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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2095 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2095

 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

_______________________________________________________________________

                                 A BILL

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

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Crop Insurance Reform Act of 
1994''.

SEC. 2. CROP INSURANCE AMENDMENTS.

    (a) Section 505(a) of title V of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1505) is amended--
            (1) by striking ``the'' after ``Federal crop insurance 
        program,'' and inserting ``one additional''; and
            (2) by striking ``responsible for the farm credit programs 
        of the Department of Agriculture'' and inserting ``as 
        designated by the Secretary of Agriculture''.
    (b) Section 506 of title V of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1506) is amended--
            (1) by redesignating subsections (j), (k), (l), (m), and 
        (n) as subsections (k), (l), (m), (n), and (o), respectively;
            (2) by inserting after subsection (i) the following new 
        subsection:
    ``(j) Settling Claims.--The Corporation shall have the authority to 
make final and conclusive settlement and adjustment of any claims by or 
against the Corporation or the account of its fiscal officers.'';
            (3) in subsection (1) (as redesignated), by striking 
        ``contracts or agreements'' each place it appears and inserting 
        ``contracts, agreements, or regulations'';
            (4) in subsection (n)(1) (as redesignated), by striking 
        paragraph (B) and inserting the following new paragraph:
                    ``(B) disqualify the person from purchasing 
                catastrophic risk protection or receiving noninsured 
                assistance for a period not to exceed 2 years and from 
                receiving any other benefit under this title for a 
                period not to exceed 10 years.'';
            (5) in subsection (o) (as redesignated), by striking 
        paragraph (1) and inserting the following new paragraph:
            ``(1) instituting appropriate requirements for 
        documentation of the actual production history of insured 
        producers to establish recorded or appraised yields for Federal 
        crop insurance coverage that more accurately reflect the 
        associated actuarial risk. The Corporation may not carry out 
        this paragraph in a manner that would prevent beginning 
        farmers, as determined by the Secretary, from obtaining Federal 
        crop insurance.''; and
            (6) by adding at the end thereof the following new 
        subsections:
    ``(p) Regulations.--The Secretary and the Corporation, 
respectively, are authorized to issue regulations as may be necessary 
to carry out this title.
    ``(q) Source of Funding.--There is hereby appropriated, without 
fiscal year limitation, such sums as may be necessary to carry out the 
purpose of the insurance fund.''.
    (c) Section 507 of title V of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1507) is amended--
            (1) in subsection (a), by striking ``, and county crop 
        insurance committeemen'';
            (2) in subsection (c), by striking the words beginning with 
        ``, in which case the agent or broker'' through ``the agent or 
        broker has caused the error or omission''; and
            (3) in subsection (d), by replacing the comma with a period 
        after the words ``section 516 of this Act'', and by deleting 
        the remainder of the subsection.
    (d) Section 508 of title V of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1508) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Authority To Offer Insurance.--
            ``(1) If sufficient actuarial data are available, as 
        determined by the Board, the Corporation may insure or provide 
        reinsurance for insurers of producers of agricultural 
        commodities grown in the United States under any plan or plans 
        of insurance determined by the Board to be adapted to the 
        agricultural commodity involved. To qualify for coverage under 
        these plans of insurance, the losses of the insured commodity 
        shall be due to drought, flood or other natural disaster as 
        determined by the Secretary. Except in the case of tobacco, 
        insurance shall not extend beyond the period the insured 
        commodity is in the field. For the purpose of the foregoing 
        sentence, in the case of aquacultural species, the term `field' 
        means the environment in which the commodity is produced. 
        Insurance provided under this subsection shall not cover losses 
        due to--
                    ``(A) the neglect or malfeasance of the producer;
                    ``(B) the failure of the producer to reseed to the 
                same crop in those areas and under such circumstances 
                where it is customary to so reseed; or
                    ``(C) the failure of the producer to follow good 
                farming practices, as determined by the Corporation.'';
            (2) by striking subsections (c), (e), (g), (l) and (n);
            (3) by redesignating subsections (b), (d), (f), (h), (i), 
        (j), (k), and (m) as subsections (g), (h), (i), (j), (k), (l), 
        (m), and (n), respectively;
            (4) by inserting after subsection (a) the following new 
        subsections:
    ``(b) Catastrophic Risk Protection.--
            ``(1) The Corporation shall offer a catastrophic risk 
        protection plan to indemnify producers for crop loss due to 
        loss of yield and prevented planting when the producer is 
        unable because of drought, flood or other natural disaster, as 
        determined by the Secretary, to plant other crops for harvest 
        on that acreage for that crop year.
            ``(2) Catastrophic risk protection shall offer the producer 
        50 percent loss in yield coverage, on an area or individual 
        yield basis, indemnified at 60 percent of the expected market 
        price or a comparable coverage, as determined by the 
        Corporation.
            ``(3) Producers shall have the option of basing their 
        catastrophic coverage on either an individual yield and loss 
        basis or on an area yield and loss basis when both options are 
        offered by the Corporation.
            ``(4) For catastrophic risk protection, producers shall pay 
        an administrative fee. The administrative fees shall be $50 per 
        crop per county, not to exceed $100 per producer per county. 
        The administrative fee shall be paid at the service point--the 
        United States Department of Agriculture office or the approved 
        private insurance provider--at the time of application. This 
        administrative fee shall be waived for limited resource 
        farmers, as defined by the Corporation, or if the producer 
        elects to purchase additional protection at 65 percent or more 
        of the recorded or appraised average yield and 100 percent of 
        the expected market price, or an equivalent coverage, offered 
        by approved crop insurance providers. Funds collected as 
        administrative fees shall be available, subject to 
        appropriations, for salaries and expenses.
            ``(5) Participation in the catastrophic risk coverage for 
        any producer's crop on any land in the county requires 
        participation for that producer's crop on all insurable land of 
        the producer in the county.
            ``(6) To be eligible for any price support, production 
        adjustment, or conservation program administered by the United 
        States Department of Agriculture for any crop, or for loans 
        under any program of the Farmers Home Administration or any 
        successor agency, the producer must obtain at least the 
        catastrophic level of insurance for all crops of economic 
        significance grown on all farms in the county in which the 
        producer has an interest, if insurance is available in the 
        county for those crops. The term `economic significance' shall 
        mean any crop that has contributed, or is expected to 
        contribute, 10 percent or more of the total expected value of 
        all crops grown by the producer.
            ``(7) The Board may limit insurance in any county or area, 
        or on any farm, on the basis of the insurance risk involved.
    ``(c) Coverage Levels Generally.--
            ``(1) The Corporation shall offer plans of insurance 
        providing levels of coverage greater than that available under 
        catastrophic risk protection. Producers may only purchase there 
        other plans from approved private insurance providers, if such 
        private insurance is available. Nothing contained herein 
        restricts the Corporation from offering insurance if coverage 
        from private insurance providers is unavailable. If the 
        producer has already applied for catastrophic risk protection 
        at the United States Department of Agriculture office and 
        elects to purchase additional coverage, the insurance file for 
        that producer shall be transferred to the approved private 
        insurance provider servicing the additional coverage policy and 
        the administrative fee for the crop for which additional 
        coverage at 65 percent or more of the recorded or appraised 
        average yield and 100 percent of the expected market price, or 
        an equivalent coverage, is obtained shall be refunded to the 
        insured.
            ``(2) Producers shall have the option of purchasing 
        additional coverage based on either an individual yield and 
        loss basis or on an area yield and loss basis when both options 
        are offered by the Corporation.
            ``(3) The level of coverage shall be dollar denominated and 
        may be purchased at any level not to exceed 85 percent of the 
        individual yield or 95 percent of the area yield, as determined 
        by the Corporation.
            ``(4) The Corporation shall establish a price level for 
        each commodity on which insurance is offered that--
                    ``(A) shall not be less than the projected market 
                price for the commodity as determined by the 
                Corporation; or
                    ``(B) at the discretion of the Corporation, may be 
                based on the actual market price at the time of 
                harvest, as determined by the Corporation.
            ``(5) Insurance coverage shall be made available to the 
        producer on the basis of any price election that equals or is 
        less than that established by the Board and the coverage shall 
        be quoted in terms of dollars per acre: Provided, That the 
        Corporation may establish minimum price elections below which 
        levels of insurance shall not be offered.
            ``(6) For levels of coverage 65 percent or more of the 
        recorded or appraised average yield and 100 percent of the 
        expected market price, or an equivalent coverage, the producer 
        may elect to delete from the insurance coverage provided under 
        this title coverage against damage caused by fire and hail, 
        provided an equivalent or greater dollar amount of coverage for 
        damage caused by fire and hail is obtained from a private hail/
        fire insurance provider. Upon written notice of such election 
        to the company issuing the policy providing coverage under this 
        title and submission of evidence of substitute coverage on the 
        commodity insured, the producer's premium shall be reduced by 
        an amount determined by the Corporation to be actuarially 
        appropriate, taking into account the actuarial value of the 
        remaining coverage provided by the Corporation. In no event 
        shall the producer be given credit for an amount of premium 
        determined to be greater than the actuarial value of the 
        protection against losses caused by fire and hail that is 
        included in the coverage under this title for the crop.
            ``(7) The Board may enter into agreements with any State or 
        agency of a State under which such State or agency may pay to 
        the approved insurance provider an additional premium subsidy 
        to further reduce the portion of the premium paid by farmers in 
        such State.
            ``(8) The Board may limit or refuse insurance in any county 
        or area, or on any farm, on the basis of the insurance risk 
        involved.
    ``(d) Premiums.--
            ``(1) The Corporation shall fix adequate premiums for all 
        its plans of insurance at such rates as the Board deems 
        actuarially sufficient to attain an expected loss ratio of not 
        greater than 1.1.
                    ``(A) For catastrophic risk protection coverage, 
                the amount of premium shall be sufficient to cover 
                anticipated losses and a reasonable reserve.
                    ``(B) For levels of coverage below 65 percent of 
                the recorded or appraised average yield and 100 percent 
                of the expected market price, or an equivalent 
                coverage, but greater than catastrophic risk 
                protection, the amount of premium shall be sufficient 
                to cover anticipated losses, a reasonable reserve, and 
                an amount for operating and administrative expenses, as 
                determined by the Corporation, that is less than the 
                amount established for coverage at 65 percent and 100 
                percent of the expected market price, or an equivalent 
                coverage.
                    ``(C) For levels of coverage of at least 65 percent 
                of the recorded or appraised average yield and 100 
                percent of the expected market price, or an equivalent 
                coverage, the amount of premium shall be sufficient to 
                cover anticipated losses, a reasonable reserve, and an 
                amount to pay the operating and administrative expenses 
                as determined by the Corporation on an industry-wide 
                basis as a percent of the total premium.
            ``(2) For the purpose of encouraging the broadest possible 
        participation, the Corporation shall pay a part of the premium 
        equivalent to--
                    ``(A) for catastrophic risk protection coverage, an 
                amount equal to the premium established in paragraph 
                (1)(A) of this section;
                    ``(B) for levels of coverage below 65 percent of 
                the recorded or appraised average yield and 100 percent 
                of the expected market price or an equivalent coverage, 
                but greater than catastrophic risk protection, the 
                amount of premium established for catastrophic risk 
                protection coverage, a reasonable reserve, plus the 
                amount of operating and administrative expenses 
                established in paragraph (1)(B) of this section; and
                    ``(C) for levels of coverage at or greater than 65 
                percent of the recorded and appraised yield and 100 
                percent of the expected market price, or an equivalent 
                coverage, on an individual or area basis, an amount 
                equal to the premium established for 50 percent loss in 
                yield indemnified at 75 percent of the expected market 
                price, a reasonable reserve, plus the amount of 
                operating and administrative expenses established in 
                paragraph (1)(C) of this section.
            ``(3) If a private insurance provider determines that it 
        may provide insurance more efficiently than the expense 
        reimbursement amount set by the Corporation, the private 
        insurance provider, if approved by the Board, may reduce the 
        premium charged the insured by the amount of such efficiency. 
        Any such reductions shall be subject to the rules, limitations, 
        and procedures established by the Corporation.
    ``(e) Eligibility.--To participate in catastrophic risk protection 
coverage under this title, producers may make application at the local 
United States Department of Agriculture office or to an approved 
private crop insurance provider. For all coverages, producers shall be 
required to--
            ``(1) purchase crop insurance on or before the sales 
        closing date for the crop by providing the required information 
        and executing the required documents. Such sales closing date 
        shall be established by the Corporation to maximize convenience 
        to producers in obtaining benefits under price and production 
        adjustment programs of the Department whenever feasible; 
        however, the Corporation will establish all sales closing dates 
        to assure that the goal of actuarial soundness for the crop 
        insurance program is met;
            ``(2) provide records, acceptable to the Corporation, of 
        previous acreage and production or accept a Corporation 
        determined yield; and
            ``(3) report acreage planted and prevented from planting by 
        the designated acreage reporting date for that crop and 
        location as established by the Corporation.
    ``(f) Yield Determinations.--
            ``(1) In general.--The Corporation shall implement crop 
        insurance underwriting rules that ensure that yield coverage, 
        as specified in subsection (f)(2) of this section, is provided 
        to all producers participating in the Federal crop insurance 
        program.
            ``(2) Yield coverage plans.--
                    ``(A) Actual production history.--
                            ``(i) This plan uses the producer's actual 
                        production history for the 4 previous 
                        consecutive crop years without penalty, up to a 
                        production data base of 10 consecutive years, 
                        subject to paragraph (ii), to determine yield 
                        coverage.
                            ``(ii) If the producer does not submit 
                        adequate documentation of history for a crop, 
                        the producer shall be assigned, as the 
                        producer's farm program yield, not less than 65 
                        percent of the transitional yield of the 
                        producer (adjusted to reflect actual production 
                        reflected in the records acceptable to the 
                        Corporation for continuous years), as specified 
                        in regulations issued by the Corporation based 
                        on production history requirements.
                    ``(B) Area yield.--The Corporation may offer a crop 
                insurance plan based on an area yield that allows an 
                insured producer to qualify for an indemnity if a loss 
                has occurred in an area, as specified by the 
                Corporation, in which the farm of the producer is 
                located. Under an area yield plan, an insured producer 
                shall be allowed to select the level of area production 
                at which an indemnity will be paid consistent with the 
                terms and conditions established by the Corporation.
                    ``(C) Commodity-by-commodity basis.--A producer may 
                choose between either individual yield or area yield 
                coverage, where available, on a commodity-by-commodity 
                basis.
                    ``(D) Notice.--The Corporation shall ensure that, 
                whenever the yield coverage provisions of this section 
                are effective, producers are given adequate notice of 
                such provisions in advance of the crop insurance 
                application period for the crops to which such 
                provisions first will apply.'';
            (5) in subsection (g) (as redesignated)--
                    (A) in paragraph (1), by striking ``(a)'' and 
                inserting ``(c)'';
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Preparation of policies.--A policy or other material 
        submitted to the Board under this subsection may be prepared 
        without regard to the limitations contained in this title, 
        including the requirements concerning the levels of coverage 
        and rates and the requirement that a price level for each 
        commodity insured must equal the projected market price for the 
        commodity as established by the Board. Such policy may only be 
        subsidized at an amount equivalent to coverage that is 
        authorized under this title.'';
                    (C) in paragraph (3)--
                            (i) by striking ``taking into consideration 
                        the risks covered by the policy or other 
                        material'';
                            (ii) by inserting after ``more than one 
                        reinsurance agreement'' the words ``with the 
                        private insurance provider''; and
                            (iii) by striking title ``V'' and inserting 
                        ``title 5''; and
                    (D) by striking paragraph (4) and inserting the 
                following new paragraph:
            ``(4) Required publication.--Any policies, provisions of 
        policies, and rates approved under this subsection shall be 
        published as a notice in the Federal Register and made 
        available to all persons contracting with or reinsured by the 
        Corporation under the same terms and conditions as between the 
        Corporation and the submitting person.'';
            (6) by striking subsection (i) (as redesignated) and 
        inserting the following new subsection:
    ``(i) Claims For Losses.--The Corporation may provide for 
adjustment and payment of claims for losses as provided under 
subsection (a) of this section under rules prescribed by the Board. The 
rules prescribed by the Board shall establish standards to ensure that 
all claims for losses are adjusted, to the extent practicable, in a 
uniform and timely manner. If any claim for indemnity is denied by the 
Corporation, an action on such claim may be brought against the 
Corporation and the insurance provider in the United States district 
court for the district in which the insured farm is located: Provided, 
That no suit on such claim may be allowed under this section unless it 
shall have been brought within one year after the date when written 
notice of denial of the claim is provided to the claimant.'';
            (7) by striking subsection (j) (as redesignated) and 
        inserting the following new subsection:
    ``(j) Reinsurance.--Notwithstanding any other provision of this 
title, the Corporation is directed, to the maximum extent practicable, 
to provide reinsurance upon such terms and conditions as the Board may 
determine to be consistent with subsections (b) and (c) of this section 
and sound reinsurance principles to insurers, as defined by the 
Corporation, that insure producers of any agricultural commodity under 
a plan or plans acceptable to the Corporation. The Corporation's 
reinsurance agreements with the reinsured companies shall require the 
reinsured companies to bear a sufficient share of any potential loss 
under such agreement so as to ensure that the reinsured company will 
sell and service policies of insurance in a sound and prudent manner, 
taking into consideration the availability of private reinsurance.'';
            (8) in subsection (k) (as redesignated), by striking 
        ``provide'' after ``The Corporation may'' and inserting ``offer 
        plans of''; and
            (9) by striking subsection (n) (as redesignated) and 
        inserting the following new subsection:
    ``(n) Information Collection on Crop Insurance.--The Corporation 
shall make available to producers through local offices of the 
Department of Agriculture--
            ``(1) current and complete information on all aspects of 
        Federal crop insurance; and
            ``(2) a listing of insurance agents.''.
    (e) Section 508A of title V of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1508A) is repealed.
    (f) Section 511 of title V of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1511) is amended by inserting ``its contracts of 
insurance and premium thereon, whether insured directly or reinsured by 
the Corporation,'' after ``The Corporation, including''.
    (g) Title V of the Agricultural Adjustment Act of 1938 is amended 
by striking section 516 and inserting the following new section:

``SEC. 516. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Appropriations.--There are hereby authorized to be 
appropriated such sums as may be necessary, including funds collected 
as administrative fees, to cover the administrative and operating 
expenses of the Corporation.
    ``(b) Insurance Fund.--There shall be established an insurance fund 
for deposit of premium income, income from reinsurance operations, and 
appropriations provided by this Act. The Corporation will pay amounts 
due under its reinsurance agreements with private insurance providers, 
including premium subsidies, from the fund.''.
    (h) Title V of the Agricultural Adjustment Act of 1938 is amended 
by striking section 520 and inserting the following new section:

``SEC. 520. PRODUCER ELIGIBILITY.

    ``Except as otherwise provided in this title, no producer shall be 
denied insurance under this title if--
            ``(1) for purposes of catastrophic risk protection 
        coverage, the producer meets the definition of person, as 
        defined by the Secretary; and
            ``(2) for purposes of any other plan of insurance, the 
        producer is eighteen years of age and has a bona fide insurable 
        interest in a crop as an owner-operator, landlord, tenant, or 
        sharecropper.''.

SEC. 3. ADVISORY COMMITTEE.

    Title V of the Agricultural Adjustment Act of 1938 is amended by 
adding the following new section:

``SEC. 521. ADVISORY COMMITTEE FOR FEDERAL CROP INSURANCE.

    ``(a) Establishment.--The Secretary may establish within the 
Department of Agriculture a committee to be known as the Advisory 
Committee for Federal Crop Insurance which shall remain in existence 
until September 30, 1998.
    ``(b) Membership.--The Advisory Committee shall be composed of the 
Manager of the Corporation, the Secretary or his designee, and not less 
than ten representatives of organizations or agencies involved with the 
Federal crop insurance program, which may include the following: 
insurance companies; insurance agents; farm producer organizations; 
experts on agronomic practices; and banking and lending institutions.
    ``(c) Administrative Provisions.--
            ``(1) Terms.--Members of the Advisory Committee shall be 
        appointed by the Secretary for a term of up to two years from 
        nominations made by the participating organizations. The terms 
        of the members shall be staggered.
            ``(2) Chairperson.--The Advisory Committee shall be chaired 
        by the Manager of the Corporation.
            ``(3) Meetings.--The Advisory Committee shall meet at least 
        annually. The meetings of the Advisory Committee shall be 
        publicly announced in advance and shall be open to the public. 
        Appropriate records of the activities of the Advisory Committee 
        shall be kept and made available to the public on request.
    ``(d) Primary Responsibility.--The primary responsibility of the 
Advisory Committee shall be to advise the Secretary on the 
implementation of this title and on other issues related to crop 
insurance, as determined by the Manager.
    ``(e) Reports.--Not later than June 30 of each year, the Advisory 
Committee shall prepare, and submit to the Secretary, a report 
specifying its conclusions on--
            ``(1) the progress toward implementation of the provisions 
        of this title;
            ``(2) the actuarial soundness of the Federal crop insurance 
        program; and
            ``(3) the rate of participation in both the catastrophic 
        and the additional coverage programs.''.

SEC. 4. NONINSURED ASSISTANCE.

    Title V of the Agricultural Adjustment Act of 1938 is amended by 
adding the following new section:

``SEC. 522. NONINSURED ASSISTANCE PROGRAM.

    ``(a) Eligibility.--
            ``(1) A noninsured assistance program is established to 
        provide coverage equivalent to the catastrophic risk protection 
        insurance for crops for which catastrophic risk protection 
        insurance is not available. Crops covered include all 
        commercial crops and commodities for which catastrophic risk 
        protection coverage is not available and that are produced for 
        food or fiber on a commercial basis but shall not include 
        livestock. Noninsured assistance shall not cover losses due 
        to--
                    ``(A) the neglect or malfeasance of the producer;
                    ``(B) the failure of the producer to reseed to the 
                same crop in those areas and under such circumstances 
                where it is customary to so reseed; or
                    ``(C) the failure of the producer to follow good 
                farming practices, as determined by the Corporation.
            ``(2) Producers shall make a timely application for 
        noninsured assistance at the United States Department of 
        Agriculture office.
            ``(3) Producers shall provide records, acceptable to the 
        Corporation, of previous crop acreage and production or the 
        producers shall accept a yield as determined by the 
        Corporation.
            ``(4) Producers shall report acreage planted and prevented 
        from being planted by the designated acreage reporting date for 
        that crop and location as established by the Corporation.
            ``(5) Producers of non-program crops shall not be eligible 
        for noninsured assistance unless the area, as determined by the 
        Corporation, average yield, or an equivalent measure in the 
        event yield data are not available, for that crop falls below 
        65 percent of the expected area yield as established by the 
        Corporation.
            ``(6) The Corporation shall make a prevented planting 
        noninsured assistance payment if the producer is prevented from 
        planting more than 35 percent of the acreage intended for the 
        crop because of drought, flood, or other natural disaster as 
        determined by the Secretary.
            ``(7) If, because of drought, flood, or other natural 
        disaster as determined by the Secretary, the total quantity of 
        the crop that a producer is able to harvest on any farm is less 
        than 50 percent of the expected area yield for the crop, as 
        determined by the Corporation, factored for the producer's 
        interest for the crop, the Corporation shall make a reduced 
        yield noninsured assistance payment.
            ``(8) A person who has qualifying gross revenues in excess 
        of $2,000,000 annually, as determined by the Secretary, shall 
        not be eligible to receive any noninsured assistance payments. 
        For purposes of this section, the term `qualifying gross 
        revenues' means--
                    ``(A) if a majority of the person's gross revenue 
                is received from farming, ranching, and forestry 
                operations, the gross revenue from the person's 
                farming, ranching, and forestry operations; and
                    ``(B) if less than a majority of the person's gross 
                revenue is received from farming, ranching, and 
                forestry operations, the person's gross revenue from 
                all sources.
    ``(b) Payment Rate.--If the producer is eligible for noninsured 
assistance, payments shall be made for losses in excess of 50 percent 
of the established yield for the crop at 60 percent of the average 
market price for that crop or any comparable coverage as determined by 
the Corporation.
    ``(c) Farm Yields.--
            ``(1) The Corporation shall establish noninsured assistance 
        program farm yields for crops for the purposes of this section.
            ``(2) If the producer can provide satisfactory evidence of 
        the producer's actual production history for the four previous 
        consecutive crop years, up to a production data base of ten 
        consecutive crop years, the yield of the farm shall be based on 
        such proven yield.
            ``(3) If the producer does not submit adequate 
        documentation of such history for the crop, the producer shall 
        be assigned as the producer's farm program yield not less than 
        65 percent of the transitional yield (adjusted to reflect 
        actual experience), as specified in regulations issued by the 
        Corporation based on production history requirements.
    ``(d) Payment of Losses.--Payments for noninsured assistance losses 
under this section shall be made from the insurance fund and shall be 
reimbursed from appropriations provided under this Act. Such losses 
shall not be included in calculating the premiums charged to producers 
for insurance.
    ``(e) Payment Limitations.--
            ``(1) The total amount of payments that a person shall be 
        entitled to receive annually under this section may not exceed 
        $100,000.
            ``(2) The Corporation shall issue regulations defining the 
        term `person' that shall conform, to the extent practicable, to 
        the regulations defining `person' issued under section 1001 of 
        the Food Security Act of 1985 (7 U.S.C. 1308).''.

SEC. 5. CONFORMING AMENDMENTS.

    (a) The Agricultural Act of 1949 is amended--
            (1) in section 101B (7 U.S.C. 1441-2)--
                    (A) by striking subsection (c)(1)(F); and
                    (B) in subsection (c) by striking paragraph (2) and 
                inserting in lieu thereof the following:
            ``(2) Crop insurance requirement.--As a condition of 
        receiving any benefits (including payments) under this section, 
        the producer must, if offered by the Federal Crop Insurance 
        Corporation, obtain at least the catastrophic risk protection 
        insurance coverage for the crop and crop year in which the 
        benefit is sought.'';
            (2) in section 103(h) (7 U.S.C. 1444), by adding at the end 
        the following new paragraph:
            ``(17) As a condition of receiving any benefits (including 
        payments) under this section, the producer must, if offered by 
        the Federal Crop Insurance Corporation, obtain at least the 
        catastrophic risk protection insurance coverage for the crop 
        and crop year in which the benefit is sought.'';
            (3) in section 103B (7 U.S.C. 1444-2)--
                    (A) by striking subsection (c)(1)(F); and
                    (B) in subsection (c) by striking paragraph (2) and 
                inserting in lieu thereof the following:
            ``(2) Crop insurance requirement.--As a condition of 
        receiving any benefits (including payments) under this section, 
        the producer must, if offered by the Federal Crop Insurance 
        Corporation, obtain at least the catastrophic risk protection 
        insurance coverage for the crop and crop year in which the 
        benefit is sought.'';
            (4) in section 105B (7 U.S.C. 1444f)--
                    (A) by striking subsection (c)(1)(G); and
                    (B) in subsection (c) by striking paragraph (2) and 
                inserting in lieu thereof the following:
            ``(2) Crop insurance requirement.--As a condition of 
        receiving any benefits (including payments) under this section, 
        the producer must, if offered by the Federal Crop Insurance 
        Corporation, obtain at least the catastrophic risk protection 
        insurance coverage for the crop and crop year in which the 
        benefit is sought.'';
            (5) in section 107B (7 U.S.C. 1444b-3a)--
                    (A) by striking subsection (c)(1)(G); and
                    (B) in subsection (c) by striking paragraph (2) and 
                inserting in lieu thereof the following:
            ``(2) Crop insurance requirement.--As a condition of 
        receiving any benefits (including payments) under this section, 
        the producer must, if offered by the Federal Crop Insurance 
        Corporation, obtain at least the catastrophic risk protection 
        insurance coverage for the crop and crop year in which the 
        benefit is sought.'';
            (6) in section 108B (7 U.S.C. 1445c-3), by adding at the 
        end the following new subsection:
    ``(i) Crop Insurance Requirement.--As a condition of receiving any 
benefits (including payments) under this section, the producer must, if 
offered by the Federal Crop Insurance Corporation, obtain at least the 
catastrophic risk protection insurance coverage for the crop and crop 
year in which the benefit is sought.'';
            (7) in section 205 (7 U.S.C. 1446f), by adding at the end 
        the following new subsection:
    ``(o) Crop Insurance Requirement.--As a condition of receiving any 
benefits (including payments) under this section, the producer must, if 
offered by the Federal Crop Insurance Corporation, obtain at least the 
catastrophic risk protection insurance coverage for the crop and crop 
year in which the benefit is sought.'';
            (8) in section 206 (7 U.S.C. 1446g), by adding at the end 
        the following new subsection:
    ``(k) Crop Insurance Requirement.--As a condition of receiving any 
benefits under this section, the producer must, if offered by the 
Federal Crop Insurance Corporation, obtain at least the catastrophic 
risk protection insurance coverage for the crop and crop year in which 
the benefit is sought.'';
            (9) in section 207 (7 U.S.C. 1446h), by adding at the end 
        the following new subsection:
    ``(k) Crop Insurance Requirement.--As a condition of receiving any 
benefits (including payments) under this section, the producer must, if 
offered by the Federal Corp Insurance Corporation, obtain at least the 
catastrophic risk protection insurance coverage for the crop and crop 
year in which the benefit is sought.''; and
            (10) by repealing section 208 (7 U.S.C. 1446i).
    (b) Farmers Home Administration Programs.--The Consolidated Farm 
and Rural Development Act (7 U.S.C. 1921 et seq.) is amended by adding 
at the end the following new section:

``SEC. 371. CROP INSURANCE REQUIREMENT.

    ``(a) In General.--As a condition of obtaining any benefit 
(including a direct loan, loan guarantee, or payment) described in 
subsection (b), a borrower must obtain at least catastrophic risk 
protection insurance coverage under section 508 of the Federal Crop 
Insurance Act (7 U.S.C. 1508) for the crop and crop year for which the 
benefit is sought, if the coverage is offered by the Secretary.
    ``(b) Applicable Benefits.--Subsection (a) shall apply to--
            ``(1) a farm ownership loan (FO) under section 303;
            ``(2) an operating loan (OL) under section 312; and
            ``(3) an emergency loan (EM) under section 321.''.
    (c) The Food, Agriculture, Conservation, and Trade Act of 1990 is 
amended by striking chapters 1, 2, and 3 of subtitle B of title XXII.
    (d) Section 251(b)(2)(D) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 (2 U.S.C. 901(b)(2)(D)), is amended 
effective July 1, 1995, by striking subparagraph (i) and inserting the 
following new subparagraph:
    ``(i) If, for any fiscal year, appropriations for discretionary 
accounts are enacted that the President designates as emergency 
requirements and that Congress so designates in statute, the adjustment 
shall be the total of such appropriations in discretionary accounts 
designated as emergency requirements and the outlays flowing in all 
years from such appropriations: Provided, That this provision shall not 
apply to appropriations to cover agricultural crop disaster 
assistance.''.

SEC. 6. EFFECTIVE DATE.

    Except as otherwise specifically provided in section 5(c), this Act 
shall become effective beginning with the crop year immediately 
following the date of enactment.

                                 <all>

S 2095 IS----2
S 2095 IS----3
```