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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2251 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 464

106th CONGRESS

  2d Session

                                S. 2251

_______________________________________________________________________

                                 A BILL

   To amend the Federal Crop Insurance Act to improve crop insurance 
  coverage, to provide agricultural producers with choices to manage 
                     risk, and for other purposes.

_______________________________________________________________________

                             March 20, 2000

                 Read twice and placed on the calendar

                                                       Calendar No. 464
106th CONGRESS
  2d Session
                                S. 2251

   To amend the Federal Crop Insurance Act to improve crop insurance 
  coverage, to provide agricultural producers with choices to manage 
                     risk, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 20, 2000

Mr. Lugar, from the Committee on Agriculture, Nutrition, and Forestry, 
 reported the following original bill; which was read twice and placed 
                            on the calendar

_______________________________________________________________________

                                 A BILL

 
   To amend the Federal Crop Insurance Act to improve crop insurance 
  coverage, to provide agricultural producers with choices to manage 
                     risk, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Risk Management 
for the 21st Century Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--CROP INSURANCE COVERAGE

Sec. 101. Quality adjustment.
Sec. 102. Prevented planting.
Sec. 103. Payment of portion of premium by Corporation.
Sec. 104. Assigned yields.
Sec. 105. Multiyear disaster actual production history adjustment.
Sec. 106. Noninsured crop disaster assistance program.
                 TITLE II--RESEARCH AND PILOT PROGRAMS

Sec. 201. Research and pilot programs.
Sec. 202. Research and development contracting authority.
Sec. 203. Choice of risk management options.
Sec. 204. Conforming amendments.
                       TITLE III--ADMINISTRATION

Sec. 301. Board of Directors of Corporation.
Sec. 302. Good farming practices.
Sec. 303. Sanctions for program noncompliance and fraud.
Sec. 304. Oversight of agents and loss adjusters.
Sec. 305. Adequate coverage for States.
Sec. 306. Records and reporting.
Sec. 307. Fees for plans of insurance.
Sec. 308. Limitation on double insurance.
Sec. 309. Specialty crops.
Sec. 310. Federal Crop Insurance Improvement Commission.
Sec. 311. Highly erodible land and wetland conservation.
          TITLE IV--EFFECTIVE DATES; TERMINATION OF AUTHORITY

Sec. 401. Effective dates.
Sec. 402. Termination of authority.

                    TITLE I--CROP INSURANCE COVERAGE

SEC. 101. QUALITY ADJUSTMENT.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
is amended by striking paragraph (6) and inserting the following:
            ``(6) Quality adjustment policies.--
                    ``(A) In general.--The Corporation shall offer 
                coverage that permits a reduction in the quantity of 
                production of an agricultural commodity produced during 
                a crop year, or any similar adjustment, that results 
                from the agricultural commodity not meeting the quality 
                standards established in the policy.
                    ``(B) Election not to receive coverage.--
                            ``(i) In general.--A producer may elect not 
                        to receive quality adjustment coverage.
                            ``(ii) Premium reduction.--In the case of 
                        an election described in clause (i), the 
                        Corporation shall provide a reduction in the 
                        premium payable by the producer for a plan of 
                        insurance in an amount equal to the premium for 
                        the quality adjustment coverage, as determined 
                        by the Corporation.
                    ``(C) Review of criteria and procedures.--The 
                Corporation shall--
                            ``(i) contract with a qualified person to 
                        analyze the quality loss adjustment procedures 
                        of the Corporation; and
                            ``(ii) based on the analysis, make 
                        adjustments in the quality loss adjustment 
                        procedures of the Corporation necessary to more 
                        accurately reflect local quality discounts that 
                        are applied to agricultural commodities insured 
                        under this title, taking into consideration the 
                        actuarial soundness of the adjustment and the 
                        prevention of fraud, waste, and abuse.''.

SEC. 102. PREVENTED PLANTING.

    (a) In General.--Section 508(a) of the Federal Crop Insurance Act 
(7 U.S.C. 1508(a)) (as amended by section 101) is amended by inserting 
after paragraph (6) the following:
            ``(7) Prevented planting.--
                    ``(A) Election not to receive coverage.--
                            ``(i) In general.--A producer may elect not 
                        to receive coverage for prevented planting of 
                        an agricultural commodity.
                            ``(ii) Premium reduction.--In the case of 
                        an election described in clause (i), the 
                        Corporation shall provide a reduction in the 
                        premium payable by the producer for a plan of 
                        insurance in an amount equal to the premium for 
                        the prevented planting coverage, as determined 
                        by the Corporation.
                    ``(B) Equal coverage.--For each agricultural 
                commodity for which prevented planting coverage is 
                available, the Corporation shall offer an equal 
                percentage level of prevented planting coverage.
                    ``(C) Area conditions required for payment.--The 
                Corporation shall limit prevented planting payments to 
                producers in the area in which the farm is located that 
                are generally affected by the conditions that prevent 
                an agricultural commodity from being planted.
                    ``(D) Substitute commodity.--
                            ``(i) Authority to plant.--Subject to 
                        clause (v), a producer that has prevented 
                        planting coverage and is eligible to receive an 
                        indemnity under the coverage may plant an 
                        agricultural commodity, other than the 
                        commodity covered by the prevented planting 
                        coverage, on the acreage originally prevented 
                        from being planted.
                            ``(ii) Nonavailability of insurance.--A 
                        substitute agricultural commodity planted under 
                        clause (i) for harvest in the same crop year 
                        shall not be eligible for coverage under a 
                        policy or plan of insurance under this title or 
                        for noninsured crop disaster assistance under 
                        section 196 of the Agricultural Market 
                        Transition Act (7 U.S.C. 7333).
                            ``(iii) Relationship to other 
                        requirements.--The producer of a substitute 
                        agricultural commodity under clause (ii) shall 
                        remain eligible for the benefits described in 
                        subsection (b)(7).
                            ``(iv) Effect on actual production 
                        history.--If a producer plants a substitute 
                        agricultural commodity under clause (i) for a 
                        crop year, the Corporation shall assign the 
                        producer a yield, for that crop year for the 
                        commodity that was prevented from being 
                        planted, equal to 60 percent of the producer's 
                        actual production history for that commodity 
                        for purposes of determining the producer's 
                        actual production history for subsequent crop 
                        years.
                            ``(v) Effect on prevented planting 
                        payment.--If a producer plants a substitute 
                        agricultural commodity under clause (i) before 
                        the latest planting date established by the 
                        Corporation for the agricultural commodity 
                        prevented from being planted, the Corporation 
                        shall not make a prevented planting payment 
                        with regard to the commodity prevented from 
                        being planted.
                    ``(E) Relationship to other law.--This paragraph 
                shall supersede subsection (h)(7) to the extent that 
                this paragraph is inconsistent with subsection (h)(7).
                    ``(F) Fiscal years.--This paragraph shall apply to 
                each of fiscal years 2001 through 2004.''.
    (b) Application.--The amendment made by subsection (a) shall be 
reflected in the rates for applicable plans of insurance not later than 
the 2001 reinsurance year.

SEC. 103. PAYMENT OF PORTION OF PREMIUM BY CORPORATION.

    (a) Expected Market Price.--Section 508(c) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(c)) is amended by striking paragraph (5) 
and inserting the following:
            ``(5) Expected market price.--
                    ``(A) In general.--For the purposes of this title, 
                the Corporation shall establish or approve the price 
                level (referred to in this title as the `expected 
                market price') of each agricultural commodity for which 
                insurance is offered.
                    ``(B) Amount.--The expected market price of an 
                agricultural commodity--
                            ``(i) except as otherwise provided in this 
                        subparagraph, shall be not less than the 
                        projected market price of the agricultural 
                        commodity, as determined by the Corporation;
                            ``(ii) may be based on the actual market 
                        price of the agricultural commodity at the time 
                        of harvest, as determined by the Corporation;
                            ``(iii) in the case of revenue and other 
                        similar plans of insurance, shall be the actual 
                        market price of the agricultural commodity, as 
                        determined by the Corporation; or
                            ``(iv) in the case of cost of production or 
                        similar plans of insurance, shall be the 
                        projected cost of producing the agricultural 
                        commodity, as determined by the Corporation.''.
    (b) Premium Amounts.--Section 508(d)(2) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(d)(2)) is amended by striking subparagraph 
(C) and inserting the following:
                    ``(C) In the case of additional coverage at greater 
                than or equal to 65 percent of the recorded or 
                appraised average yield indemnified at 100 percent of 
                the expected market price, or a comparable coverage for 
                a plan of insurance that is not based on yield, but 
                less than 75 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or a comparable coverage for a 
                plan of insurance that is not based on yield, the 
                amount of the premium shall--
                            ``(i) be sufficient to cover anticipated 
                        losses and a reasonable reserve; and
                            ``(ii) include an amount for operating and 
                        administrative expenses, as determined by the 
                        Corporation, on an industry-wide basis as a 
                        percentage of the amount of the premium used to 
                        define loss ratio.
                    ``(D) In the case of additional coverage equal to 
                or greater than 75 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or a comparable coverage for a 
                plan of insurance that is not based on yield, the 
                amount of the premium shall--
                            ``(i) be sufficient to cover anticipated 
                        losses and a reasonable reserve; and
                            ``(ii) include an amount for operating and 
                        administrative expenses, as determined by the 
                        Corporation, on an industry-wide basis as a 
                        percentage of the amount of the premium used to 
                        define loss ratio.''.
    (c) Payment of Portion of Premium by Corporation.--Section 508(e) 
of the Federal Crop Insurance Act (7 U.S.C. 1508(e)) is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) In general.--
                    ``(A) Mandatory payments.--For the purpose of 
                encouraging the broadest possible participation of 
                producers in the crop insurance plans of insurance 
                described in subsections (b) and (c), the Corporation 
                shall pay a part of the premium in the amounts 
                determined under this subsection.
                    ``(B) Discretionary payments.--For the purpose of 
                encouraging the broadest possible participation of 
                producers, in the case of a plan of insurance approved 
                by the Corporation under subsection (h), the 
                Corporation may pay a part of the premium as determined 
                under this subsection.''; and
            (2) in paragraph (2), by striking subparagraphs (B) and (C) 
        and inserting the following:
                    ``(B) In the case of additional coverage less than 
                or equal to 50 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or a comparable coverage for a 
                plan of insurance that is not based on yield, the 
                amount shall be equal to the sum of--
                            ``(i) 60 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(B)(ii).
                    ``(C) In the case of additional coverage at 55 
                percent or 60 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or a comparable coverage for a 
                plan of insurance that is not based on yield, the 
                amount shall be equal to the sum of--
                            ``(i) 45 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(B)(ii).
                    ``(D) In the case of additional coverage at 65 
                percent or 70 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or a comparable coverage for a 
                plan of insurance that is not based on yield, the 
                amount shall be equal to the sum of--
                            ``(i) 50 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(C)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(C)(ii).
                    ``(E) In the case of additional coverage equal to 
                or greater than 75 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or a comparable coverage for a 
                plan of insurance that is not based on yield, the 
                amount shall be equal to the sum of--
                            ``(i) 55 percent of the amount of the 
                        premium established for coverage at 75 percent 
                        of the recorded or appraised average yield 
                        indemnified at 100 percent of the expected 
                        market price under subsection (d)(2)(D)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(D)(ii).
                    ``(F) Subparagraphs (A) through (E) shall apply to 
                each of fiscal years 2001 through 2004.''.
    (d) Revenue Coverage for Potatoes.--Section 508(a) of the Federal 
Crop Insurance Act (7 U.S.C. 1508(a)) is amended by striking paragraph 
(3) and inserting the following:
            ``(3) Exclusions.--
                    ``(A) In general.--Insurance provided under this 
                subsection shall not cover losses due to--
                            ``(i) the neglect or malfeasance of the 
                        producer;
                            ``(ii) the failure of the producer to 
                        reseed to the same crop in such areas and under 
                        such circumstances as it is customary to 
                        reseed; or
                            ``(iii) the failure of the producer to 
                        follow good farming practices (as determined by 
                        the Secretary).
                    ``(B) Revenue coverage for potatoes.--No plan of 
                insurance provided under this title (including a plan 
                of insurance approved by the Board under subsection 
                (h)) shall cover losses due to a reduction in revenue 
                for potatoes except as covered under a whole farm plan 
                of insurance, as determined by the Corporation.''.
    (e) Conforming Amendments.--Section 508 of the Federal Crop 
Insurance Act (7 U.S.C. 1508) is amended--
            (1) in subsection (e), by striking paragraph (4); and
            (2) in subsection (g)(2)(D), by striking ``(as provided in 
        subsection (e)(4))''.

SEC. 104. ASSIGNED YIELDS.

    Section 508(g)(2)(B) of the Federal Crop Insurance Act (7 U.S.C. 
1508(g)(2)(B)) is amended--
            (1) by striking ``assigned a yield'' and inserting 
        ``assigned--
                            ``(i) a yield'';
            (2) by striking the period at the end and inserting ``; 
        or''; and
            (3) by adding at the end the following:
                            ``(ii) a yield determined by the 
                        Corporation, in the case of--
                                    ``(I) a producer that has not had a 
                                share of the production of the insured 
                                crop for more than 2 crop years, as 
                                determined by the Secretary;
                                    ``(II) a producer that produces an 
                                agricultural commodity on land that has 
                                not been farmed by the producer; and
                                    ``(III) a producer that rotates a 
                                crop produced on a farm to a crop that 
                                has not been produced on the farm.''.

SEC. 105. MULTIYEAR DISASTER ACTUAL PRODUCTION HISTORY ADJUSTMENT.

    Section 508(g) of the Federal Crop Insurance Act (7 U.S.C. 1508(g)) 
is amended by adding at the end the following:
            ``(4) Transitional adjustment for disasters.--
                    ``(A) Definition of a producer that has suffered a 
                multiyear disaster.--In this paragraph, the term `a 
                producer that has suffered a multiyear disaster' means 
                a producer (or a successor entity through which the 
                actual production history of the producer can be 
                traced) that has suffered a natural disaster during at 
                least 3 of the immediately preceding 5 crop years that 
                resulted in a cumulative reduction of at least 25 
                percent in the actual production history of the crop of 
                an agricultural commodity.
                    ``(B) Elimination of certain years of production 
                history.--Notwithstanding paragraph (2), effective 
                beginning with the 2001 crop year, for the purpose of 
                calculating the actual production history for a crop of 
                an agricultural commodity, a producer that has suffered 
                a multiyear disaster with respect to the crop may 
                exclude 1 year of production history for each 5 years 
                included in the actual production history calculation 
                of the crop for which the producer purchased crop 
                insurance.
                    ``(C) Corporation's share of changed costs.--In the 
                case of an exclusion under subparagraph (B), in 
                addition to any other authority to pay any portion of 
                premium, the Corporation shall pay--
                            ``(i) the portion of the premium that 
                        represents the increase in premium associated 
                        with the exclusion;
                            ``(ii) all additional indemnities 
                        associated with the exclusion; and
                            ``(iii) any amounts that result from the 
                        difference in the administrative and operating 
                        expenses owed to an approved insurance provider 
                        as the result of an exclusion in actual 
                        production history under this paragraph.
                    ``(D) Increase in actual production history after 
                exclusions.--In the case of a producer that has 
                received an exclusion under subparagraph (B), the 
                Corporation shall not limit the increase of the actual 
                production history based on the producer's actual 
                production of the crop of an agricultural commodity in 
                succeeding crop years until the actual production 
                history for the producer reaches the level for the crop 
                year immediately preceding the first year of the 
                multiyear disaster.
                    ``(E) Termination of exclusion authority.--The 
                authority to apply this paragraph to a producer shall 
                terminate with respect to the first crop year in which 
                crop insurance is available to the producer that 
                adequately insures against natural disasters that occur 
                in multiple crop years, as determined by the 
                Corporation.
                    ``(F) Reinsurance years.--This paragraph shall 
                apply to each of the 2001 through 2004 reinsurance 
                years.''.

SEC. 106. NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

    (a) Operation and Administration of Program.--Section 196(a)(2) of 
the Agricultural Market Transition Act (7 U.S.C. 7333(a)(2)) is amended 
by adding at the end the following:
                    ``(C) Combination of similar types or varieties.--
                At the option of the Secretary, all types or varieties 
                of a crop or commodity, described in subparagraphs (A) 
                and (B), may be considered to be a single eligible crop 
                under this section.''.
    (b) Records and Application Date.--Section 196(b) of the 
Agricultural Market Transition Act (7 U.S.C. 7333(b)) is amended--
            (1) in the second sentence of paragraph (1), by striking 
        ``at such time as the Secretary may require.'' and inserting 
        ``not later than March 15.'';
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Records.--To be eligible for assistance under this 
        section, a producer shall provide annually to the Secretary 
        records of crop acreage, acreage yields, and production for 
        each crop, as required by the Secretary.''; and
            (3) in paragraph (3), by inserting ``annual'' after ``shall 
        provide''.
    (c) Loss Requirements.--Section 196 of the Agricultural Market 
Transition Act (7 U.S.C. 7333) is amended by striking subsection (c) 
and inserting the following:
    ``(c) Loss Requirements.--
            ``(1) Cause.--To be eligible for assistance under this 
        section, a producer of an eligible crop shall have suffered a 
        loss of a noninsured commodity as the result of a cause 
        described in subsection (a)(3).
            ``(2) Assistance.--On making a determination described in 
        subsection (a)(3), the Secretary shall provide assistance under 
        this section to producers of an eligible crop that have 
        suffered a loss as a result of the cause described in 
        subsection (a)(3).
            ``(3) Prevented planting.--The Secretary shall make a 
        prevented planting noninsured crop disaster assistance payment 
        to a producer if the producer is prevented from planting more 
        than 15 percent of the acreage intended for the eligible crop 
        because of a cause described in subsection (a)(3), as 
        determined by the Secretary.
            ``(4) Area trigger.--The Secretary may provide assistance 
        to individual producers without any requirement of an area 
        loss.''.
    (d) New Eligible Crops.--Section 196 of the Agricultural Market 
Transition Act (7 U.S.C. 7333) is amended--
            (1) in subsection (d)(1)--
                    (A) by inserting ``(except as provided in 
                subsection (j))'' after ``percent''; and
                    (B) by inserting ``determined under subsection 
                (e)'' after ``for the crop'';
            (2) by redesignating subsection (j) as subsection (l); and
            (3) by inserting after subsection (i) the following:
    ``(j) New Eligible Crops.--
            ``(1) In general.--Subject to paragraph (2), if a producer 
        produces an eligible crop that is new to an area (as determined 
        by the Secretary), a payment for the producer shall be computed 
        by substituting the following percentages of yields for the 
        percentages of yields specified in subsection (d)(1):
                    ``(A) In the case of the first crop year of the 
                eligible crop produced by the producer, 35 percent of 
                the established yield for the crop determined under 
                subsection (e).
                    ``(B) In the case of each of the second through 
                fourth years of the eligible crop produced by the 
                producer--
                            ``(i) 45 percent of the established yield 
                        for the crop determined under subsection (e); 
                        or
                            ``(ii) if the producer received a payment 
                        under this section for the first crop year of 
                        the eligible crop produced by the producer, 35 
                        percent of the established yield for the crop 
                        determined under subsection (e).
            ``(2) Temporary ineligibility.--If a producer of an 
        eligible crop described in paragraph (1) receives a payment 
        under this section in both the first and second crop years of 
        the eligible crop, the producer shall be ineligible for a 
        payment under this section until the producer has successfully 
        produced the crop for at least 3 consecutive crop years with no 
        loss reported, as determined by the Secretary.''.
    (e) Service Fee.--Section 196 of the Agricultural Market Transition 
Act (7 U.S.C. 7333) (as amended by subsection (d)) is amended by 
inserting after subsection (j) the following:
    ``(k) Service Fee.--
            ``(1) In general.--To be eligible to receive assistance for 
        an eligible crop for a crop year under this section, a producer 
        shall pay to the Secretary (at the time at which the producer 
        provides reports under subsection (b)(3)) a service fee for the 
        eligible crop in an amount that is equal to the lesser of--
                    ``(A) the equivalent of the per policy fee for 
                catastrophic risk protection available under section 
                508(b)(5) of the Federal Crop Insurance Act (7 U.S.C. 
                1508(b)(5)); or
                    ``(B) $200 per producer per county, but not to 
                exceed a total of $600 per producer.
            ``(2) Waiver.--The Secretary shall waive the service fee 
        required under paragraph (1) in the case of a limited resource 
        farmer, as defined by the Secretary.
            ``(3) Use.--The Secretary shall deposit service fees 
        collected under this subsection in the Commodity Credit 
        Corporation Fund.''.
    (f) Crop Years.--This section and the amendments made by this 
section shall apply to each of the 2001 through 2004 crop years.

                 TITLE II--RESEARCH AND PILOT PROGRAMS

SEC. 201. RESEARCH AND PILOT PROGRAMS.

    The Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) is amended 
by adding at the end the following:

``SEC. 522. RESEARCH AND PILOT PROGRAMS.

    ``(a) General Provisions.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the Corporation may conduct research, surveys, 
        pilot programs, and investigations relating to crop insurance 
        and agriculture-related risks and losses based on proposals 
        developed by the Corporation or by an approved insurance 
        provider to evaluate whether the proposal or new risk 
        management tool is suitable for the marketplace and addresses 
        the needs of producers of agricultural commodities.
            ``(2) Private coverage.--Under this section, the 
        Corporation shall not conduct any activity that provides 
        insurance protection against a risk if insurance protection 
        against the risk is generally available from private companies.
            ``(3) Covered activities.--The activities described in 
        paragraph (1) include insurance on losses involving--
                    ``(A) reduced forage on rangeland caused by drought 
                or insect infestation;
                    ``(B) livestock poisoning and disease;
                    ``(C) destruction of bees due to the use of 
                pesticides;
                    ``(D) unique special risks related to fruits, nuts, 
                vegetables, and specialty crops in general, 
                aquacultural species, and forest industry needs 
                (including appreciation);
                    ``(E) loss of timber due to drought, flood, fire, 
                or other natural disaster;
                    ``(F) other agricultural products as determined by 
                the Board; and
                    ``(G) after October 1, 2000, insurance coverage for 
                livestock.
            ``(4) Scope of pilot programs.--The Corporation may--
                    ``(A) offer a pilot program authorized under this 
                title on a regional, State, or national basis after 
                considering the interests of affected producers and the 
                interests of, and risks to, the Corporation;
                    ``(B) operate the pilot program, including any 
                modifications of the pilot program, for a period of up 
                to 4 years;
                    ``(C) extend the time period for the pilot program 
                for additional periods, as determined appropriate by 
                the Corporation; and
                    ``(D) provide pilot programs that would allow 
                producers--
                            ``(i) to receive premium discounts for 
                        using whole farm units or single crop units of 
                        insurance; and
                            ``(ii) to cross State and county boundaries 
                        to form insurable units.
            ``(5) Evaluation.--After the completion of any pilot 
        program under this section, the Corporation shall evaluate the 
        pilot program and submit to the Committee on Agriculture of the 
        House of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate, a report on the 
        operations of the pilot program, including the evaluation by 
        the Corporation of the pilot program and the recommendations of 
        the Corporation with respect to implementing the program on a 
        national basis.
            ``(6) Funding.--The amount of funds used to carry out 
        research and pilot programs that are established after the date 
        of enactment of this section (other than subsection (b)(2)) 
        shall not exceed--
                    ``(A) in the case of fiscal year 2001, $20,000,000;
                    ``(B) in the case of fiscal year 2002, $40,000,000;
                    ``(C) in the case of fiscal year 2003, $60,000,000; 
                and
                    ``(D) in the case of fiscal year 2004, $80,000,000.
            ``(7) Fiscal years.--Paragraphs (3)(E), (3)(G), (4), and 
        (6) shall apply to each of fiscal years 2001 through 2004.
            ``(8) Relation to other laws.--
                    ``(A) In general.--The terms and conditions of any 
                policy or plan of insurance offered under this section 
                that is reinsured by the Corporation shall not--
                            ``(i) be subject to the jurisdiction of the 
                        Commodity Futures Trading Commission or the 
                        Securities and Exchange Commission; or
                            ``(ii) be considered to be accounts, 
                        agreements (including any transaction that is 
                        of the character of, or is commonly known to 
                        the trade as, an `option', `privilege', 
                        `indemnity', `bid', `offer', `put', `call', 
                        `advance guaranty', or `decline guaranty'), or 
                        transactions involving contracts of sale of a 
                        commodity for future delivery, traded or 
                        executed on a contract market for the purposes 
                        of the Commodity Exchange Act (7 U.S.C. 1 et 
                        seq.).
                    ``(B) Effect on cftc and commodity exchange act.--
                Nothing in this paragraph affects the jurisdiction of 
                the Commodity Futures Trading Commission or the 
                applicability of the Commodity Exchange Act (7 U.S.C. 1 
                et seq.) to any transaction conducted on a contract 
                market under that Act by an approved insurance provider 
                to offset the approved insurance provider's risk under 
                a plan or policy of insurance under this section.''.

SEC. 202. RESEARCH AND DEVELOPMENT CONTRACTING AUTHORITY.

    Section 522 of the Federal Crop Insurance Act (as added by section 
201) is amended by adding at the end the following:
    ``(b) Research and Development Contracting Authority.--
            ``(1) In general.--Subject to section 523(a), to obtain the 
        best research and analysis concerning any significant issue 
        pertaining to crop insurance, including outreach and education, 
        pilot programs, or the development of a new plan of insurance, 
        the Corporation may use only the authority provided by this 
        section and funds made available under section 516(b)(2)(A) 
        to--
                    ``(A) contract on a competitive basis with 
                qualified persons;
                    ``(B) reimburse research costs associated with 
                product development; and
                    ``(C) reimburse costs associated with the 
                reassessment and modification of plans of insurance.
            ``(2) Alternative rating methodologies.--
                    ``(A) In general.--The Corporation shall enter into 
                contracts with qualified persons to study and develop 
                alternative methodologies for rating plans of insurance 
                for catastrophic risk protection and higher levels of 
                additional coverage under subsections (b) and (c), 
                respectively, of section 508, and rates for the plans 
                of insurance, that take into account--
                            ``(i) producers that elect not to 
                        participate in the Federal crop insurance 
                        program; and
                            ``(ii) producers that elect to obtain only 
                        catastrophic risk protection.
                    ``(B) Priority.--The studies conducted under this 
                paragraph shall provide priority to agricultural 
                commodities with--
                            ``(i) the largest average acreage 
                        nationwide; and
                            ``(ii) the lowest percentage of producers 
                        that purchase additional coverage.
                    ``(C) Funding.--
                            ``(i) In general.--The Corporation shall 
                        fund the studies conducted under this paragraph 
                        from funds in the insurance fund available 
                        under section 516(b)(2)(A).
                            ``(ii) Amount.--There are authorized for 
                        the studies conducted under this paragraph--
                                    ``(I) in the case of each of fiscal 
                                years 2001 and 2002, $1,000,0000; and
                                    ``(II) in the case of each of 
                                fiscal years 2003 and 2004, $250,000.
                    ``(D) Fiscal years.--This paragraph shall apply to 
                each of fiscal years 2001 through 2004.
            ``(3) Research and development priorities.--The Corporation 
        shall establish, as 1 of the highest research and development 
        priorities of the Corporation, the development of a pasture, 
        range, and forage program to promote land stewardship.
            ``(4) Study of multiyear coverage.--
                    ``(A) In general.--The Corporation shall contract 
                with a qualified person to conduct a study to determine 
                whether offering plans of insurance that provide 
                coverage for multiple years would reduce fraud and 
                abuse by persons that participate in the Federal crop 
                insurance program.
                    ``(B) Report.--Not later than 1 year after the date 
                of enactment of this section, the Corporation shall 
                submit to the Committee on Agriculture of the House of 
                Representatives and the Committee on Agriculture, 
                Nutrition, and Forestry of the Senate a report that 
                describes the results of the study conducted under 
                subparagraph (A).''.

SEC. 203. CHOICE OF RISK MANAGEMENT OPTIONS.

    (a) In General.--Section 522 of the Federal Crop Insurance Act (as 
amended by section 202) is amended by adding at the end the following:
    ``(c) Choice of Risk Management Options.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Agricultural commodity.--The term 
                `agricultural commodity' means each agricultural 
                commodity specified in section 518--
                            ``(i) for which catastrophic risk 
                        protection or additional coverage is available 
                        under this title, other than solely this 
                        section; and
                            ``(ii) that is selected by the Secretary in 
                        a manner that--
                                    ``(I) encourages the maximum number 
                                of participants in the program under 
                                this subsection;
                                    ``(II) provides a mixture of 
                                program, specialty, and regional crops; 
                                and
                                    ``(III) gives consideration to 
                                agricultural commodities with low crop 
                                insurance participation rates.
                    ``(B) Applicable crop.--The term `applicable crop' 
                means each of the 2002 through 2004 crops of an 
                agricultural commodity produced by a producer.
                    ``(C) Applicable year.--The term `applicable year' 
                means the year in which--
                            ``(i) the applicable crop is produced on 
                        the farm of a producer; and
                            ``(ii) the producer elects to receive a 
                        risk management payment or crop insurance 
                        premium subsidy under this subsection.
                    ``(D) Regulated exchange.--The term `regulated 
                exchange' means a board of trade (as defined in section 
                1a of the Commodity Exchange Act (7 U.S.C. 1a)) that is 
                designated as a contract market under section 
                2(a)(1)(B) of that Act (7 U.S.C. 2a).
            ``(2) Risk management payments.--
                    ``(A) Offer.--The Corporation shall offer either to 
                make either risk management payments or to provide crop 
                insurance premium subsidies for each of the 2002 
                through 2004 crops of an agricultural commodity in 
                accordance with subparagraph (B).
                    ``(B) Terms.--Not later than the sales closing date 
                for obtaining coverage for an agricultural commodity 
                for each applicable year, an eligible producer may 
                elect to receive, with respect to the agricultural 
                commodity--
                            ``(i) a risk management payment under this 
                        subsection; or
                            ``(ii) a crop insurance premium subsidy, 
                        including a catastrophic risk protection 
                        subsidy, under this subsection.
            ``(3) Risk management payment.--
                    ``(A) In general.--In the case of a producer that 
                elects to receive a risk management payment for an 
                applicable crop of an agricultural commodity under this 
                subsection, the Corporation shall make a risk 
                management payment to the producer that covers the 
                agricultural commodity produced by the producer for the 
                applicable crop.
                    ``(B) Basis for payment.--The amount of a risk 
                management payment shall be determined in accordance 
                with paragraph (5).
            ``(4) Qualifying risk management practices.--To be eligible 
        for a risk management payment under this subsection for an 
        applicable crop of an agricultural commodity, a producer shall 
        obtain or use for the applicable crop a qualifying risk 
        management practice from at least 2 of the following 
        categories:
                    ``(A) Crop insurance category.--A producer may 
                purchase coverage for an agricultural commodity under a 
                private plan of insurance or a Federal plan of 
                insurance that is not subsidized.
                    ``(B) Marketing risk category.--
                            ``(i) Future or option.--A producer may 
                        enter into a future or option for an 
                        agricultural commodity produced on the farm of 
                        the producer for the applicable crop on a 
                        regulated exchange that is (as determined by 
                        the Corporation)--
                                    ``(I)(aa) in the case of a future, 
                                at least 1 regulated futures contract 
                                (as defined in section 1256(g) of the 
                                Internal Revenue Code of 1986); and
                                    ``(bb) in the case of an option, at 
                                least 1 listed option (as defined in 
                                section 1256(g) of that Code); and
                                    ``(II) a hedging transaction (as 
                                defined in section 1256(e)(2) of that 
                                Code) involving an agricultural 
                                commodity that is used to reduce 
                                production, price, or revenue risk.
                            ``(ii) Agricultural trade option.--A 
                        producer may purchase, on other than a 
                        regulated exchange, an agricultural trade 
                        option for the applicable crop of an 
                        agricultural commodity produced on the farm of 
                        the producer that (as determined by the 
                        Corporation)--
                                    ``(I) provides coverage for at 
                                least 10 percent of the estimated 
                                monetary value of the agricultural 
                                commodity;
                                    ``(II) is an equity option (as 
                                defined in section 1256(g) of the 
                                Internal Revenue Code of 1986); and
                                    ``(III) is a hedging transaction 
                                (as defined in section 1256(e)(2) of 
                                that Code) involving an agricultural 
                                commodity that is used to reduce 
                                production, price, or revenue risk.
                            ``(iii) Cash forward or other marketing 
                        contract.--A producer may enter into a cash 
                        forward or other type of marketing contract for 
                        at least 20 percent of the monetary value of an 
                        agricultural commodity produced on the farm of 
                        the producer for the applicable crop, as 
                        determined by the Secretary.
                            ``(iv) Marketing through cooperatives.--A 
                        producer may market at least 25 percent of an 
                        agricultural commodity produced by the producer 
                        through a cooperative that is owned by 
                        agricultural producers.
                    ``(C) Financial risk category.--
                            ``(i) Trust.--A producer may make a deposit 
                        of an amount equal to at least 10 percent of 
                        the payments of the producer for the applicable 
                        year under the Agricultural Market Transition 
                        Act (7 U.S.C. 7201 et seq.) into a trust 
                        authorized by statute for eligible farming 
                        businesses that may be established to accept 
                        tax deductible contributions.
                            ``(ii) Agricultural marketing and risk 
                        management education.--A producer may attend 
                        and complete in the applicable year an 
                        agricultural marketing or risk management class 
                        or seminar approved by the Corporation.
                            ``(iii) Financial risk reduction.--A 
                        producer may reduce farm financial risk by 
                        reducing debt in an amount that reduces 
                        leverage or by increasing liquidity, as 
                        determined by the Secretary.
                            ``(iv) Diversification.--A producer may 
                        address production or financial risk by--
                                    ``(I) diversifying production on 
                                the farm of the producer by producing 
                                at least 1 additional commodity on the 
                                farm;
                                    ``(II) significantly increasing 
                                farm enterprise diversification in the 
                                applicable year, as determined by the 
                                Secretary;
                                    ``(III) maintaining an integrated 
                                farming system with a substantial 
                                degree of diversification, as 
                                determined by the Secretary; or
                                    ``(IV) implementing a transition to 
                                organic farming.
                    ``(D) Farm resources risk category.--
                            ``(i) Conservation practices.--A producer 
                        may implement new or existing conservation 
                        practices consisting of--
                                    ``(I) nutrient management;
                                    ``(II) integrated pest management;
                                    ``(III) conservation tillage;
                                    ``(IV) conservation buffers; or
                                    ``(V) other conservation practices 
                                that are appropriate for the farm, as 
                                determined by the Secretary.
                            ``(ii) Agricultural conservation management 
                        plan.--A producer may develop a plan to 
                        mitigate financial risk associated with 
                        resource conservation through practices 
                        consisting of--
                                    ``(I) nutrient management;
                                    ``(II) integrated pest management;
                                    ``(III) soil erosion control;
                                    ``(IV) conservation buffers;
                                    ``(V) soil residue management;
                                    ``(VI) water quantity or quality 
                                management; or
                                    ``(VII) other conservation 
                                practices that are appropriate for the 
                                farm, as determined by the Secretary.
                            ``(iii) Agricultural resource 
                        improvements.--A producer may invest in the 
                        improvement or development of 1 or more of the 
                        following capital land improvements on the farm 
                        of the producer to reduce production risk:
                                    ``(I) Irrigation management.
                                    ``(II) Watershed management 
                                structures.
                                    ``(III) Planting trees for 
                                windbreaks or water quality.
                                    ``(IV) Soil quality management 
                                options.
                                    ``(V) Animal waste management 
                                structures.
                                    ``(VI) Other land improvements, as 
                                determined by the Secretary.
                    ``(E) Other category.--A producer may engage in any 
                other risk management practice approved by the 
                Secretary.
            ``(5) Determination of risk management payment.--
                    ``(A) In general.--The Secretary shall determine 
                the amount of a risk management payment for an 
                agricultural commodity produced on the farm of a 
                producer for an applicable crop taking into 
                consideration the expenditure by the producer on the 
                risk management practices obtained or used by the 
                producer.
                    ``(B) Maximum payment.--No payment shall be made in 
                excess of an amount equal to the national average of 
                the previous year's liability for all catastrophic risk 
                protection policies.
                    ``(C) Funding.--
                            ``(i) In general.--Subject to clause (ii), 
                        there are authorized to be expended to carry 
                        out this subsection from the insurance fund 
                        under section 516(b)(2)(C) not more than 
                        $500,000,000 for the period of fiscal years 
                        2002 through 2004.
                            ``(ii) Annual limitation.--Not more than 
                        $200,000,000 may be expended in any fiscal year 
                        to carry out this subsection.
            ``(6) Administrative provisions.--
                    ``(A) Certification.--A producer shall submit to 
                the crop insurance agent or approved insurance provider 
                a risk management practices form that certifies, in 
                accordance with standards prescribed by the Secretary, 
                the qualifying risk management practices and associated 
                costs that were obtained or used by the producer during 
                the applicable year.
                    ``(B) Compliance.--The Corporation may perform 
                random audits of producers that obtain a risk 
                management payment to ensure that the producers 
                obtained or used the qualifying risk management 
                practices described in the form.
                    ``(C) Violation of terms of risk management 
                payment.--If a producer has accepted a risk management 
                payment or crop insurance premium subsidy for an 
                applicable year and the producer fails to comply with 
                subparagraph (A), or to carry out a qualifying risk 
                management option elected by the producer under 
                paragraph (4), with respect to the applicable year, the 
                producer--
                            ``(i) shall refund to the Corporation an 
                        amount equal to the risk management payment; 
                        and
                            ``(ii) may be subject to debarment from 
                        loans and payments for a period of not to 
                        exceed 5 years, as provided in section 
                        506(n)(3)(B).
                    ``(D) Assignment and sharing of benefits.--
                            ``(i) Assignment of benefits.--Assignment 
                        of a benefit provided under this subsection 
                        shall be carried out as provided in section 
                        8(g) of the Soil Conservation and Domestic 
                        Allotment Act (16 U.S.C. 590h(g)).
                            ``(ii) Notice.--The producer making the 
                        assignment, or the assignee, shall provide the 
                        Corporation with notice, in such manner as the 
                        Corporation may require, of any assignment.
                            ``(iii) Sharing of benefits.--The 
                        Corporation shall provide for the sharing of 
                        benefits under this subsection among all 
                        producers that are at risk in the production of 
                        an applicable crop on a fair and equitable 
                        basis.
            ``(7) Fiscal years.--This subsection shall apply to each of 
        fiscal years 2002 through 2004.''.
    (b) Authorization of Appropriations.--Section 516(a) of the Federal 
Crop Insurance Act (7 U.S.C. 1516(a)) is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) Discretionary expenses.--There are authorized to be 
        appropriated for fiscal year 1999 and each subsequent fiscal 
        year such sums as are necessary to cover--
                    ``(A) the salaries and expenses of the Corporation; 
                and
                    ``(B) the expenses of approved insurance providers 
                incurred in carrying out section 522(c).''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following:
                    ``(C) risk management payments authorized under 
                section 522(c) in an amount not to exceed $500,000,000 
                for the period of fiscal years 2002 through 2004, of 
                which not more than $200,000,000 may be expended for 
                any 1 fiscal year; and''.

SEC. 204. CONFORMING AMENDMENTS.

    (a) Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) 
is amended--
            (1) by striking subsection (m); and
            (2) by redesignating subsection (n) as subsection (m).
    (b) Section 516(b)(2)(A) of the Federal Crop Insurance Act (7 
U.S.C. 1516(b)(2)(A)) is amended by striking ``exceed $3,500,000 for 
each fiscal year.'' and inserting ``exceed--
                            ``(i) in the case of each of fiscal years 
                        2001 and 2002, $4,500,000;
                            ``(ii) in the case of each of fiscal years 
                        2003 and 2004, $3,750,000; and
                            ``(iii) in the case of each subsequent 
                        fiscal year, $3,500,000.''.
    (c) Section 518 of the Federal Crop Insurance Act (7 U.S.C. 1518) 
is amended by striking ``subsection (a) or (m) of section 508 of this 
title'' and inserting ``section 508(a), 522, or 523''.

                       TITLE III--ADMINISTRATION

SEC. 301. BOARD OF DIRECTORS OF CORPORATION.

    (a) In General.--Section 505 of the Federal Crop Insurance Act (7 
U.S.C. 1505) is amended by striking subsection (a) and inserting the 
following:
    ``(a) Board of Directors.--
            ``(1) In general.--The management of the Corporation shall 
        be vested in a Board of Directors, subject to the general 
        supervision of the Secretary.
            ``(2) Composition.--The Board shall consist of--
                    ``(A) 4 members who are active agricultural 
                producers with or without crop insurance, with 1 member 
                appointed from each of the 4 regions of the United 
                States (as determined by the Secretary);
                    ``(B) 1 member who is active in the crop insurance 
                business;
                    ``(C) 1 member who is active in the reinsurance 
                business;
                    ``(D) the Under Secretary for Farm and Foreign 
                Agricultural Services;
                    ``(E) the Under Secretary for Rural Development; 
                and
                    ``(F) the Chief Economist of the Department of 
                Agriculture.
            ``(3) Appointment and terms of private sector members.--The 
        members of the Board described in subparagraphs (A), (B), and 
        (C) of paragraph (2)--
                    ``(A) shall be appointed by, and hold office at the 
                pleasure of, the Secretary;
                    ``(B) shall not be otherwise employed by the 
                Federal Government;
                    ``(C) shall be appointed to staggered 4-year terms, 
                as determined by the Secretary; and
                    ``(D) shall serve not more than 2 consecutive 
                terms.
            ``(4) Chairperson.--The Board shall select a member of the 
        Board described in subparagraph (A), (B), or (C) of paragraph 
        (2) to serve as Chairperson of the Board.
            ``(5) Office of risk management.--The Office of Risk 
        Management shall provide assistance to the Board in developing, 
        reviewing, and recommending--
                    ``(A) new plans of insurance and pilot projects 
                under this title that are proposed by the Office or by 
                a private insurance provider;
                    ``(B) terms of the Standard Reinsurance Agreement;
                    ``(C) rates for plans of insurance under this 
                title; and
                    ``(D) other issues involved in the administration 
                of Federal crop insurance, as requested by the Board.
            ``(6) Executive director; staff.--
                    ``(A) Executive director.--An executive director 
                appointed by the Secretary, with the concurrence of the 
                Board, shall--
                            ``(i) assist the Board, as provided in 
                        subparagraph (C); and
                            ``(ii) report to the Secretary.
                    ``(B) Staff.--
                            ``(i) In general.--A staff of 4 individuals 
                        appointed by the Executive Director shall 
                        report to the Executive Director.
                            ``(ii) Qualifications.--An individual 
                        described in clause (i) (except the Executive 
                        Director) shall be knowledgeable and 
                        experienced in quantitative mathematics and 
                        actuarial rating.
                    ``(C) Functions.--The Executive Director and staff 
                appointed under this paragraph shall--
                            ``(i) assist the Board in reviewing and 
                        approving policies and materials with respect 
                        to plans of insurance or other materials 
                        authorized or submitted under section 508, 522, 
                        or 523;
                            ``(ii) provide at least monthly reports to 
                        the Board on crop insurance issues, which shall 
                        be based on comments received from producers, 
                        approved insurance providers, and other sources 
                        that the Executive Director and staff consider 
                        appropriate;
                            ``(iii) review policies and materials with 
                        respect to--
                                    ``(I) subsidized plans of insurance 
                                authorized under section 508; and
                                    ``(II) unsubsidized plans of 
                                insurance submitted to the Board under 
                                section 508(h);
                            ``(iv) make recommendations to the Board 
                        with respect to approval of the policies and 
                        materials, including recommendations with 
                        respect to the disapproval of any policies and 
                        materials that contain terms or conditions that 
                        promote fraud;
                            ``(v) make recommendations to the Board to 
                        encourage cooperation between United States 
                        attorneys, the Corporation, and approved 
                        insurance providers to minimize fraud in 
                        connection with an insurance plan or policy 
                        under this title;
                            ``(vi) review and make recommendations to 
                        the Board with respect to methodologies for 
                        rating plans of insurance under this title; and
                            ``(vii) perform such other functions as the 
                        Board considers appropriate.
                    ``(D) Funding.--
                            ``(i) Insurance fund.--From amounts in the 
                        insurance fund under section 516(c)(1), 
                        effective for fiscal year 2001, $500,000 shall 
                        be available to pay the salaries and expenses 
                        of the Executive Director and staff appointed 
                        under this paragraph.
                            ``(ii) Salaries and expenses.--Subject to 
                        the availability of appropriations, the Risk 
                        Management Agency shall transfer $500,000 for 
                        fiscal year 2001, and $1,000,000 for each 
                        subsequent fiscal year, at the beginning of the 
                        fiscal year to the Executive Director for the 
                        salaries and expenses of the Executive Director 
                        and staff appointed under this paragraph.''.
    (b) Submission of Policies and Materials to Board.--Section 508(h) 
of the Federal Crop Insurance Act (7 U.S.C. 1508(h)) is amended--
            (1) by striking paragraphs (1) through (4) and inserting 
        the following:
            ``(1) In general.--In addition to any standard forms or 
        policies that the Board may require be made available to 
        producers under subsection (c), a person may propose to the 
        Board--
                    ``(A) loss of yield or revenue insurance coverage 
                on an individual, area, or a combination of individual 
                and area basis, for 1 or more agricultural commodities;
                    ``(B) rates of premium for a proposed or existing 
                policy; and
                    ``(C) underwriting systems for a proposed or 
                existing policy.
            ``(2) Submission of proposals.--
                    ``(A) In general.--Subject to subparagraph (B) and 
                paragraph (3), a proposal submitted to the Board under 
                this subsection may be prepared without regard to the 
                limitations of this title, including limitations--
                            ``(i) concerning actuarial soundness;
                            ``(ii) concerning levels of coverage;
                            ``(iii) concerning rates of premium;
                            ``(iv) that the price level for coverage 
                        for each insured commodity must equal the 
                        expected market price for the commodity as 
                        established by the Board; and
                            ``(v) that an approved insurance provider 
                        shall provide coverage under a policy 
                        throughout a State for all commodities if the 
                        approved insurance provider elects to provide 
                        any coverage in the State.
                    ``(B) Maximum allowable subsidy.--The payment by 
                the Corporation of a portion of the premium of the 
                policy approved by the Board under this subsection may 
                not exceed the amount that would otherwise be 
                authorized under subsection (e).
            ``(3) Standards.--
                    ``(A) In general.--The Board shall approve a 
                proposal under this subsection for subsidy and 
                reinsurance if the Board finds that the proposal 
                adequately ensures that--
                            ``(i) the interests of producers of 
                        commodities are adequately protected;
                            ``(ii) premiums charged to producers are 
                        actuarially appropriate;
                            ``(iii) the underwriting system included in 
                        the proposal is appropriate and adequate; and
                            ``(iv) the proposal is reinsured under this 
                        title, is reinsured through private 
                        reinsurance, or is self-insured;
                    ``(B) Rates of premium.--A proposed rate of premium 
                (including the part of premium paid by the Corporation) 
                shall be considered to be actuarially appropriate if 
                the rate is sufficient to cover projected losses and 
                expenses, a reasonable reserve, and the amount of 
                operating and administrative expenses of the approved 
                insurance provider determined under subsection (d)(2).
                    ``(C) Proposed underwriting plans.--A proposed 
                underwriting plan--
                            ``(i) may be on an area or individual farm 
                        basis; and
                            ``(ii) shall, at a minimum, specify factors 
                        such as yield history for the farm or region, 
                        soils and resource quality for the farm, and 
                        farm production practices.
                    ``(D) Reinsurance.--
                            ``(i) Federal reinsurance.--The Corporation 
                        shall, to the maximum extent practicable, make 
                        reinsurance available to an approved insurance 
                        provider under this subsection.
                            ``(ii) Private or federal reinsurance.--An 
                        approved insurance provider may--
                                    ``(I) obtain private reinsurance 
                                for the proposal;
                                    ``(II) obtain reinsurance for the 
                                proposal under this title; or
                                    ``(III) self-insure the proposal.
                    ``(E) Actuarially appropriate.--The Board shall 
                prescribe standards for determining whether premium 
                rates are actuarially appropriate considering the risk 
                inherent in the proposed product.
            ``(4) Review and approval by board.--With respect to any 
        policy or other material submitted to the Board after October 
        1, 2000, under this subsection, the following guidelines shall 
        apply:
                    ``(A) In general.--The policy or other material 
                shall be reviewed by the Board in accordance with 
                subparagraphs (C) and (D).
                    ``(B) Multiple insurance agreements.--The 
                Corporation may enter into more than 1 reinsurance 
                agreement simultaneously with the approved insurance 
                provider to facilitate the offering of the new policy.
                    ``(C) Procedures for submission and review.--The 
                Corporation shall promulgate regulations that establish 
                procedures for the submission and review by the Board 
                of proposals submitted to the Board under this 
                subsection, including--
                            ``(i) the standards applicable to a 
                        proposal under paragraph (3) (including 
                        documentation required to establish that a 
                        proposal satisfies the standards);
                            ``(ii) procedures concerning the time 
                        limitations provided under this paragraph; and
                            ``(iii) procedures that provide an 
                        applicant the opportunity to present the 
                        proposal to the Board in person.
                    ``(D) Review by the board.--
                            ``(i) Period for approval.--Notwithstanding 
                        any other provision of law, a proposal 
                        submitted to the Board shall be considered to 
                        be approved unless the Board disapproves the 
                        proposal by the date that is 60 business days 
                        after the later of--
                                    ``(I) the date of submission of the 
                                completed proposal to the Board; or
                                    ``(II) the date on which the 
                                applicant provides to the Board notice 
                                of intent to modify the proposal under 
                                clause (ii)(IV).
                            ``(ii) Notice of disapproval.--
                                    ``(I) In general.--Not later than 
                                15 days before the date on which the 
                                Board intends to announce disapproval 
                                of a proposal, the Board shall provide 
                                the applicant, by registered mail, with 
                                notice of intent to disapprove the 
                                proposal.
                                    ``(II) Right to modify.--An 
                                applicant that is notified under 
                                subclause (I) may modify the proposal.
                                    ``(III) Original application.--For 
                                the purposes of this clause, any 
                                modified proposal shall be considered 
                                to be an original proposal.
                                    ``(IV) Notice of intent to 
                                modify.--Not later than 5 business days 
                                after receipt of a notice under 
                                subclause (I), an applicant that 
                                intends to modify the proposal shall so 
                                notify the Board.
                    ``(E) Timing.--In establishing procedures under 
                this subsection, the Board shall prescribe a reasonable 
                deadline for the submission of proposals that approved 
                insurance providers expect to market during the 
                reinsurance year.
                    ``(F) Confidentiality.--
                            ``(i) In general.--A proposal submitted to 
                        the Board under this subsection (including any 
                        information generated from the proposal) shall 
                        be considered to be confidential commercial or 
                        financial information for the purposes of 
                        section 552(b)(4) of title 5, United States 
                        Code.
                            ``(ii) Standard of confidentiality.--Except 
                        as provided in clauses (iii) and (iv), if 
                        information concerning a proposal could be 
                        withheld by the Secretary under the standard 
                        for privileged or confidential information 
                        pertaining to trade secrets and commercial or 
                        financial information under section 552(b)(4) 
                        of title 5, United States Code, the information 
                        shall not be released to the public.
                            ``(iii) Exception for purchasers of plans 
                        of insurance.--Clause (ii) shall not apply in 
                        the case of an approved insurance provider that 
                        elects to pay a fee to sell a plan of insurance 
                        developed by another provider under paragraph 
                        (5).
                            ``(iv) Approved proposals.--In lieu of 
                        publication in the Federal Register, a general 
                        summary of the content of the proposal shall be 
                        made available to other approved insurance 
                        providers at the time at which the proposal is 
                        approved by the Board, consisting of a 
                        description of--
                                    ``(I) the identity of the approved 
                                insurance provider;
                                    ``(II) the coverage provided; and
                                    ``(III) the area to be covered by 
                                the approved proposal.'';
            (2) by striking paragraphs (6), (8), and (10); and
            (3) by redesignating paragraphs (7) and (9) as paragraphs 
        (6) and (7), respectively.
    (c) Conforming Amendments.--Section 516(b)(1) of the Federal Crop 
Insurance Act (7 U.S.C. 1516(b)(1)) is amended--
            (1) in subparagraph (B), by striking ``; and'' and 
        inserting a semicolon;
            (2) in subparagraph (C), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following:
                    ``(D) the salaries and expenses of the Executive 
                Director and staff appointed under section 505(a)(6) 
                for fiscal year 2001, but not to exceed $500,000 for 
                the fiscal year; and''.

SEC. 302. GOOD FARMING PRACTICES.

    Section 508(a)(3) of the Federal Crop Insurance Act (7 U.S.C. 
1508(a)(3)) (as amended by section 103(d)) is amended in subparagraph 
(A)(iii) by inserting after ``good farming practices'' the following: 
``, including scientifically sound sustainable and organic farming 
practices''.

SEC. 303. SANCTIONS FOR PROGRAM NONCOMPLIANCE AND FRAUD.

    (a) In General.--Section 506 of the Federal Crop Insurance Act (7 
U.S.C. 1506) is amended by striking subsection (n) and inserting the 
following:
    ``(n) Sanctions for Program Noncompliance and Fraud.--
            ``(1) False information.--A producer, agent, loss adjuster, 
        approved insurance provider, or other person that willfully and 
        intentionally provides any false or inaccurate information to 
        the Corporation or to an approved insurance provider with 
        respect to a policy or plan of insurance under this title may, 
        after notice and an opportunity for a hearing on the record, be 
        subject to 1 or more of the sanctions described in paragraph 
        (3).
            ``(2) Compliance.--A person may, after notice and an 
        opportunity for a hearing on the record, be subject to 1 or 
        more of the sanctions described in paragraph (3) if the person 
        is--
                    ``(A) a producer, agent, loss adjuster, approved 
                insurance provider, or other person that willfully and 
                intentionally fails to comply with a requirement of the 
                Corporation; or
                    ``(B) an agent, loss adjuster, approved insurance 
                provider, or other person (other than a producer) that 
                willfully and intentionally fails to comply with a 
                requirement of the Standard Reinsurance Agreement.
            ``(3) Authorized sanctions.--If the Secretary determines 
        that a person covered by this subsection has committed a 
        material violation under paragraph (1) or (2), the following 
        sanctions may be imposed:
                    ``(A) Civil fines.--A civil fine may be imposed for 
                each violation in an amount not to exceed the greater 
                of--
                            ``(i) the amount of the pecuniary gain 
                        obtained as a result of the false or inaccurate 
                        information provided or the noncompliance with 
                        a requirement of this title; or
                            ``(ii) $10,000.
                    ``(B) Debarment.--
                            ``(i) Producers.--In the case of a 
                        violation committed by a producer, the producer 
                        may be disqualified for a period of up to 5 
                        years from receiving any monetary or 
                        nonmonetary benefit provided under--
                                    ``(I) this title;
                                    ``(II) the Agricultural Market 
                                Transition Act (7 U.S.C. 7201 et seq.), 
                                including the noninsured crop disaster 
                                assistance program under section 196 of 
                                that Act (7 U.S.C. 7333);
                                    ``(III) the Agricultural Act of 
                                1949 (7 U.S.C. 1421 et seq.);
                                    ``(IV) the Commodity Credit 
                                Corporation Charter Act (15 U.S.C. 714 
                                et seq.);
                                    ``(V) the Agricultural Adjustment 
                                Act of 1938 (7 U.S.C. 1281 et seq.);
                                    ``(VI) title XII of the Food 
                                Security Act of 1985 (16 U.S.C. 3801 et 
                                seq.);
                                    ``(VII) the Consolidated Farm and 
                                Rural Development Act (7 U.S.C. 1921 et 
                                seq.); and
                                    ``(VIII) any law that provides 
                                assistance to a producer of an 
                                agricultural commodity affected by a 
                                crop loss or a decline in the prices of 
                                agricultural commodities.
                            ``(ii) Other persons.--In the case of a 
                        violation committed by an agent, loss adjuster, 
                        approved insurance provider, or other person 
                        (other than a producer), the violator may be 
                        disqualified for a period of up to 5 years from 
                        participating in any program, or receiving any 
                        benefit, under this title.
            ``(4) Assessment of sanction.--The Secretary shall consider 
        the gravity of the violation of the person covered by this 
        subsection in determining--
                    ``(A) whether to impose a sanction under this 
                subsection; and
                    ``(B) the amount of the sanction to be imposed.
            ``(5) Disclosure of sanctions.--Each policy or plan of 
        insurance under this title shall provide notice about the 
        sanctions prescribed under paragraph (3) for willfully and 
        intentionally--
                    ``(A) providing false or inaccurate information to 
                the Corporation or to an approved insurance provider; 
                or
                    ``(B) failing to comply with a requirement of the 
                Corporation or the Standard Reinsurance Agreement.
            ``(6) Insurance fund.--Any funds collected under this 
        subsection shall be deposited into the insurance fund under 
        section 516(c)(1).''.
    (b) Conforming Amendments.--Section 516(c) of the Federal Crop 
Insurance Act (7 U.S.C. 1516(c)) is amended by striking paragraph (1) 
and inserting the following:
            ``(1) In general.--There is established the insurance fund, 
        which shall include (to remain available without fiscal year 
        limitation)--
                    ``(A) premium income;
                    ``(B) amounts made available under subsection 
                (a)(2); and
                    ``(C) civil fines collected under section 
                506(n)(3)(A).''.

SEC. 304. OVERSIGHT OF AGENTS AND LOSS ADJUSTERS.

    Section 506(q) of the Federal Crop Insurance Act (7 U.S.C. 1506(q)) 
is amended by adding at the end the following:
            ``(3) Oversight of agents and loss adjusters.--The 
        Corporation shall--
                    ``(A) develop procedures for an annual review by an 
                approved insurance provider of the performance of each 
                agent and loss adjuster used by the approved insurance 
                provider;
                    ``(B) oversee the annual review conducted by each 
                approved insurance provider; and
                    ``(C) consult with each approved insurance provider 
                regarding any remedial action that is determined 
                necessary as a result of the annual review of an agent 
                or loss adjuster.
            ``(4) Compliance reports.--Not later than the end of each 
        fiscal year, the Corporation shall submit, to the Committee on 
        Agriculture of the House of Representatives, the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate, and the 
        Board, a report concerning compliance by approved insurance 
        providers, agents, and loss adjusters with this title, 
        including any recommendations for legislative or administrative 
        changes that could further improve compliance.''.

SEC. 305. ADEQUATE COVERAGE FOR STATES.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 102(a)) is amended by adding at the end the 
following:
            ``(8) Adequate coverage for states.--
                    ``(A) Definition of adequately served.--In this 
                paragraph, the term `adequately served' means having a 
                participation rate that is at least 50 percent of the 
                national average participation rate.
                    ``(B) Review.--The Board shall review the plans of 
                insurance that are offered by approved insurance 
                providers under this title to determine if each State 
                is adequately served by the plans of insurance.
                    ``(C) Report.--
                            ``(i) In general.--Not later than 30 days 
                        after completion of the review under 
                        subparagraph (B), the Board shall submit to 
                        Congress a report on the results of the review.
                            ``(ii) Recommendations.--The report shall 
                        include recommendations to increase 
                        participation in States that are not adequately 
                        served by the plans of insurance.''.

SEC. 306. RECORDS AND REPORTING.

    (a) Condition of Obtaining Coverage.--Section 508(f)(3)(A) of the 
Federal Crop Insurance Act (7 U.S.C. 1508(f)(3)(A)) is amended by 
striking ``provide,'' and all that follows through ``sought'' and 
inserting ``provide annually records acceptable to the Secretary 
regarding crop acreage, acreage yields, and production for each 
agricultural commodity insured under this title''.
    (b) Coordination and Use of Records and Reports.--Section 506(h) of 
the Federal Crop Insurance Act (7 U.S.C. 1506(h)) is amended--
            (1) by striking ``The Corporation'' and inserting the 
        following:
            ``(1) In general.--The Corporation''; and
            (2) by adding at the end the following:
            ``(2) Coordination and use of records and reports.--
                    ``(A) Coordination.--The Secretary shall ensure 
                that recordkeeping and reporting requirements under 
                this title and section 196 of the Agricultural Market 
                Transition Act (7 U.S.C. 7333) are coordinated by the 
                Corporation and the Farm Service Agency--
                            ``(i) to avoid duplication of records and 
                        reports;
                            ``(ii) to streamline procedures involved 
                        with the submission of records and reports; and
                            ``(iii) to enhance the accuracy of records 
                        and reports.
                    ``(B) Use.--Records submitted under this title and 
                section 196 of the Agricultural Market Transition Act 
                (7 U.S.C. 7333) shall be available to agencies and 
                local offices of the Department, appropriate State and 
                Federal agencies and divisions, and approved insurance 
                providers for use in carrying out this title, that 
                section, and other agricultural programs and related 
                responsibilities.''.

SEC. 307. FEES FOR PLANS OF INSURANCE.

    (a) In General.--Section 508(h) of the Federal Crop Insurance Act 
(7 U.S.C. 1508(h)) is amended by striking paragraph (5) and inserting 
the following:
            ``(5) Fees for plans of insurance.--
                    ``(A) Fees for existing plans of insurance.--
                            ``(i) In general.--Effective beginning with 
                        the 2001 reinsurance year, if an approved 
                        insurance provider elects to sell a plan of 
                        insurance that was developed by another 
                        approved insurance provider and the plan of 
                        insurance was approved by the Board before 
                        January 1, 2000, the approved insurance 
                        provider that developed the plan of insurance 
                        shall have the right to receive a fee from the 
                        approved insurance provider that elects to sell 
                        the plan of insurance.
                            ``(ii) Amount.--The amount of the fee that 
                        is payable by an approved insurance provider 
                        for a plan of insurance under clause (i) shall 
                        be--
                                    ``(I) for each of the first 5 crop 
                                years that the plan is sold, $2.00 for 
                                each policy under the plan that is sold 
                                by the approved insurance provider;
                                    ``(II) for each of the next 3 crop 
                                years that the plan is sold, $1.00 for 
                                each policy under the plan that is sold 
                                by the approved insurance provider; and
                                    ``(III) for each crop year 
                                thereafter that the plan is sold, 50 
                                cents for each policy under the plan 
                                that is sold by the approved insurance 
                                provider.
                    ``(B) Fees for new plans of insurance.--
                            ``(i) In general.--Effective beginning with 
                        the 2001 reinsurance year, if an approved 
                        insurance provider elects to sell a plan of 
                        insurance that was developed by another 
                        approved insurance provider, the plan of 
                        insurance was approved by the Board under this 
                        subsection on or after January 1, 2000, and the 
                        plan of insurance was not available at the time 
                        at which the plan of insurance was approved by 
                        the Board, the approved insurance provider that 
                        developed the plan of insurance shall have the 
                        right to receive a fee from the approved 
                        insurance provider that elects to sell the plan 
                        of insurance.
                            ``(ii) Amount.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the amount of the fee 
                                that is payable by an approved 
                                insurance provider for a plan of 
                                insurance under clause (i) shall be an 
                                amount that is--
                                            ``(aa) determined by the 
                                        approved insurance provider 
                                        that developed the plan; and
                                            ``(bb) approved by the 
                                        Board.
                                    ``(II) Approval.--The Board shall 
                                not approve the amount of a fee under 
                                clause (i) if the amount of the fee 
                                unnecessarily inhibits the use of the 
                                plan of insurance, as determined by the 
                                Board.
                    ``(C) Payments.--The Corporation shall annually--
                            ``(i) collect from an approved insurance 
                        provider the amount of any fees that are 
                        payable by the approved insurance provider 
                        under subparagraphs (A) and (B); and
                            ``(ii) credit any fees that are payable to 
                        an approved insurance provider under 
                        subparagraphs (A) and (B).
                    ``(D) Exceptions.--In the case of a policy 
                developed by an approved insurance provider that does 
                not conduct business in a State--
                            ``(i) the approved policy may be marketed 
                        in the State by another approved insurance 
                        provider if the approved insurance provider 
                        marketing the policy pays any fee for marketing 
                        the policy imposed by the developing provider; 
                        and
                            ``(ii) the developing provider shall not 
                        deny payment of a fee by another provider to 
                        maintain full marketing rights of the approved 
                        policy.''.
    (b) Funding.--Section 516 of the Federal Crop Insurance Act (7 
U.S.C. 1516) (as amended by sections 301(c) and 303(b)) is amended--
            (1) in subsection (b)(1), by adding at the end the 
        following:
                    ``(E) payment of fees in accordance with section 
                508(h)(5)(C).''; and
            (2) in subsection (c)(1)(A), by inserting ``and fees'' 
        after ``premium income''.

SEC. 308. LIMITATION ON DOUBLE INSURANCE.

    Subsection (m) of section 508 of the Federal Crop Insurance Act (7 
U.S.C. 1508) (as redesignated by section 204(a)(2)) is amended by 
adding at the end the following:
            ``(3) Limitation on double insurance.--The Corporation may 
        offer plans of insurance or reinsurance for only 1 agricultural 
        commodity produced on specific acreage during a crop year, 
        unless--
                    ``(A) there is an established practice of double-
                cropping in an area, as determined by the Corporation;
                    ``(B) the additional plan of insurance is offered 
                with respect to an agricultural commodity that is 
                customarily double-cropped in the area; and
                    ``(C) the producer has a history of double cropping 
                or the specific acreage has historically been double-
                cropped.''.

SEC. 309. SPECIALTY CROPS.

    (a) In General.--The Federal Crop Insurance Act (7 U.S.C. 1501 et 
seq.) (as amended by sections 201 through 203) is amended by adding at 
the end the following:

``SEC. 523. SPECIALTY CROPS.

    ``(a) Research Regarding the Development of New or Revised Crop 
Insurance Policies.--To encourage the development of new or revised 
crop insurance policies and other materials for specialty crops by 
qualified private entities, and the submission of those insurance 
policies and other materials to the Corporation under section 508(h), 
the Specialty Crops Coordinator may--
            ``(1) make grants on a competitive basis for the research 
        and development of plans of insurance for underserved specialty 
        crops;
            ``(2) reimburse research costs associated with product 
        development; and
            ``(3) enter into contracts on a competitive basis for the 
        research and development of plans of insurance for underserved 
        specialty crops.
    ``(b) Partnerships for Development of Risk Management Tools for 
Specialty Crops.--
            ``(1) Purpose.--The purpose of this subsection is to 
        authorize the Specialty Crops Coordinator, on behalf of the 
        Corporation, to enter into partnerships with qualified public 
        and private entities for the purpose of increasing the 
        availability of risk management tools for producers of 
        specialty crops.
            ``(2) Authority.--
                    ``(A) In general.--For each of fiscal years 2001 
                through 2004, the Corporation may use not more than 
                $20,000,000 from funds in the insurance fund under 
                section 516(c)(1) to enter into partnerships with the 
                Cooperative State Research, Education, and Extension 
                Service, the Agricultural Research Service, the 
                National Oceanic and Atmospheric Administration, and 
                other appropriate public and private entities with 
                demonstrated capabilities in developing and 
                implementing risk management and marketing options for 
                specialty crops.
                    ``(B) Exclusion.--Amounts necessary to carry out 
                subparagraph (A) shall not be counted toward the 
                limitation on research and development expenses 
                established in section 516(b)(2)(A).
            ``(3) Objectives.--The Corporation may enter into a 
        partnership under this subsection to--
                    ``(A) enhance the notice, and timeliness of notice 
                of weather conditions, that could negatively affect 
                specialty crop yields, quality, and final product use 
                in order to allow producers to take preventive actions 
                to increase end-product profitability and marketability 
                and to reduce the possibility of crop insurance claims;
                    ``(B) develop a multifaceted approach to pest 
                management to decrease inputs, decrease the development 
                of pest resistance, and increase the effectiveness of 
                pest prevention applications;
                    ``(C) develop a multifaceted approach to 
                fertilization to decrease inputs, decrease excessive 
                nutrient loading to the environment, and increase 
                application efficiency;
                    ``(D) develop or improve techniques for planning, 
                breeding, growing, maintaining, harvesting, storage, 
                and shipping that will address quality and quantity 
                challenges for specialty crops and livestock associated 
                with year-to-year and regional variations;
                    ``(E) provide assistance to State foresters or 
                equivalent officials for the prescribed use of burning 
                on private forest land for the prevention, control, and 
                suppression of fire; and
                    ``(F) develop other risk management tools that 
                specialty crop producers can use to further increase 
                their economic and production stability.
    ``(c) Time Periods for Purchase of Coverage for Specialty Crops.--
            ``(1) Sales closing date.--The sales closing date for 
        obtaining coverage for a specialty crop under this title may 
        not expire before the end of the 120-day period beginning on 
        the date of the final release of materials for policies from 
        the Risk Management Agency and the Specialty Crops Coordinator.
            ``(2) Purchase during insurance period.--A producer of a 
        specialty crop may purchase new coverage for the specialty 
        crop, or increase coverage levels, at any time during the 
        insurance period, subject to a 30-day waiting period for the 
        coverage to take effect to permit an inspection to verify 
        acceptability by the insurance provider.
    ``(d) Studies of New Specialty Crop Insurance Policies.--
            ``(1) In general.--The Corporation and the Specialty Crops 
        Coordinator authorized under section 507(g) shall jointly 
        conduct studies of the feasibility of developing new insurance 
        policies for specialty crops, including policies based on the 
        cost of production or adjusted gross income, quality-based 
        policies, or an intermediate program with a higher coverage and 
        cost than the catastrophic risk protection offered on the date 
        of enactment of this section.
            ``(2) Submission of results.--Not later than 1 year after 
        the date of enactment of this section, and annually thereafter, 
        the Corporation and the Specialty Crops Coordinator shall 
        submit to Congress a report containing the results of the 
        studies required under this subsection.
    ``(e) Fiscal Years.--Subsections (b) and (c) shall apply to each of 
fiscal years 2001 through 2004.''.
    (b) Report on Coverage of New and Specialty Crops and Method for 
Provision of Catastrophic Risk Protection.--Not later than 180 days 
after the date of enactment of this Act, the Secretary of Agriculture 
shall submit to the President, the Committee on Agriculture of the 
House of Representatives, and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate a report assessing--
            (1)(A) the progress made by the Department of Agriculture 
        in expanding crop insurance coverage for new and specialty 
        crops; and
            (B) the plans of the Department to continue to expand 
        coverage for additional crops; and
            (2)(A) whether provision of catastrophic risk protection by 
        private sector insurance providers--
                    (i) has resulted in a uniform quality of risk 
                protection services in all regions of the United 
                States; and
                    (ii) has fulfilled the goal of increased 
                participation in the Federal crop insurance program, 
                particularly in States with traditionally low crop 
                insurance participation rates and States with a high 
                proportion of specialty crops; and
            (B) whether, particularly in States described in 
        subparagraph (A)(ii), the Secretary should resume direct 
        provision of catastrophic risk protection and performance of 
        loss adjustment functions through local offices of the 
        Department.

SEC. 310. FEDERAL CROP INSURANCE IMPROVEMENT COMMISSION.

    (a) In General.--Section 515 of the Federal Crop Insurance Act (7 
U.S.C. 1515) is amended to read as follows:

``SEC. 515. FEDERAL CROP INSURANCE IMPROVEMENT COMMISSION.

    ``(a) Definitions.--In this section:
            ``(1) Commission.--The term `Commission' means the Federal 
        Crop Insurance Improvement Commission established by subsection 
        (b).
            ``(2) Specialty crop.--The term `specialty crop' means an 
        agricultural commodity other than a contract commodity (as 
        defined in section 102 of the Agricultural Marketing Transition 
        Act (7 U.S.C. 7202)).
    ``(b) Establishment of Commission.--There is established a 
Commission to be known as the `Federal Crop Insurance Improvement 
Commission'.
    ``(c) Membership.--
            ``(1) In general.--The Commission shall be composed of the 
        following 9 members:
                    ``(A) The Under Secretary for Farm and Foreign 
                Agricultural Services of the Department.
                    ``(B) The manager of the Corporation.
                    ``(C) The Chief Economist of the Department or a 
                person appointed by the Chief Economist.
                    ``(D) An employee of the Office of Management and 
                Budget, appointed by the Director of the Office of 
                Management and Budget.
                    ``(E) A representative of the National Association 
                of Insurance Commissioners, experienced in insurance 
                regulation, appointed by the National Association of 
                Insurance Commissioners.
                    ``(F) Representatives of 3 approved insurance 
                providers (the 3 approved insurance providers being 
                elected by majority vote of all approved insurance 
                providers), appointed by the 3 approved insurance 
                providers.
                    ``(G) A representative of a private nonprofit 
                organization designated by the manager of the 
                Corporation--
                            ``(i) that is organized and has operated 
                        for at least 5 consecutive years as an 
                        insurance advisory and statistical agent 
                        organization for crop insurance written in the 
                        United States;
                            ``(ii) that is licensed and approved as a 
                        statistical agent by substantially all States 
                        in which federally reinsured crop insurance is 
                        sold; and
                            ``(iii) the activities of which have 
                        included--
                                    ``(I) the accumulation and analysis 
                                of loss expenses and other crop 
                                insurance statistics;
                                    ``(II) the development of forms for 
                                crop insurance policies; and
                                    ``(III) the development of 
                                procedures for loss adjustment;
                appointed by the organization.
            ``(2) Time of appointment.--The members of the Commission 
        shall be appointed not later than 60 days after the date of 
        enactment of the Risk Management for the 21st Century Act.
            ``(3) Term.--A member of the Commission shall serve for the 
        life of the Commission.
    ``(d) Duties.--The Commission shall study the following subjects:
            ``(1) The extent to which approved insurance providers 
        should bear the risk of loss for federally subsidized crop 
        insurance.
            ``(2) Whether the Corporation should--
                    ``(A) continue to provide financial assistance for 
                the benefit of agricultural producers by reinsuring 
                coverage written by approved insurance providers; or
                    ``(B) provide assistance in another form, such as 
                by acting as an excess insurer.
            ``(3) The extent to which development of new insurance 
        products should be undertaken by the private sector, including 
        development of insurance products for specialty crops.
            ``(4) The use by the Corporation of private sector 
        resources under section 507(c).
            ``(5) The progress of the Corporation in reducing 
        administrative and operating costs of approved insurance 
        providers under section 508(k)(5).
            ``(6) The identification of methods, and of organizational, 
        statutory, and structural changes, to enhance and improve--
                    ``(A) delivery of reasonably priced crop insurance 
                products to agricultural producers;
                    ``(B) loss adjustment procedures;
                    ``(C) good farming practices;
                    ``(D) the establishment of premiums; and
                    ``(E) compliance with this title (including 
                regulations issued under this title, the terms and 
                conditions of insurance coverage, and adjustments of 
                losses).
    ``(e) Commission Operations.--
            ``(1) Chairperson; voting.--The Under Secretary for Farm 
        and Foreign Agricultural Services of the Department of 
        Agriculture shall--
                    ``(A) serve as Chairperson of the Commission; and
                    ``(B) vote in the case of a tie.
            ``(2) Meetings.--
                    ``(A) In general.--The Commission shall meet 
                regularly, but not less than 6 times per year.
                    ``(B) Time.--A meeting may be called--
                            ``(i) at any time, by the Chairperson; or
                            ``(ii) notwithstanding section 10(f) of the 
                        Federal Advisory Committee Act (5 U.S.C. App.), 
                        by any 3 members of the Commission, if those 
                        members give notice to the Commission not later 
                        than 10 days before the date of the meeting.
            ``(3) Disclosure.--
                    ``(A) In general.--To the extent that the records, 
                papers, or other documents received, prepared, or 
                maintained by the Commission are subject to public 
                disclosure, the documents shall be available for public 
                inspection and copying at the Office of Risk 
                Management.
                    ``(B) Exceptions.--Section 10(a) of the Federal 
                Advisory Committee Act (5 U.S.C. App.) shall not apply 
                to--
                            ``(i) a meeting of the Commission; or
                            ``(ii) any disclosure of records, reports, 
                        transcripts, minutes, appendixes, working 
                        papers, drafts, studies, agenda, or other 
                        similar documents containing such information 
                        as is not required under section 10(b) of that 
                        Act.
                    ``(C) Applicability.--The exceptions described in 
                subparagraph (B) shall not exempt the Commission from 
                any requirement of--
                            ``(i) section 10(a)(2) of the Federal 
                        Advisory Committee Act (5 U.S.C. App.) (to the 
                        extent of giving public notice of its 
                        meetings);
                            ``(ii) section 10(a)(3) of that Act (to the 
                        extent of allowing interested persons to appear 
                        and to present or file statements); or
                            ``(iii) section 10(c) of that Act.
            ``(4) Compensation.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a member of the Commission who is 
                employed by the Department or by another agency, 
                department, or office of the Federal Government shall 
                receive no additional compensation for the services of 
                the employee as a member of the Commission.
                    ``(B) Expenses.--A member of the Commission may be 
                allowed necessary traveling and subsistence expenses 
                when engaged in business of the Commission.
                    ``(C) Non-federal members.--A member of the 
                Commission who is not employed by the Federal 
                Government, when on the business of the Commission away 
                from the home or regular place of business of the 
                member, shall be paid--
                            ``(i) compensation for the services of the 
                        member at the daily equivalent of the annual 
                        rate of basic pay prescribed for level IV of 
                        the Executive Schedule under section 5315 of 
                        title 5, United States Code; and
                            ``(ii) necessary traveling and subsistence 
                        expenses (or a per diem allowance in lieu of 
                        subsistence expenses) as authorized by section 
                        5703 of title 5, United States Code, for 
                        persons employed intermittently in the Federal 
                        Government service.
            ``(5) Miscellaneous accommodations.--
                    ``(A) Office space.--The Under Secretary for Farm 
                and Foreign Agricultural Services (or, on delegation by 
                the Under Secretary for Farm and Foreign Agricultural 
                Services, the manager of the Corporation) shall arrange 
                for the Commission to occupy offices and meeting rooms 
                at the offices of the Department in the District of 
                Columbia, in accordance with section 5(b)(5) of the 
                Federal Advisory Committee Act (5 U.S.C. App.).
                    ``(B) Support services.--The Department shall 
                provide support services for the Commission in 
                accordance with section 12 of the Federal Advisory 
                Committee Act (5 U.S.C. App.).
            ``(6) Staff.--
                    ``(A) In general.--The Commission may employ staff 
                and retain the services of professionals such as 
                accountants, actuaries, attorneys, economists, and 
                management consultants to assist the Commission in 
                carrying out its duties under this section.
                    ``(B) Compensation.--In accordance with 
                subparagraph (C), the Commission--
                            ``(i) may compensate staff hired and 
                        professionals retained under subparagraph (A) 
                        on such terms and in such amounts as are 
                        customary and reasonable within the private 
                        sector; and
                            ``(ii) shall not be limited in any respect 
                        to terms, amounts, and limitations related to 
                        compensation that would apply if the Commission 
                        were retaining contractors to or for a 
                        governmental entity.
                    ``(C) Limitation on compensation.--The aggregate of 
                all staff and professional compensation shall not 
                exceed $4,000,000 per year.
                    ``(D) Reimbursement.--A member of the Commission 
                may be reimbursed for the costs of professional 
                services obtained by the member to assist in the work 
                of the member for the Commission, except that--
                            ``(i) no reimbursement (other than travel 
                        and subsistence expenses) shall be allowed with 
                        respect to any services rendered by any person 
                        otherwise employed by the Federal Government;
                            ``(ii) a majority of the Commission shall 
                        approve in advance the retention by a member of 
                        professional services, including the terms of 
                        compensation of the professional;
                            ``(iii) the services to be reimbursed shall 
                        relate exclusively to the work of the 
                        Commission;
                            ``(iv) the work product of any professional 
                        hired under this paragraph shall be available 
                        to the Commission and all professionals engaged 
                        by the Commission;
                            ``(v) no reimbursement may be made without 
                        approval by a majority of the Commission; and
                            ``(vi) the aggregate amount of all such 
                        services for all members of the Commission 
                        under this subparagraph shall not exceed 
                        $1,000,000 for each fiscal year.
            ``(7) Source of funds.--All expenses of the Commission, 
        including payments made under paragraphs (4) and (6), shall be 
        paid from the insurance fund established under section 516.
    ``(f) Final Report.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of the Risk Management for the 21st Century Act, the 
        Commission shall submit to the Committee on Agriculture of the 
        House of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a final report on the 
        study under subsection (d).
            ``(2) Copies.--The Commission shall provide copies of the 
        final report to--
                    ``(A) the Secretary;
                    ``(B) the Board; and
                    ``(C) the Comptroller General of the United States.
            ``(3) Interim reports.--To expedite completion of the work 
        of the Commission, the Commission may submit 1 or more interim 
        reports or reports on 1 or more of the subjects to be studied.
    ``(g) Termination.--The Commission shall terminate on the earlier 
of--
            ``(1) 60 days after the date on which the Commission 
        submits the final report under subsection (f); or
            ``(2) September 30, 2004.''.
    (b) Conforming Amendments.--Section 516 of the Federal Crop 
Insurance Act (as amended by section 203(b)(2)) is amended--
            (1) in subsection (a)(2), by adding at the end the 
        following:
                    ``(D) all necessary amounts to fund the operations 
                of the Commission authorized under section 515.''; and
            (2) in subsection (b), by adding at the end the following:
            ``(3) Funds for commission.--For each of fiscal years 2001 
        through 2004, the Corporation shall pay from the insurance fund 
        established under subsection (c) such sums as are necessary to 
        fund the operation of the Commission authorized under section 
        515.''.

SEC. 311. HIGHLY ERODIBLE LAND AND WETLAND CONSERVATION.

    (a) Highly Erodible Land.--Section 1211(3) of the Food Security Act 
of 1985 (16 U.S.C. 3811(3)) is amended--
            (1) in subparagraph (C), by striking ``or'' at the end;
            (2) in subparagraph (D), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the following:
                    ``(E) crop or revenue insurance, or a risk 
                management payment, under the Federal Crop Insurance 
                Act (7 U.S.C. 1501 et seq).''.
    (b) Wetland Conservation.--Section 1221(b)(3) of the Food Security 
Act of 1985 (16 U.S.C. 3821(b)(3)) is amended by adding at the end the 
following:
                    ``(E) Crop or revenue insurance, or a risk 
                management payment, under the Federal Crop Insurance 
                Act (7 U.S.C. 1501 et seq).''.

          TITLE IV--EFFECTIVE DATES; TERMINATION OF AUTHORITY

SEC. 401. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsections (b) and (c)(2) 
and section 402(a), this Act and the amendments made by this Act take 
effect on the date of enactment of this Act.
    (b) Delayed Obligation.--The Federal Crop Insurance Corporation 
shall not obligate funds to carry out the amendments made by sections 
102, 103, 105, 106, 201 through 204, 309, and 310 until October 1, 
2000.
    (c) Regulations.--
            (1) In general.--Not later than 60 days after the date of 
        enactment of this Act, the Secretary of Agriculture shall 
        promulgate regulations to carry out this Act and the amendments 
        made by this Act.
            (2) Voiding of bulletin.--
                    (A) In general.--Bulletin MGR-99-004, issued by the 
                Administrator of the Risk Management Agency of the 
                Department of Agriculture, is void.
                    (B) Transitional provision.--The original terms of 
                the crop revenue coverage plan of insurance, as 
                published on July 14, 1998 (63 Fed. Reg. 37829), shall 
                remain in effect for the 1999 crop year.
                    (C) Effective date.--This paragraph takes effect on 
                October 1, 2000.

SEC. 402. TERMINATION OF AUTHORITY.

    (a) Effective Date.--This section and the amendments made by this 
section take effect on September 30, 2004.
    (b) Repeal.--
            (1) In general.--The amendments made by sections 102, 103, 
        105, 106, 203(b), and 310 are repealed.
            (2) Applicability.--The Federal Crop Insurance Act (7 
        U.S.C. 1501 et seq.) and section 196 of the Agricultural Market 
        Transition Act (7 U.S.C. 7333) shall be applied and 
        administered as if the provisions described in paragraph (1) 
        had not been enacted.
            (3) Conforming amendment.--Section 508(a) of the Federal 
        Crop Insurance Act (7 U.S.C. 1508(a)) is amended by 
        redesignating paragraph (8) (as added by section 305) as 
        paragraph (7).
    (c) Pilot Programs.--Section 522 of the Federal Crop Insurance Act 
(as added by sections 201 through 203) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (3)--
                            (i) in subparagraph (D), by adding ``and'' 
                        at the end;
                            (ii) by striking subparagraphs (E) and (G);
                            (iii) in subparagraph (F), by striking ``; 
                        and'' and inserting a period; and
                            (iv) by redesignating subparagraph (F) as 
                        subparagraph (E);
                    (B) by striking paragraphs (4), (6), and (7); and
                    (C) by redesignating paragraphs (5) and (8) as 
                paragraphs (4) and (5), respectively;
            (2) in subsection (b)--
                    (A) by striking paragraph (2); and
                    (B) by redesignating paragraphs (3) and (4) as 
                paragraphs (2) and (3), respectively; and
            (3) by striking subsection (c).
    (d) Board of Directors of Corporation.--Section 516(b)(1) of the 
Federal Crop Insurance Act (7 U.S.C. 1516(b)(1)) (as amended by 
sections 301(c) and 307(b)(1)) is amended--
            (1) in subparagraph (C), by inserting ``and'' after the 
        semicolon;
            (2) by striking subparagraph (D); and
            (3) by redesignating subparagraph (E) as subparagraph (D).
    (e) Specialty Crops.--
            (1) In general.--Section 523 of the Federal Crop Insurance 
        Act (as added by section 309(a)) is amended--
                    (A) in subsection (b)--
                            (i) by striking paragraph (2); and
                            (ii) by redesignating paragraph (3) as 
                        paragraph (2);
                    (B) by striking subsections (c) and (e); and
                    (C) by redesignating subsection (d) as subsection 
                (c).
            (2) Report.--Section 309 of this Act is amended by striking 
        subsection (b).
    (f) Funding.--Neither the Secretary of Agriculture nor the Federal 
Crop Insurance Corporation may use the funds of the insurance fund 
under section 516(c)(1) of the Federal Crop Insurance Act (7 U.S.C. 
1516(c)(1)), the funds of the Commodity Credit Corporation, or funds 
under any provision of law to carry out a provision repealed or struck 
by this section.
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