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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4702 Introduced in House (IH)]

108th CONGRESS
  2d Session
                                H. R. 4702

 To require farmers to be offered supplemental crop insurance based on 
               an area yield and loss plan of insurance.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 24, 2004

Mr. Neugebauer introduced the following bill; which was referred to the 
                        Committee on Agriculture

_______________________________________________________________________

                                 A BILL

 
 To require farmers to be offered supplemental crop insurance based on 
               an area yield and loss plan of insurance.

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

SECTION 1. REQUIREMENT TO OFFER FARMERS SUPPLEMENTAL CROP INSURANCE 
              BASED ON AN AREA YIELD AND LOSS PLAN OF INSURANCE.

    (a) In General.--Section 508(c)(3) of the Federal Crop Insurance 
Act (7 U.S.C. 1508(c)(3)) is amended to read as follows:
            ``(3) Yield and loss basis.--
                    ``(A) Availability of coverage on individual or 
                area yield and loss basis.--A producer shall have the 
                option of purchasing additional coverage based on an 
                individual yield and loss basis or on an area yield and 
                loss basis, if both options are offered by the 
                Corporation.
                    ``(B) Supplemental area coverage.--
                            ``(i) Authority to offer coverage.--
                                    ``(I) In general.--Notwithstanding 
                                section 508(c)(4), if area coverage is 
                                available in the area (as determined by 
                                the Corporation), the Corporation may 
                                provide producers in that area that 
                                purchase an additional level of 
                                coverage for an insurable commodity 
                                based either on an individual yield and 
                                loss plan of insurance or a revenue 
                                plan of insurance that includes 
                                coverage for a loss in yield, as 
                                applicable, the option to purchase 
                                supplemental insurance coverage based 
                                on an area yield and loss plan of 
                                insurance.
                                    ``(II) Limitation.-- The sum of (a) 
                                the coverage level expressed in 
                                percentage terms for the individual 
                                yield and loss plan of insurance or a 
                                revenue plan of insurance that includes 
                                coverage for a loss in yield, as 
                                applicable, and (b) the share expressed 
                                in percentage terms of the area yield 
                                and loss plan of insurance (at whatever 
                                coverage level is selected) that is 
                                used to determine the level of 
                                supplemental insurance coverage shall 
                                not exceed 100 percent.
                            ``(ii) Individual yield and loss plan 
                        required.--To be eligible for supplemental 
                        coverage under this subparagraph, a producer 
                        must also purchase an individual yield and loss 
                        plan of insurance or a revenue plan of 
                        insurance that includes coverage for a loss in 
                        yield, as applicable, at an additional coverage 
                        level for the same crop covered by the 
                        supplemental coverage.
                            ``(iii) Payment of portion of premium.--The 
                        Corporation shall pay a portion of the premium 
                        under a supplemental area yield and loss plan 
                        of insurance and the associated individual area 
                        yield and loss plan of insurance or revenue 
                        plan of insurance that includes coverage for a 
                        loss in yield, as applicable, in an amount 
                        described in subsection (e).
                            ``(iv) Indemnity paid under supplemental 
                        coverage.--
                                    ``(I) Amount of indemnity.--The 
                                indemnity payable under supplemental 
                                coverage shall be calculated as--
                                            ``(aa) the total indemnity 
                                        for an area yield and loss plan 
                                        of insurance at the coverage 
                                        level chosen by the producer; 
                                        multiplied by
                                            ``(bb) the share of the 
                                        coverage of the area yield and 
                                        loss plan of insurance selected 
                                        by the producer.
                                    ``(II) Special rule relating to 
                                qualifying losses.--In the case of a 
                                qualifying loss in an area (as 
                                determined by the Corporation) under a 
                                supplemental area yield and loss plan 
                                of insurance, subject to the applicable 
                                coverage limits, the total amount of 
                                the indemnity shall be available to the 
                                producer regardless of the loss 
                                incurred under the individual yield and 
                                loss plan of insurance or revenue plan 
                                of insurance that includes coverage for 
                                a loss in yield, as applicable, of the 
                                producer.
                            ``(v) Reinsurance year.--Subject to 
                        availability of area coverage for the insurable 
                        crop in the area (as determined by the 
                        Corporation), the supplemental plan of 
                        insurance described in this subparagraph shall 
                        be made available by the Corporation not later 
                        than the 2005 reinsurance year.''.
    (b) Conforming Amendment.--Section 508(d)(2) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(d)(2)) is amended--
            (1) by striking ``additional coverage'' the first place it 
        occurs and inserting ``additional and supplemental coverages''; 
        and
            (2) by adding at the end the following:
                    ``(C) In the case of supplemental area coverage 
                that, in combination with either the individual yield 
                and loss coverage, or a comparable coverage for a 
                policy or plan of insurance that is not based on 
                individual yield and does not insure more than 100 
                percent of the recorded or appraised average yield 
                indemnified at not greater than 100 percent of the 
                expected market price, the amount of the premium 
                shall--
                            ``(i) be sufficient to cover anticipated 
                        losses and a reasonable reserve; and
                            ``(ii) include an amount for operating and 
                        administrative expenses, as determined by the 
                        Corporation, on an industry-wide basis as a 
                        percentage of the amount of the premium used to 
                        define loss ratio.''.
                                 <all>
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