I 
109TH CONGRESS 
1ST SESSION 
H. R. 721
To amend the Federal Crop Insurance Act to require the Federal Crop 
Insurance Corporation to offer farmers supplemental crop insurance 
based on an area yield and loss plan of insurance, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 9, 2005
Mr. NEUGEBAUER introduced the following bill; which was referred to the 
Committee on Agriculture 
A BILL 
To amend the Federal Crop Insurance Act to require the 
Federal Crop Insurance Corporation to offer farmers 
supplemental crop insurance based on an area yield and 
loss plan of insurance, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. REQUIREMENT TO OFFER FARMERS SUPPLE-
MENTAL CROP INSURANCE BASED ON AN 
AREA YIELD AND LOSS PLAN OF INSURANCE. 
(a) IN GENERAL.—Section 508(c) of the Federal 
Crop Insurance Act (7 U.S.C. 1508(c)) is amended by 
adding at the end the following new paragraph:
‘‘(11) SUPPLEMENTAL AREA COVERAGE.—
‘‘(A) AUTHORITY TO OFFER COVERAGE.—
Notwithstanding paragraph (4), if area cov-
erage is available in an area (as determined by 
the Corporation under paragraph (3)), the Cor-
poration may provide producers in that area de-
scribed in subparagraph (B) with the option to 
purchase 
supplemental 
insurance 
coverage 
based on an area yield and loss plan of insur-
ance. 
‘‘(B) ELIGIBLE PRODUCERS.—To be eligi-
ble to obtain supplemental coverage under this 
paragraph, a producer must purchase either an 
individual yield and loss plan of insurance or a 
revenue plan of insurance that includes cov-
erage for a loss in yield at an additional cov-
erage level for the same crop to be covered by 
the supplemental coverage. 
‘‘(C) LIMITATION.—In providing supple-
mental coverage to a producer under this para-
graph, the sum of the following shall not exceed 
100 percent: 
‘‘(i) The coverage level expressed in 
percentage terms for the individual yield 
and loss plan of insurance or the revenue
plan of insurance that includes coverage 
for a loss in yield that is purchased by the 
producer for the same crop covered by the 
supplemental coverage, as required by sub-
paragraph (B). 
‘‘(ii) The share expressed in percent-
age 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 pro-
vided the producer under this paragraph. 
‘‘(D) PAYMENT
OF
PORTION
OF
PRE-
MIUM.—As provided in subsection (e), the Cor-
poration shall pay a portion of the premium 
under a supplemental area yield and loss plan 
of insurance provided under this paragraph and 
the associated individual area yield and loss 
plan of insurance or revenue plan of insurance 
that includes coverage for a loss in yield. 
‘‘(E) AMOUNT OF INDEMNITY PAID UNDER 
SUPPLEMENTAL
COVERAGE.—The 
indemnity 
payable under supplemental coverage provided 
under this paragraph shall be calculated as—
‘‘(i) the total indemnity for an area 
yield and loss plan of insurance at the cov-
erage level chosen by the producer; multi-
plied by 
‘‘(ii) the share of the coverage of the 
area yield and loss plan of insurance se-
lected by the producer. 
‘‘(F) SPECIAL RULE RELATING TO QUALI-
FYING 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 the revenue plan of insur-
ance that includes coverage for a loss in yield 
of the producer. 
‘‘(G) REINSURANCE
YEAR.—Subject to 
availability of area coverage for the insurable 
crop in the area (as determined by the Corpora-
tion), the supplemental plan of insurance de-
scribed in this paragraph shall be made avail-
able by the Corporation not later than the 2006 
reinsurance year.’’.
(b) CONFORMING AMENDMENTS.—Section 508(d)(2) 
of the Federal Crop Insurance Act (7 U.S.C. 1508(d)(2)) 
is amended—
(1) by striking ‘‘additional coverage’’ in the 
matter preceding subparagraph (A) and inserting 
‘‘additional and supplemental coverages’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) In the case of supplemental area cov-
erage provided under subsection (c)(11) 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 aver-
age 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.’’.
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