of substitute coverage on the

5 commodity insured, the producer’s premium shall be

6 reduced by an amount determined by the Corpora7 tion to be actuarially appropriate, taking into ac8 count the actuarial value of the remaining coverage

9 provided by the Corporation. In no event shall the

10 producer be given credit for an amount of premium

11 determined to be greater than the actuarial value of

12 the protection against losses caused by fire and hail

13 that is included in the coverage under this title for

14 the crop.

15 ‘‘(7) The Board may enter into agreements

16 with any State or agency of a State under which

17 such State or agency may pay to the approved insur18 ance provider an additional premium subsidy to fur19 ther reduce the portion of the premium paid by

20 farmers in such State.

21 ‘‘(8) The Board may limit or refuse insurance

22 in any county or area, or on any farm, on the basis

23 of the insurance risk involved.

24 ‘‘(d) PREMIUMS.—
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1 ‘‘(1) The Corporation shall fix adequate pre2 miums for all its plans of insurance at such rates as

3 the Board deems actuarially sufficient to attain an

4 expected loss ratio of not greater than 1.1.

5 ‘‘(A) For catastrophic risk protection cov6 erage, the amount of premium shall be suffi7 cient to cover anticipated losses and a reason8 able reserve.

9 ‘‘(B) For levels of coverage below 65 per10 cent of the recorded or appraised average yield

11 and 100 percent of the expected market price,

12 or an equivalent coverage, but greater than cat13 astrophic risk protection, the amount of pre14 mium shall be sufficient to cover anticipated

15 losses, a reasonable reserve, and an amount for

16 operating and administrative expenses, as deter17 mined by the Corporation, that is less than the

18 amount established for coverage at 65 percent

19 and 100 percent of the expected market price,

20 or an equivalent coverage.

21 ‘‘(C) For levels of coverage of at least 65

22 percent of the recorded or appraised average

23 yield and 100 percent of the expected market

24 price, or an equivalent coverage, the amount of

25 premium shall be sufficient to cover anticipated
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1 losses, a reasonable reserve, and an amount to

2 pay the operating and administrative expenses

3 as determined by the Corporation on an indus4 try-wide basis as a percent of the total pre5 mium.

6 ‘‘(2) For the purpose of encouraging the broad7 est possible participation, the Corporation shall pay

8 a part of the premium equivalent to—

9 ‘‘(A) for catastrophic risk protection cov10 erage, an amount equal to the premium estab11 lished in paragraph (1)(A) of this section;

12 ‘‘(B) for levels of coverage below 65 per13 cent of the recorded or appraised average yield

14 and 100 percent of the expected market price

15 or an equivalent coverage, but greater than cat16 astrophic risk protection, the amount of pre17 mium established for catastrophic risk protec18 tion coverage, a reasonable reserve, plus the

19 amount of operating and administrative ex20 penses established in paragraph (1)(B) of this

21 section; and

22 ‘‘(C) for levels of coverage at or greater

23 than 65 percent of the recorded and appraised

24 yield and 100 percent of the expected market

25 price, or an equivalent coverage, on an individ-
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1 ual or area basis, an amount equal to the pre2 mium established for 50 percent loss in yield in3 demnified at 75 percent of the expected market

4 price, a reasonable reserve, plus the amount of

5 operating and administrative expenses estab6 lished in paragraph (1)(C) of this section.

7 ‘‘(3) If a private insurance provider determines

8 that it may provide insurance more efficiently than

9 the expense reimbursement amount set by the Cor10 poration, the private insurance provider, if approved

11 by the Board, may reduce the premium charged the

12 insured by the amount of such efficiency. Any such

13 reductions shall be subject to the rules, limitations,

14 and procedures established by the Corporation.

15 ‘‘(e) ELIGIBILITY.—To participate in catastrophic

16 risk protection coverage under this title, producers may

17 make application at the local United States Department

18 of Agriculture office or to an approved private crop insur19 ance provider. For all coverages, producers shall be re20 quired to—

21 ‘‘(1) purchase crop insurance on or before the

22 sales closing date for the crop by providing the re23 quired information and executing the required docu24 ments. Such sales closing date shall be established

25 by the Corporation to maximize convenience to pro-
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1 ducers in obtaining benefits under price and produc2 tion adjustment programs of the Department when3 ever feasible; however, the Corporation will establish

4 all sales closing dates to assure that the goal of ac5 tuarial soundness for the crop insurance program is

6 met;

7 ‘‘(2) provide records, acceptable to the Corpora8 tion, of previous acreage and production or accept a

9 Corporation determined yield; and

10 ‘‘(3) report acreage planted and prevented from

11 planting by the designated acreage reporting date

12 for that crop and location as established by the Cor13 poration.

14 ‘‘(f) YIELD DETERMINATIONS.—

15 ‘‘(1) IN GENERAL.—The Corporation shall im16 plement crop insurance underwriting rules that en17 sure that yield coverage, as specified in subsection

18 (f)(2) of this section, is provided to all producers

19 participating in the Federal crop insurance program.

20 ‘‘(2) YIELD COVERAGE PLANS.—

21 ‘‘(A) ACTUAL PRODUCTION HISTORY.—

22 ‘‘(i) This plan uses the producer’s ac23 tual production history for the 4 previous

24 consecutive crop years without penalty, up

25 to a production data base of 10 consecutive
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1 years, subject to paragraph (ii), to deter2 mine yield coverage.

3 ‘‘(ii) If the producer does not submit

4 adequate documentation of history for a

5 crop, the producer shall be assigned, as the

6 producer’s farm program yield, not less

7 than 65 percent of the transitional yield of

8 the producer (adjusted to reflect actual

9 production reflected in the records accept10 able to the Corporation for continuous

11 years), as specified in regulations issued by

12 the Corporation based on production his13 tory requirements.

14 ‘‘(B) AREA YIELD.—The Corporation may

15 offer a crop insurance plan based on an area

16 yield that allows an insured producer to qualify

17 for an indemnity if a loss has occurred in an

18 area, as specified by the Corporation, in which

19 the farm of the producer is located. Under an

20 area yield plan, an insured producer shall be al21 lowed to select the level of area production at

22 which an indemnity will be paid consistent with

23 the terms and conditions established by the

24 Corporation.
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1 ‘‘(C) COMMODITY-BY-COMMODITY BASIS.—

2 A producer may choose between either individ3 ual yield or area yield coverage, where available,

4 on a commodity-by-commodity basis.

5 ‘‘(D) NOTICE.—The Corporation shall en6 sure that, whenever the yield coverage provi7 sions of this section are effective, producers are

8 given adequate notice of such provisions in ad9 vance of the crop insurance application period

10 for the crops to which such provisions first will

11 apply.’’;

12 (5) in subsection (g) (as redesignated)—

13 (A) in paragraph (1), by striking ‘‘(a)’’

14 and inserting ‘‘(c)’’;

15 (B) by striking paragraph (2) and insert16 ing the following new paragraph:

17 ‘‘(2) PREPARATION OF POLICIES.—A policy or

18 other material submitted to the Board under this

19 subsection may be prepared without regard to the

20 limitations contained in this title, including the re21 quirements concerning the levels of coverage and

22 rates and the requirement that a price level for each

23 commodity insured must equal the projected market

24 price for the commodity as established by the Board.

25 Such policy may only be subsidized at an amount
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1 equivalent to coverage that is authorized under this

2 title.’’;

3 (C) in paragraph (3)—

4 (i) by striking ‘‘taking into consider5 ation the risks covered by the policy or

6 other material’’;

7 (ii) by inserting after ‘‘more than one

8 reinsurance agreement’’ the words ‘‘with

9 the private insurance provider’’; and

10 (iii) by striking title ‘‘V’’ and insert11 ing ‘‘title 5’’; and

12 (D) by striking paragraph (4) and insert13 ing the following new paragraph:

14 ‘‘(4) REQUIRED PUBLICATION.—Any policies,

15 provisions of policies, and rates approved under this

16 subsection shall be published as a notice in the Fed17 eral Register and made available to all persons con18 tracting with or reinsured by the Corporation under

19 the same terms and conditions as between the Cor20 poration and the submitting person.’’;

21 (6) by striking subsection (i) (as redesignated)

22 and inserting the following new subsection:

23 ‘‘(i) CLAIMS FOR LOSSES.—The Corporation may

24 provide for adjustment and payment of claims for losses

25 as provided under subsection (a) of this section under
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1 rules prescribed by the Board. The rules prescribed by the

2 Board shall establish standards to ensure that all claims

3 for losses are adjusted, to the extent practicable, in a uni4 form and timely manner. If any claim for indemnity is

5 denied by the Corporation, an action on such claim may

6 be brought against the Corporation and the insurance pro7 vider in the United States district court for the district

8 in which the insured farm is located: Provided, That no

9 suit on such claim may be allowed under this section un10 less it shall have been brought within one year after the

11 date when written notice of denial of the claim is provided

12 to the claimant.’’;

13 (7) by striking subsection (j) (as redesignated)

14 and inserting the following new subsection:

15 ‘‘(j) REINSURANCE.—Notwithstanding any other pro16 vision of this title, the Corporation is directed, to the maxi17 mum extent practicable, to provide reinsurance upon such

18 terms and conditions as the Board may determine to be

19 consistent with subsections (b) and (c) of this section and

20 sound reinsurance principles to insurers, as defined by the

21 Corporation, that insure producers of any agricultural

22 commodity under a plan or plans acceptable to the Cor23 poration. The Corporation’s reinsurance agreements with

24 the reinsured companies shall require the reinsured com25 panies to bear a sufficient share of any potential loss
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1 under such agreement so as to ensure that the reinsured

2 company will sell and service policies of insurance in a

3 sound and prudent manner, taking into consideration the

4 availability of private reinsurance.’’;

5 (8) in subsection (k) (as redesignated), by strik6 ing ‘‘provide’’ after ‘‘The Corporation may’’ and in7 serting ‘‘offer plans of’’; and

8 (9) by striking subsection (n) (as redesignated)

9 and inserting the following new subsection:

10 ‘‘(n) INFORMATION COLLECTION ON CROP INSUR11 ANCE.—The Corporation shall make available to produc12 ers through local offices of the Department of Agri13 culture—

14 ‘‘(1) current and complete information on all

15 aspects of Federal crop insurance; and

16 ‘‘(2) a listing of insurance agents.’’.

17 (e) Section 508A of title V of the Agricultural Adjust18 ment Act of 1938 (7 U.S.C. 1508A) is repealed.

19 (f) Section 511 of title V of the Agricultural Adjust20 ment Act of 1938 (7 U.S.C. 1511) is amended by inserting

21 ‘‘its contracts of insurance and premium thereon, whether

22 insured directly or reinsured by the Corporation,’’ after

23 ‘‘The Corporation, including’’.
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1 (g) Title V of the Agricultural Adjustment Act of

2 1938 is amended by striking section 516 and inserting the

3 following new section:

4 ‘‘SEC. 516. AUTHORIZATION OF APPROPRIATIONS.

5 ‘‘(a) APPROPRIATIONS.—There are hereby authorized

6 to be appropriated such sums as may be necessary, includ7 ing funds collected as administrative fees, to cover the ad8 ministrative and operating expenses of the Corporation.

9 ‘‘(b) INSURANCE FUND.—There shall be established

10 an insurance fund for deposit of premium income, income

11 from reinsurance operations, and appropriations provided

12 by this Act. The Corporation will pay amounts due under

13 its reinsurance agreements with private insurance provid14 ers, including premium subsidies, from the fund.’’.

15 (h) Title V of the Agricultural Adjustment Act of

16 1938 is amended by striking section 520 and inserting the

17 following new section:

18 ‘‘SEC. 520. PRODUCER ELIGIBILITY.

19 ‘‘Except as otherwise provided in this title, no pro20 ducer shall be denied insurance under this title if—

21 ‘‘(1) for purposes of catastrophic risk protection

22 coverage, the producer meets the definition of per23 son, as defined by the Secretary; and

24 ‘‘(2) for purposes of any other plan of insur25 ance, the producer is eighteen years of age and has
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1 a bona fide insurable interest in a crop as an owner2 operator, landlord, tenant, or sharecropper.’’.

3 SEC. 3. ADVISORY COMMITTEE.

4 Title V of the Agricultural Adjustment Act of 1938

5 is amended by adding the following new section:

6 ‘‘SEC. 521. ADVISORY COMMITTEE FOR FEDERAL CROP IN7 SURANCE.

8 ‘‘(a) ESTABLISHMENT.—The Secretary may establish

9 within the Department of Agriculture a committee to be

10 known as the Advisory Committee for Federal Crop Insur11 ance which shall remain in existence until September 30,

12 1998.

13 ‘‘(b) MEMBERSHIP.—The Advisory Committee shall

14 be composed of the Manager of the Corporation, the Sec15 retary or his designee, and not less than ten representa16 tives of organizations or agencies involved with the Fed17 eral crop insurance program, which may include the fol18 lowing: insurance companies; insurance agents; farm pro19 ducer organizations; experts on agronomic practices; and

20 banking and lending institutions.

21 ‘‘(c) ADMINISTRATIVE PROVISIONS.—

22 ‘‘(1) TERMS.—Members of the Advisory Com23 mittee shall be appointed by the Secretary for a

24 term of up to two years from nominations made by
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1 the participating organizations. The terms of the

2 members shall be staggered.

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

4 shall be chaired by the Manager of the Corporation.

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

6 shall meet at least annually. The meetings of the

7 Advisory Committee shall be publicly announced in

8 advance and shall be open to the public. Appropriate

9 records of the activities of the Advisory Committee

10 shall be kept and made available to the public on re11 quest.

12 ‘‘(d) PRIMARY RESPONSIBILITY.—The primary re13 sponsibility of the Advisory Committee shall be to advise

14 the Secretary on the implementation of this title and on

15 other issues related to crop insurance, as determined by

16 the Manager.

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

18 the Advisory Committee shall prepare, and submit to the

19 Secretary, a report specifying its conclusions on—

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

21 provisions of this title;

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

23 crop insurance program; and

24 ‘‘(3) the rate of participation in both the cata25 strophic and the additional coverage programs.’’.
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1 SEC. 4. NONINSURED ASSISTANCE.

2 Title V of the Agricultural Adjustment Act of 1938

3 is amended by adding the following new section:

4 ‘‘SEC. 522. NONINSURED ASSISTANCE PROGRAM.

5 ‘‘(a) ELIGIBILITY.—

6 ‘‘(1) A noninsured assistance program is estab7 lished to provide coverage equivalent to the cata8 strophic risk protection insurance for crops for

9 which catastrophic risk protection insurance is not

10 available. Crops covered include all commercial crops

11 and commodities for which catastrophic risk protec12 tion coverage is not available and that are produced

13 for food or fiber on a commercial basis but shall not

14 include livestock. Noninsured assistance shall not

15 cover losses due to—

16 ‘‘(A) the neglect or malfeasance of the pro17 ducer;

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

19 to the same crop in those areas and under such

20 circumstances where it is customary to so re21 seed; or

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

23 good farming practices, as determined by the

24 Corporation.
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1 ‘‘(2) Producers shall make a timely application

2 for noninsured assistance at the United States De3 partment of Agriculture office.

4 ‘‘(3) Producers shall provide records, acceptable

5 to the Corporation, of previous crop acreage and

6 production or the producers shall accept a yield as

7 determined by the Corporation.

8 ‘‘(4) Producers shall report acreage planted and

9 prevented from being planted by the designated

10 acreage reporting date for that crop and location as

11 established by the Corporation.

12 ‘‘(5) Producers of non-program crops shall not

13 be eligible for noninsured assistance unless the area,

14 as determined by the Corporation, average yield, or

15 an equivalent measure in the event yield data are

16 not available, for that crop falls below 65 percent of

17 the expected area yield as established by the Cor18 poration.

19 ‘‘(6) The Corporation shall make a prevented

20 planting noninsured assistance payment if the pro21 ducer is prevented from planting more than 35 per22 cent of the acreage intended for the crop because of

23 drought, flood, or other natural disaster as deter24 mined by the Secretary.
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1 ‘‘(7) If, because of drought, flood, or other nat2 ural disaster as determined by the Secretary, the

3 total quantity of the crop that a producer is able to

4 harvest on any farm is less than 50 percent of the

5 expected area yield for the crop, as determined by

6 the Corporation, factored for the producer’s interest

7 for the crop, the Corporation shall make a reduced

8 yield noninsured assistance payment.

9 ‘‘(8) A person who has qualifying gross reve10 nues in excess of $2,000,000 annually, as deter11 mined by the Secretary, shall not be eligible to re12 ceive any noninsured assistance payments. For pur13 poses of this section, the term ‘qualifying gross reve14 nues’ means—

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

16 revenue is received from farming, ranching, and

17 forestry operations, the gross revenue from the

18 person’s farming, ranching, and forestry oper19 ations; and

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

21 gross revenue is received from farming, ranch22 ing, and forestry operations, the person’s gross

23 revenue from all sources.

24 ‘‘(b) PAYMENT RATE.—If the producer is eligible for

25 noninsured assistance, payments shall be made for losses
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1 in excess of 50 percent of the established yield for the crop

2 at 60 percent of the average market price for that crop

3 or any comparable coverage as determined by the Corpora4 tion.

5 ‘‘(c) FARM YIELDS.—

6 ‘‘(1) The Corporation shall establish noninsured

7 assistance program farm yields for crops for the

8 purposes of this section.

9 ‘‘(2) If the producer can provide satisfactory

10 evidence of the producer’s actual production history

11 for the four previous consecutive crop years, up to

12 a production data base of ten consecutive crop years,

13 the yield of the farm shall be based on such proven

14 yield.

15 ‘‘(3) If the producer does not submit adequate

16 documentation of such history for the crop, the pro17 ducer shall be assigned as the producer’s farm pro18 gram yield not less than 65 percent of the transi19 tional yield (adjusted to reflect actual experience), as

20 specified in regulations issued by the Corporation

21 based on production history requirements.

22 ‘‘(d) PAYMENT OF LOSSES.—Payments for

23 noninsured assistance losses under this section shall be

24 made from the insurance fund and shall be reimbursed

25 from appropriations provided under this Act. Such losses
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1 shall not be included in calculating the premiums charged

2 to producers for insurance.

3 ‘‘(e) PAYMENT LIMITATIONS.—

4 ‘‘(1) The total amount of payments that a per5 son shall be entitled to receive annually under this

6 section may not exceed $100,000.

7 ‘‘(2) The Corporation shall issue regulations de8 fining the term ‘person’ that shall conform, to the

9 extent practicable, to the regulations defining ‘per10 son’ issued under section 1001 of the Food Security

11 Act of 1985 (7 U.S.C. 1308).’’.

12 SEC. 5. CONFORMING AMENDMENTS.

13 (a) The Agricultural Act of 1949 is amended—

14 (1) in section 101B (7 U.S.C. 1441–2)—

15 (A) by striking subsection (c)(1)(F); and

16 (B) in subsection (c) by striking paragraph

17 (2) and inserting in lieu thereof the following:

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

19 condition of receiving any benefits (including pay20 ments) under this section, the producer must, if of21 fered by the Federal Crop Insurance Corporation,

22 obtain at least the catastrophic risk protection insur23 ance coverage for the crop and crop year in which

24 the benefit is sought.’’;
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1 (2) in section 103(h) (7 U.S.C. 1444), by add2 ing at the end the following new paragraph:

3 ‘‘(17) As a condition of receiving any benefits

4 (including payments) under this section, the pro5 ducer must, if offered by the Federal Crop Insur6 ance Corporation, obtain at least the catastrophic

7 risk protection insurance coverage for the crop and

8 crop year in which the benefit is sought.’’;

9 (3) in section 103B (7 U.S.C. 1444–2)—

10 (A) by striking subsection (c)(1)(F); and

11 (B) in subsection (c) by striking paragraph

12 (2) and inserting in lieu thereof the following:

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

14 condition of receiving any benefits (including pay15 ments) under this section, the producer must, if of16 fered by the Federal Crop Insurance Corporation,

17 obtain at least the catastrophic risk protection insur18 ance coverage for the crop and crop year in which

19 the benefit is sought.’’;

20 (4) in section 105B (7 U.S.C. 1444f)—

21 (A) by striking subsection (c)(1)(G); and

22 (B) in subsection (c) by striking paragraph

23 (2) and inserting in lieu thereof the following:

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

25 condition of receiving any benefits (including pay-
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1 ments) under this section, the producer must, if of2 fered by the Federal Crop Insurance Corporation,

3 obtain at least the catastrophic risk protection insur4 ance coverage for the crop and crop year in which

5 the benefit is sought.’’;

6 (5) in section 107B (7 U.S.C. 1444b–3a)—

7 (A) by striking subsection (c)(1)(G); and

8 (B) in subsection (c) by striking paragraph

9 (2) and inserting in lieu thereof the following:

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

11 condition of receiving any benefits (including pay12 ments) under this section, the producer must, if of13 fered by the Federal Crop Insurance Corporation,

14 obtain at least the catastrophic risk protection insur15 ance coverage for the crop and crop year in which

16 the benefit is sought.’’;

17 (6) in section 108B (7 U.S.C. 1445c–3), by

18 adding at the end the following new subsection:

19 ‘‘(i) CROP INSURANCE REQUIREMENT.—As a condi20 tion of receiving any benefits (including payments) under

21 this section, the producer must, if offered by the Federal

22 Crop Insurance Corporation, obtain at least the cata23 strophic risk protection insurance coverage for the crop

24 and crop year in which the benefit is sought.’’;
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1 (7) in section 205 (7 U.S.C. 1446f), by adding

2 at the end the following new subsection:

3 ‘‘(o) CROP INSURANCE REQUIREMENT.—As a condi4 tion of receiving any benefits (including payments) under

5 this section, the producer must, if offered by the Federal

6 Crop Insurance Corporation, obtain at least the cata7 strophic risk protection insurance coverage for the crop

8 and crop year in which the benefit is sought.’’;

9 (8) in section 206 (7 U.S.C. 1446g), by adding

10 at the end the following new subsection:

11 ‘‘(k) CROP INSURANCE REQUIREMENT.—As a condi12 tion of receiving any benefits under this section, the pro13 ducer must, if offered by the Federal Crop Insurance Cor14 poration, obtain at least the catastrophic risk protection

15 insurance coverage for the crop and crop year in which

16 the benefit is sought.’’;

17 (9) in section 207 (7 U.S.C. 1446h), by adding

18 at the end the following new subsection:

19 ‘‘(k) CROP INSURANCE REQUIREMENT.—As a condi20 tion of receiving any benefits (including payments) under

21 this section, the producer must, if offered by the Federal

22 Corp Insurance Corporation, obtain at least the cata23 strophic risk protection insurance coverage for the crop

24 and crop year in which the benefit is sought.’’; and

25 (10) by repealing section 208 (7 U.S.C. 1446i).
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1 (b) FARMERS HOME ADMINISTRATION PROGRAMS.—

2 The Consolidated Farm and Rural Development Act (7

3 U.S.C. 1921 et seq.) is amended by adding at the end

4 the following new section:

5 ‘‘SEC. 371. CROP INSURANCE REQUIREMENT.

6 ‘‘(a) IN GENERAL.—As a condition of obtaining any

7 benefit (including a direct loan, loan guarantee, or pay8 ment) described in subsection (b), a borrower must obtain

9 at least catastrophic risk protection insurance coverage

10 under section 508 of the Federal Crop Insurance Act (7

11 U.S.C. 1508) for the crop and crop year for which the

12 benefit is sought, if the coverage is offered by the Sec13 retary.

14 ‘‘(b) APPLICABLE BENEFITS.—Subsection (a) shall

15 apply to—

16 ‘‘(1) a farm ownership loan (FO) under section

17 303;

18 ‘‘(2) an operating loan (OL) under section 312;

19 and

20 ‘‘(3) an emergency loan (EM) under section

21 321.’’.

22 (c) The Food, Agriculture, Conservation, and Trade

23 Act of 1990 is amended by striking chapters 1, 2, and

24 3 of subtitle B of title XXII.
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1 (d) Section 251(b)(2)(D) of the Balanced Budget and

2 Emergency Deficit Control Act of 1985 (2 U.S.C.

3 901(b)(2)(D)), is amended effective July 1, 1995, by strik4 ing subparagraph (i) and inserting the following new sub5 paragraph:

6 ‘‘(i) If, for any fiscal year, appropriations for discre7 tionary accounts are enacted that the President designates

8 as emergency requirements and that Congress so des9 ignates in statute, the adjustment shall be the total of

10 such appropriations in discretionary accounts designated

11 as emergency requirements and the outlays flowing in all

12 years from such appropriations: Provided, That this provi13 sion shall not apply to appropriations to cover agricultural

14 crop disaster assistance.’’.

15 SEC. 6. EFFECTIVE DATE.

16 Except as otherwise specifically provided in section

17 5(c), this Act shall become effective beginning with the

18 crop year immediately following the date of enactment.

19 SECTION 1. SHORT TITLE; TABLE OF CONTENTS; REF20 ERENCES.

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

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

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

24 Act is as follows:

Sec. 1. Short title; table of contents; references.
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TITLE I—CATASTROPHIC RISK AND ADDITIONAL COVERAGE

INSURANCE

Sec. 101. Authority to offer insurance.

Sec. 102. Catastrophic risk protection.

Sec. 103. General coverage levels.

Sec. 104. Premiums.

Sec. 105. Eligibility.

Sec. 106. Yield determinations.

Sec. 107. Insurance policies.

Sec. 108. Claims for losses.

Sec. 109. Reinsurance.

Sec. 110. Funding.

Sec. 111. Advisory Committee for Federal Crop Insurance.

Sec. 112. Management of Corporation.

TITLE II—NONINSURED ASSISTANCE PROGRAM

Sec. 201. Noninsured assistance program.

Sec. 202. Payment and income limitations.

TITLE III—MISCELLANEOUS

Sec. 301. Ineligibility for catastrophic risk and noninsured assistance payments.

Sec. 302. Prevented planting.

Sec. 303. Conforming amendments.

Sec. 304. Effective dates.

Sec. 305. Termination of authority.

1 (c) REFERENCES TO FEDERAL CROP INSURANCE

2 ACT.—Except as otherwise expressly provided, whenever in

3 this Act an amendment or repeal is expressed in terms of

4 an amendment to, or repeal of, a section or other provision,

5 the reference shall be considered to be made to a section or

6 other provision of the Federal Crop Insurance Act (7 U.S.C.

7 1501 et seq.).

8 TITLE I—CATASTROPHIC RISK

9 AND ADDITIONAL COVERAGE

10 INSURANCE

11 SEC. 101. AUTHORITY TO OFFER INSURANCE.

12 Section 508 (7 U.S.C. 1508) is amended—
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1 (1) by striking subsection (a) and inserting the

2 following new subsection:

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

4 ‘‘(1) IN GENERAL.—If sufficient actuarial data

5 are available (as determined by the Corporation), the

6 Corporation may insure, or provide reinsurance for

7 insurers of, producers of agricultural commodities

8 grown in the United States under 1 or more plans of

9 insurance determined by the Corporation to be adapt10 ed to the agricultural commodity concerned. To qual11 ify for coverage under a plan of insurance, the losses

12 of the insured commodity shall be due to drought,

13 flood, or other natural disaster (as determined by the

14 Secretary).

15 ‘‘(2) PERIOD.—Except in the cases of tobacco

16 and potatoes, insurance shall not extend beyond the

17 period during which the insured commodity is in the

18 field. As used in the preceding sentence, in the case

19 of aquacultural species, the term ‘field’ means the en20 vironment in which the commodity is produced.

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

22 this subsection shall not cover losses due to—

23 ‘‘(A) the neglect or malfeasance of the pro24 ducer;
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1 ‘‘(B) the failure of the producer to reseed to

2 the same crop in such areas and under such cir3 cumstances as it is customary to so reseed; or

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

5 good farming practices (as determined by the

6 Secretary).’’;

7 (2) by striking subsections (c), (e), (g), (l), and

8 (n); and

9 (3) by redesignating subsections (b), (d), (f), (h),

10 (i), (j), (k), and (m) as subsections (g) through (n),

11 respectively.

12 SEC. 102. CATASTROPHIC RISK PROTECTION.

13 Section 508 (7 U.S.C. 1508) (as amended by section

14 101) is further amended by inserting after subsection (a)

15 the following new subsection:

16 ‘‘(b) CATASTROPHIC RISK PROTECTION.—

17 ‘‘(1) IN GENERAL.—The Corporation shall offer a

18 catastrophic risk protection plan to indemnify pro19 ducers for crop loss due to loss of yield or prevented

20 planting when the producer is unable, because of

21 drought, flood, or other natural disaster (as deter22 mined by the Secretary), to plant crops for harvest on

23 the acreage for that crop year.

24 ‘‘(2) AMOUNT OF COVERAGE.—Catastrophic risk

25 protection shall offer a producer 50 percent loss in
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1 yield coverage, on an individual yield or area yield

2 basis, indemnified at 60 percent of the expected mar3 ket price, or a comparable coverage (as determined by

4 the Corporation).

5 ‘‘(3) PAYMENT.—A catastrophic risk payment

6 may reflect a reduction that is proportionate to the

7 lack of out-of-pocket expenses associated with the fail8 ure to plant, grow, or harvest the crop, as determined

9 by the Corporation.

10 ‘‘(4) YIELD AND LOSS BASIS.—A producer shall

11 have the option of basing the catastrophic coverage of

12 the producer on an individual yield and loss basis or

13 on an area yield and loss basis, if both options are

14 offered by the Corporation.

15 ‘‘(5) SALE OF CATASTROPHIC RISK COVERAGE.—

16 ‘‘(A) IN GENERAL.—Catastrophic risk cov17 erage may be offered by—

18 ‘‘(i) private insurance providers, if

19 available in an area; and

20 ‘‘(ii) at the option of the Secretary that

21 is based on considerations of need, local of22 fices of the United States Department of Ag23 riculture (referred to in this title as the ‘De24 partment’).
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1 ‘‘(B) NEED.—For purposes of considering

2 need under subparagraph (A)(ii), the Secretary

3 may take into account the most efficient and

4 cost-effective use of resources, the availability of

5 personnel, fairness to local producers, the needs

6 and convenience of local producers, and the

7 availability of private insurance carriers.

8 ‘‘(6) ADMINISTRATIVE FEE.—

9 ‘‘(A) IN GENERAL.—As a condition of cata10 strophic risk protection, a producer shall pay an

11 administrative fee. The administrative fee shall

12 be $50 per crop per county, but not to exceed

13 $100 per producer per county. The administra14 tive fee shall be paid at the service point, at the

15 local office of the Department, or to the approved

16 insurance provider, at the time of application.

17 ‘‘(B) FEE WAIVERS.—The administrative

18 fee shall be waived—

19 ‘‘(i) for farmers of limited resources (as

20 defined by the Corporation); or

21 ‘‘(ii) if the producer elects to purchase

22 additional protection at 65 percent or more

23 of the recorded or appraised average yield

24 and 100 percent of the expected market
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1 price, or an equivalent coverage, offered by

2 an approved insurance provider.

3 ‘‘(C) USE OF FEES COLLECTED.—Funds

4 collected as administrative fees shall be retained

5 by the Department or the approved insurance

6 provider for operating and administrative ex7 penses for the delivery of catastrophic risk pro8 tection policies.

9 ‘‘(7) PARTICIPATION REQUIREMENT.—A pro10 ducer may obtain catastrophic risk coverage for a

11 crop of the producer on land in the county only if the

12 producer obtains such coverage for the crop on all in13 surable land of the producer in that county.

14 ‘‘(8) ELIGIBILITY FOR DEPARTMENT PRO15 GRAMS.—

16 ‘‘(A) IN GENERAL.—To be eligible for any

17 price support or production adjustment program

18 or any benefit described in section 371 of the

19 Consolidated Farm and Rural Development Act,

20 the producer must obtain at least the cata21 strophic level of insurance for each crop of eco22 nomic significance grown on each farm in the

23 county in which the producer has an interest, if

24 insurance is available in the county for the crop.
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1 ‘‘(B) DEFINITION OF CROP OF ECONOMIC

2 SIGNIFICANCE.—As used in this paragraph, the

3 term ‘crop of economic significance’ means a

4 crop that has contributed, or is expected to con5 tribute, 10 percent or more of the total expected

6 value of all crops grown by the producer.

7 ‘‘(9) LIMITATION DUE TO RISK.—The Corpora8 tion may limit catastrophic risk coverage in any

9 county or area, or on any farm, on the basis of the

10 insurance risk concerned.

11 ‘‘(10) SIMPLIFICATION.—

12 ‘‘(A) CATASTROPHIC RISK PROTECTION

13 PLANS.—In developing and carrying out the

14 policies and procedures for a catastrophic risk

15 protection plan under this title, the Corporation

16 shall, to the maximum extent practicable, mini17 mize the paperwork required and the complexity

18 and costs of procedures governing applications

19 for, processing, and servicing of the plan for all

20 parties involved.

21 ‘‘(B) OTHER PLANS.—To the extent that the

22 policies and procedures developed under subpara23 graph (A) may be applied to other plans of in24 surance offered under this title without jeopard25 izing the actuarial soundness or integrity of the
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1 crop insurance program, the Corporation shall

2 apply the policies and procedures to the other

3 plans of insurance within a reasonable period of

4 time (as determined by the Corporation) after

5 the effective date of this paragraph.’’.

6 SEC. 103. GENERAL COVERAGE LEVELS.

7 Section 508 (7 U.S.C. 1508) (as amended by section

8 102) is further amended by inserting after subsection (b)

9 the following new subsection:

10 ‘‘(c) GENERAL COVERAGE LEVELS.—

11 ‘‘(1) IN GENERAL.—The Corporation shall offer

12 plans of insurance that provide levels of coverage that

13 are greater than the level available under catastrophic

14 risk protection under subsection (b). A producer may

15 purchase such a plan only from an approved insur16 ance provider, if the private insurance is available.

17 Nothing in this paragraph restricts the Corporation

18 from offering insurance plans if coverage from private

19 insurance providers is unavailable.

20 ‘‘(2) TRANSFER OF INSURANCE FILES.—If a pro21 ducer has already applied for catastrophic risk pro22 tection at the local office of the Department and elects

23 to purchase additional coverage, the insurance file for

24 the crop of the producer shall be transferred to the ap-
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1 proved insurance provider servicing the additional

2 coverage crop policy.

3 ‘‘(3) YIELD AND LOSS BASIS.—A producer shall

4 have the option of purchasing additional coverage

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

6 area yield and loss basis, if both options are offered

7 by the Corporation.

8 ‘‘(4) LEVEL OF COVERAGE.—The level of coverage

9 shall be dollar denominated and may be purchased at

10 any level not to exceed 85 percent of the individual

11 yield or 95 percent of the area yield (as determined

12 by the Corporation). By the beginning of the 1996

13 crop year, the Corporation shall provide producers

14 with information on catastrophic risk and additional

15 coverage in terms of dollar coverage (within the allow16 able limits of coverage provided in this paragraph).

17 ‘‘(5) PRICE LEVEL.—The Corporation shall es18 tablish a price level for each commodity on which in19 surance is offered that—

20 ‘‘(A) shall not be less than the projected

21 market price for the commodity (as determined

22 by the Corporation); or

23 ‘‘(B) at the discretion of the Corporation,

24 may be based on the actual market price at the
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1 time of harvest (as determined by the Corpora2 tion).

3 ‘‘(6) PRICE ELECTIONS.—

4 ‘‘(A) IN GENERAL.—Subject to subpara5 graph (B), insurance coverage shall be made

6 available to the producer on the basis of any

7 price election that equals or is less than the price

8 election established by the Corporation. The cov9 erage shall be quoted in terms of dollars per acre.

10 ‘‘(B) MINIMUM PRICE ELECTIONS.—The

11 Corporation may establish minimum price elec12 tions below which levels of insurance shall not be

13 offered.

14 ‘‘(C) WHEAT VARIETIES.—The Corporation

15 shall, over a period of time as determined prac16 ticable by the Corporation, offer producers dif17 ferent price elections for varieties of wheat, in

18 addition to the standard price election, that re19 flect different market prices, as determined by

20 the Corporation. The Corporation shall offer ad21 ditional coverage for each variety determined

22 under this subparagraph and charge a premium

23 for each variety that is actuarially sound.

24 ‘‘(7) SUBSTITUTE COVERAGE FOR FIRE AND

25 HAIL.—
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1 ‘‘(A) IN GENERAL.—For levels of coverage

2 65 percent or more of the recorded or appraised

3 average yield and 100 percent of the expected

4 market price, or an equivalent coverage, the pro5 ducer may elect to delete from the insurance cov6 erage provided under this title coverage against

7 damage caused by fire or hail, if an equivalent

8 or greater dollar amount of coverage for damage

9 caused by fire or hail is obtained from a private

10 fire or hail insurance provider.

11 ‘‘(B) CREDIT FOR SUBSTITUTE COV12 ERAGE.—On written notice of an election under

13 subparagraph (A) to the company issuing the

14 policy providing coverage under this title and

15 submission of evidence of substitute coverage on

16 the commodity insured, the premium of the pro17 ducer shall be reduced by an amount determined

18 by the Corporation to be actuarially appro19 priate, taking into account the actuarial value of

20 the remaining coverage provided by the Corpora21 tion. The producer shall not be given a reduction

22 for an amount of premium determined to be

23 greater than the actuarial value of the protection

24 against losses caused by fire or hail that is in-
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1 cluded in the coverage under this title for the

2 crop.

3 ‘‘(8) STATE PREMIUM SUBSIDIES.—The Corpora4 tion may enter into agreements with any State or

5 agency of a State under which the State or agency

6 may pay to the approved insurance provider an addi7 tional premium subsidy to further reduce the portion

8 of the premium paid by the producers in the State.

9 ‘‘(9) LIMITATION DUE TO RISK.—The Corpora10 tion may limit or refuse insurance in any county or

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

12 risk concerned.

13 ‘‘(10) ADMINISTRATIVE FEE.—

14 ‘‘(A) IN GENERAL.—As a condition of cov15 erage that is in addition to catastrophic risk

16 protection but less than 65 percent of the re17 corded or appraised average yield and 100 per18 cent of the expected market price, or an equiva19 lent coverage, a producer shall pay an adminis20 trative fee. The administrative fee shall be $50

21 per crop per county, but not to exceed $100 per

22 producer per county. The administrative fee

23 shall be paid to the approved insurance provider

24 or the Department, as applicable, at the time of

25 application.
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1 ‘‘(B) FEE WAIVERS.—The administrative

2 fee shall be waived—

3 ‘‘(i) for farmers of limited resources (as

4 defined by the Corporation); or

5 ‘‘(ii) if the producer elects to purchase

6 additional protection at 65 percent or more

7 of the recorded or appraised average yield

8 and 100 percent of the expected market

9 price, or an equivalent coverage, offered by

10 an approved insurance provider.

11 ‘‘(C) USE OF FEES COLLECTED.—Funds

12 collected as administrative fees shall be retained

13 by the approved insurance provider or the De14 partment, as applicable, for operating and ad15 ministrative expenses.’’.

16 SEC. 104. PREMIUMS.

17 Section 508 (7 U.S.C. 1508) (as amended by section

18 103) is further amended by inserting after subsection (c)

19 the following new subsection:

20 ‘‘(d) PREMIUMS.—

21 ‘‘(1) LEVELS.—

22 ‘‘(A) CATASTROPHIC RISK PROTECTION.—

23 For catastrophic risk protection coverage, the

24 amount of premium shall be sufficient to cover

25 anticipated losses and a reasonable reserve.
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1 ‘‘(B) ADDITIONAL COVERAGE.—For levels of

2 coverage below 65 percent of the recorded or ap3 praised average yield and 100 percent of the ex4 pected market price, or an equivalent coverage,

5 but greater than catastrophic risk protection cov6 erage, the amount of premium shall be sufficient

7 to cover anticipated losses, a reasonable reserve,

8 and an amount for operating and administra9 tive expenses (as determined by the Corporation)

10 that is less than the amount established for cov11 erage at 65 percent of the recorded or appraised

12 average yield and 100 percent of the expected

13 market price, or an equivalent coverage.

14 ‘‘(C) HIGH COVERAGE.—For levels of cov15 erage of at least 65 percent of the recorded or ap16 praised average yield and 100 percent of the ex17 pected market price, or an equivalent coverage,

18 the amount of premium shall be sufficient to

19 cover anticipated losses, a reasonable reserve,

20 and an amount to pay the operating and admin21 istrative expenses (as determined by the Corpora22 tion) on an industry-wide basis as a percentage

23 of the total premium.

24 ‘‘(2) PAYMENT OF PART OF PREMIUM.—For the

25 purpose of encouraging the broadest possible partici-
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1 pation, the Corporation shall pay a part of the pre2 mium equivalent to—

3 ‘‘(A) for catastrophic risk protection cov4 erage, an amount equal to the premium estab5 lished under paragraph (1)(A);

6 ‘‘(B) for levels of coverage below 65 percent

7 of the recorded and appraised average yield and

8 100 percent of the expected market price, or an

9 equivalent coverage, but greater than cata10 strophic risk protection, an amount equal to the

11 sum of the amount of premium established for

12 catastrophic risk protection coverage and the

13 amount for operating and administrative ex14 penses established under paragraph (1)(B); and

15 ‘‘(C) for levels of coverage at or greater than

16 65 percent of the recorded and appraised yield

17 and 100 percent of the expected market price, or

18 an equivalent coverage, on an individual or area

19 basis, an amount equal to the sum of—

20 ‘‘(i) the premium established for—

21 ‘‘(I) in the case of each of the

22 1995 and 1996 crop years, 50 percent

23 loss in yield indemnified at 80 percent

24 of the expected market price;
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1 ‘‘(II) in the case of the 1997 crop

2 year, 50 percent loss in yield indem3 nified at 77.5 percent of the expected

4 market price; and

5 ‘‘(III) in the case of the 1998 and

6 each subsequent crop year, 50 percent

7 loss in yield indemnified at 75 percent

8 of the expected market price; and

9 ‘‘(ii) the amount for operating and ad10 ministrative expenses established under

11 paragraph (1)(C).

12 ‘‘(3) REDUCTIONS BY PRIVATE PROVIDERS.—If a

13 private insurance provider determines that the pro14 vider may provide insurance more efficiently than the

15 expense reimbursement amount set by the Corpora16 tion, the private insurance provider may, with the

17 approval of the Corporation, reduce the premium

18 charged the insured by the amount of the efficiency.

19 A reduction pursuant to the preceding sentence shall

20 be subject to such rules, limitations, and procedures

21 as are established by the Corporation.

22 ‘‘(4) INDIVIDUAL AND AREA CROP INSURANCE

23 COVERAGE.—

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

25 allow an approved insurance provider to offer a
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1 producer a plan of insurance that provides a

2 level of coverage that is greater than that pro3 vided under catastrophic risk protection at a

4 premium rate determined by the provider if the

5 provider agrees to bear (depending on the type of

6 coverage involved) portions of the underwriting

7 risk, and operating and administrative expenses,

8 that result from the additional level of coverage.

9 ‘‘(B) COMBINED COVERAGES.—To provide

10 the additional level of coverage to an insured

11 producer under subparagraph (A), a provider

12 may combine—

13 ‘‘(i) individual crop insurance cov14 erage; and

15 ‘‘(ii) area crop insurance coverage pro16 vided by the Corporation through the pro17 vider to the producer that is based on area

18 yields in a manner that allows the producer

19 to qualify for an indemnity if a loss has oc20 curred in a specified area (as defined by the

21 Corporation) in which the farm of the pro22 ducer is located.

23 ‘‘(C) INDEMNITY.—If a producer qualifies

24 for an indemnity under an area crop insurance
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1 policy described in subparagraph (B)(ii), the

2 Corporation shall provide to—

3 ‘‘(i) the provider, an amount that is

4 the lesser of—

5 ‘‘(I) the indemnity under the in6 dividual crop insurance coverage; or

7 ‘‘(II) the indemnity under the

8 area crop insurance coverage; and

9 ‘‘(ii) the producer, the remainder of the

10 indemnity.

11 ‘‘(D) SUBSIDY.—If a provider combines in12 dividual crop insurance coverage and area crop

13 insurance coverage under subparagraph (B), the

14 Corporation shall pay a part of the premium

15 equivalent to—

16 ‘‘(i) for individual crop insurance cov17 erage, an amount equal to the premium es18 tablished for catastrophic risk protection

19 coverage; and

20 ‘‘(ii) for area crop insurance coverage,

21 an amount equal to the premium estab22 lished for 50 percent loss in yield indem23 nified at 15 percent of the expected market

24 price on an individual basis, plus the

25 amount of operating and administrative ex-
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1 penses for the area coverage (as established

2 under paragraph (1)(C)).

3 ‘‘(E) REINSURANCE AND ADMINISTRA4 TION.—If a provider combines individual crop

5 insurance coverage and area crop insurance cov6 erage under subparagraph (B), the Corporation

7 shall—

8 ‘‘(i) not provide reinsurance, except

9 that the Corporation shall provide reinsur10 ance on—

11 ‘‘(I) the area crop insurance cov12 erage at the request of the provider;

13 and

14 ‘‘(II) the catastrophic risk protec15 tion provided under the individual in16 surance coverage; and

17 ‘‘(ii) reimburse the provider for admin18 istrative expenses associated with the area

19 crop insurance coverage, except that the

20 amount of the reimbursement shall be no

21 less than reimbursement provided by the

22 Corporation for comparable area coverage.’’.
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1 SEC. 105. ELIGIBILITY.

2 (a) IN GENERAL.—Section 508 (7 U.S.C. 1508) (as

3 amended by section 104) is further amended by inserting

4 after subsection (d) the following new subsection:

5 ‘‘(e) ELIGIBILITY.—

6 ‘‘(1) IN GENERAL.—To participate in cata7 strophic risk protection coverage under this section, a

8 producer shall submit an application at the local of9 fice of the Department or to an approved insurance

10 provider.

11 ‘‘(2) SALES CLOSING DATE.—For coverage under

12 this title, each producer shall purchase crop insurance

13 on or before the sales closing date for the crop by pro14 viding the required information and executing the re15 quired documents. Subject to the goal of ensuring ac16 tuarial soundness for the crop insurance program, the

17 sales closing date shall be established by the Corpora18 tion to maximize convenience to producers in obtain19 ing benefits under price and production adjustment

20 programs of the Department. Beginning with the

21 1995 crop year, the Corporation shall establish, for an

22 insurance policy for each insurable crop that is plant23 ed in the spring, a sales closing date that is 30 days

24 earlier than the corresponding sales closing date that

25 was established for the 1994 crop year.
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1 ‘‘(3) RECORDS.—For coverage under this title,

2 each producer shall provide records, acceptable to the

3 Corporation, of previous acreage and production or

4 accept a yield determined by the Corporation.

5 ‘‘(4) REPORTING.—For coverage under this title,

6 each producer shall report acreage planted and pre7 vented from planting by the designated acreage re8 porting date for the crop and location as established

9 by the Corporation.’’.

10 (b) PRODUCER ELIGIBILITY.—Section 520 (7 U.S.C.

11 1520) is amended to read as follows:

12 ‘‘SEC. 520. PRODUCER ELIGIBILITY.

13 ‘‘Except as otherwise provided in this title, a producer

14 shall not be denied insurance under this title if—

15 ‘‘(1) for purposes of catastrophic risk protection

16 coverage, the producer is a ‘person’ (as defined by the

17 Secretary); and

18 ‘‘(2) for purposes of any other plan of insurance,

19 the producer is 18 years of age and has a bona fide

20 insurable interest in a crop as an owner-operator,

21 landlord, tenant, or sharecropper.’’.

22 SEC. 106. YIELD DETERMINATIONS.

23 Section 508 (7 U.S.C. 1508) (as amended by section

24 105(a)) is further amended by inserting after subsection (e)

25 the following new subsection:
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1 ‘‘(f) YIELD DETERMINATIONS.—

2 ‘‘(1) IN GENERAL.—Subject to paragraph (2), the

3 Corporation shall implement crop insurance under4 writing rules that ensure that yield coverage is pro5 vided to eligible producers participating in the Fed6 eral crop insurance program.

7 ‘‘(2) YIELD COVERAGE PLANS.—

8 ‘‘(A) ACTUAL PRODUCTION HISTORY.—Sub9 ject to subparagraph (B), the yield for a crop

10 shall be based on the actual production history

11 for the crop, if the crop was produced on the

12 farm without penalty during each of the 4 crop

13 years immediately preceding the crop year for

14 which actual production history is being estab15 lished, building up to a production data base for

16 each of the 10 consecutive crop years preceding

17 the crop year for which actual production his18 tory is being established.

19 ‘‘(B) ASSIGNED YIELD.—If the producer

20 does not provide satisfactory evidence of the yield

21 of a commodity under subparagraph (A), the

22 producer shall be assigned a yield that is not less

23 than 65 percent of the transitional yield of the

24 producer (adjusted to reflect actual production

25 reflected in the records acceptable to the Corpora-
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1 tion for continuous years), as specified in regula2 tions issued by the Corporation based on produc3 tion history requirements.

4 ‘‘(C) AREA YIELD.—The Corporation may

5 offer a crop insurance plan based on an area

6 yield that allows an insured producer to qualify

7 for an indemnity if a loss has occurred in an

8 area (as specified by the Corporation) in which

9 the farm of the producer is located. Under an

10 area yield plan, an insured producer shall be al11 lowed to select the level of area production at

12 which an indemnity will be paid consistent with

13 such terms and conditions as are established by

14 the Corporation.

15 ‘‘(D) COMMODITY-BY-COMMODITY BASIS.—A

16 producer may choose between individual yield or

17 area yield coverage or combined coverage (as

18 provided in subsection (d)(4)), if available, on a

19 commodity-by-commodity basis.

20 ‘‘(3) NOTICE.—The Corporation shall ensure that

21 producers are given adequate notice of the applicable

22 yield coverage provisions of this section in advance of

23 the crop insurance application period for the crops to

24 which the provisions first will apply.
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1 ‘‘(4) TRANSITIONAL YIELDS FOR PRODUCERS OF

2 FEED OR FORAGE.—

3 ‘‘(A) IN GENERAL.—If a producer does not

4 provide satisfactory evidence of the yield under

5 paragraph (2)(A), the producer shall be assigned

6 a yield that is at least 80 percent of the transi7 tional yield established by the Corporation (ad8 justed to reflect the actual production history of

9 the producer) if the Secretary determines that—

10 ‘‘(i) the producer grows feed or forage

11 primarily for on-farm use in a livestock,

12 dairy, or poultry operation; and

13 ‘‘(ii) over 50 percent of the net farm

14 income of the producer is derived from the

15 livestock, dairy, or poultry operation.

16 ‘‘(B) YIELD CALCULATION.—The Corpora17 tion shall—

18 ‘‘(i) for the first year of participation

19 of a producer, provide the assigned yield

20 under this paragraph to the producer of feed

21 or forage; and

22 ‘‘(ii) for the second year of participa23 tion of the producer, apply the actual pro24 duction history or assigned yield require25 ment, as provided in this subsection.
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1 ‘‘(C) TERMINATION OF AUTHORITY.—The

2 authority provided by this paragraph shall ter3 minate on the date that is 2 years after the effec4 tive date of this paragraph.’’.

5 SEC. 107. INSURANCE POLICIES.

6 Subsection (g) of section 508 (7 U.S.C. 1508) (as redes7 ignated by section 101(3)) is amended—

8 (1) in paragraph (1), by striking ‘‘(a)’’ and in9 serting ‘‘(c)’’;

10 (2) by striking paragraph (2) and inserting the

11 following new paragraph:

12 ‘‘(2) PREPARATION OF POLICIES.—A policy or

13 other material submitted to the Corporation under

14 this subsection may be prepared without regard to the

15 limitations specified in this title, including the re16 quirements concerning the levels of coverage and rates

17 and the requirement that a price level for each com18 modity insured shall equal the projected market price

19 for the commodity as established by the Corporation.

20 The policy may be subsidized only at an amount

21 equivalent to coverage authorized under this title.’’;

22 (3) in paragraph (3)—

23 (A) in the first sentence, by striking ‘‘taking

24 into consideration the risks covered by the policy

25 or other material’’; and
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1 (B) in the second sentence, by inserting

2 ‘‘with a private insurance provider’’ after ‘‘rein3 surance agreement’’; and

4 (4) by striking paragraph (4) and inserting the

5 following new paragraphs:

6 ‘‘(4) REQUIRED PUBLICATION.—Any policy, pro7 vision of a policy, or rate approved under this sub8 section shall be published as a notice in the Federal

9 Register and made available to each person who con10 tracts with or is reinsured by the Corporation under

11 the same terms and conditions as are applicable be12 tween the Corporation and the submitting person.

13 ‘‘(5) PILOT COST OF PRODUCTION RISK PROTEC14 TION PLAN.—

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

16 offer, to the extent practicable, a cost of produc17 tion risk protection plan of insurance that would

18 indemnify producers (including new producers)

19 for insurable losses as provided in this para20 graph.

21 ‘‘(B) PILOT BASIS.—The cost of production

22 risk protection plan shall—

23 ‘‘(i) be established as a pilot project for

24 each of the 1996 and 1997 crop years; and
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1 ‘‘(ii) be carried out in a number of

2 counties that is determined by the Corpora3 tion to be adequate to provide a comprehen4 sive evaluation of the feasibility, effective5 ness, and demand among producers for the

6 plan.

7 ‘‘(C) INSURABLE LOSS.—An insurable loss

8 shall be incurred by a producer if the gross in9 come of the producer (as determined by the Cor10 poration) is less than an amount determined by

11 the Corporation, as a result of a reduction in

12 yield or price resulting from an insured cause.

13 ‘‘(D) DEFINITION OF NEW PRODUCER.—As

14 used in this paragraph, the term ‘new producer’

15 means a person that has not been actively en16 gaged in farming for a share of the production

17 of the insured crop for more than 2 crop years,

18 as determined by the Secretary.

19 ‘‘(6) ADDITIONAL PREVENTED PLANTING POLICY

20 COVERAGE.—

21 ‘‘(A) IN GENERAL.—Beginning with the

22 1995 crop year, the Corporation shall offer to

23 producers additional prevented planting coverage

24 that insures producers against losses in accord25 ance with this paragraph.
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1 ‘‘(B) APPROVED INSURANCE PROVIDERS.—

2 Additional prevented planting coverage shall be

3 offered by the Corporation through approved in4 surance providers.

5 ‘‘(C) TIMING OF LOSS.—A crop loss shall be

6 covered by the additional prevented planting cov7 erage if—

8 ‘‘(i) crop insurance policies were ob9 tained for—

10 ‘‘(I) the crop year the loss was ex11 perienced; and

12 ‘‘(II) the crop year immediately

13 preceding the year of the prevented

14 planting loss; and

15 ‘‘(ii) the cause of the loss occurred—

16 ‘‘(I) after the sales closing date for

17 the crop in the crop year immediately

18 preceding the loss; and

19 ‘‘(II) before the sales closing date

20 for the crop in the year in which the

21 loss is experienced.

22 ‘‘(7) PILOT TRANSITIONAL YIELD PROGRAM FOR

23 NEW PRODUCERS.—

24 ‘‘(A) INCREASED TRANSITIONAL YIELD.—

25 The Corporation shall offer, to the extent prac-
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1 ticable, a transitional yield program for new

2 producers to provide 110 percent of the transi3 tional yield established by the Corporation.

4 ‘‘(B) PILOT BASIS.—The transitional yield

5 program shall—

6 ‘‘(i) be established as a pilot project for

7 each of the 1995 and 1996 crop years; and

8 ‘‘(ii) be carried out in 30 counties that

9 are determined by the Corporation to be

10 adequate to provide a comprehensive eval11 uation of the feasibility, effectiveness, and

12 demand among new producers for the plan.

13 ‘‘(C) DEFINITION OF NEW PRODUCER.—As

14 used in this paragraph, the term ‘new producer’

15 means a person that has not been actively en16 gaged in farming for a share of the production

17 of the insured crop for more than 2 crop years,

18 as determined by the Secretary.’’.

19 SEC. 108. CLAIMS FOR LOSSES.

20 Subsection (i) of section 508 (7 U.S.C. 1508) (as redes21 ignated by section 101(3)) is amended to read as follows:

22 ‘‘(i) CLAIMS FOR LOSSES.—

23 ‘‘(1) IN GENERAL.—The Corporation may pro24 vide for adjustment and payment of claims for losses

25 as provided under subsection (a) under rules pre-
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1 scribed by the Corporation. The rules prescribed by

2 the Corporation shall establish standards to ensure

3 that all claims for losses are adjusted, to the extent

4 practicable, in a uniform and timely manner.

5 ‘‘(2) DENIAL OF CLAIMS.—

6 ‘‘(A) IN GENERAL.—Subject to subpara7 graph (B), if a claim for indemnity is denied by

8 the Corporation or by the private insurance pro9 vider, an action on the claim shall only be

10 brought against the Corporation or Secretary or

11 the insurance provider in the United States Dis12 trict Court for the district in which the insured

13 farm is located.

14 ‘‘(B) STATUTE OF LIMITATIONS.—A suit on

15 the claim may be brought not later than 1 year

16 after the date on which written notice of denial

17 of the claim is provided to the claimant.

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

19 provide insurance companies, agents, and brokers

20 with indemnification, including costs and reasonable

21 attorney fees, from the Corporation for errors or omis22 sions on the part of the Corporation.’’.

23 SEC. 109. REINSURANCE.

24 Section 508 (7 U.S.C. 1508) is amended—
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1 (1) by striking subsection (j) (as redesignated by

2 section 101(3)) and inserting the following new sub3 section:

4 ‘‘(j) REINSURANCE.—Notwithstanding any other pro5 vision of this title, the Corporation shall, to the maximum

6 extent practicable, provide reinsurance, on such terms and

7 conditions as the Corporation determines to be consistent

8 with subsections (b) and (c) and sound reinsurance prin9 ciples, to insurers (as defined by the Corporation) that in10 sure producers of any agricultural commodity under 1 or

11 more plans acceptable to the Corporation. Each reinsurance

12 agreement of the Corporation with a reinsured company

13 shall require the reinsured company to bear a sufficient

14 share of any potential loss under the agreement so as to

15 ensure that the reinsured company will sell and service poli16 cies of insurance in a sound and prudent manner, taking

17 into consideration the availability of private reinsurance.’’;

18 and

19 (2) in subsection (k) (as so redesignated), by

20 striking ‘‘provide’’ and inserting ‘‘offer plans of ’’.

21 SEC. 110. FUNDING.

22 Section 516 (7 U.S.C. 1516) is amended to read as

23 follows:

24 ‘‘SEC. 516. FUNDING.

25 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—
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1 ‘‘(1) EXPENSES OF CORPORATION.—There are

2 authorized to be appropriated such sums as are nec3 essary to cover the salaries and expenses of the Cor4 poration and the administrative and operating ex5 penses of the Corporation for the sales commissions of

6 agents.

7 ‘‘(2) EXPENSES OF PROVIDERS.—There are au8 thorized to be appropriated such sums as are nec9 essary to cover the administrative and operating ex10 penses of an approved insurance provider for the de11 livery of policies with coverage that is greater than

12 catastrophic risk protection.

13 ‘‘(b) PAYMENT OF EXPENSES.—

14 ‘‘(1) ADMINISTRATIVE AND OPERATING EX15 PENSES.—Beginning with the 1996 crop year, the

16 Corporation is authorized to pay, from the insurance

17 fund established under subsection (c), the administra18 tive and operating expenses of an approved insurance

19 provider, other than expenses covered under subsection

20 (a)(1).

21 ‘‘(2) OTHER EXPENSES.—The Corporation is au22 thorized to pay from the insurance fund established

23 under subsection (c)—

24 ‘‘(A) all other expenses of the Corporation

25 (other than expenses covered in subsection
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1 (a)(1)), including all premium subsidies and in2 demnities;

3 ‘‘(B) for the 1995 crop year, all administra4 tive and expense reimbursements due under a re5 insurance agreement with an approved insur6 ance provider; and

7 ‘‘(C) to the extent necessary, expenses in8 curred by the Corporation to carry out research

9 and development.

10 ‘‘(c) INSURANCE FUND.—

11 ‘‘(1) IN GENERAL.—There is established an in12 surance fund for the deposit of premium income, in13 come from reinsurance operations, and amounts made

14 available under subsection (a).

15 ‘‘(2) SOURCE OF FUNDING.—There are appro16 priated, without fiscal year limitation, such sums as

17 may be necessary to carry out subsection (b) through

18 the insurance fund.’’.

19 SEC. 111. ADVISORY COMMITTEE FOR FEDERAL CROP IN20 SURANCE.

21 The Act is amended by inserting after section 514 (7

22 U.S.C. 1514) the following new section:
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1 ‘‘SEC. 515. ADVISORY COMMITTEE FOR FEDERAL CROP IN2 SURANCE.

3 ‘‘(a) ESTABLISHMENT.—The Secretary may establish

4 within the Department a committee to be known as the ‘Ad5 visory Committee for Federal Crop Insurance’ (referred to

6 in this section as the ‘Advisory Committee’), which shall

7 remain in existence until September 30, 1998.

8 ‘‘(b) MEMBERSHIP.—The Advisory Committee shall be

9 composed of—

10 ‘‘(1) the Manager of the Corporation;

11 ‘‘(2) the Secretary or a designee; and

12 ‘‘(3) not fewer than 10 representatives of organi13 zations or agencies involved with the Federal crop in14 surance program, which may include insurance com15 panies, insurance agents, farm producer organiza16 tions, experts on agronomic practices, and banking

17 and lending institutions.

18 ‘‘(c) ADMINISTRATIVE PROVISIONS.—

19 ‘‘(1) TERMS.—Members of the Advisory Commit20 tee shall be appointed by the Secretary for a term of

21 not more than 2 years from nominations made by the

22 participating organizations and agencies referred to

23 in subsection (b). The terms of the members shall be

24 staggered.

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

26 shall be chaired by the Manager of the Corporation.
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1 ‘‘(3) MEETINGS.—The Advisory Committee shall

2 meet at least annually. The meetings of the Advisory

3 Committee shall be publicly announced in advance

4 and shall be open to the public. Appropriate records

5 of the activities of the Advisory Committee shall be

6 kept and made available to the public on request.

7 ‘‘(d) PRIMARY RESPONSIBILITY.—The primary re8 sponsibility of the Advisory Committee shall be to advise

9 the Secretary on the implementation of this title and on

10 other issues related to crop insurance (as determined by the

11 Manager of the Corporation).

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

13 the Advisory Committee shall prepare, and submit to the

14 Secretary, a report specifying the conclusions of the Advi15 sory Committee on—

16 ‘‘(1) the progress toward implementation of this

17 title;

18 ‘‘(2) the actuarial soundness of the Federal crop

19 insurance program; and

20 ‘‘(3) the rate of participation in the catastrophic

21 and the additional coverage programs under this

22 title.’’.

23 SEC. 112. MANAGEMENT OF CORPORATION.

24 (a) IN GENERAL.—The second sentence of section

25 505(a) (7 U.S.C. 1505(a)) is amended—
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1 (1) by striking ‘‘program, the Under Secretary’’

2 and inserting ‘‘program, 1 additional Under Sec3 retary’’; and

4 (2) by striking ‘‘responsible for the farm credit

5 programs of the Department of Agriculture’’ and in6 serting ‘‘, as designated by the Secretary of Agri7 culture (referred to in this title as the ‘Secretary’)’’.

8 (b) GENERAL POWERS.—Section 506 (7 U.S.C. 1506)

9 is amended—

10 (1) by redesignating subsections (j) through (n)

11 as subsections (k) through (o), respectively;

12 (2) by inserting after subsection (i) the following

13 new subsection:

14 ‘‘(j) SETTLING CLAIMS.—The Corporation shall have

15 the authority to make final and conclusive settlement and

16 adjustment of any claim by or against the Corporation or

17 a fiscal officer of the Corporation.’’;

18 (3) in subsection (l) (as so redesignated)—

19 (A) in the first sentence, by inserting ‘‘, and

20 issue regulations,’’ after ‘‘agreements’’; and

21 (B) in the second sentence, by striking ‘‘con22 tracts or agreements’’ each place it appears and

23 inserting ‘‘contracts, agreements, or regulations’’;
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1 (4) in subsection (n)(1) (as so redesignated), by

2 striking subparagraph (B) and inserting the following

3 new subparagraph:

4 ‘‘(B) disqualify the person from purchasing

5 catastrophic risk protection or receiving

6 noninsured assistance for a period of not to ex7 ceed 2 years, or from receiving any other benefit

8 under this title for a period of not to exceed 10

9 years.’’;

10 (5) in subsection (o) (as so redesignated)—

11 (A) by redesignating paragraphs (1)

12 through (4) as subparagraphs (A) through (D)

13 and aligning the margins of each subparagraph

14 with the margins of subparagraph (A) of sub15 section (n)(1) (as redesignated by paragraph

16 (1));

17 (B) by striking ‘‘(o) ACTUARIAL SOUND18 NESS.—The Corporation’’ and inserting the fol19 lowing:

20 ‘‘(o) ACTUARIAL SOUNDNESS.—

21 ‘‘(1) PROJECTED LOSS RATIO AS OF OCTOBER 1,

22 1995.—The Corporation’’;

23 (C) in subparagraph (A) (as redesignated

24 by subparagraph (A)), by striking ‘‘from obtain25 ing adequate Federal crop insurance, as deter-
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1 mined by the Corporation’’ and inserting ‘‘(as

2 defined by the Secretary) from obtaining Federal

3 crop insurance’’;

4 (D) in subparagraph (C) (as so redesig5 nated)—

6 (i) by inserting ‘‘, agents, and loss ad7 justers’’ after ‘‘participating producers’’;

8 and

9 (ii) by inserting ‘‘, agents, and loss ad10 justers’’ after ‘‘identify insured producers’’;

11 and

12 (E) by adding at the end the following new

13 paragraphs:

14 ‘‘(2) PROJECTED LOSS RATIO AS OF OCTOBER 1,

15 1998.—The Corporation shall take such actions, in16 cluding the establishment of adequate premiums, as

17 are necessary to improve the actuarial soundness of

18 Federal multiperil crop insurance made available

19 under this title to achieve, on and after October 1,

20 1998, an overall projected loss ratio of not greater

21 than 1.0.

22 ‘‘(3) NONSTANDARD CLASSIFICATION SYSTEM.—

23 To the extent that the Corporation uses the non24 standard classification system, the Corporation shall
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1 apply the system to all insured producers in a fair

2 and consistent manner.’’; and

3 (6) by adding at the end the following new sub4 sections:

5 ‘‘(p) LOSS RATIO DEFINED.—As used in this Act, the

6 term ‘loss ratio’ means the ratio of all sums paid by the

7 Corporation as indemnities under any eligible crop insur8 ance policy to that portion of the premium designated for

9 anticipated losses and a reasonable reserve, other than that

10 portion of the premium designated for operating and ad11 ministrative expenses.

12 ‘‘(q) REGULATIONS.—The Secretary and the Corpora13 tion are each authorized to issue such regulations as are

14 necessary to carry out this title.’’.

15 (c) PERSONNEL.—Section 507 (7 U.S.C. 1507) is

16 amended—

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

18 crop insurance committeemen’’;

19 (2) in subsection (c), by striking ‘‘, in which case

20 the agent or broker’’ and all that follows through ‘‘the

21 agent or broker has caused the error or omission’’;

22 and

23 (3) in subsection (d), by striking ‘‘of this Act,’’

24 and all that follows through ‘‘agency’’.
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1 (d) INFORMATION COLLECTION ON CROP INSUR2 ANCE.—Subsection (n) of section 508 (7 U.S.C. 1508) (as

3 redesignated by section 101(3)) is amended to read as fol4 lows:

5 ‘‘(n) INFORMATION COLLECTION ON CROP INSUR6 ANCE.—The Secretary shall make available to producers

7 through local offices of the Department—

8 ‘‘(1) current and complete information on all as9 pects of Federal crop insurance; and

10 ‘‘(2) a listing of insurance agents.’’.

11 (e) CROP INSURANCE YIELD COVERAGE.—Section

12 508A (7 U.S.C. 1508a) is repealed.

13 (f) PREEMPTION.—Section 511 (7 U.S.C. 1511) is

14 amended by inserting after ‘‘The Corporation, including’’

15 the following: ‘‘the contracts of insurance of the Corporation

16 and premiums on the contracts, whether insured directly

17 or reinsured by the Corporation,’’.

18 (g) FALSE STATEMENTS.—Section 1014 of title 18,

19 United States Code, is amended by inserting ‘‘or a company

20 the Corporation reinsures’’ after ‘‘Federal Crop Insurance

21 Corporation’’.
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1 TITLE II—NONINSURED

2 ASSISTANCE PROGRAM

3 SEC. 201. NONINSURED ASSISTANCE PROGRAM.

4 The Act (7 U.S.C. 1501 et seq.) is amended by adding

5 at the end the following new section:

6 ‘‘SEC. 521. NONINSURED ASSISTANCE PROGRAM.

7 ‘‘(a) ELIGIBILITY.—

8 ‘‘(1) IN GENERAL.—The Corporation shall estab9 lish a noninsured assistance program to provide cov10 erage equivalent to the catastrophic risk protection in11 surance described in section 508(b) for crops for

12 which catastrophic risk protection insurance is not

13 available. Crops covered shall include all commercial

14 crops and commodities for which catastrophic risk

15 protection coverage is not available and that are pro16 duced for food, fiber, or an industrial crop on a com17 mercial basis but shall not include livestock.

18 Noninsured assistance shall not cover losses due to—

19 ‘‘(A) the neglect or malfeasance of the pro20 ducer;

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

22 the same crop in such areas and under such cir23 cumstances as it is customary to so reseed; or
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1 ‘‘(C) the failure of the producer to follow

2 good farming practices (as determined by the

3 Secretary).

4 ‘‘(2) APPLICATIONS.—To be eligible for assist5 ance under this section, a producer shall make a

6 timely application, as required by the Corporation,

7 for noninsured assistance at the local office of the De8 partment.

9 ‘‘(3) RECORDS.—A producer shall annually pro10 vide records, as required by the Corporation, of pre11 vious crop acreage and yields, or the producer shall

12 accept a yield under subsection (c)(2)(B) determined

13 by the Corporation.

14 ‘‘(4) ACREAGE REPORTS.—A producer shall pro15 vide reports on acreage planted or prevented from

16 being planted, as required by the Corporation, by the

17 designated acreage reporting date for the crop and lo18 cation as established by the Corporation.

19 ‘‘(5) AREA YIELD LOSSES.—

20 ‘‘(A) AREA AVERAGE YIELD.—A producer of

21 a noninsurable crop shall not be eligible for

22 noninsured assistance unless the area (as deter23 mined by the Corporation) average yield, or an

24 equivalent measure if yield data are not avail25 able, for the crop is less than 65 percent of the
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1 expected area yield established by the Corpora2 tion.

3 ‘‘(B) PREVENTED PLANTING PAYMENTS.—

4 Subject to subparagraph (A), the Corporation

5 shall make a prevented planting noninsured as6 sistance payment to a producer if the producer

7 is prevented from planting more than 35 percent

8 of the acreage intended for the crop because of

9 drought, flood, or other natural disaster (as de10 termined by the Secretary).

11 ‘‘(C) REDUCED YIELD PAYMENTS.—Subject

12 to subparagraph (A), if, because of drought,

13 flood, or other natural disaster (as determined by

14 the Secretary), the total quantity of the crop that

15 a producer is able to harvest on any farm is less

16 than 50 percent of the expected area yield for the

17 crop (as determined by the Corporation) factored

18 for the interest of the producer for the crop, the

19 Corporation shall make a reduced yield

20 noninsured assistance payment.

21 ‘‘(b) PAYMENT.—The Corporation shall make available

22 to a producer eligible for noninsured assistance under this

23 section a payment computed by multiplying—

24 ‘‘(1) the quantity that is less than 50 percent of

25 the established yield for the crop; by
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1 ‘‘(2) 60 percent of the average market price for

2 the crop (or any comparable coverage determined by

3 the Corporation); by

4 ‘‘(3) a payment rate for the type of crop (as de5 termined by the Corporation) that—

6 ‘‘(A) in the case of a crop that is produced

7 with a significant and variable harvesting ex8 pense, a payment rate that reflects the decreasing

9 cost incurred in the production cycle for the crop

10 that is—

11 ‘‘(i) harvested;

12 ‘‘(ii) planted but not harvested; and

13 ‘‘(iii) prevented from being planted be14 cause of drought, flood, or other natural dis15 aster (as determined by the Secretary); and

16 ‘‘(B) in the case of a crop that is not pro17 duced with a significant and variable harvesting

18 expense, a payment rate determined by the Cor19 poration.

20 ‘‘(c) YIELDS.—

21 ‘‘(1) IN GENERAL.—The Corporation shall estab22 lish noninsured assistance program farm yields for

23 crops for the purposes of this section.

24 ‘‘(2) ACTUAL PRODUCTION HISTORY.—
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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), the yield for a crop shall be based on

3 the actual production history for the crop, if the

4 crop was produced on the farm without penalty

5 during each of the 4 crop years immediately pre6 ceding the crop year for which actual production

7 history is being established, building up to a

8 production data base of the 10 crop years imme9 diately preceding the crop year for which pro10 duction history is being established.

11 ‘‘(B) ASSIGNED YIELD.—

12 ‘‘(i) IN GENERAL.—If the producer

13 does not provide sufficient evidence of the

14 yield (as required by the Corporation) of a

15 commodity under subparagraph (A), the

16 producer shall be assigned a yield that is

17 not less than 65 percent of the transitional

18 yield of the producer (adjusted to reflect ac19 tual production reflected in the records ac20 ceptable to the Corporation for continuous

21 years), as specified in regulations issued by

22 the Corporation based on production history

23 requirements.

24 ‘‘(ii) LIMITATION.—A producer who re25 ceives an assigned yield for the current year
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1 of a natural disaster because required pro2 duction records were not submitted to the

3 local office of the Department shall not be

4 eligible for an assigned yield for the year of

5 the next natural disaster unless the required

6 production records of the previous 1 or more

7 years (as applicable) are provided to the

8 local office.

9 ‘‘(C) YIELD VARIATIONS DUE TO DIFFERENT

10 FARMING PRACTICES.—The Corporation shall

11 make noninsured payments that accurately re12 flect significant yield variations due to different

13 farming practices, such as between irrigated and

14 nonirrigated acreage.

15 ‘‘(d) INCREASED CROP PLANTINGS.—

16 ‘‘(1) IN GENERAL.—If the acreage of a crop in

17 a county has increased by more than 100 percent

18 since the 1987 crop year, to become eligible for a

19 noninsured assistance payment, a producer must pro20 vide detailed documentation of production costs, acres

21 planted, and yield, as required by the Corporation.

22 Except as provided in paragraph (2), a producer who

23 produces a crop on a farm located in a county de24 scribed in the preceding sentence may not obtain an

25 assigned yield.
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1 ‘‘(2) EXCEPTION.—A crop or a producer shall

2 not be subject to this subsection if—

3 ‘‘(A) the planted acreage of the producer for

4 the crop has been inspected by a third party ac5 ceptable to the Secretary; or

6 ‘‘(B)(i) the County Executive Director, the

7 District Director, and the State Executive Direc8 tor recommend an exemption from the require9 ment to the Deputy Administrator for State and

10 County Operations of the Agricultural Stabiliza11 tion and Conservation Service; and

12 ‘‘(ii) the Deputy Administrator approves

13 the recommendation.

14 ‘‘(e) CONTRACT PAYMENTS.—A producer who has re15 ceived a guaranteed payment for production, as opposed to

16 delivery, of a crop pursuant to a contract shall have the

17 production of the producer adjusted upward by the amount

18 of the production equal to the amount of the contract pay19 ment received.

20 ‘‘(f) PAYMENT OF LOSSES.—Payments for noninsured

21 assistance losses under this section shall be made from the

22 insurance fund established under section 516(b). The losses

23 shall not be included in calculating the premiums charged

24 to producers for insurance.’’.
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1 SEC. 202. PAYMENT AND INCOME LIMITATIONS.

2 Section 521 (as added by section 201) is further

3 amended by adding at the end the following new subsection:

4 ‘‘(g) PAYMENT AND INCOME LIMITATIONS.—

5 ‘‘(1) DEFINITIONS.—As used in this subsection:

6 ‘‘(A) PERSON.—The term ‘person’ has the

7 meaning provided the term in regulations issued

8 by the Secretary. The regulations shall conform,

9 to the extent practicable, to the regulations defin10 ing the term ‘person’ issued under section 1001

11 of the Food Security Act of 1985 (7 U.S.C.

12 1308).

13 ‘‘(B) QUALIFYING GROSS REVENUES.—The

14 term ‘qualifying gross revenues’ means—

15 ‘‘(i) if a majority of the gross revenue

16 of the person is received from farming,

17 ranching, and forestry operations, the gross

18 revenue from the farming, ranching, and

19 forestry operations of the person; and

20 ‘‘(ii) if less than a majority of the

21 gross revenue of the person is received from

22 farming, ranching, and forestry operations,

23 the gross revenue of the person from all

24 sources.
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1 ‘‘(2) PAYMENT LIMITATION.—The total amount

2 of payments that a person shall be entitled to receive

3 annually under this title may not exceed $100,000.

4 ‘‘(3) NO DOUBLE BENEFITS.—No person may re5 ceive a noninsured assistance payment under this

6 title and emergency livestock feed assistance under

7 section 606 of the Agricultural Act of 1949 (7 U.S.C.

8 1471d) for the same livestock feed or forage loss.

9 ‘‘(4) INCOME LIMITATION.—A person who has

10 qualifying gross revenues in excess of the amount

11 specified in section 2266(a) of the Food, Agriculture,

12 Conservation, and Trade Act of 1990 (7 U.S.C. 1421

13 note) (as in effect on November 28, 1990) during the

14 taxable year (as determined by the Secretary) shall

15 not be eligible to receive any noninsured assistance

16 payment under this section.

17 ‘‘(5) REGULATIONS.—The Secretary shall issue

18 regulations prescribing such rules as the Secretary de19 termines necessary to ensure a fair and equitable ap20 plication of section 1001 of the Food Security Act of

21 1985 (7 U.S.C. 1308), the general payment limitation

22 regulations of the Secretary, and the limitations es23 tablished under this subsection.’’.
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1 TITLE III—MISCELLANEOUS

2 SEC. 301. INELIGIBILITY FOR CATASTROPHIC RISK AND

3 NONINSURED ASSISTANCE PAYMENTS.

4 The Act (7 U.S.C. 1501 et seq.) (as amended by section

5 201) is further amended by adding at the end the following

6 new section:

7 ‘‘SEC. 522. INELIGIBILITY FOR CATASTROPHIC RISK AND

8 NONINSURED ASSISTANCE PAYMENTS.

9 ‘‘If the Secretary determines that a person has know10 ingly adopted a material scheme or device to obtain cata11 strophic risk, additional coverage, or noninsured assistance

12 benefits under this Act to which the person is not entitled,

13 has evaded this Act, or has acted with the purposes of evad14 ing this Act, the person shall be ineligible to receive all bene15 fits applicable to the crop year for which the scheme or de16 vice was adopted. The authority provided by this section

17 shall be in addition to, and shall not supplant, the author18 ity provided by section 506(m).’’.

19 SEC. 302. PREVENTED PLANTING.

20 (a) IN GENERAL.—Effective for the 1994 crop year,

21 a producer described in subsection (b) shall receive com22 pensation under the prevented planting coverage policy pro23 vision described in subsection (b)(1) by—

24 (1) obtaining from the Secretary of Agriculture

25 the applicable amount that is payable under the con-
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1 servation use program described in subsection (b)(4);

2 and

3 (2) obtaining from the Federal Crop Insurance

4 Corporation the amount that is equal to the difference

5 between—

6 (A) the amount that is payable under the

7 conservation use program; and

8 (B) the amount that is payable under the

9 prevented planting coverage policy.

10 (b) ELIGIBLE PRODUCERS.—Subsection (a) shall

11 apply to a producer who—

12 (1) purchased a prevented planting policy for the

13 1994 crop year from the Federal Crop Insurance Cor14 poration prior to the spring sales closing date for the

15 1994 crop year;

16 (2) is unable to plant a crop due to major, wide17 spread flooding in the Midwest, or excessive ground

18 moisture, that occurred prior to the spring sales clos19 ing date for the 1994 crop year;

20 (3) had a reasonable expectation of planting a

21 crop on the prevented planting acreage for the 1994

22 crop year; and

23 (4) participates in a conservation use program

24 established for the 1994 crop of wheat, feed grains,

25 upland cotton, or rice established under section
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1 107B(c)(1)(E), 105B(c)(1)(E), 103B(c)(1)(D), or

2 101B(c)(1)(D), respectively, of the Agricultural Act of

3 1949 (7 U.S.C. 1445b–3a(c)(1)(E), 1444f(c)(1)(E),

4 1444–2(c)(1)(D), or 1441–2(c)(1)(D)).

5 (c) OILSEED PREVENTED PLANTING PAYMENTS.—

6 (1) IN GENERAL.—Effective for the 1994 crop

7 year, a producer of a crop of oilseeds (as defined in

8 section 205(a) of the Agricultural Act of 1949 (7

9 U.S.C. 1446f(a)) shall receive a prevented planting

10 payment for the crop if the requirements of para11 graphs (1), (2), and (3) of subsection (b) are satisfied.

12 (2) SOURCE OF PAYMENT.—The total amount of

13 payments required under this subsection shall be

14 made by the Federal Crop Insurance Corporation.

15 (d) PAYMENT.—A payment under this section may not

16 be made before October 1, 1994.

17 SEC. 303. CONFORMING AMENDMENTS.

18 (a) PRICE SUPPORT PROGRAMS.—

19 (1) IN GENERAL.—Title IV of the Agricultural

20 Act of 1949 (7 U.S.C. 1421 et seq.) is amended by

21 adding at the end the following new section:

22 ‘‘SEC. 427. CROP INSURANCE REQUIREMENT.

23 ‘‘As a condition of receiving any benefit (including

24 payments) under title I or II for each of the 1995 and subse25 quent crops of tobacco, rice, extra long staple cotton, upland
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1 cotton, feed grains, wheat, peanuts, oilseeds, and sugar and

2 for each of the 1995 and subsequent calendar years with

3 respect to milk, a producer must obtain at least catastrophic

4 risk protection insurance coverage under section 508 of the

5 Federal Crop Insurance Act (7 U.S.C. 1508) for the crop

6 and crop year for which the benefit is sought, if the coverage

7 is offered by the Corporation.’’.

8 (2) RICE.—Section 101B(c) of such Act (7

9 U.S.C. 1441–2(c)) is amended—

10 (A) in paragraph (1), by striking subpara11 graph (F); and

12 (B) by striking paragraph (2) and inserting

13 the following new paragraph:

14 ‘‘(2) CROP INSURANCE REQUIREMENT.—A pro15 ducer shall obtain catastrophic risk protection insur16 ance coverage in accordance with section 427.’’.

17 (3) UPLAND COTTON.—Section 103B(c) of such

18 Act (7 U.S.C. 1444–2(c)) is amended—

19 (A) in paragraph (1), by striking subpara20 graph (F); and

21 (B) by striking paragraph (2) and inserting

22 the following new paragraph:

23 ‘‘(2) CROP INSURANCE REQUIREMENT.—A pro24 ducer shall obtain catastrophic risk protection insur25 ance coverage in accordance with section 427.’’.
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1 (4) FEED GRAINS.—Section 105B(c) of such Act

2 (7 U.S.C. 1444f(c)) is amended—

3 (A) in paragraph (1), by striking subpara4 graph (G); and

5 (B) by striking paragraph (2) and inserting

6 the following new paragraph:

7 ‘‘(2) CROP INSURANCE REQUIREMENT.—A pro8 ducer shall obtain catastrophic risk protection insur9 ance coverage in accordance with section 427.’’.

10 (5) WHEAT.—Section 107B(c) of such Act (7

11 U.S.C. 1445b–3a(c)) is amended—

12 (A) in paragraph (1), by striking subpara13 graph (G); and

14 (B) by striking paragraph (2) and inserting

15 the following new paragraph:

16 ‘‘(2) CROP INSURANCE REQUIREMENT.—A pro17 ducer shall obtain catastrophic risk protection insur18 ance coverage in accordance with section 427.’’.

19 (6) DISASTER PAYMENTS.—Section 208 of such

20 Act (7 U.S.C. 1446i) is repealed.

21 (b) FARMERS HOME ADMINISTRATION PROGRAMS.—

22 The Consolidated Farm and Rural Development Act (7

23 U.S.C. 1921 et seq.) is amended by adding at the end the

24 following new section:
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1 ‘‘SEC. 371. CROP INSURANCE REQUIREMENT.

2 ‘‘(a) IN GENERAL.—As a condition of obtaining any

3 benefit (including a direct loan, loan guarantee, or pay4 ment) described in subsection (b), a borrower must obtain

5 at least catastrophic risk protection insurance coverage

6 under section 508 of the Federal Crop Insurance Act (7

7 U.S.C. 1508) for the crop and crop year for which the bene8 fit is sought, if the coverage is offered by the Corporation.

9 ‘‘(b) APPLICABLE BENEFITS.—Subsection (a) shall

10 apply to—

11 ‘‘(1) a farm ownership loan (FO) under section

12 303;

13 ‘‘(2) an operating loan (OL) under section 312;

14 and

15 ‘‘(3) an emergency loan (EM) under section

16 321.’’.

17 (c) DISASTER ASSISTANCE.—Subtitle B of title XXII

18 of the Food, Agriculture, Conservation, and Trade Act of

19 1990 (7 U.S.C. 1421 note) is amended by striking chapter

20 3.

21 (d) TECHNICAL AMENDMENTS.—

22 (1) The first sentence of section 506(d) (7 U.S.C.

23 1506(d)) is amended by striking ‘‘508(f)’’ and insert24 ing ‘‘508(i)’’.
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1 (2) The last sentence of section 507(c) (7 U.S.C.

2 1507(c)) is amended by striking ‘‘508(b)’’ and insert3 ing ‘‘508(g)’’.

4 (3) Section 518 (7 U.S.C. 1518) is amended by

5 striking ‘‘(k)’’ and inserting ‘‘(m)’’.

6 SEC. 304. EFFECTIVE DATES.

7 (a) IN GENERAL.—Except as otherwise provided in

8 this Act, this Act and the amendments made by this Act

9 shall become effective beginning with—

10 (1) if this Act is enacted before August 1, 1994,

11 the 1995 crop year for the applicable agricultural

12 commodity; or

13 (2) if this Act is enacted on or after August 1,

14 1994, the 1996 crop year for the applicable agricul15 tural commodity.

16 (b) EXCEPTIONS.—Sections 1, 101(1), 112(e), 112(f),

17 and 302, the amendments made by such sections, and this

18 section shall become effective on the date of enactment of

19 this Act.

20 SEC. 305. TERMINATION OF AUTHORITY.

21 The authority provided by this Act and the amend22 ments made by this Act shall terminate on September 30,

23 2000.

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