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
II

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.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Risk Management for the 21st Century Act’’.

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

7 this Act is as follows:
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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.

1 TITLE I—CROP INSURANCE

2 COVERAGE

3 SEC. 101. QUALITY ADJUSTMENT.

4 Section 508(a) of the Federal Crop Insurance Act (7

5 U.S.C. 1508(a)) is amended by striking paragraph (6) and

6 inserting the following:

7 ‘‘(6) QUALITY ADJUSTMENT POLICIES.—

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

9 offer coverage that permits a reduction in the
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1 quantity of production of an agricultural com2 modity produced during a crop year, or any

3 similar adjustment, that results from the agri4 cultural commodity not meeting the quality

5 standards established in the policy.

6 ‘‘(B) ELECTION NOT TO RECEIVE COV7 ERAGE.—

8 ‘‘(i) IN GENERAL.—A producer may

9 elect not to receive quality adjustment cov10 erage.

11 ‘‘(ii) PREMIUM REDUCTION.—In the

12 case of an election described in clause (i),

13 the Corporation shall provide a reduction

14 in the premium payable by the producer

15 for a plan of insurance in an amount equal

16 to the premium for the quality adjustment

17 coverage, as determined by the Corpora18 tion.

19 ‘‘(C) REVIEW OF CRITERIA AND PROCE20 DURES.—The Corporation shall—

21 ‘‘(i) contract with a qualified person

22 to analyze the quality loss adjustment pro23 cedures of the Corporation; and

24 ‘‘(ii) based on the analysis, make ad25 justments in the quality loss adjustment
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1 procedures of the Corporation necessary to

2 more accurately reflect local quality dis3 counts that are applied to agricultural

4 commodities insured under this title, tak5 ing into consideration the actuarial sound6 ness of the adjustment and the prevention

7 of fraud, waste, and abuse.’’.

8 SEC. 102. PREVENTED PLANTING.

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

10 Crop Insurance Act (7 U.S.C. 1508(a)) (as amended by

11 section 101) is amended by inserting after paragraph (6)

12 the following:

13 ‘‘(7) PREVENTED PLANTING.—

14 ‘‘(A) ELECTION NOT TO RECEIVE COV15 ERAGE.—

16 ‘‘(i) IN GENERAL.—A producer may

17 elect not to receive coverage for prevented

18 planting of an agricultural commodity.

19 ‘‘(ii) PREMIUM REDUCTION.—In the

20 case of an election described in clause (i),

21 the Corporation shall provide a reduction

22 in the premium payable by the producer

23 for a plan of insurance in an amount equal

24 to the premium for the prevented planting
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1 coverage, as determined by the Corpora2 tion.

3 ‘‘(B) EQUAL COVERAGE.—For each agri4 cultural commodity for which prevented plant5 ing coverage is available, the Corporation shall

6 offer an equal percentage level of prevented

7 planting coverage.

8 ‘‘(C) AREA CONDITIONS REQUIRED FOR

9 PAYMENT.—The Corporation shall limit pre10 vented planting payments to producers in the

11 area in which the farm is located that are gen12 erally affected by the conditions that prevent an

13 agricultural commodity from being planted.

14 ‘‘(D) SUBSTITUTE COMMODITY.—

15 ‘‘(i) AUTHORITY TO PLANT.—Subject

16 to clause (v), a producer that has pre17 vented planting coverage and is eligible to

18 receive an indemnity under the coverage

19 may plant an agricultural commodity,

20 other than the commodity covered by the

21 prevented planting coverage, on the acre22 age originally prevented from being plant23 ed.

24 ‘‘(ii) NONAVAILABILITY OF INSUR25 ANCE.—A substitute agricultural com-
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1 modity planted under clause (i) for harvest

2 in the same crop year shall not be eligible

3 for coverage under a policy or plan of in4 surance under this title or for noninsured

5 crop disaster assistance under section 196

6 of the Agricultural Market Transition Act

7 (7 U.S.C. 7333).

8 ‘‘(iii) RELATIONSHIP TO OTHER RE9 QUIREMENTS.—The producer of a sub10 stitute agricultural commodity under

11 clause (ii) shall remain eligible for the ben12 efits described in subsection (b)(7).

13 ‘‘(iv) EFFECT ON ACTUAL PRODUC14 TION HISTORY.—If a producer plants a

15 substitute agricultural commodity under

16 clause (i) for a crop year, the Corporation

17 shall assign the producer a yield, for that

18 crop year for the commodity that was pre19 vented from being planted, equal to 60

20 percent of the producer’s actual production

21 history for that commodity for purposes of

22 determining the producer’s actual produc23 tion history for subsequent crop years.

24 ‘‘(v) EFFECT ON PREVENTED PLANT25 ING PAYMENT.—If a producer plants a
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1 substitute agricultural commodity under

2 clause (i) before the latest planting date

3 established by the Corporation for the agri4 cultural commodity prevented from being

5 planted, the Corporation shall not make a

6 prevented planting payment with regard to

7 the commodity prevented from being plant8 ed.

9 ‘‘(E) RELATIONSHIP TO OTHER LAW.—

10 This paragraph shall supersede subsection

11 (h)(7) to the extent that this paragraph is in12 consistent with subsection (h)(7).

13 ‘‘(F) FISCAL YEARS.—This paragraph

14 shall apply to each of fiscal years 2001 through

15 2004.’’.

16 (b) APPLICATION.—The amendment made by sub17 section (a) shall be reflected in the rates for applicable

18 plans of insurance not later than the 2001 reinsurance

19 year.

20 SEC. 103. PAYMENT OF PORTION OF PREMIUM BY COR21 PORATION.

22 (a) EXPECTED MARKET PRICE.—Section 508(c) of

23 the Federal Crop Insurance Act (7 U.S.C. 1508(c)) is

24 amended by striking paragraph (5) and inserting the fol25 lowing:
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1 ‘‘(5) EXPECTED MARKET PRICE.—

2 ‘‘(A) IN GENERAL.—For the purposes of

3 this title, the Corporation shall establish or ap4 prove the price level (referred to in this title as

5 the ‘expected market price’) of each agricultural

6 commodity for which insurance is offered.

7 ‘‘(B) AMOUNT.—The expected market

8 price of an agricultural commodity—

9 ‘‘(i) except as otherwise provided in

10 this subparagraph, shall be not less than

11 the projected market price of the agricul12 tural commodity, as determined by the

13 Corporation;

14 ‘‘(ii) may be based on the actual mar15 ket price of the agricultural commodity at

16 the time of harvest, as determined by the

17 Corporation;

18 ‘‘(iii) in the case of revenue and other

19 similar plans of insurance, shall be the ac20 tual market price of the agricultural com21 modity, as determined by the Corporation;

22 or

23 ‘‘(iv) in the case of cost of production

24 or similar plans of insurance, shall be the

25 projected cost of producing the agricultural
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1 commodity, as determined by the Corpora2 tion.’’.

3 (b) PREMIUM AMOUNTS.—Section 508(d)(2) of the

4 Federal Crop Insurance Act (7 U.S.C. 1508(d)(2)) is

5 amended by striking subparagraph (C) and inserting the

6 following:

7 ‘‘(C) In the case of additional coverage at

8 greater than or equal to 65 percent of the re9 corded or appraised average yield indemnified

10 at 100 percent of the expected market price, or

11 a comparable coverage for a plan of insurance

12 that is not based on yield, but less than 75 per13 cent of the recorded or appraised average yield

14 indemnified at 100 percent of the expected mar15 ket price, or a comparable coverage for a plan

16 of insurance that is not based on yield, the

17 amount of the premium shall—

18 ‘‘(i) be sufficient to cover anticipated

19 losses and a reasonable reserve; and

20 ‘‘(ii) include an amount for operating

21 and administrative expenses, as determined

22 by the Corporation, on an industry-wide

23 basis as a percentage of the amount of the

24 premium used to define loss ratio.
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1 ‘‘(D) In the case of additional coverage

2 equal to or greater than 75 percent of the re3 corded or appraised average yield indemnified

4 at 100 percent of the expected market price, or

5 a comparable coverage for a plan of insurance

6 that is not based on yield, the amount of the

7 premium shall—

8 ‘‘(i) be sufficient to cover anticipated

9 losses and a reasonable reserve; and

10 ‘‘(ii) include an amount for operating

11 and administrative expenses, as determined

12 by the Corporation, on an industry-wide

13 basis as a percentage of the amount of the

14 premium used to define loss ratio.’’.

15 (c) PAYMENT OF PORTION OF PREMIUM BY COR16 PORATION.—Section 508(e) of the Federal Crop Insurance

17 Act (7 U.S.C. 1508(e)) is amended—

18 (1) by striking paragraph (1) and inserting the

19 following:

20 ‘‘(1) IN GENERAL.—

21 ‘‘(A) MANDATORY PAYMENTS.—For the

22 purpose of encouraging the broadest possible

23 participation of producers in the crop insurance

24 plans of insurance described in subsections (b)

25 and (c), the Corporation shall pay a part of the
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1 premium in the amounts determined under this

2 subsection.

3 ‘‘(B) DISCRETIONARY PAYMENTS.—For

4 the purpose of encouraging the broadest pos5 sible participation of producers, in the case of

6 a plan of insurance approved by the Corpora7 tion under subsection (h), the Corporation may

8 pay a part of the premium as determined under

9 this subsection.’’; and

10 (2) in paragraph (2), by striking subparagraphs

11 (B) and (C) and inserting the following:

12 ‘‘(B) In the case of additional coverage less

13 than or equal to 50 percent of the recorded or

14 appraised average yield indemnified at 100 per15 cent of the expected market price, or a com16 parable coverage for a plan of insurance that is

17 not based on yield, the amount shall be equal

18 to the sum of—

19 ‘‘(i) 60 percent of the amount of the

20 premium established under subsection

21 (d)(2)(B)(i); and

22 ‘‘(ii) the amount of operating and ad23 ministrative expenses determined under

24 subsection (d)(2)(B)(ii).
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1 ‘‘(C) In the case of additional coverage at

2 55 percent or 60 percent of the recorded or ap3 praised average yield indemnified at 100 per4 cent of the expected market price, or a com5 parable coverage for a plan of insurance that is

6 not based on yield, the amount shall be equal

7 to the sum of—

8 ‘‘(i) 45 percent of the amount of the

9 premium established under subsection

10 (d)(2)(B)(i); and

11 ‘‘(ii) the amount of operating and ad12 ministrative expenses determined under

13 subsection (d)(2)(B)(ii).

14 ‘‘(D) In the case of additional coverage at

15 65 percent or 70 percent of the recorded or ap16 praised average yield indemnified at 100 per17 cent of the expected market price, or a com18 parable coverage for a plan of insurance that is

19 not based on yield, the amount shall be equal

20 to the sum of—

21 ‘‘(i) 50 percent of the amount of the

22 premium established under subsection

23 (d)(2)(C)(i); and
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1 ‘‘(ii) the amount of operating and ad2 ministrative expenses determined under

3 subsection (d)(2)(C)(ii).

4 ‘‘(E) In the case of additional coverage

5 equal to or greater than 75 percent of the re6 corded or appraised average yield indemnified

7 at 100 percent of the expected market price, or

8 a comparable coverage for a plan of insurance

9 that is not based on yield, the amount shall be

10 equal to the sum of—

11 ‘‘(i) 55 percent of the amount of the

12 premium established for coverage at 75

13 percent of the recorded or appraised aver14 age yield indemnified at 100 percent of the

15 expected market price under subsection

16 (d)(2)(D)(i); and

17 ‘‘(ii) the amount of operating and ad18 ministrative expenses determined under

19 subsection (d)(2)(D)(ii).

20 ‘‘(F) Subparagraphs (A) through (E) shall

21 apply to each of fiscal years 2001 through

22 2004.’’.

23 (d) REVENUE COVERAGE FOR POTATOES.—Section

24 508(a) of the Federal Crop Insurance Act (7 U.S.C.
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1 1508(a)) is amended by striking paragraph (3) and insert2 ing the following:

3 ‘‘(3) EXCLUSIONS.—

4 ‘‘(A) IN GENERAL.—Insurance provided

5 under this subsection shall not cover losses due

6 to—

7 ‘‘(i) the neglect or malfeasance of the

8 producer;

9 ‘‘(ii) the failure of the producer to re10 seed to the same crop in such areas and

11 under such circumstances as it is cus12 tomary to reseed; or

13 ‘‘(iii) the failure of the producer to

14 follow good farming practices (as deter15 mined by the Secretary).

16 ‘‘(B) REVENUE COVERAGE FOR POTA17 TOES.—No plan of insurance provided under

18 this title (including a plan of insurance ap19 proved by the Board under subsection (h)) shall

20 cover losses due to a reduction in revenue for

21 potatoes except as covered under a whole farm

22 plan of insurance, as determined by the Cor23 poration.’’.
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1 (e) CONFORMING AMENDMENTS.—Section 508 of the

2 Federal Crop Insurance Act (7 U.S.C. 1508) is

3 amended—

4 (1) in subsection (e), by striking paragraph (4);

5 and

6 (2) in subsection (g)(2)(D), by striking ‘‘(as

7 provided in subsection (e)(4))’’.

8 SEC. 104. ASSIGNED YIELDS.

9 Section 508(g)(2)(B) of the Federal Crop Insurance

10 Act (7 U.S.C. 1508(g)(2)(B)) is amended—

11 (1) by striking ‘‘assigned a yield’’ and inserting

12 ‘‘assigned—

13 ‘‘(i) a yield’’;

14 (2) by striking the period at the end and insert15 ing ‘‘; or’’; and

16 (3) by adding at the end the following:

17 ‘‘(ii) a yield determined by the Cor18 poration, in the case of—

19 ‘‘(I) a producer that has not had

20 a share of the production of the in21 sured crop for more than 2 crop

22 years, as determined by the Secretary;

23 ‘‘(II) a producer that produces

24 an agricultural commodity on land
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1 that has not been farmed by the pro2 ducer; and

3 ‘‘(III) a producer that rotates a

4 crop produced on a farm to a crop

5 that has not been produced on the

6 farm.’’.

7 SEC. 105. MULTIYEAR DISASTER ACTUAL PRODUCTION HIS8 TORY ADJUSTMENT.

9 Section 508(g) of the Federal Crop Insurance Act (7

10 U.S.C. 1508(g)) is amended by adding at the end the fol11 lowing:

12 ‘‘(4) TRANSITIONAL ADJUSTMENT FOR DISAS13 TERS.—

14 ‘‘(A) DEFINITION OF A PRODUCER THAT

15 HAS SUFFERED A MULTIYEAR DISASTER.—In

16 this paragraph, the term ‘a producer that has

17 suffered a multiyear disaster’ means a producer

18 (or a successor entity through which the actual

19 production history of the producer can be

20 traced) that has suffered a natural disaster

21 during at least 3 of the immediately preceding

22 5 crop years that resulted in a cumulative re23 duction of at least 25 percent in the actual pro24 duction history of the crop of an agricultural

25 commodity.
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1 ‘‘(B) ELIMINATION OF CERTAIN YEARS OF

2 PRODUCTION HISTORY.—Notwithstanding para3 graph (2), effective beginning with the 2001

4 crop year, for the purpose of calculating the ac5 tual production history for a crop of an agricul6 tural commodity, a producer that has suffered

7 a multiyear disaster with respect to the crop

8 may exclude 1 year of production history for

9 each 5 years included in the actual production

10 history calculation of the crop for which the

11 producer purchased crop insurance.

12 ‘‘(C) CORPORATION’S SHARE OF CHANGED

13 COSTS.—In the case of an exclusion under sub14 paragraph (B), in addition to any other author15 ity to pay any portion of premium, the Corpora16 tion shall pay—

17 ‘‘(i) the portion of the premium that

18 represents the increase in premium associ19 ated with the exclusion;

20 ‘‘(ii) all additional indemnities associ21 ated with the exclusion; and

22 ‘‘(iii) any amounts that result from

23 the difference in the administrative and op24 erating expenses owed to an approved in25 surance provider as the result of an exclu-
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1 sion in actual production history under this

2 paragraph.

3 ‘‘(D) INCREASE IN ACTUAL PRODUCTION

4 HISTORY AFTER EXCLUSIONS.—In the case of a

5 producer that has received an exclusion under

6 subparagraph (B), the Corporation shall not

7 limit the increase of the actual production his8 tory based on the producer’s actual production

9 of the crop of an agricultural commodity in suc10 ceeding crop years until the actual production

11 history for the producer reaches the level for

12 the crop year immediately preceding the first

13 year of the multiyear disaster.

14 ‘‘(E) TERMINATION OF EXCLUSION AU15 THORITY.—The authority to apply this para16 graph to a producer shall terminate with re17 spect to the first crop year in which crop insur18 ance is available to the producer that ade19 quately insures against natural disasters that

20 occur in multiple crop years, as determined by

21 the Corporation.

22 ‘‘(F) REINSURANCE YEARS.—This para23 graph shall apply to each of the 2001 through

24 2004 reinsurance years.’’.
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1 SEC. 106. NONINSURED CROP DISASTER ASSISTANCE PRO2 GRAM.

3 (a) OPERATION AND ADMINISTRATION OF PRO4 GRAM.—Section 196(a)(2) of the Agricultural Market

5 Transition Act (7 U.S.C. 7333(a)(2)) is amended by add6 ing at the end the following:

7 ‘‘(C) COMBINATION OF SIMILAR TYPES OR

8 VARIETIES.—At the option of the Secretary, all

9 types or varieties of a crop or commodity, de10 scribed in subparagraphs (A) and (B), may be

11 considered to be a single eligible crop under this

12 section.’’.

13 (b) RECORDS AND APPLICATION DATE.—Section

14 196(b) of the Agricultural Market Transition Act (7

15 U.S.C. 7333(b)) is amended—

16 (1) in the second sentence of paragraph (1), by

17 striking ‘‘at such time as the Secretary may re18 quire.’’ and inserting ‘‘not later than March 15.’’;

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

20 following:

21 ‘‘(2) RECORDS.—To be eligible for assistance

22 under this section, a producer shall provide annually

23 to the Secretary records of crop acreage, acreage

24 yields, and production for each crop, as required by

25 the Secretary.’’; and
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1 (3) in paragraph (3), by inserting ‘‘annual’’

2 after ‘‘shall provide’’.

3 (c) LOSS REQUIREMENTS.—Section 196 of the Agri4 cultural Market Transition Act (7 U.S.C. 7333) is amend5 ed by striking subsection (c) and inserting the following:

6 ‘‘(c) LOSS REQUIREMENTS.—

7 ‘‘(1) CAUSE.—To be eligible for assistance

8 under this section, a producer of an eligible crop

9 shall have suffered a loss of a noninsured commodity

10 as the result of a cause described in subsection

11 (a)(3).

12 ‘‘(2) ASSISTANCE.—On making a determination

13 described in subsection (a)(3), the Secretary shall

14 provide assistance under this section to producers of

15 an eligible crop that have suffered a loss as a result

16 of the cause described in subsection (a)(3).

17 ‘‘(3) PREVENTED PLANTING.—The Secretary

18 shall make a prevented planting noninsured crop dis19 aster assistance payment to a producer if the pro20 ducer is prevented from planting more than 15 per21 cent of the acreage intended for the eligible crop be22 cause of a cause described in subsection (a)(3), as

23 determined by the Secretary.
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1 ‘‘(4) AREA TRIGGER.—The Secretary may pro2 vide assistance to individual producers without any

3 requirement of an area loss.’’.

4 (d) NEW ELIGIBLE CROPS.—Section 196 of the Agri5 cultural Market Transition Act (7 U.S.C. 7333) is

6 amended—

7 (1) in subsection (d)(1)—

8 (A) by inserting ‘‘(except as provided in

9 subsection (j))’’ after ‘‘percent’’; and

10 (B) by inserting ‘‘determined under sub11 section (e)’’ after ‘‘for the crop’’;

12 (2) by redesignating subsection (j) as sub13 section (l); and

14 (3) by inserting after subsection (i) the fol15 lowing:

16 ‘‘(j) NEW ELIGIBLE CROPS.—

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

18 if a producer produces an eligible crop that is new

19 to an area (as determined by the Secretary), a pay20 ment for the producer shall be computed by sub21 stituting the following percentages of yields for the

22 percentages of yields specified in subsection (d)(1):

23 ‘‘(A) In the case of the first crop year of

24 the eligible crop produced by the producer, 35
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1 percent of the established yield for the crop de2 termined under subsection (e).

3 ‘‘(B) In the case of each of the second

4 through fourth years of the eligible crop pro5 duced by the producer—

6 ‘‘(i) 45 percent of the established yield

7 for the crop determined under subsection

8 (e); or

9 ‘‘(ii) if the producer received a pay10 ment under this section for the first crop

11 year of the eligible crop produced by the

12 producer, 35 percent of the established

13 yield for the crop determined under sub14 section (e).

15 ‘‘(2) TEMPORARY INELIGIBILITY.—If a pro16 ducer of an eligible crop described in paragraph (1)

17 receives a payment under this section in both the

18 first and second crop years of the eligible crop, the

19 producer shall be ineligible for a payment under this

20 section until the producer has successfully produced

21 the crop for at least 3 consecutive crop years with

22 no loss reported, as determined by the Secretary.’’.

23 (e) SERVICE FEE.—Section 196 of the Agricultural

24 Market Transition Act (7 U.S.C. 7333) (as amended by
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1 subsection (d)) is amended by inserting after subsection

2 (j) the following:

3 ‘‘(k) SERVICE FEE.—

4 ‘‘(1) IN GENERAL.—To be eligible to receive as5 sistance for an eligible crop for a crop year under

6 this section, a producer shall pay to the Secretary

7 (at the time at which the producer provides reports

8 under subsection (b)(3)) a service fee for the eligible

9 crop in an amount that is equal to the lesser of—

10 ‘‘(A) the equivalent of the per policy fee

11 for catastrophic risk protection available under

12 section 508(b)(5) of the Federal Crop Insur13 ance Act (7 U.S.C. 1508(b)(5)); or

14 ‘‘(B) $200 per producer per county, but

15 not to exceed a total of $600 per producer.

16 ‘‘(2) WAIVER.—The Secretary shall waive the

17 service fee required under paragraph (1) in the case

18 of a limited resource farmer, as defined by the Sec19 retary.

20 ‘‘(3) USE.—The Secretary shall deposit service

21 fees collected under this subsection in the Com22 modity Credit Corporation Fund.’’.

23 (f) CROP YEARS.—This section and the amendments

24 made by this section shall apply to each of the 2001

25 through 2004 crop years.
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1 TITLE II—RESEARCH AND PILOT

2 PROGRAMS

3 SEC. 201. RESEARCH AND PILOT PROGRAMS.

4 The Federal Crop Insurance Act (7 U.S.C. 1501 et

5 seq.) is amended by adding at the end the following:

6 ‘‘SEC. 522. RESEARCH AND PILOT PROGRAMS.

7 ‘‘(a) GENERAL PROVISIONS.—

8 ‘‘(1) IN GENERAL.—Except as otherwise pro9 vided in this subsection, the Corporation may con10 duct research, surveys, pilot programs, and inves11 tigations relating to crop insurance and agriculture12 related risks and losses based on proposals developed

13 by the Corporation or by an approved insurance pro14 vider to evaluate whether the proposal or new risk

15 management tool is suitable for the marketplace and

16 addresses the needs of producers of agricultural

17 commodities.

18 ‘‘(2) PRIVATE COVERAGE.—Under this section,

19 the Corporation shall not conduct any activity that

20 provides insurance protection against a risk if insur21 ance protection against the risk is generally available

22 from private companies.

23 ‘‘(3) COVERED ACTIVITIES.—The activities de24 scribed in paragraph (1) include insurance on losses

25 involving—
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1 ‘‘(A) reduced forage on rangeland caused

2 by drought or insect infestation;

3 ‘‘(B) livestock poisoning and disease;

4 ‘‘(C) destruction of bees due to the use of

5 pesticides;

6 ‘‘(D) unique special risks related to fruits,

7 nuts, vegetables, and specialty crops in general,

8 aquacultural species, and forest industry needs

9 (including appreciation);

10 ‘‘(E) loss of timber due to drought, flood,

11 fire, or other natural disaster;

12 ‘‘(F) other agricultural products as deter13 mined by the Board; and

14 ‘‘(G) after October 1, 2000, insurance cov15 erage for livestock.

16 ‘‘(4) SCOPE OF PILOT PROGRAMS.—The Cor17 poration may—

18 ‘‘(A) offer a pilot program authorized

19 under this title on a regional, State, or national

20 basis after considering the interests of affected

21 producers and the interests of, and risks to, the

22 Corporation;

23 ‘‘(B) operate the pilot program, including

24 any modifications of the pilot program, for a

25 period of up to 4 years;
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1 ‘‘(C) extend the time period for the pilot

2 program for additional periods, as determined

3 appropriate by the Corporation; and

4 ‘‘(D) provide pilot programs that would

5 allow producers—

6 ‘‘(i) to receive premium discounts for

7 using whole farm units or single crop units

8 of insurance; and

9 ‘‘(ii) to cross State and county bound10 aries to form insurable units.

11 ‘‘(5) EVALUATION.—After the completion of

12 any pilot program under this section, the Corpora13 tion shall evaluate the pilot program and submit to

14 the Committee on Agriculture of the House of Rep15 resentatives and the Committee on Agriculture, Nu16 trition, and Forestry of the Senate, a report on the

17 operations of the pilot program, including the eval18 uation by the Corporation of the pilot program and

19 the recommendations of the Corporation with re20 spect to implementing the program on a national

21 basis.

22 ‘‘(6) FUNDING.—The amount of funds used to

23 carry out research and pilot programs that are es24 tablished after the date of enactment of this section

25 (other than subsection (b)(2)) shall not exceed—
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1 ‘‘(A) in the case of fiscal year 2001,

2 $20,000,000;

3 ‘‘(B) in the case of fiscal year 2002,

4 $40,000,000;

5 ‘‘(C) in the case of fiscal year 2003,

6 $60,000,000; and

7 ‘‘(D) in the case of fiscal year 2004,

8 $80,000,000.

9 ‘‘(7) FISCAL YEARS.—Paragraphs (3)(E),

10 (3)(G), (4), and (6) shall apply to each of fiscal

11 years 2001 through 2004.

12 ‘‘(8) RELATION TO OTHER LAWS.—

13 ‘‘(A) IN GENERAL.—The terms and condi14 tions of any policy or plan of insurance offered

15 under this section that is reinsured by the Cor16 poration shall not—

17 ‘‘(i) be subject to the jurisdiction of

18 the Commodity Futures Trading Commis19 sion or the Securities and Exchange Com20 mission; or

21 ‘‘(ii) be considered to be accounts,

22 agreements (including any transaction that

23 is of the character of, or is commonly

24 known to the trade as, an ‘option’, ‘privi25 lege’, ‘indemnity’, ‘bid’, ‘offer’, ‘put’, ‘call’,
28

•S 2251 PCS

1 ‘advance guaranty’, or ‘decline guaranty’),

2 or transactions involving contracts of sale

3 of a commodity for future delivery, traded

4 or executed on a contract market for the

5 purposes of the Commodity Exchange Act

6 (7 U.S.C. 1 et seq.).

7 ‘‘(B) EFFECT ON CFTC AND COMMODITY

8 EXCHANGE ACT.—Nothing in this paragraph af9 fects the jurisdiction of the Commodity Futures

10 Trading Commission or the applicability of the

11 Commodity Exchange Act (7 U.S.C. 1 et seq.)

12 to any transaction conducted on a contract

13 market under that Act by an approved insur14 ance provider to offset the approved insurance

15 provider’s risk under a plan or policy of insur16 ance under this section.’’.

17 SEC. 202. RESEARCH AND DEVELOPMENT CONTRACTING

18 AUTHORITY.

19 Section 522 of the Federal Crop Insurance Act (as

20 added by section 201) is amended by adding at the end

21 the following:

22 ‘‘(b) RESEARCH AND DEVELOPMENT CONTRACTING

23 AUTHORITY.—

24 ‘‘(1) IN GENERAL.—Subject to section 523(a),

25 to obtain the best research and analysis concerning
29

•S 2251 PCS

1 any significant issue pertaining to crop insurance,

2 including outreach and education, pilot programs, or

3 the development of a new plan of insurance, the Cor4 poration may use only the authority provided by this

5 section and funds made available under section

6 516(b)(2)(A) to—

7 ‘‘(A) contract on a competitive basis with

8 qualified persons;

9 ‘‘(B) reimburse research costs associated

10 with product development; and

11 ‘‘(C) reimburse costs associated with the

12 reassessment and modification of plans of in13 surance.

14 ‘‘(2) ALTERNATIVE RATING METHODOLOGIES.—

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

16 enter into contracts with qualified persons to

17 study and develop alternative methodologies for

18 rating plans of insurance for catastrophic risk

19 protection and higher levels of additional cov20 erage under subsections (b) and (c), respec21 tively, of section 508, and rates for the plans of

22 insurance, that take into account—

23 ‘‘(i) producers that elect not to par24 ticipate in the Federal crop insurance pro25 gram; and
30

•S 2251 PCS

1 ‘‘(ii) producers that elect to obtain

2 only catastrophic risk protection.

3 ‘‘(B) PRIORITY.—The studies conducted

4 under this paragraph shall provide priority to

5 agricultural commodities with—

6 ‘‘(i) the largest average acreage na7 tionwide; and

8 ‘‘(ii) the lowest percentage of pro9 ducers that purchase additional coverage.

10 ‘‘(C) FUNDING.—

11 ‘‘(i) IN GENERAL.—The Corporation

12 shall fund the studies conducted under this

13 paragraph from funds in the insurance

14 fund available under section 516(b)(2)(A).

15 ‘‘(ii) AMOUNT.—There are authorized

16 for the studies conducted under this

17 paragraph—

18 ‘‘(I) in the case of each of fiscal

19 years 2001 and 2002, $1,000,0000;

20 and

21 ‘‘(II) in the case of each of fiscal

22 years 2003 and 2004, $250,000.

23 ‘‘(D) FISCAL YEARS.—This paragraph

24 shall apply to each of fiscal years 2001 through

25 2004.
31

•S 2251 PCS

1 ‘‘(3) RESEARCH AND DEVELOPMENT PRIOR2 ITIES.—The Corporation shall establish, as 1 of the

3 highest research and development priorities of the

4 Corporation, the development of a pasture, range,

5 and forage program to promote land stewardship.

6 ‘‘(4) STUDY OF MULTIYEAR COVERAGE.—

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

8 contract with a qualified person to conduct a

9 study to determine whether offering plans of in10 surance that provide coverage for multiple years

11 would reduce fraud and abuse by persons that

12 participate in the Federal crop insurance pro13 gram.

14 ‘‘(B) REPORT.—Not later than 1 year

15 after the date of enactment of this section, the

16 Corporation shall submit to the Committee on

17 Agriculture of the House of Representatives

18 and the Committee on Agriculture, Nutrition,

19 and Forestry of the Senate a report that de20 scribes the results of the study conducted under

21 subparagraph (A).’’.

22 SEC. 203. CHOICE OF RISK MANAGEMENT OPTIONS.

23 (a) IN GENERAL.—Section 522 of the Federal Crop

24 Insurance Act (as amended by section 202) is amended

25 by adding at the end the following:
32

•S 2251 PCS

1 ‘‘(c) CHOICE OF RISK MANAGEMENT OPTIONS.—

2 ‘‘(1) DEFINITIONS.—In this subsection:

3 ‘‘(A) AGRICULTURAL COMMODITY.—The

4 term ‘agricultural commodity’ means each agri5 cultural commodity specified in section 518—

6 ‘‘(i) for which catastrophic risk pro7 tection or additional coverage is available

8 under this title, other than solely this sec9 tion; and

10 ‘‘(ii) that is selected by the Secretary

11 in a manner that—

12 ‘‘(I) encourages the maximum

13 number of participants in the pro14 gram under this subsection;

15 ‘‘(II) provides a mixture of pro16 gram, specialty, and regional crops;

17 and

18 ‘‘(III) gives consideration to agri19 cultural commodities with low crop in20 surance participation rates.

21 ‘‘(B) APPLICABLE CROP.—The term ‘appli22 cable crop’ means each of the 2002 through

23 2004 crops of an agricultural commodity pro24 duced by a producer.
33

•S 2251 PCS

1 ‘‘(C) APPLICABLE YEAR.—The term ‘appli2 cable year’ means the year in which—

3 ‘‘(i) the applicable crop is produced on

4 the farm of a producer; and

5 ‘‘(ii) the producer elects to receive a

6 risk management payment or crop insur7 ance premium subsidy under this sub8 section.

9 ‘‘(D) REGULATED EXCHANGE.—The term

10 ‘regulated exchange’ means a board of trade (as

11 defined in section 1a of the Commodity Ex12 change Act (7 U.S.C. 1a)) that is designated as

13 a contract market under section 2(a)(1)(B) of

14 that Act (7 U.S.C. 2a).

15 ‘‘(2) RISK MANAGEMENT PAYMENTS.—

16 ‘‘(A) OFFER.—The Corporation shall offer

17 either to make either risk management pay18 ments or to provide crop insurance premium

19 subsidies for each of the 2002 through 2004

20 crops of an agricultural commodity in accord21 ance with subparagraph (B).

22 ‘‘(B) TERMS.—Not later than the sales

23 closing date for obtaining coverage for an agri24 cultural commodity for each applicable year, an
34

•S 2251 PCS

1 eligible producer may elect to receive, with re2 spect to the agricultural commodity—

3 ‘‘(i) a risk management payment

4 under this subsection; or

5 ‘‘(ii) a crop insurance premium sub6 sidy, including a catastrophic risk protec7 tion subsidy, under this subsection.

8 ‘‘(3) RISK MANAGEMENT PAYMENT.—

9 ‘‘(A) IN GENERAL.—In the case of a pro10 ducer that elects to receive a risk management

11 payment for an applicable crop of an agricul12 tural commodity under this subsection, the Cor13 poration shall make a risk management pay14 ment to the producer that covers the agricul15 tural commodity produced by the producer for

16 the applicable crop.

17 ‘‘(B) BASIS FOR PAYMENT.—The amount

18 of a risk management payment shall be deter19 mined in accordance with paragraph (5).

20 ‘‘(4) QUALIFYING RISK MANAGEMENT PRAC21 TICES.—To be eligible for a risk management pay22 ment under this subsection for an applicable crop of

23 an agricultural commodity, a producer shall obtain

24 or use for the applicable crop a qualifying risk man-
35

•S 2251 PCS

1 agement practice from at least 2 of the following

2 categories:

3 ‘‘(A) CROP INSURANCE CATEGORY.—A

4 producer may purchase coverage for an agricul5 tural commodity under a private plan of insur6 ance or a Federal plan of insurance that is not

7 subsidized.

8 ‘‘(B) MARKETING RISK CATEGORY.—

9 ‘‘(i) FUTURE OR OPTION.—A pro10 ducer may enter into a future or option for

11 an agricultural commodity produced on the

12 farm of the producer for the applicable

13 crop on a regulated exchange that is (as

14 determined by the Corporation)—

15 ‘‘(I)(aa) in the case of a future,

16 at least 1 regulated futures contract

17 (as defined in section 1256(g) of the

18 Internal Revenue Code of 1986); and

19 ‘‘(bb) in the case of an option, at

20 least 1 listed option (as defined in sec21 tion 1256(g) of that Code); and

22 ‘‘(II) a hedging transaction (as

23 defined in section 1256(e)(2) of that

24 Code) involving an agricultural com-
36

•S 2251 PCS

1 modity that is used to reduce produc2 tion, price, or revenue risk.

3 ‘‘(ii) AGRICULTURAL TRADE OP4 TION.—A producer may purchase, on other

5 than a regulated exchange, an agricultural

6 trade option for the applicable crop of an

7 agricultural commodity produced on the

8 farm of the producer that (as determined

9 by the Corporation)—

10 ‘‘(I) provides coverage for at

11 least 10 percent of the estimated

12 monetary value of the agricultural

13 commodity;

14 ‘‘(II) is an equity option (as de15 fined in section 1256(g) of the Inter16 nal Revenue Code of 1986); and

17 ‘‘(III) is a hedging transaction

18 (as defined in section 1256(e)(2) of

19 that Code) involving an agricultural

20 commodity that is used to reduce pro21 duction, price, or revenue risk.

22 ‘‘(iii) CASH FORWARD OR OTHER MAR23 KETING CONTRACT.—A producer may

24 enter into a cash forward or other type of

25 marketing contract for at least 20 percent
37

•S 2251 PCS

1 of the monetary value of an agricultural

2 commodity produced on the farm of the

3 producer for the applicable crop, as deter4 mined by the Secretary.

5 ‘‘(iv) MARKETING THROUGH CO6 OPERATIVES.—A producer may market at

7 least 25 percent of an agricultural com8 modity produced by the producer through

9 a cooperative that is owned by agricultural

10 producers.

11 ‘‘(C) FINANCIAL RISK CATEGORY.—

12 ‘‘(i) TRUST.—A producer may make a

13 deposit of an amount equal to at least 10

14 percent of the payments of the producer

15 for the applicable year under the Agricul16 tural Market Transition Act (7 U.S.C.

17 7201 et seq.) into a trust authorized by

18 statute for eligible farming businesses that

19 may be established to accept tax deductible

20 contributions.

21 ‘‘(ii) AGRICULTURAL MARKETING AND

22 RISK MANAGEMENT EDUCATION.—A pro23 ducer may attend and complete in the ap24 plicable year an agricultural marketing or
38

•S 2251 PCS

1 risk management class or seminar ap2 proved by the Corporation.

3 ‘‘(iii) FINANCIAL RISK REDUCTION.—

4 A producer may reduce farm financial risk

5 by reducing debt in an amount that re6 duces leverage or by increasing liquidity, as

7 determined by the Secretary.

8 ‘‘(iv) DIVERSIFICATION.—A producer

9 may address production or financial risk

10 by—

11 ‘‘(I) diversifying production on

12 the farm of the producer by producing

13 at least 1 additional commodity on the

14 farm;

15 ‘‘(II) significantly increasing

16 farm enterprise diversification in the

17 applicable year, as determined by the

18 Secretary;

19 ‘‘(III) maintaining an integrated

20 farming system with a substantial de21 gree of diversification, as determined

22 by the Secretary; or

23 ‘‘(IV) implementing a transition

24 to organic farming.

25 ‘‘(D) FARM RESOURCES RISK CATEGORY.—
39

•S 2251 PCS

1 ‘‘(i) CONSERVATION PRACTICES.—A

2 producer may implement new or existing

3 conservation practices consisting of—

4 ‘‘(I) nutrient management;

5 ‘‘(II) integrated pest manage6 ment;

7 ‘‘(III) conservation tillage;

8 ‘‘(IV) conservation buffers; or

9 ‘‘(V) other conservation practices

10 that are appropriate for the farm, as

11 determined by the Secretary.

12 ‘‘(ii) AGRICULTURAL CONSERVATION

13 MANAGEMENT PLAN.—A producer may de14 velop a plan to mitigate financial risk asso15 ciated with resource conservation through

16 practices consisting of—

17 ‘‘(I) nutrient management;

18 ‘‘(II) integrated pest manage19 ment;

20 ‘‘(III) soil erosion control;

21 ‘‘(IV) conservation buffers;

22 ‘‘(V) soil residue management;

23 ‘‘(VI) water quantity or quality

24 management; or
40

•S 2251 PCS

1 ‘‘(VII) other conservation prac2 tices that are appropriate for the

3 farm, as determined by the Secretary.

4 ‘‘(iii) AGRICULTURAL RESOURCE IM5 PROVEMENTS.—A producer may invest in

6 the improvement or development of 1 or

7 more of the following capital land improve8 ments on the farm of the producer to re9 duce production risk:

10 ‘‘(I) Irrigation management.

11 ‘‘(II) Watershed management

12 structures.

13 ‘‘(III) Planting trees for

14 windbreaks or water quality.

15 ‘‘(IV) Soil quality management

16 options.

17 ‘‘(V) Animal waste management

18 structures.

19 ‘‘(VI) Other land improvements,

20 as determined by the Secretary.

21 ‘‘(E) OTHER CATEGORY.—A producer may

22 engage in any other risk management practice

23 approved by the Secretary.

24 ‘‘(5) DETERMINATION OF RISK MANAGEMENT

25 PAYMENT.—
41

•S 2251 PCS

1 ‘‘(A) IN GENERAL.—The Secretary shall

2 determine the amount of a risk management

3 payment for an agricultural commodity pro4 duced on the farm of a producer for an applica5 ble crop taking into consideration the expendi6 ture by the producer on the risk management

7 practices obtained or used by the producer.

8 ‘‘(B) MAXIMUM PAYMENT.—No payment

9 shall be made in excess of an amount equal to

10 the national average of the previous year’s li11 ability for all catastrophic risk protection poli12 cies.

13 ‘‘(C) FUNDING.—

14 ‘‘(i) IN GENERAL.—Subject to clause

15 (ii), there are authorized to be expended to

16 carry out this subsection from the insur17 ance fund under section 516(b)(2)(C) not

18 more than $500,000,000 for the period of

19 fiscal years 2002 through 2004.

20 ‘‘(ii) ANNUAL LIMITATION.—Not more

21 than $200,000,000 may be expended in

22 any fiscal year to carry out this subsection.

23 ‘‘(6) ADMINISTRATIVE PROVISIONS.—

24 ‘‘(A) CERTIFICATION.—A producer shall

25 submit to the crop insurance agent or approved
42

•S 2251 PCS

1 insurance provider a risk management practices

2 form that certifies, in accordance with stand3 ards prescribed by the Secretary, the qualifying

4 risk management practices and associated costs

5 that were obtained or used by the producer dur6 ing the applicable year.

7 ‘‘(B) COMPLIANCE.—The Corporation may

8 perform random audits of producers that obtain

9 a risk management payment to ensure that the

10 producers obtained or used the qualifying risk

11 management practices described in the form.

12 ‘‘(C) VIOLATION OF TERMS OF RISK MAN13 AGEMENT PAYMENT.—If a producer has accept14 ed a risk management payment or crop insur15 ance premium subsidy for an applicable year

16 and the producer fails to comply with subpara17 graph (A), or to carry out a qualifying risk

18 management option elected by the producer

19 under paragraph (4), with respect to the appli20 cable year, the producer—

21 ‘‘(i) shall refund to the Corporation

22 an amount equal to the risk management

23 payment; and

24 ‘‘(ii) may be subject to debarment

25 from loans and payments for a period of
43

•S 2251 PCS

1 not to exceed 5 years, as provided in sec2 tion 506(n)(3)(B).

3 ‘‘(D) ASSIGNMENT AND SHARING OF BEN4 EFITS.—

5 ‘‘(i) ASSIGNMENT OF BENEFITS.—As6 signment of a benefit provided under this

7 subsection shall be carried out as provided

8 in section 8(g) of the Soil Conservation

9 and Domestic Allotment Act (16 U.S.C.

10 590h(g)).

11 ‘‘(ii) NOTICE.—The producer making

12 the assignment, or the assignee, shall pro13 vide the Corporation with notice, in such

14 manner as the Corporation may require, of

15 any assignment.

16 ‘‘(iii) SHARING OF BENEFITS.—The

17 Corporation shall provide for the sharing

18 of benefits under this subsection among all

19 producers that are at risk in the produc20 tion of an applicable crop on a fair and eq21 uitable basis.

22 ‘‘(7) FISCAL YEARS.—This subsection shall

23 apply to each of fiscal years 2002 through 2004.’’.
44

•S 2251 PCS

1 (b) AUTHORIZATION OF APPROPRIATIONS.—Section

2 516(a) of the Federal Crop Insurance Act (7 U.S.C.

3 1516(a)) is amended—

4 (1) by striking paragraph (1) and inserting the

5 following:

6 ‘‘(1) DISCRETIONARY EXPENSES.—There are

7 authorized to be appropriated for fiscal year 1999

8 and each subsequent fiscal year such sums as are

9 necessary to cover—

10 ‘‘(A) the salaries and expenses of the Cor11 poration; and

12 ‘‘(B) the expenses of approved insurance

13 providers incurred in carrying out section

14 522(c).’’; and

15 (2) in paragraph (2)—

16 (A) in subparagraph (A), by striking

17 ‘‘and’’ at the end;

18 (B) in subparagraph (B), by striking the

19 period at the end and inserting a semicolon;

20 and

21 (C) by adding at the end the following:

22 ‘‘(C) risk management payments author23 ized under section 522(c) in an amount not to

24 exceed $500,000,000 for the period of fiscal

25 years 2002 through 2004, of which not more
45

•S 2251 PCS

1 than $200,000,000 may be expended for any 1

2 fiscal year; and’’.

3 SEC. 204. CONFORMING AMENDMENTS.

4 (a) Section 508 of the Federal Crop Insurance Act

5 (7 U.S.C. 1508) is amended—

6 (1) by striking subsection (m); and

7 (2) by redesignating subsection (n) as sub8 section (m).

9 (b) Section 516(b)(2)(A) of the Federal Crop Insur10 ance Act (7 U.S.C. 1516(b)(2)(A)) is amended by striking

11 ‘‘exceed $3,500,000 for each fiscal year.’’ and inserting

12 ‘‘exceed—

13 ‘‘(i) in the case of each of fiscal years

14 2001 and 2002, $4,500,000;

15 ‘‘(ii) in the case of each of fiscal years

16 2003 and 2004, $3,750,000; and

17 ‘‘(iii) in the case of each subsequent

18 fiscal year, $3,500,000.’’.

19 (c) Section 518 of the Federal Crop Insurance Act

20 (7 U.S.C. 1518) is amended by striking ‘‘subsection (a)

21 or (m) of section 508 of this title’’ and inserting ‘‘section

22 508(a), 522, or 523’’.
46

•S 2251 PCS

1 TITLE III—ADMINISTRATION

2 SEC. 301. BOARD OF DIRECTORS OF CORPORATION.

3 (a) IN GENERAL.—Section 505 of the Federal Crop

4 Insurance Act (7 U.S.C. 1505) is amended by striking

5 subsection (a) and inserting the following:

6 ‘‘(a) BOARD OF DIRECTORS.—

7 ‘‘(1) IN GENERAL.—The management of the

8 Corporation shall be vested in a Board of Directors,

9 subject to the general supervision of the Secretary.

10 ‘‘(2) COMPOSITION.—The Board shall consist

11 of—

12 ‘‘(A) 4 members who are active agricul13 tural producers with or without crop insurance,

14 with 1 member appointed from each of the 4 re15 gions of the United States (as determined by

16 the Secretary);

17 ‘‘(B) 1 member who is active in the crop

18 insurance business;

19 ‘‘(C) 1 member who is active in the rein20 surance business;

21 ‘‘(D) the Under Secretary for Farm and

22 Foreign Agricultural Services;

23 ‘‘(E) the Under Secretary for Rural Devel24 opment; and
47

•S 2251 PCS

1 ‘‘(F) the Chief Economist of the Depart2 ment of Agriculture.

3 ‘‘(3) APPOINTMENT AND TERMS OF PRIVATE

4 SECTOR MEMBERS.—The members of the Board de5 scribed in subparagraphs (A), (B), and (C) of para6 graph (2)—

7 ‘‘(A) shall be appointed by, and hold office

8 at the pleasure of, the Secretary;

9 ‘‘(B) shall not be otherwise employed by

10 the Federal Government;

11 ‘‘(C) shall be appointed to staggered 4-year

12 terms, as determined by the Secretary; and

13 ‘‘(D) shall serve not more than 2 consecu14 tive terms.

15 ‘‘(4) CHAIRPERSON.—The Board shall select a

16 member of the Board described in subparagraph

17 (A), (B), or (C) of paragraph (2) to serve as Chair18 person of the Board.

19 ‘‘(5) OFFICE OF RISK MANAGEMENT.—The Of20 fice of Risk Management shall provide assistance to

21 the Board in developing, reviewing, and

22 recommending—

23 ‘‘(A) new plans of insurance and pilot

24 projects under this title that are proposed by

25 the Office or by a private insurance provider;
48

•S 2251 PCS

1 ‘‘(B) terms of the Standard Reinsurance

2 Agreement;

3 ‘‘(C) rates for plans of insurance under

4 this title; and

5 ‘‘(D) other issues involved in the adminis6 tration of Federal crop insurance, as requested

7 by the Board.

8 ‘‘(6) EXECUTIVE DIRECTOR; STAFF.—

9 ‘‘(A) EXECUTIVE DIRECTOR.—An execu10 tive director appointed by the Secretary, with

11 the concurrence of the Board, shall—

12 ‘‘(i) assist the Board, as provided in

13 subparagraph (C); and

14 ‘‘(ii) report to the Secretary.

15 ‘‘(B) STAFF.—

16 ‘‘(i) IN GENERAL.—A staff of 4 indi17 viduals appointed by the Executive Direc18 tor shall report to the Executive Director.

19 ‘‘(ii) QUALIFICATIONS.—An individual

20 described in clause (i) (except the Execu21 tive Director) shall be knowledgeable and

22 experienced in quantitative mathematics

23 and actuarial rating.
49

•S 2251 PCS

1 ‘‘(C) FUNCTIONS.—The Executive Director

2 and staff appointed under this paragraph

3 shall—

4 ‘‘(i) assist the Board in reviewing and

5 approving policies and materials with re6 spect to plans of insurance or other mate7 rials authorized or submitted under section

8 508, 522, or 523;

9 ‘‘(ii) provide at least monthly reports

10 to the Board on crop insurance issues,

11 which shall be based on comments received

12 from producers, approved insurance pro13 viders, and other sources that the Execu14 tive Director and staff consider appro15 priate;

16 ‘‘(iii) review policies and materials

17 with respect to—

18 ‘‘(I) subsidized plans of insurance

19 authorized under section 508; and

20 ‘‘(II) unsubsidized plans of insur21 ance submitted to the Board under

22 section 508(h);

23 ‘‘(iv) make recommendations to the

24 Board with respect to approval of the poli25 cies and materials, including recommenda-
50

•S 2251 PCS

1 tions with respect to the disapproval of any

2 policies and materials that contain terms

3 or conditions that promote fraud;

4 ‘‘(v) make recommendations to the

5 Board to encourage cooperation between

6 United States attorneys, the Corporation,

7 and approved insurance providers to mini8 mize fraud in connection with an insurance

9 plan or policy under this title;

10 ‘‘(vi) review and make recommenda11 tions to the Board with respect to meth12 odologies for rating plans of insurance

13 under this title; and

14 ‘‘(vii) perform such other functions as

15 the Board considers appropriate.

16 ‘‘(D) FUNDING.—

17 ‘‘(i) INSURANCE FUND.—From

18 amounts in the insurance fund under sec19 tion 516(c)(1), effective for fiscal year

20 2001, $500,000 shall be available to pay

21 the salaries and expenses of the Executive

22 Director and staff appointed under this

23 paragraph.

24 ‘‘(ii) SALARIES AND EXPENSES.—Sub25 ject to the availability of appropriations,
51

•S 2251 PCS

1 the Risk Management Agency shall trans2 fer $500,000 for fiscal year 2001, and

3 $1,000,000 for each subsequent fiscal year,

4 at the beginning of the fiscal year to the

5 Executive Director for the salaries and ex6 penses of the Executive Director and staff

7 appointed under this paragraph.’’.

8 (b) SUBMISSION OF POLICIES AND MATERIALS TO

9 BOARD.—Section 508(h) of the Federal Crop Insurance

10 Act (7 U.S.C. 1508(h)) is amended—

11 (1) by striking paragraphs (1) through (4) and

12 inserting the following:

13 ‘‘(1) IN GENERAL.—In addition to any standard

14 forms or policies that the Board may require be

15 made available to producers under subsection (c), a

16 person may propose to the Board—

17 ‘‘(A) loss of yield or revenue insurance cov18 erage on an individual, area, or a combination

19 of individual and area basis, for 1 or more agri20 cultural commodities;

21 ‘‘(B) rates of premium for a proposed or

22 existing policy; and

23 ‘‘(C) underwriting systems for a proposed

24 or existing policy.

25 ‘‘(2) SUBMISSION OF PROPOSALS.—
52

•S 2251 PCS

1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B) and paragraph (3), a proposal sub3 mitted to the Board under this subsection may

4 be prepared without regard to the limitations of

5 this title, including limitations—

6 ‘‘(i) concerning actuarial soundness;

7 ‘‘(ii) concerning levels of coverage;

8 ‘‘(iii) concerning rates of premium;

9 ‘‘(iv) that the price level for coverage

10 for each insured commodity must equal the

11 expected market price for the commodity

12 as established by the Board; and

13 ‘‘(v) that an approved insurance pro14 vider shall provide coverage under a policy

15 throughout a State for all commodities if

16 the approved insurance provider elects to

17 provide any coverage in the State.

18 ‘‘(B) MAXIMUM ALLOWABLE SUBSIDY.—

19 The payment by the Corporation of a portion of

20 the premium of the policy approved by the

21 Board under this subsection may not exceed the

22 amount that would otherwise be authorized

23 under subsection (e).

24 ‘‘(3) STANDARDS.—
53

•S 2251 PCS

1 ‘‘(A) IN GENERAL.—The Board shall ap2 prove a proposal under this subsection for sub3 sidy and reinsurance if the Board finds that the

4 proposal adequately ensures that—

5 ‘‘(i) the interests of producers of com6 modities are adequately protected;

7 ‘‘(ii) premiums charged to producers

8 are actuarially appropriate;

9 ‘‘(iii) the underwriting system in10 cluded in the proposal is appropriate and

11 adequate; and

12 ‘‘(iv) the proposal is reinsured under

13 this title, is reinsured through private rein14 surance, or is self-insured;

15 ‘‘(B) RATES OF PREMIUM.—A proposed

16 rate of premium (including the part of premium

17 paid by the Corporation) shall be considered to

18 be actuarially appropriate if the rate is suffi19 cient to cover projected losses and expenses, a

20 reasonable reserve, and the amount of operating

21 and administrative expenses of the approved in22 surance provider determined under subsection

23 (d)(2).

24 ‘‘(C) PROPOSED UNDERWRITING PLANS.—

25 A proposed underwriting plan—
54

•S 2251 PCS

1 ‘‘(i) may be on an area or individual

2 farm basis; and

3 ‘‘(ii) shall, at a minimum, specify fac4 tors such as yield history for the farm or

5 region, soils and resource quality for the

6 farm, and farm production practices.

7 ‘‘(D) REINSURANCE.—

8 ‘‘(i) FEDERAL REINSURANCE.—The

9 Corporation shall, to the maximum extent

10 practicable, make reinsurance available to

11 an approved insurance provider under this

12 subsection.

13 ‘‘(ii) PRIVATE OR FEDERAL REINSUR14 ANCE.—An approved insurance provider

15 may—

16 ‘‘(I) obtain private reinsurance

17 for the proposal;

18 ‘‘(II) obtain reinsurance for the

19 proposal under this title; or

20 ‘‘(III) self-insure the proposal.

21 ‘‘(E) ACTUARIALLY APPROPRIATE.—The

22 Board shall prescribe standards for determining

23 whether premium rates are actuarially appro24 priate considering the risk inherent in the pro25 posed product.
55

•S 2251 PCS

1 ‘‘(4) REVIEW AND APPROVAL BY BOARD.—With

2 respect to any policy or other material submitted to

3 the Board after October 1, 2000, under this sub4 section, the following guidelines shall apply:

5 ‘‘(A) IN GENERAL.—The policy or other

6 material shall be reviewed by the Board in ac7 cordance with subparagraphs (C) and (D).

8 ‘‘(B) MULTIPLE INSURANCE AGREE9 MENTS.—The Corporation may enter into more

10 than 1 reinsurance agreement simultaneously

11 with the approved insurance provider to facili12 tate the offering of the new policy.

13 ‘‘(C) PROCEDURES FOR SUBMISSION AND

14 REVIEW.—The Corporation shall promulgate

15 regulations that establish procedures for the

16 submission and review by the Board of pro17 posals submitted to the Board under this sub18 section, including—

19 ‘‘(i) the standards applicable to a pro20 posal under paragraph (3) (including docu21 mentation required to establish that a pro22 posal satisfies the standards);

23 ‘‘(ii) procedures concerning the time

24 limitations provided under this paragraph;

25 and
56

•S 2251 PCS

1 ‘‘(iii) procedures that provide an ap2 plicant the opportunity to present the pro3 posal to the Board in person.

4 ‘‘(D) REVIEW BY THE BOARD.—

5 ‘‘(i) PERIOD FOR APPROVAL.—Not6 withstanding any other provision of law, a

7 proposal submitted to the Board shall be

8 considered to be approved unless the

9 Board disapproves the proposal by the date

10 that is 60 business days after the later

11 of—

12 ‘‘(I) the date of submission of the

13 completed proposal to the Board; or

14 ‘‘(II) the date on which the appli15 cant provides to the Board notice of

16 intent to modify the proposal under

17 clause (ii)(IV).

18 ‘‘(ii) NOTICE OF DISAPPROVAL.—

19 ‘‘(I) IN GENERAL.—Not later

20 than 15 days before the date on which

21 the Board intends to announce dis22 approval of a proposal, the Board

23 shall provide the applicant, by reg24 istered mail, with notice of intent to

25 disapprove the proposal.
57

•S 2251 PCS

1 ‘‘(II) RIGHT TO MODIFY.—An

2 applicant that is notified under sub3 clause (I) may modify the proposal.

4 ‘‘(III) ORIGINAL APPLICATION.—

5 For the purposes of this clause, any

6 modified proposal shall be considered

7 to be an original proposal.

8 ‘‘(IV) NOTICE OF INTENT TO

9 MODIFY.—Not later than 5 business

10 days after receipt of a notice under

11 subclause (I), an applicant that in12 tends to modify the proposal shall so

13 notify the Board.

14 ‘‘(E) TIMING.—In establishing procedures

15 under this subsection, the Board shall prescribe

16 a reasonable deadline for the submission of pro17 posals that approved insurance providers expect

18 to market during the reinsurance year.

19 ‘‘(F) CONFIDENTIALITY.—

20 ‘‘(i) IN GENERAL.—A proposal sub21 mitted to the Board under this subsection

22 (including any information generated from

23 the proposal) shall be considered to be con24 fidential commercial or financial informa-
58

•S 2251 PCS

1 tion for the purposes of section 552(b)(4)

2 of title 5, United States Code.

3 ‘‘(ii) STANDARD OF CONFIDEN4 TIALITY.—Except as provided in clauses

5 (iii) and (iv), if information concerning a

6 proposal could be withheld by the Sec7 retary under the standard for privileged or

8 confidential information pertaining to

9 trade secrets and commercial or financial

10 information under section 552(b)(4) of

11 title 5, United States Code, the informa12 tion shall not be released to the public.

13 ‘‘(iii) EXCEPTION FOR PURCHASERS

14 OF PLANS OF INSURANCE.—Clause (ii)

15 shall not apply in the case of an approved

16 insurance provider that elects to pay a fee

17 to sell a plan of insurance developed by an18 other provider under paragraph (5).

19 ‘‘(iv) APPROVED PROPOSALS.—In lieu

20 of publication in the Federal Register, a

21 general summary of the content of the pro22 posal shall be made available to other ap23 proved insurance providers at the time at

24 which the proposal is approved by the

25 Board, consisting of a description of—
59

•S 2251 PCS

1 ‘‘(I) the identity of the approved

2 insurance provider;

3 ‘‘(II) the coverage provided; and

4 ‘‘(III) the area to be covered by

5 the approved proposal.’’;

6 (2) by striking paragraphs (6), (8), and (10);

7 and

8 (3) by redesignating paragraphs (7) and (9) as

9 paragraphs (6) and (7), respectively.

10 (c) CONFORMING AMENDMENTS.—Section 516(b)(1)

11 of the Federal Crop Insurance Act (7 U.S.C. 1516(b)(1))

12 is amended—

13 (1) in subparagraph (B), by striking ‘‘; and’’

14 and inserting a semicolon;

15 (2) in subparagraph (C), by striking the period

16 at the end and inserting a semicolon; and

17 (3) by adding at the end the following:

18 ‘‘(D) the salaries and expenses of the Ex19 ecutive Director and staff appointed under sec20 tion 505(a)(6) for fiscal year 2001, but not to

21 exceed $500,000 for the fiscal year; and’’.

22 SEC. 302. GOOD FARMING PRACTICES.

23 Section 508(a)(3) of the Federal Crop Insurance Act

24 (7 U.S.C. 1508(a)(3)) (as amended by section 103(d)) is

25 amended in subparagraph (A)(iii) by inserting after ‘‘good
60

•S 2251 PCS

1 farming practices’’ the following: ‘‘, including scientifically

2 sound sustainable and organic farming practices’’.

3 SEC. 303. SANCTIONS FOR PROGRAM NONCOMPLIANCE

4 AND FRAUD.

5 (a) IN GENERAL.—Section 506 of the Federal Crop

6 Insurance Act (7 U.S.C. 1506) is amended by striking

7 subsection (n) and inserting the following:

8 ‘‘(n) SANCTIONS FOR PROGRAM NONCOMPLIANCE

9 AND FRAUD.—

10 ‘‘(1) FALSE INFORMATION.—A producer, agent,

11 loss adjuster, approved insurance provider, or other

12 person that willfully and intentionally provides any

13 false or inaccurate information to the Corporation or

14 to an approved insurance provider with respect to a

15 policy or plan of insurance under this title may,

16 after notice and an opportunity for a hearing on the

17 record, be subject to 1 or more of the sanctions de18 scribed in paragraph (3).

19 ‘‘(2) COMPLIANCE.—A person may, after notice

20 and an opportunity for a hearing on the record, be

21 subject to 1 or more of the sanctions described in

22 paragraph (3) if the person is—

23 ‘‘(A) a producer, agent, loss adjuster, ap24 proved insurance provider, or other person that
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•S 2251 PCS

1 willfully and intentionally fails to comply with a

2 requirement of the Corporation; or

3 ‘‘(B) an agent, loss adjuster, approved in4 surance provider, or other person (other than a

5 producer) that willfully and intentionally fails to

6 comply with a requirement of the Standard Re7 insurance Agreement.

8 ‘‘(3) AUTHORIZED SANCTIONS.—If the Sec9 retary determines that a person covered by this sub10 section has committed a material violation under

11 paragraph (1) or (2), the following sanctions may be

12 imposed:

13 ‘‘(A) CIVIL FINES.—A civil fine may be im14 posed for each violation in an amount not to ex15 ceed the greater of—

16 ‘‘(i) the amount of the pecuniary gain

17 obtained as a result of the false or inac18 curate information provided or the non19 compliance with a requirement of this title;

20 or

21 ‘‘(ii) $10,000.

22 ‘‘(B) DEBARMENT.—

23 ‘‘(i) PRODUCERS.—In the case of a

24 violation committed by a producer, the pro25 ducer may be disqualified for a period of
62

•S 2251 PCS

1 up to 5 years from receiving any monetary

2 or nonmonetary benefit provided under—

3 ‘‘(I) this title;

4 ‘‘(II) the Agricultural Market

5 Transition Act (7 U.S.C. 7201 et

6 seq.), including the noninsured crop

7 disaster assistance program under

8 section 196 of that Act (7 U.S.C.

9 7333);

10 ‘‘(III) the Agricultural Act of

11 1949 (7 U.S.C. 1421 et seq.);

12 ‘‘(IV) the Commodity Credit Cor13 poration Charter Act (15 U.S.C. 714

14 et seq.);

15 ‘‘(V) the Agricultural Adjustment

16 Act of 1938 (7 U.S.C. 1281 et seq.);

17 ‘‘(VI) title XII of the Food Secu18 rity Act of 1985 (16 U.S.C. 3801 et

19 seq.);

20 ‘‘(VII) the Consolidated Farm

21 and Rural Development Act (7 U.S.C.

22 1921 et seq.); and

23 ‘‘(VIII) any law that provides as24 sistance to a producer of an agricul25 tural commodity affected by a crop
63

•S 2251 PCS

1 loss or a decline in the prices of agri2 cultural commodities.

3 ‘‘(ii) OTHER PERSONS.—In the case

4 of a violation committed by an agent, loss

5 adjuster, approved insurance provider, or

6 other person (other than a producer), the

7 violator may be disqualified for a period of

8 up to 5 years from participating in any

9 program, or receiving any benefit, under

10 this title.

11 ‘‘(4) ASSESSMENT OF SANCTION.—The Sec12 retary shall consider the gravity of the violation of

13 the person covered by this subsection in

14 determining—

15 ‘‘(A) whether to impose a sanction under

16 this subsection; and

17 ‘‘(B) the amount of the sanction to be im18 posed.

19 ‘‘(5) DISCLOSURE OF SANCTIONS.—Each policy

20 or plan of insurance under this title shall provide no21 tice about the sanctions prescribed under paragraph

22 (3) for willfully and intentionally—

23 ‘‘(A) providing false or inaccurate informa24 tion to the Corporation or to an approved insur25 ance provider; or
64

•S 2251 PCS

1 ‘‘(B) failing to comply with a requirement

2 of the Corporation or the Standard Reinsurance

3 Agreement.

4 ‘‘(6) INSURANCE FUND.—Any funds collected

5 under this subsection shall be deposited into the in6 surance fund under section 516(c)(1).’’.

7 (b) CONFORMING AMENDMENTS.—Section 516(c) of

8 the Federal Crop Insurance Act (7 U.S.C. 1516(c)) is

9 amended by striking paragraph (1) and inserting the fol10 lowing:

11 ‘‘(1) IN GENERAL.—There is established the in12 surance fund, which shall include (to remain avail13 able without fiscal year limitation)—

14 ‘‘(A) premium income;

15 ‘‘(B) amounts made available under sub16 section (a)(2); and

17 ‘‘(C) civil fines collected under section

18 506(n)(3)(A).’’.

19 SEC. 304. OVERSIGHT OF AGENTS AND LOSS ADJUSTERS.

20 Section 506(q) of the Federal Crop Insurance Act (7

21 U.S.C. 1506(q)) is amended by adding at the end the fol22 lowing:

23 ‘‘(3) OVERSIGHT OF AGENTS AND LOSS AD24 JUSTERS.—The Corporation shall—
65

•S 2251 PCS

1 ‘‘(A) develop procedures for an annual re2 view by an approved insurance provider of the

3 performance of each agent and loss adjuster

4 used by the approved insurance provider;

5 ‘‘(B) oversee the annual review conducted

6 by each approved insurance provider; and

7 ‘‘(C) consult with each approved insurance

8 provider regarding any remedial action that is

9 determined necessary as a result of the annual

10 review of an agent or loss adjuster.

11 ‘‘(4) COMPLIANCE REPORTS.—Not later than

12 the end of each fiscal year, the Corporation shall

13 submit, to the Committee on Agriculture of the

14 House of Representatives, the Committee on Agri15 culture, Nutrition, and Forestry of the Senate, and

16 the Board, a report concerning compliance by ap17 proved insurance providers, agents, and loss adjust18 ers with this title, including any recommendations

19 for legislative or administrative changes that could

20 further improve compliance.’’.

21 SEC. 305. ADEQUATE COVERAGE FOR STATES.

22 Section 508(a) of the Federal Crop Insurance Act (7

23 U.S.C. 1508(a)) (as amended by section 102(a)) is amend24 ed by adding at the end the following:

25 ‘‘(8) ADEQUATE COVERAGE FOR STATES.—
66

•S 2251 PCS

1 ‘‘(A) DEFINITION OF ADEQUATELY

2 SERVED.—In this paragraph, the term ‘ade3 quately served’ means having a participation

4 rate that is at least 50 percent of the national

5 average participation rate.

6 ‘‘(B) REVIEW.—The Board shall review

7 the plans of insurance that are offered by ap8 proved insurance providers under this title to

9 determine if each State is adequately served by

10 the plans of insurance.

11 ‘‘(C) REPORT.—

12 ‘‘(i) IN GENERAL.—Not later than 30

13 days after completion of the review under

14 subparagraph (B), the Board shall submit

15 to Congress a report on the results of the

16 review.

17 ‘‘(ii) RECOMMENDATIONS.—The re18 port shall include recommendations to in19 crease participation in States that are not

20 adequately served by the plans of insur21 ance.’’.

22 SEC. 306. RECORDS AND REPORTING.

23 (a) CONDITION OF OBTAINING COVERAGE.—Section

24 508(f)(3)(A) of the Federal Crop Insurance Act (7 U.S.C.

25 1508(f)(3)(A)) is amended by striking ‘‘provide,’’ and all
67

•S 2251 PCS

1 that follows through ‘‘sought’’ and inserting ‘‘provide an2 nually records acceptable to the Secretary regarding crop

3 acreage, acreage yields, and production for each agricul4 tural commodity insured under this title’’.

5 (b) COORDINATION AND USE OF RECORDS AND RE6 PORTS.—Section 506(h) of the Federal Crop Insurance

7 Act (7 U.S.C. 1506(h)) is amended—

8 (1) by striking ‘‘The Corporation’’ and insert9 ing the following:

10 ‘‘(1) IN GENERAL.—The Corporation’’; and

11 (2) by adding at the end the following:

12 ‘‘(2) COORDINATION AND USE OF RECORDS AND

13 REPORTS.—

14 ‘‘(A) COORDINATION.—The Secretary shall

15 ensure that recordkeeping and reporting re16 quirements under this title and section 196 of

17 the Agricultural Market Transition Act (7

18 U.S.C. 7333) are coordinated by the Corpora19 tion and the Farm Service Agency—

20 ‘‘(i) to avoid duplication of records

21 and reports;

22 ‘‘(ii) to streamline procedures involved

23 with the submission of records and reports;

24 and
68

•S 2251 PCS

1 ‘‘(iii) to enhance the accuracy of

2 records and reports.

3 ‘‘(B) USE.—Records submitted under this

4 title and section 196 of the Agricultural Market

5 Transition Act (7 U.S.C. 7333) shall be avail6 able to agencies and local offices of the Depart7 ment, appropriate State and Federal agencies

8 and divisions, and approved insurance providers

9 for use in carrying out this title, that section,

10 and other agricultural programs and related re11 sponsibilities.’’.

12 SEC. 307. FEES FOR PLANS OF INSURANCE.

13 (a) IN GENERAL.—Section 508(h) of the Federal

14 Crop Insurance Act (7 U.S.C. 1508(h)) is amended by

15 striking paragraph (5) and inserting the following:

16 ‘‘(5) FEES FOR PLANS OF INSURANCE.—

17 ‘‘(A) FEES FOR EXISTING PLANS OF IN18 SURANCE.—

19 ‘‘(i) IN GENERAL.—Effective begin20 ning with the 2001 reinsurance year, if an

21 approved insurance provider elects to sell a

22 plan of insurance that was developed by

23 another approved insurance provider and

24 the plan of insurance was approved by the

25 Board before January 1, 2000, the ap-
69

•S 2251 PCS

1 proved insurance provider that developed

2 the plan of insurance shall have the right

3 to receive a fee from the approved insur4 ance provider that elects to sell the plan of

5 insurance.

6 ‘‘(ii) AMOUNT.—The amount of the

7 fee that is payable by an approved insur8 ance provider for a plan of insurance

9 under clause (i) shall be—

10 ‘‘(I) for each of the first 5 crop

11 years that the plan is sold, $2.00 for

12 each policy under the plan that is sold

13 by the approved insurance provider;

14 ‘‘(II) for each of the next 3 crop

15 years that the plan is sold, $1.00 for

16 each policy under the plan that is sold

17 by the approved insurance provider;

18 and

19 ‘‘(III) for each crop year there20 after that the plan is sold, 50 cents

21 for each policy under the plan that is

22 sold by the approved insurance pro23 vider.

24 ‘‘(B) FEES FOR NEW PLANS OF INSUR25 ANCE.—
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•S 2251 PCS

1 ‘‘(i) IN GENERAL.—Effective begin2 ning with the 2001 reinsurance year, if an

3 approved insurance provider elects to sell a

4 plan of insurance that was developed by

5 another approved insurance provider, the

6 plan of insurance was approved by the

7 Board under this subsection on or after

8 January 1, 2000, and the plan of insur9 ance was not available at the time at which

10 the plan of insurance was approved by the

11 Board, the approved insurance provider

12 that developed the plan of insurance shall

13 have the right to receive a fee from the ap14 proved insurance provider that elects to

15 sell the plan of insurance.

16 ‘‘(ii) AMOUNT.—

17 ‘‘(I) IN GENERAL.—Subject to

18 subclause (II), the amount of the fee

19 that is payable by an approved insur20 ance provider for a plan of insurance

21 under clause (i) shall be an amount

22 that is—

23 ‘‘(aa) determined by the ap24 proved insurance provider that

25 developed the plan; and
71

•S 2251 PCS

1 ‘‘(bb) approved by the

2 Board.

3 ‘‘(II) APPROVAL.—The Board

4 shall not approve the amount of a fee

5 under clause (i) if the amount of the

6 fee unnecessarily inhibits the use of

7 the plan of insurance, as determined

8 by the Board.

9 ‘‘(C) PAYMENTS.—The Corporation shall

10 annually—

11 ‘‘(i) collect from an approved insur12 ance provider the amount of any fees that

13 are payable by the approved insurance pro14 vider under subparagraphs (A) and (B);

15 and

16 ‘‘(ii) credit any fees that are payable

17 to an approved insurance provider under

18 subparagraphs (A) and (B).

19 ‘‘(D) EXCEPTIONS.—In the case of a pol20 icy developed by an approved insurance provider

21 that does not conduct business in a State—

22 ‘‘(i) the approved policy may be mar23 keted in the State by another approved in24 surance provider if the approved insurance

25 provider marketing the policy pays any fee
72

•S 2251 PCS

1 for marketing the policy imposed by the

2 developing provider; and

3 ‘‘(ii) the developing provider shall not

4 deny payment of a fee by another provider

5 to maintain full marketing rights of the

6 approved policy.’’.

7 (b) FUNDING.—Section 516 of the Federal Crop In8 surance Act (7 U.S.C. 1516) (as amended by sections

9 301(c) and 303(b)) is amended—

10 (1) in subsection (b)(1), by adding at the end

11 the following:

12 ‘‘(E) payment of fees in accordance with

13 section 508(h)(5)(C).’’; and

14 (2) in subsection (c)(1)(A), by inserting ‘‘and

15 fees’’ after ‘‘premium income’’.

16 SEC. 308. LIMITATION ON DOUBLE INSURANCE.

17 Subsection (m) of section 508 of the Federal Crop

18 Insurance Act (7 U.S.C. 1508) (as redesignated by section

19 204(a)(2)) is amended by adding at the end the following:

20 ‘‘(3) LIMITATION ON DOUBLE INSURANCE.—

21 The Corporation may offer plans of insurance or re22 insurance for only 1 agricultural commodity pro23 duced on specific acreage during a crop year,

24 unless—
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•S 2251 PCS

1 ‘‘(A) there is an established practice of

2 double-cropping in an area, as determined by

3 the Corporation;

4 ‘‘(B) the additional plan of insurance is of5 fered with respect to an agricultural commodity

6 that is customarily double-cropped in the area;

7 and

8 ‘‘(C) the producer has a history of double

9 cropping or the specific acreage has historically

10 been double-cropped.’’.

11 SEC. 309. SPECIALTY CROPS.

12 (a) IN GENERAL.—The Federal Crop Insurance Act

13 (7 U.S.C. 1501 et seq.) (as amended by sections 201

14 through 203) is amended by adding at the end the fol15 lowing:

16 ‘‘SEC. 523. SPECIALTY CROPS.

17 ‘‘(a) RESEARCH REGARDING THE DEVELOPMENT OF

18 NEW OR REVISED CROP INSURANCE POLICIES.—To en19 courage the development of new or revised crop insurance

20 policies and other materials for specialty crops by qualified

21 private entities, and the submission of those insurance

22 policies and other materials to the Corporation under sec23 tion 508(h), the Specialty Crops Coordinator may—
74

•S 2251 PCS

1 ‘‘(1) make grants on a competitive basis for the

2 research and development of plans of insurance for

3 underserved specialty crops;

4 ‘‘(2) reimburse research costs associated with

5 product development; and

6 ‘‘(3) enter into contracts on a competitive basis

7 for the research and development of plans of insur8 ance for underserved specialty crops.

9 ‘‘(b) PARTNERSHIPS FOR DEVELOPMENT OF RISK

10 MANAGEMENT TOOLS FOR SPECIALTY CROPS.—

11 ‘‘(1) PURPOSE.—The purpose of this subsection

12 is to authorize the Specialty Crops Coordinator, on

13 behalf of the Corporation, to enter into partnerships

14 with qualified public and private entities for the pur15 pose of increasing the availability of risk manage16 ment tools for producers of specialty crops.

17 ‘‘(2) AUTHORITY.—

18 ‘‘(A) IN GENERAL.—For each of fiscal

19 years 2001 through 2004, the Corporation may

20 use not more than $20,000,000 from funds in

21 the insurance fund under section 516(c)(1) to

22 enter into partnerships with the Cooperative

23 State Research, Education, and Extension Serv24 ice, the Agricultural Research Service, the Na25 tional Oceanic and Atmospheric Administration,
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•S 2251 PCS

1 and other appropriate public and private enti2 ties with demonstrated capabilities in devel3 oping and implementing risk management and

4 marketing options for specialty crops.

5 ‘‘(B) EXCLUSION.—Amounts necessary to

6 carry out subparagraph (A) shall not be count7 ed toward the limitation on research and devel8 opment expenses established in section

9 516(b)(2)(A).

10 ‘‘(3) OBJECTIVES.—The Corporation may enter

11 into a partnership under this subsection to—

12 ‘‘(A) enhance the notice, and timeliness of

13 notice of weather conditions, that could nega14 tively affect specialty crop yields, quality, and

15 final product use in order to allow producers to

16 take preventive actions to increase end-product

17 profitability and marketability and to reduce

18 the possibility of crop insurance claims;

19 ‘‘(B) develop a multifaceted approach to

20 pest management to decrease inputs, decrease

21 the development of pest resistance, and increase

22 the effectiveness of pest prevention applications;

23 ‘‘(C) develop a multifaceted approach to

24 fertilization to decrease inputs, decrease exces-
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•S 2251 PCS

1 sive nutrient loading to the environment, and

2 increase application efficiency;

3 ‘‘(D) develop or improve techniques for

4 planning, breeding, growing, maintaining, har5 vesting, storage, and shipping that will address

6 quality and quantity challenges for specialty

7 crops and livestock associated with year-to-year

8 and regional variations;

9 ‘‘(E) provide assistance to State foresters

10 or equivalent officials for the prescribed use of

11 burning on private forest land for the preven12 tion, control, and suppression of fire; and

13 ‘‘(F) develop other risk management tools

14 that specialty crop producers can use to further

15 increase their economic and production sta16 bility.

17 ‘‘(c) TIME PERIODS FOR PURCHASE OF COVERAGE

18 FOR SPECIALTY CROPS.—

19 ‘‘(1) SALES CLOSING DATE.—The sales closing

20 date for obtaining coverage for a specialty crop

21 under this title may not expire before the end of the

22 120-day period beginning on the date of the final re23 lease of materials for policies from the Risk Manage24 ment Agency and the Specialty Crops Coordinator.
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•S 2251 PCS

1 ‘‘(2) PURCHASE DURING INSURANCE PERIOD.—

2 A producer of a specialty crop may purchase new

3 coverage for the specialty crop, or increase coverage

4 levels, at any time during the insurance period, sub5 ject to a 30-day waiting period for the coverage to

6 take effect to permit an inspection to verify accept7 ability by the insurance provider.

8 ‘‘(d) STUDIES OF NEW SPECIALTY CROP INSURANCE

9 POLICIES.—

10 ‘‘(1) IN GENERAL.—The Corporation and the

11 Specialty Crops Coordinator authorized under sec12 tion 507(g) shall jointly conduct studies of the feasi13 bility of developing new insurance policies for spe14 cialty crops, including policies based on the cost of

15 production or adjusted gross income, quality-based

16 policies, or an intermediate program with a higher

17 coverage and cost than the catastrophic risk protec18 tion offered on the date of enactment of this section.

19 ‘‘(2) SUBMISSION OF RESULTS.—Not later than

20 1 year after the date of enactment of this section,

21 and annually thereafter, the Corporation and the

22 Specialty Crops Coordinator shall submit to Con23 gress a report containing the results of the studies

24 required under this subsection.
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•S 2251 PCS

1 ‘‘(e) FISCAL YEARS.—Subsections (b) and (c) shall

2 apply to each of fiscal years 2001 through 2004.’’.

3 (b) REPORT ON COVERAGE OF NEW AND SPECIALTY

4 CROPS AND METHOD FOR PROVISION OF CATASTROPHIC

5 RISK PROTECTION.—Not later than 180 days after the

6 date of enactment of this Act, the Secretary of Agriculture

7 shall submit to the President, the Committee on Agri8 culture of the House of Representatives, and the Com9 mittee on Agriculture, Nutrition, and Forestry of the Sen10 ate a report assessing—

11 (1)(A) the progress made by the Department of

12 Agriculture in expanding crop insurance coverage for

13 new and specialty crops; and

14 (B) the plans of the Department to continue to

15 expand coverage for additional crops; and

16 (2)(A) whether provision of catastrophic risk

17 protection by private sector insurance providers—

18 (i) has resulted in a uniform quality of risk

19 protection services in all regions of the United

20 States; and

21 (ii) has fulfilled the goal of increased par22 ticipation in the Federal crop insurance pro23 gram, particularly in States with traditionally

24 low crop insurance participation rates and
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•S 2251 PCS

1 States with a high proportion of specialty crops;

2 and

3 (B) whether, particularly in States described in

4 subparagraph (A)(ii), the Secretary should resume

5 direct provision of catastrophic risk protection and

6 performance of loss adjustment functions through

7 local offices of the Department.

8 SEC. 310. FEDERAL CROP INSURANCE IMPROVEMENT COM9 MISSION.

10 (a) IN GENERAL.—Section 515 of the Federal Crop

11 Insurance Act (7 U.S.C. 1515) is amended to read as fol12 lows:

13 ‘‘SEC. 515. FEDERAL CROP INSURANCE IMPROVEMENT

14 COMMISSION.

15 ‘‘(a) DEFINITIONS.—In this section:

16 ‘‘(1) COMMISSION.—The term ‘Commission’

17 means the Federal Crop Insurance Improvement

18 Commission established by subsection (b).

19 ‘‘(2) SPECIALTY CROP.—The term ‘specialty

20 crop’ means an agricultural commodity other than a

21 contract commodity (as defined in section 102 of the

22 Agricultural Marketing Transition Act (7 U.S.C.

23 7202)).
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•S 2251 PCS

1 ‘‘(b) ESTABLISHMENT OF COMMISSION.—There is es2 tablished a Commission to be known as the ‘Federal Crop

3 Insurance Improvement Commission’.

4 ‘‘(c) MEMBERSHIP.—

5 ‘‘(1) IN GENERAL.—The Commission shall be

6 composed of the following 9 members:

7 ‘‘(A) The Under Secretary for Farm and

8 Foreign Agricultural Services of the Depart9 ment.

10 ‘‘(B) The manager of the Corporation.

11 ‘‘(C) The Chief Economist of the Depart12 ment or a person appointed by the Chief Econo13 mist.

14 ‘‘(D) An employee of the Office of Manage15 ment and Budget, appointed by the Director of

16 the Office of Management and Budget.

17 ‘‘(E) A representative of the National As18 sociation of Insurance Commissioners, experi19 enced in insurance regulation, appointed by the

20 National Association of Insurance Commis21 sioners.

22 ‘‘(F) Representatives of 3 approved insur23 ance providers (the 3 approved insurance pro24 viders being elected by majority vote of all ap-
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•S 2251 PCS

1 proved insurance providers), appointed by the 3

2 approved insurance providers.

3 ‘‘(G) A representative of a private non4 profit organization designated by the manager

5 of the Corporation—

6 ‘‘(i) that is organized and has oper7 ated for at least 5 consecutive years as an

8 insurance advisory and statistical agent or9 ganization for crop insurance written in

10 the United States;

11 ‘‘(ii) that is licensed and approved as

12 a statistical agent by substantially all

13 States in which federally reinsured crop in14 surance is sold; and

15 ‘‘(iii) the activities of which have

16 included—

17 ‘‘(I) the accumulation and anal18 ysis of loss expenses and other crop

19 insurance statistics;

20 ‘‘(II) the development of forms

21 for crop insurance policies; and

22 ‘‘(III) the development of proce23 dures for loss adjustment;

24 appointed by the organization.
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1 ‘‘(2) TIME OF APPOINTMENT.—The members of

2 the Commission shall be appointed not later than 60

3 days after the date of enactment of the Risk Man4 agement for the 21st Century Act.

5 ‘‘(3) TERM.—A member of the Commission

6 shall serve for the life of the Commission.

7 ‘‘(d) DUTIES.—The Commission shall study the fol8 lowing subjects:

9 ‘‘(1) The extent to which approved insurance

10 providers should bear the risk of loss for federally

11 subsidized crop insurance.

12 ‘‘(2) Whether the Corporation should—

13 ‘‘(A) continue to provide financial assist14 ance for the benefit of agricultural producers by

15 reinsuring coverage written by approved insur16 ance providers; or

17 ‘‘(B) provide assistance in another form,

18 such as by acting as an excess insurer.

19 ‘‘(3) The extent to which development of new

20 insurance products should be undertaken by the pri21 vate sector, including development of insurance

22 products for specialty crops.

23 ‘‘(4) The use by the Corporation of private sec24 tor resources under section 507(c).
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1 ‘‘(5) The progress of the Corporation in reduc2 ing administrative and operating costs of approved

3 insurance providers under section 508(k)(5).

4 ‘‘(6) The identification of methods, and of orga5 nizational, statutory, and structural changes, to en6 hance and improve—

7 ‘‘(A) delivery of reasonably priced crop in8 surance products to agricultural producers;

9 ‘‘(B) loss adjustment procedures;

10 ‘‘(C) good farming practices;

11 ‘‘(D) the establishment of premiums; and

12 ‘‘(E) compliance with this title (including

13 regulations issued under this title, the terms

14 and conditions of insurance coverage, and ad15 justments of losses).

16 ‘‘(e) COMMISSION OPERATIONS.—

17 ‘‘(1) CHAIRPERSON; VOTING.—The Under Sec18 retary for Farm and Foreign Agricultural Services

19 of the Department of Agriculture shall—

20 ‘‘(A) serve as Chairperson of the Commis21 sion; and

22 ‘‘(B) vote in the case of a tie.

23 ‘‘(2) MEETINGS.—
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1 ‘‘(A) IN GENERAL.—The Commission shall

2 meet regularly, but not less than 6 times per

3 year.

4 ‘‘(B) TIME.—A meeting may be called—

5 ‘‘(i) at any time, by the Chairperson;

6 or

7 ‘‘(ii) notwithstanding section 10(f) of

8 the Federal Advisory Committee Act (5

9 U.S.C. App.), by any 3 members of the

10 Commission, if those members give notice

11 to the Commission not later than 10 days

12 before the date of the meeting.

13 ‘‘(3) DISCLOSURE.—

14 ‘‘(A) IN GENERAL.—To the extent that the

15 records, papers, or other documents received,

16 prepared, or maintained by the Commission are

17 subject to public disclosure, the documents shall

18 be available for public inspection and copying at

19 the Office of Risk Management.

20 ‘‘(B) EXCEPTIONS.—Section 10(a) of the

21 Federal Advisory Committee Act (5 U.S.C.

22 App.) shall not apply to—

23 ‘‘(i) a meeting of the Commission; or

24 ‘‘(ii) any disclosure of records, re25 ports, transcripts, minutes, appendixes,
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•S 2251 PCS

1 working papers, drafts, studies, agenda, or

2 other similar documents containing such

3 information as is not required under sec4 tion 10(b) of that Act.

5 ‘‘(C) APPLICABILITY.—The exceptions de6 scribed in subparagraph (B) shall not exempt

7 the Commission from any requirement of—

8 ‘‘(i) section 10(a)(2) of the Federal

9 Advisory Committee Act (5 U.S.C. App.)

10 (to the extent of giving public notice of its

11 meetings);

12 ‘‘(ii) section 10(a)(3) of that Act (to

13 the extent of allowing interested persons to

14 appear and to present or file statements);

15 or

16 ‘‘(iii) section 10(c) of that Act.

17 ‘‘(4) COMPENSATION.—

18 ‘‘(A) IN GENERAL.—Except as provided in

19 subparagraph (B), a member of the Commis20 sion who is employed by the Department or by

21 another agency, department, or office of the

22 Federal Government shall receive no additional

23 compensation for the services of the employee

24 as a member of the Commission.
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1 ‘‘(B) EXPENSES.—A member of the Com2 mission may be allowed necessary traveling and

3 subsistence expenses when engaged in business

4 of the Commission.

5 ‘‘(C) NON-FEDERAL MEMBERS.—A mem6 ber of the Commission who is not employed by

7 the Federal Government, when on the business

8 of the Commission away from the home or reg9 ular place of business of the member, shall be

10 paid—

11 ‘‘(i) compensation for the services of

12 the member at the daily equivalent of the

13 annual rate of basic pay prescribed for

14 level IV of the Executive Schedule under

15 section 5315 of title 5, United States

16 Code; and

17 ‘‘(ii) necessary traveling and subsist18 ence expenses (or a per diem allowance in

19 lieu of subsistence expenses) as authorized

20 by section 5703 of title 5, United States

21 Code, for persons employed intermittently

22 in the Federal Government service.

23 ‘‘(5) MISCELLANEOUS ACCOMMODATIONS.—

24 ‘‘(A) OFFICE SPACE.—The Under Sec25 retary for Farm and Foreign Agricultural Serv-
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•S 2251 PCS

1 ices (or, on delegation by the Under Secretary

2 for Farm and Foreign Agricultural Services,

3 the manager of the Corporation) shall arrange

4 for the Commission to occupy offices and meet5 ing rooms at the offices of the Department in

6 the District of Columbia, in accordance with

7 section 5(b)(5) of the Federal Advisory Com8 mittee Act (5 U.S.C. App.).

9 ‘‘(B) SUPPORT SERVICES.—The Depart10 ment shall provide support services for the

11 Commission in accordance with section 12 of

12 the Federal Advisory Committee Act (5 U.S.C.

13 App.).

14 ‘‘(6) STAFF.—

15 ‘‘(A) IN GENERAL.—The Commission may

16 employ staff and retain the services of profes17 sionals such as accountants, actuaries, attor18 neys, economists, and management consultants

19 to assist the Commission in carrying out its du20 ties under this section.

21 ‘‘(B) COMPENSATION.—In accordance with

22 subparagraph (C), the Commission—

23 ‘‘(i) may compensate staff hired and

24 professionals retained under subparagraph

25 (A) on such terms and in such amounts as
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•S 2251 PCS

1 are customary and reasonable within the

2 private sector; and

3 ‘‘(ii) shall not be limited in any re4 spect to terms, amounts, and limitations

5 related to compensation that would apply if

6 the Commission were retaining contractors

7 to or for a governmental entity.

8 ‘‘(C) LIMITATION ON COMPENSATION.—

9 The aggregate of all staff and professional com10 pensation shall not exceed $4,000,000 per year.

11 ‘‘(D) REIMBURSEMENT.—A member of the

12 Commission may be reimbursed for the costs of

13 professional services obtained by the member to

14 assist in the work of the member for the Com15 mission, except that—

16 ‘‘(i) no reimbursement (other than

17 travel and subsistence expenses) shall be

18 allowed with respect to any services ren19 dered by any person otherwise employed by

20 the Federal Government;

21 ‘‘(ii) a majority of the Commission

22 shall approve in advance the retention by

23 a member of professional services, includ24 ing the terms of compensation of the pro25 fessional;
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•S 2251 PCS

1 ‘‘(iii) the services to be reimbursed

2 shall relate exclusively to the work of the

3 Commission;

4 ‘‘(iv) the work product of any profes5 sional hired under this paragraph shall be

6 available to the Commission and all profes7 sionals engaged by the Commission;

8 ‘‘(v) no reimbursement may be made

9 without approval by a majority of the

10 Commission; and

11 ‘‘(vi) the aggregate amount of all such

12 services for all members of the Commission

13 under this subparagraph shall not exceed

14 $1,000,000 for each fiscal year.

15 ‘‘(7) SOURCE OF FUNDS.—All expenses of the

16 Commission, including payments made under para17 graphs (4) and (6), shall be paid from the insurance

18 fund established under section 516.

19 ‘‘(f) FINAL REPORT.—

20 ‘‘(1) IN GENERAL.—Not later than 2 years

21 after the date of enactment of the Risk Management

22 for the 21st Century Act, the Commission shall sub23 mit to the Committee on Agriculture of the House

24 of Representatives and the Committee on Agri-
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•S 2251 PCS

1 culture, Nutrition, and Forestry of the Senate a

2 final report on the study under subsection (d).

3 ‘‘(2) COPIES.—The Commission shall provide

4 copies of the final report to—

5 ‘‘(A) the Secretary;

6 ‘‘(B) the Board; and

7 ‘‘(C) the Comptroller General of the

8 United States.

9 ‘‘(3) INTERIM REPORTS.—To expedite comple10 tion of the work of the Commission, the Commission

11 may submit 1 or more interim reports or reports on

12 1 or more of the subjects to be studied.

13 ‘‘(g) TERMINATION.—The Commission shall termi14 nate on the earlier of—

15 ‘‘(1) 60 days after the date on which the Com16 mission submits the final report under subsection

17 (f); or

18 ‘‘(2) September 30, 2004.’’.

19 (b) CONFORMING AMENDMENTS.—Section 516 of the

20 Federal Crop Insurance Act (as amended by section

21 203(b)(2)) is amended—

22 (1) in subsection (a)(2), by adding at the end

23 the following:
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•S 2251 PCS

1 ‘‘(D) all necessary amounts to fund the op2 erations of the Commission authorized under

3 section 515.’’; and

4 (2) in subsection (b), by adding at the end the

5 following:

6 ‘‘(3) FUNDS FOR COMMISSION.—For each of

7 fiscal years 2001 through 2004, the Corporation

8 shall pay from the insurance fund established under

9 subsection (c) such sums as are necessary to fund

10 the operation of the Commission authorized under

11 section 515.’’.

12 SEC. 311. HIGHLY ERODIBLE LAND AND WETLAND CON13 SERVATION.

14 (a) HIGHLY ERODIBLE LAND.—Section 1211(3) of

15 the Food Security Act of 1985 (16 U.S.C. 3811(3)) is

16 amended—

17 (1) in subparagraph (C), by striking ‘‘or’’ at

18 the end;

19 (2) in subparagraph (D), by striking the period

20 at the end and inserting ‘‘; or’’; and

21 (3) by adding at the following:

22 ‘‘(E) crop or revenue insurance, or a risk

23 management payment, under the Federal Crop

24 Insurance Act (7 U.S.C. 1501 et seq).’’.
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•S 2251 PCS

1 (b) WETLAND CONSERVATION.—Section 1221(b)(3)

2 of the Food Security Act of 1985 (16 U.S.C. 3821(b)(3))

3 is amended by adding at the end the following:

4 ‘‘(E) Crop or revenue insurance, or a risk

5 management payment, under the Federal Crop

6 Insurance Act (7 U.S.C. 1501 et seq).’’.

7 TITLE IV—EFFECTIVE DATES;

8 TERMINATION OF AUTHORITY

9 SEC. 401. EFFECTIVE DATES.

10 (a) IN GENERAL.—Except as provided in subsections

11 (b) and (c)(2) and section 402(a), this Act and the amend12 ments made by this Act take effect on the date of enact13 ment of this Act.

14 (b) DELAYED OBLIGATION.—The Federal Crop In15 surance Corporation shall not obligate funds to carry out

16 the amendments made by sections 102, 103, 105, 106,

17 201 through 204, 309, and 310 until October 1, 2000.

18 (c) REGULATIONS.—

19 (1) IN GENERAL.—Not later than 60 days after

20 the date of enactment of this Act, the Secretary of

21 Agriculture shall promulgate regulations to carry out

22 this Act and the amendments made by this Act.

23 (2) VOIDING OF BULLETIN.—

24 (A) IN GENERAL.—Bulletin MGR–99–004,

25 issued by the Administrator of the Risk Man-
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•S 2251 PCS

1 agement Agency of the Department of Agri2 culture, is void.

3 (B) TRANSITIONAL PROVISION.—The origi4 nal terms of the crop revenue coverage plan of

5 insurance, as published on July 14, 1998 (63

6 Fed. Reg. 37829), shall remain in effect for the

7 1999 crop year.

8 (C) EFFECTIVE DATE.—This paragraph

9 takes effect on October 1, 2000.

10 SEC. 402. TERMINATION OF AUTHORITY.

11 (a) EFFECTIVE DATE.—This section and the amend12 ments made by this section take effect on September 30,

13 2004.

14 (b) REPEAL.—

15 (1) IN GENERAL.—The amendments made by

16 sections 102, 103, 105, 106, 203(b), and 310 are re17 pealed.

18 (2) APPLICABILITY.—The Federal Crop Insur19 ance Act (7 U.S.C. 1501 et seq.) and section 196 of

20 the Agricultural Market Transition Act (7 U.S.C.

21 7333) shall be applied and administered as if the

22 provisions described in paragraph (1) had not been

23 enacted.

24 (3) CONFORMING AMENDMENT.—Section

25 508(a) of the Federal Crop Insurance Act (7 U.S.C.
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•S 2251 PCS

1 1508(a)) is amended by redesignating paragraph (8)

2 (as added by section 305) as paragraph (7).

3 (c) PILOT PROGRAMS.—Section 522 of the Federal

4 Crop Insurance Act (as added by sections 201 through

5 203) is amended—

6 (1) in subsection (a)—

7 (A) in paragraph (3)—

8 (i) in subparagraph (D), by adding

9 ‘‘and’’ at the end;

10 (ii) by striking subparagraphs (E) and

11 (G);

12 (iii) in subparagraph (F), by striking

13 ‘‘; and’’ and inserting a period; and

14 (iv) by redesignating subparagraph

15 (F) as subparagraph (E);

16 (B) by striking paragraphs (4), (6), and

17 (7); and

18 (C) by redesignating paragraphs (5) and

19 (8) as paragraphs (4) and (5), respectively;

20 (2) in subsection (b)—

21 (A) by striking paragraph (2); and

22 (B) by redesignating paragraphs (3) and

23 (4) as paragraphs (2) and (3), respectively; and

24 (3) by striking subsection (c).
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1 (d) BOARD OF DIRECTORS OF CORPORATION.—Sec2 tion 516(b)(1) of the Federal Crop Insurance Act (7

3 U.S.C. 1516(b)(1)) (as amended by sections 301(c) and

4 307(b)(1)) is amended—

5 (1) in subparagraph (C), by inserting ‘‘and’’

6 after the semicolon;

7 (2) by striking subparagraph (D); and

8 (3) by redesignating subparagraph (E) as sub9 paragraph (D).

10 (e) SPECIALTY CROPS.—

11 (1) IN GENERAL.—Section 523 of the Federal

12 Crop Insurance Act (as added by section 309(a)) is

13 amended—

14 (A) in subsection (b)—

15 (i) by striking paragraph (2); and

16 (ii) by redesignating paragraph (3) as

17 paragraph (2);

18 (B) by striking subsections (c) and (e);

19 and

20 (C) by redesignating subsection (d) as sub21 section (c).

22 (2) REPORT.—Section 309 of this Act is

23 amended by striking subsection (b).

24 (f) FUNDING.—Neither the Secretary of Agriculture

25 nor the Federal Crop Insurance Corporation may use the
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1 funds of the insurance fund under section 516(c)(1) of the

2 Federal Crop Insurance Act (7 U.S.C. 1516(c)(1)), the

3 funds of the Commodity Credit Corporation, or funds

4 under any provision of law to carry out a provision re5 pealed or struck by this section.