H. Res. 559
In the House of Representatives, U. S.,
October 3, 1994.
Resolved, That upon adoption of this resolution, the
House shall be considered to have taken from the Speaker’s
table the bill (H.R. 4217) to reform the Federal crop insur-
ance program, and for other purposes, with the Senate
amendment thereto, and to have concurred in the Senate
amendment with an amendment as follows:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Fed-
eral Crop Insurance Reform and Department of Agriculture
Reorganization Act of 1994’’.
(b) TABLE OF CONTENTS.—The table of contents of this
Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—FEDERAL CROP INSURANCE REFORM
Sec. 101. Short title; references.
Sec. 102. Definitions.
Sec. 103. Members of Board of Directors of Corporation.
Sec. 104. General powers.
Sec. 105. Personnel.
Sec. 106. Crop insurance.
Sec. 107. Crop insurance yield coverage.
Sec. 108. Preemption.
Sec. 109. Advisory Committee.
Sec. 110. Funding.
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Sec. 111. Noninsured crop disaster assistance.
Sec. 112. Payment and income limitations.
Sec. 113. Producer eligibility.
Sec. 114. Ineligibility for catastrophic risk and noninsured assistance payments.
Sec. 115. Elimination of gender references.
Sec. 116. Prevented planting.
Sec. 117. Report on improving dissemination of crop insurance information.
Sec. 118. Crop insurance provider evaluation.
Sec. 119. Conforming amendments.
Sec. 120. Effective date.
TITLE II—DEPARTMENT OF AGRICULTURE
REORGANIZATION
Sec. 201. Short title.
Sec. 202. Purpose.
Sec. 203. Definitions.
Subtitle A—General Reorganization Authorities
Sec. 211. Transfer of Department functions to Secretary of Agriculture.
Sec. 212. Authority of Secretary to delegate transferred functions.
Sec. 213. Reductions in number of department personnel.
Sec. 214. Consolidation of headquarters offices.
Sec. 215. Combination of field offices.
Sec. 216. Improvement of information sharing.
Sec. 217. Reports by the Secretary.
Sec. 218. Assistant Secretaries of Agriculture.
Sec. 219. Pay increases prohibited.
Subtitle B—Farm and Foreign Agricultural Services
Sec. 225. Under Secretary of Agriculture for Farm and Foreign Agricultural
Services.
Sec. 226. Consolidated Farm Service Agency.
Sec. 227. State, county, and area committees.
Subtitle C—Rural Economic and Community Development
Sec. 231. Under Secretary of Agriculture for Rural Economic and Community
Development.
Sec. 232. Rural Utilities Service.
Sec. 233. Rural Housing and Community Development Service.
Sec. 234. Rural Business and Cooperative Development Service.
Sec. 235. Conforming amendments regarding Rural Electrification Administra-
tion.
Subtitle D—Food, Nutrition, and Consumer Services
Sec. 241. Under Secretary of Agriculture for Food, Nutrition, and Consumer
Services.
Subtitle E—Natural Resources and Environment
Sec. 245. Under Secretary of Agriculture for Natural Resources and Environ-
ment.
Sec. 246. Natural Resources Conservation Service.
Sec. 247. Reorganization of Forest Service.
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Subtitle F—Research, Education, and Economics
Sec. 251. Under Secretary of Agriculture for Research, Education, and Eco-
nomics.
Sec. 252. Program staff.
Subtitle G—Food Safety
Sec. 261. Under Secretary of Agriculture for Food Safety.
Sec. 262. Conditions for implementation of alterations in the level of additives
allowed in animal diets.
Subtitle H—National Appeals Division
Sec. 271. Definitions.
Sec. 272. National Appeals Division and Director.
Sec. 273. Transfer of functions.
Sec. 274. Notice and opportunity for hearing.
Sec. 275. Informal hearings.
Sec. 276. Right of participants to Division hearing.
Sec. 277. Division hearings.
Sec. 278. Director review of determinations of hearing officers.
Sec. 279. Judicial review.
Sec. 280. Implementation of final determinations of Division.
Sec. 281. Conforming amendments relating to National Appeals Division.
Sec. 282. Expansion of issues covered by State mediation programs.
Sec. 283. Authorization of appropriations.
Subtitle I—Miscellaneous Reorganization Provisions
Sec. 291. Successorship provisions relating to bargaining units and exclusive
representatives.
Sec. 292. Purchase of American-made equipment and products.
Sec. 293. Miscellaneous conforming amendments.
Sec. 294. Removal of obsolete administrative provisions.
Sec. 295. Proposed conforming amendments.
Sec. 296. Termination of authority.
TITLE III—MISCELLANEOUS
Sec. 301. Poultry labeling.
Sec. 302. First Amendment rights of employees of the United States Depart-
ment of Agriculture.
Sec. 303. Adjusted cost of thrifty food plan.
Sec. 304. Office of Risk Assessment and Cost-Benefit Analysis.
Sec. 305. Fair and equitable treatment of socially disadvantaged producers.
Sec. 306. Aviation inspections.
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TITLE I—FEDERAL CROP
INSURANCE REFORM
SEC. 101. SHORT TITLE; REFERENCES.
(a) SHORT TITLE.—This title may be cited as the ‘‘Fed-
eral Crop Insurance Reform Act of 1994’’.
(b) REFERENCES
TO
FEDERAL
CROP
INSURANCE
ACT.—Except as otherwise expressly provided, whenever in
this title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Federal Crop Insurance Act (7 U.S.C. 1501
et seq.).
SEC. 102. DEFINITIONS.
(a) IN GENERAL.—Section 502 (7 U.S.C. 1502) is
amended—
(1) by striking the section heading and ‘‘SEC. 502.’’
and inserting the following:
‘‘SEC. 502. PURPOSE AND DEFINITIONS.
‘‘(a) PURPOSE.—’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) DEFINITIONS.—As used in this title:
‘‘(1) ADDITIONAL
COVERAGE.—The term ‘addi-
tional coverage’ means a plan of crop insurance coverage
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providing a level of coverage greater than the level avail-
able under catastrophic risk protection.
‘‘(2) APPROVED INSURANCE PROVIDER.—The term
‘approved insurance provider’ means a private insurance
provider that has been approved by the Corporation to
provide insurance coverage to producers participating in
the Federal crop insurance program established under
this title.
‘‘(3) BOARD.—The term ‘Board’ means the Board
of Directors of the Corporation established under section
505(a).
‘‘(4) 
CORPORATION.—The 
term 
‘Corporation’
means the Federal Crop Insurance Corporation estab-
lished under section 503.
‘‘(5) DEPARTMENT.—The term ‘Department’ means
the United States Department of Agriculture.
‘‘(6) LOSS RATIO.—The term ‘loss ratio’ means the
ratio of all sums paid by the Corporation as indemnities
under any eligible crop insurance policy to that portion
of the premium designated for anticipated losses and a
reasonable reserve, other than that portion of the pre-
mium designated for operating and administrative ex-
penses.
‘‘(7) SECRETARY.—The term ‘Secretary’ means the
Secretary of Agriculture.
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‘‘(8) TRANSITIONAL YIELD.—The term ‘transitional
yield’ means the maximum average production per acre
or equivalent measure that is assigned to acreage for a
crop year by the Corporation in accordance with the reg-
ulations of the Corporation whenever the producer
fails—
‘‘(A) to certify that acceptable documentation
of production and acreage for the crop year is in
the possession of the producer; or
‘‘(B) to present the acceptable documentation
on the demand of the Corporation or an insurance
company reinsured by the Corporation.’’.
(b) CONFORMING AMENDMENTS.—
(1) The first sentence of section 503 (7 U.S.C.
1503) is amended by striking ‘‘(herein called the Cor-
poration)’’.
(2) Section 504 (7 U.S.C. 1504) is amended—
(A) in subsection (a), by striking ‘‘Board of
Directors of the Corporation’’ and inserting
‘‘Board’’; and
(B) in subsection (d), by striking ‘‘Federal
Crop Insurance Corporation’’ and inserting ‘‘Cor-
poration’’.
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(3) The first sentence of section 505(a) (7 U.S.C.
1505(a)) is amended by striking ‘‘(hereinafter called the
‘Board’)’’.
(4) Except in section 502, the Act is amended—
(A) by striking ‘‘Board of Directors’’ each
place it appears and inserting ‘‘Board’’;
(B) by striking ‘‘Department of Agriculture’’
each place it appears and inserting ‘‘Department’’;
and
(C) by striking ‘‘Secretary of Agriculture’’ each
place it appears and inserting ‘‘Secretary’’.
SEC. 103. MEMBERS OF BOARD OF DIRECTORS OF CORPORA-
TION.
The second sentence of section 505(a) (7 U.S.C.
1505(a)) is amended—
(1) by striking ‘‘or Assistant Secretary’’ the first
place it appears; and
(2) by striking ‘‘the Under Secretary or Assistant
Secretary of Agriculture responsible for the farm credit
programs of the Department of Agriculture’’ and insert-
ing ‘‘one additional Under Secretary of Agriculture (as
designated by the Secretary of Agriculture)’’.
SEC. 104. GENERAL POWERS.
Section 506 (7 U.S.C. 1506) is amended—
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(1) by redesignating subsections (j) through (n) as
subsections (k) through (o), respectively;
(2) by inserting after subsection (i) the following
new subsection:
‘‘(j) SETTLING CLAIMS.—The Corporation shall have the
authority to make final and conclusive settlement and adjust-
ment of any claim by or against the Corporation or a fiscal
officer of the Corporation.’’;
(3) in subsection (l) (as so redesignated)—
(A) in the first sentence, by inserting ‘‘, and
issue regulations,’’ after ‘‘agreements’’; and
(B) in the second sentence, by striking ‘‘con-
tracts or agreements’’ each place it appears and in-
serting ‘‘contracts, agreements, or regulations’’;
(4) in subsection (n)(1) (as so redesignated), by
striking subparagraph (B) and inserting the following
new subparagraph:
‘‘(B) disqualify the person from purchasing
catastrophic risk protection or receiving noninsured
assistance for a period of not to exceed 2 years, or
from receiving any other benefit under this title for
a period of not to exceed 10 years.’’;
(5) in subsection (o) (as so redesignated)—
(A) by redesignating paragraphs (1) through
(4) as subparagraphs (A) through (D) and aligning
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the margins of each subparagraph with the margins
of subparagraph (A) of subsection (n)(1) (as redes-
ignated by paragraph (1));
(B) by striking ‘‘(o) ACTUARIAL
SOUND-
NESS.—The Corporation’’ and inserting the follow-
ing:
‘‘(o) ACTUARIAL SOUNDNESS.—
‘‘(1) PROJECTED LOSS RATIO AS OF OCTOBER 1,
1995.—The Corporation’’;
(C) in subparagraph (A) (as redesignated by
subparagraph (A)), by striking ‘‘from obtaining
adequate Federal crop insurance, as determined by
the Corporation’’ and inserting ‘‘(as defined by the
Secretary) from obtaining Federal crop insurance’’;
(D) in subparagraph (C) (as so redesig-
nated)—
(i) by inserting ‘‘, agents, and loss adjust-
ers’’ after ‘‘participating producers’’; and
(ii) by inserting ‘‘, agents, and loss adjust-
ers’’ after ‘‘identify insured producers’’; and
(E) by adding at the end the following new
paragraphs:
‘‘(2) PROJECTED LOSS RATIO AS OF OCTOBER 1,
1998.—The Corporation shall take such actions, includ-
ing the establishment of adequate premiums, as are nec-
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essary to improve the actuarial soundness of Federal
multiperil crop insurance made available under this title
to achieve, on and after October 1, 1998, an overall pro-
jected loss ratio of not greater than 1.075.
‘‘(3) NONSTANDARD CLASSIFICATION SYSTEM.—To
the extent that the Corporation uses the nonstandard
classification system, the Corporation shall apply the
system to all insured producers in a fair and consistent
manner.’’; and
(6) by adding at the end the following new sub-
sections:
‘‘(p) REGULATIONS.—The Secretary and the Corpora-
tion are each authorized to issue such regulations as are nec-
essary to carry out this title.
‘‘(q) PROGRAM COMPLIANCE.—
‘‘(1) TIMELINESS.—The Corporation shall work ac-
tively with approved insurance providers to address pro-
gram compliance and integrity issues as the issues de-
velop.
‘‘(2) NOTIFICATION OF COMPLIANCE PROBLEMS.—
The Corporation shall notify in writing any approved in-
surance provider with whom the Corporation has an
agreement under this title of any error, omission, or fail-
ure to follow Corporation regulations or procedures for
which the approved insurance provider may be respon-
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sible and which may result in a debt owed the Corpora-
tion. The notice shall be given within 3 years of the end
of the insurance period during which the error, omission,
or failure is alleged to have occurred, except that this
time limit shall not apply with respect to errors, omis-
sions, or procedural violations that are willful or inten-
tional. The failure to timely provide the notice required
under this subsection shall relieve the approved insur-
ance provider from the debt owed the Corporation.
‘‘(r) PURCHASE OF AMERICAN-MADE EQUIPMENT AND
PRODUCTS.—
‘‘(1) SENSE OF CONGRESS.—It is the sense of Con-
gress that, to the greatest extent practicable, all equip-
ment and products purchased by the Corporation using
funds made available to the Corporation should be
American-made.
‘‘(2) NOTICE REQUIREMENT.—In providing finan-
cial assistance to, or entering into any contract with, any
entity for the purchase of equipment and products to
carry out this title, the Corporation, to the greatest ex-
tent practicable, shall provide to the entity a notice de-
scribing the statement made in paragraph (1).’’.
SEC. 105. PERSONNEL.
Section 507 (7 U.S.C. 1507) is amended—
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(1) in subsection (a), by striking ‘‘, and county crop
insurance committeemen’’;
(2) in subsection (d), by striking ‘‘of this Act,’’ and
all that follows through ‘‘agency’’; and
(3) by adding at the end the following new sub-
section:
‘‘(g)(1) The Corporation shall establish a management-
level position to be known as the Specialty Crops Coordina-
tor.
‘‘(2) The Specialty Crops Coordinator shall have primary
responsibility for addressing the needs of specialty crop pro-
ducers, and for providing information and advice, in connec-
tion with the activities of the Corporation to improve and ex-
pand the insurance program for specialty crops. In carrying
out this paragraph, the Specialty Crops Coordinator shall act
as the liaison of the Corporation with representatives of spe-
cialty crop producers and assist the Corporation with the
knowledge, expertise, and familiarity of the producers with
risk management and production issues pertaining to spe-
cialty crops.
‘‘(3) The Specialty Crops Coordinator shall use informa-
tion collected from Corporation field office directors in States
in which specialty crops have a significant economic effect
and from other sources, including the extension service and
colleges and universities.’’.
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SEC. 106. CROP INSURANCE.
Section 508 (7 U.S.C. 1508) is amended to read as fol-
lows:
‘‘SEC. 508. CROP INSURANCE.
‘‘(a) AUTHORITY TO OFFER INSURANCE.—
‘‘(1) IN GENERAL.—If sufficient actuarial data are
available (as determined by the Corporation), the Cor-
poration may insure, or provide reinsurance for insurers
of, producers of agricultural commodities grown in the
United States under 1 or more plans of insurance deter-
mined by the Corporation to be adapted to the agricul-
tural commodity concerned. To qualify for coverage
under a plan of insurance, the losses of the insured com-
modity must be due to drought, flood, or other natural
disaster (as determined by the Secretary).
‘‘(2) PERIOD.—Except in the cases of tobacco and
potatoes, insurance shall not extend beyond the period
during which the insured commodity is in the field. As
used in the preceding sentence, in the case of an
aquacultural species, the term ‘field’ means the environ-
ment in which the commodity is produced.
‘‘(3) EXCLUSIONS.—Insurance provided under this
subsection shall not cover losses due to—
‘‘(A) the neglect or malfeasance of the pro-
ducer;
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producer of the commodity and the data is accept-
able to the Corporation.
‘‘(5) DISSEMINATION OF CROP INSURANCE INFOR-
MATION.—The Corporation shall make available to pro-
ducers through local offices of the Department—
‘‘(A) current and complete information on all
aspects of Federal crop insurance; and
‘‘(B) a listing of insurance agents and compa-
nies offering to sell crop insurance in the area of
the producers.
‘‘(6) ADDITION OF NEW AND SPECIALTY CROPS.—
‘‘(A) DATA COLLECTION.—Not later than 180
days after the date of enactment of this paragraph,
the Secretary shall issue guidelines for publication
in the Federal Register for data collection to assist
the Corporation in formulating crop insurance poli-
cies for new and specialty crops.
‘‘(B) ADDITION
OF
NEW
CROPS.—Not later
than 1 year after the date of enactment of this
paragraph, and annually thereafter, the Corporation
shall report to Congress on the progress and ex-
pected timetable for expanding crop insurance cov-
erage under this title to new and specialty crops.
‘‘(C) ADDITION OF DIRECT SALE PERISHABLE
CROPS.—Not later than 1 year after the date of en-
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actment of this paragraph, the Corporation shall re-
port to Congress on the feasibility of offering a crop
insurance program designed to meet the needs of
specialized producers of vegetables and other perish-
able crops who market through direct marketing
channels.
‘‘(b) CATASTROPHIC RISK PROTECTION.—
‘‘(1) IN GENERAL.—The Corporation shall offer a
catastrophic risk protection plan to indemnify producers
for crop loss due to loss of yield or prevented planting,
if provided by the Corporation, when the producer is un-
able, because of drought, flood, or other natural disaster
(as determined by the Secretary), to plant other crops
for harvest on the acreage for the crop year.
‘‘(2) AMOUNT OF COVERAGE.—
‘‘(A) IN GENERAL.—Subject to subparagraph
(B)—
‘‘(i) in the case of each of the 1995
through 1998 crop years, catastrophic risk pro-
tection shall offer a producer coverage for a 50
percent loss in yield, on an individual yield or
area yield basis, indemnified at 60 percent of
the expected market price, or a comparable
coverage (as determined by the Corporation);
and
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‘‘(ii) in the case of each of the 1999 and
subsequent crop years, catastrophic risk pro-
tection shall offer a producer coverage for a 50
percent loss in yield, on an individual yield or
area yield basis, indemnified at 55 percent of
the expected market price, or a comparable
coverage (as determined by the Corporation).
‘‘(B) REDUCTION IN ACTUAL PAYMENT.—The
amount paid to a producer on a claim under cata-
strophic risk protection may reflect a reduction that
is proportional to the out-of-pocket expenses that
are not incurred by the producer as a result of not
planting, growing, or harvesting the crop for which
the claim is made, as determined by the Corpora-
tion.
‘‘(3) YIELD
AND
LOSS
BASIS.—A producer shall
have the option of basing the catastrophic coverage of
the producer on an individual yield and loss basis or on
an area yield and loss basis, if both options are offered
by the Corporation.
‘‘(4) SALE OF CATASTROPHIC RISK COVERAGE.—
‘‘(A) IN GENERAL.—Catastrophic risk coverage
may be offered by—
‘‘(i) approved insurance providers, if avail-
able in an area; and
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‘‘(ii) at the option of the Secretary that is
based on considerations of need, local offices of
the Department.
‘‘(B) NEED.—For purposes of considering
need under subparagraph (A)(ii), the Secretary may
take into account the most efficient and cost-effec-
tive use of resources, the availability of personnel,
fairness to local producers, the needs and conven-
ience of local producers, and the availability of pri-
vate insurance carriers.
‘‘(5) ADMINISTRATIVE FEE.—
‘‘(A) FEE REQUIRED.—Producers shall pay an
administrative fee for catastrophic risk protection.
The administrative fee for each producer shall be
$50 per crop per county, but not to exceed $200
per producer per county up to a maximum of $600
per producer for all counties in which a producer
has insured crops. The administrative fee shall be
paid by the producer at the time the producer ap-
plies for catastrophic risk protection.
‘‘(B) USE OF FEES.—
‘‘(i) FEES UP TO $100.—
‘‘(I) FEES COLLECTED BY USDA OF-
FICES.—Not more than $100 of the ad-
ministrative fees paid by a producer for
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catastrophic risk coverage that are col-
lected by an office of the Department
shall be credited to the appropriations ac-
count providing funds for the payment of
operating and administrative expenses in-
curred for the delivery of catastrophic risk
protection under this section. The fees
shall be collected in accordance with ap-
propriation Acts and shall be available
until expended without fiscal year limita-
tion for the payment of the expenses.
‘‘(II) FEES
COLLECTED
BY
AP-
PROVED
INSURANCE
PROVIDERS.—Not
more than $100 of the administrative fees
paid by a producer for catastrophic risk
coverage that are collected by an approved
insurance provider shall be retained by the
provider as payment for operating and ad-
ministrative expenses incurred for the de-
livery of catastrophic risk protection.
‘‘(ii) FEES IN EXCESS OF $100.—Notwith-
standing the authority granted to the Secretary
under the Federal Crop Insurance Corporation
account provisions of the Agricultural, Rural
Development, Food and Drug Administration,
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and Related Agencies Appropriations Act,
1995, all fees collected under this subsection in
excess of $100 per producer per county shall
be deposited in the crop insurance fund estab-
lished under section 516(c), to be available for
the programs and activities of the Corporation.
‘‘(C) WAIVER OF FEE.—The Corporation shall
waive the administrative fee for limited resource
farmers, as defined by the Corporation.
‘‘(6) PARTICIPATION
REQUIREMENT.—A producer
may obtain catastrophic risk coverage for a crop of the
producer on land in the county only if the producer ob-
tains the coverage for the crop on all insurable land of
the producer in the county.
‘‘(7) ELIGIBILITY FOR DEPARTMENT PROGRAMS.—
‘‘(A) IN
GENERAL.—To be eligible for any
price support or production adjustment program,
the conservation reserve program, or any benefit de-
scribed in section 371 of the Consolidated Farm
and Rural Development Act, the producer must ob-
tain at least the catastrophic level of insurance for
each crop of economic significance grown on each
farm in the county in which the producer has an in-
terest, if insurance is available in the county for the
crop.
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‘‘(B) DEFINITION OF CROP OF ECONOMIC SIG-
NIFICANCE.—As used in this paragraph, the term
‘crop of economic significance’ means a crop that
has contributed, or is expected to contribute, 10
percent or more of the total expected value of all
crops grown by the producer.
‘‘(8) LIMITATION DUE TO RISK.—The Corporation
may limit catastrophic risk coverage in any county or
area, or on any farm, on the basis of the insurance risk
concerned.
‘‘(9) TRANSITIONAL COVERAGE FOR 1995 CROPS.—
Effective only for a 1995 crop planted or for which in-
surance attached prior to January 1, 1995, the Corpora-
tion shall allow producers of the crops until not later
than the end of the 180-day period beginning on the
date of enactment of the Federal Crop Insurance Re-
form Act of 1994 to obtain catastrophic risk protection
for the crop. On enactment of such Act, a producer who
made timely purchases of a crop insurance policy before
the date of enactment of such Act, under the provisions
of this title then in effect, shall be eligible for the same
benefits to which a producer would be entitled under
comparable additional coverage under subsection (c).
‘‘(10) SIMPLIFICATION.—
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‘‘(A) 
CATASTROPHIC
RISK
PROTECTION
PLANS.—In developing and carrying out the policies
and procedures for a catastrophic risk protection
plan under this title, the Corporation shall, to the
maximum extent practicable, minimize the paper-
work required and the complexity and costs of pro-
cedures governing applications for, processing, and
servicing of the plan for all parties involved.
‘‘(B) OTHER PLANS.—To the extent that the
policies and procedures developed under subpara-
graph (A) may be applied to other plans of insur-
ance offered under this title without jeopardizing
the actuarial soundness or integrity of the crop in-
surance program, the Corporation shall apply the
policies and procedures to the other plans of insur-
ance within a reasonable period of time (as deter-
mined by the Corporation) after the effective date
of this paragraph.
‘‘(c) GENERAL COVERAGE LEVELS.—
‘‘(1) ADDITIONAL COVERAGE GENERALLY.—
‘‘(A) IN
GENERAL.—The Corporation shall
offer to producers of agricultural commodities
grown in the United States plans of crop insurance
that provide additional coverage.
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‘‘(B) PURCHASE.—To be eligible for additional
coverage, a producer must apply to an approved in-
surance provider for purchase of additional coverage
if the coverage is available from an approved insur-
ance provider. If additional coverage is unavailable
privately, the Corporation may offer additional cov-
erage plans of insurance directly to producers.
‘‘(2) TRANSFER OF RELEVANT INFORMATION.—If a
producer has already applied for catastrophic risk pro-
tection at the local office of the Department and elects
to purchase additional coverage, the relevant information
for the crop of the producer shall be transferred to the
approved insurance provider servicing the additional cov-
erage crop policy.
‘‘(3) 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 Cor-
poration.
‘‘(4) LEVEL OF COVERAGE.—The level of coverage
shall be dollar denominated and may be purchased at
any level not to exceed 85 percent of the individual yield
or 95 percent of the area yield (as determined by the
Corporation). Not later than the beginning of the 1996
crop year, the Corporation shall provide producers with
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information on catastrophic risk and additional coverage
in terms of dollar coverage (within the allowable limits
of coverage provided in this paragraph).
‘‘(5) PRICE LEVEL.—The Corporation shall estab-
lish a price level for each commodity on which insurance
is offered that—
‘‘(A) shall not be less than the projected mar-
ket price for the commodity (as determined by the
Corporation); or
‘‘(B) at the discretion of the Corporation, may
be based on the actual market price at the time of
harvest (as determined by the Corporation).
‘‘(6) PRICE ELECTIONS.—
‘‘(A) IN GENERAL.—Subject to subparagraph
(B), insurance coverage shall be made available to
a producer on the basis of any price election that
equals or is less than the price election established
by the Corporation. The coverage shall be quoted in
terms of dollars per acre.
‘‘(B) MINIMUM PRICE ELECTIONS.—The Cor-
poration may establish minimum price elections
below which levels of insurance shall not be offered.
‘‘(C) WHEAT
CLASSES
AND
MALTING
BAR-
LEY.—The Corporation shall, as the Corporation
determines practicable, offer producers different
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price elections for classes of wheat and malting bar-
ley (including contract prices in the case of malting
barley), in addition to the standard price election,
that reflect different market prices, as determined
by the Corporation. The Corporation shall, as the
Corporation determines practicable, offer additional
coverage for each class determined under this sub-
paragraph and charge a premium for each class
that is actuarially sound.
‘‘(7) FIRE AND HAIL COVERAGE.—For levels of ad-
ditional coverage equal to 65 percent or more of the re-
corded or appraised average yield indemnified at 100
percent of the expected market price, or an equivalent
coverage, a producer may elect to delete from the addi-
tional coverage any coverage against damage caused by
fire and hail if the producer obtains an equivalent or
greater dollar amount of coverage for damage caused by
fire and hail from an approved insurance provider. On
written notice of the election to the company issuing the
policy providing additional coverage and submission of
evidence of substitute coverage on the commodity in-
sured, the premium of the producer shall be reduced by
an amount determined by the Corporation to be actuari-
ally appropriate, taking into account the actuarial value
of the remaining coverage provided by the Corporation.
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In no event shall the producer be given credit for an
amount of premium determined to be greater than the
actuarial value of the protection against losses caused by
fire and hail that is included in the additional coverage
for the crop.
‘‘(8) STATE
PREMIUM
SUBSIDIES.—The Corpora-
tion may enter into an agreement with any State or
agency of a State under which the State or agency may
pay to the approved insurance provider an additional
premium subsidy to further reduce the portion of the
premium paid by producers in the State.
‘‘(9) LIMITATIONS
ON
ADDITIONAL
COVERAGE.—
The Board may limit the availability of additional cov-
erage under this subsection in any county or area, or on
any farm, on the basis of the insurance risk involved.
The Board shall not offer additional coverage equal to
less than 50 percent of the recorded or appraised aver-
age yield indemnified at 100 percent of the expected
market price, or an equivalent coverage.
‘‘(10) ADMINISTRATIVE FEE.—
‘‘(A) FEE
REQUIRED.—Except as otherwise
provided in this paragraph, if a producer elects to
purchase additional coverage for a crop at a level
that is less than 65 percent of the recorded or ap-
praised average yield indemnified at 100 percent of
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the expected market price, or an equivalent cov-
erage, the producer shall pay an administrative fee
for the additional coverage. Subsection (b)(5) shall
apply in determining the amount and use of the ad-
ministrative fee or in determining whether to waive
the administrative fee.
‘‘(B) EXCEPTION.—If a producer elects to pur-
chase additional coverage for a crop equal to 65
percent or more of the recorded or appraised aver-
age yield indemnified at 100 percent of the expected
market price, or an equivalent coverage, the pro-
ducer shall not be subject to the administrative fee
required by this paragraph or subsection (b)(5). If
the producer has already paid the administrative fee
for a lower level of coverage for the crop, the ad-
ministrative fee shall be refunded to the producer
unless the refund would reduce to less than $200
the total amount of the administrative fees paid by
the producer for 2 or more crops in the same coun-
ty for which a lower level of coverage is obtained.
‘‘(C) ADDITIONAL FEE.—If a producer elects
to purchase additional coverage for a crop equal to
or exceeding 65 percent of the recorded or ap-
praised average yield and 100 percent of the ex-
pected market price or an equivalent coverage, the
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producer shall pay an administrative fee of $10 for
the coverage. If a producer has already paid an ad-
ministrative fee for lesser coverage for the crop, the
fee for lesser coverage shall be refunded to the pro-
ducer unless the producer has paid the maximum
fee for lesser coverage and refund of the fee will not
reduce the amount to be paid below the maximum
amount.
‘‘(D) DEPOSIT OF FEES.—Notwithstanding the
authority granted to the Secretary under the Fed-
eral Crop Insurance Corporation account provisions
of the Agricultural, Rural Development, Food and
Drug Administration, and Related Agencies Appro-
priations Act, 1995, administrative fees collected
under subparagraph (B) in excess of $100 per pro-
ducer per county and under subparagraph (C) shall
be deposited in the insurance fund established
under section 516(c) to be available for the pro-
grams and activities of the Corporation.
‘‘(d) PREMIUMS.—
‘‘(1) PREMIUMS REQUIRED.—The Corporation shall
fix adequate premiums for all the plans of insurance of
the Corporation at such rates as the Board determines
are actuarially sufficient to attain an expected loss ratio
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of not greater than 1.1 through September 30, 1998,
and not greater than 1.075 after October 1, 1998.
‘‘(2) PREMIUM AMOUNTS.—The premium amounts
for catastrophic risk protection under subsection (b) and
additional coverage under subsection (c) shall be fixed as
follows:
‘‘(A) In the case of catastrophic risk protec-
tion, the amount of the premium shall be sufficient
to cover anticipated losses and a reasonable reserve.
‘‘(B) In the case of additional coverage below
65 percent of the recorded or appraised average
yield indemnified at 100 percent of the expected
market price, or an equivalent coverage, but greater
than 50 percent of the recorded or appraised aver-
age yield indemnified at 100 percent of the expected
market price, or an equivalent coverage, 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.
‘‘(C) In the case of additional coverage equal
to or greater than 65 percent of the recorded or ap-
praised average yield indemnified at 100 percent of
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the expected market price, or an equivalent cov-
erage, 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.
‘‘(e) PAYMENT OF PORTION OF PREMIUM BY CORPORA-
TION.—
‘‘(1) IN GENERAL.—For the purpose of encouraging
the broadest possible participation of producers in the
catastrophic risk protection provided under subsection
(b) and the additional coverage provided under sub-
section (c), the Corporation shall pay a part of the pre-
mium in the amounts provided in accordance with this
subsection.
‘‘(2) AMOUNT OF PAYMENT.—The amount of the
premium to be paid by the Corporation shall be as fol-
lows:
‘‘(A) In the case of catastrophic risk protec-
tion, the amount shall be equivalent to the premium
established for catastrophic risk protection under
subsection (d)(2)(A).
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‘‘(B) In the case of coverage below 65 percent
of the recorded or appraised average yield indem-
nified at 100 percent of the expected market price,
or an equivalent coverage, but greater than 50 per-
cent of the recorded or appraised average yield in-
demnified at 100 percent of the expected market
price, or an equivalent coverage, the amount shall
be equivalent to the amount of premium established
for catastrophic risk protection coverage and the
amount of operating and administrative expenses
established under subsection (d)(2)(B).
‘‘(C) In the case of coverage equal to or great-
er than 65 percent of the recorded or appraised av-
erage yield indemnified at 100 percent of the ex-
pected market price, or an equivalent coverage, on
an individual or area basis, the amount shall be
equivalent to an amount equal to the premium es-
tablished for 50 percent loss in yield indemnified at
75 percent of the expected market price and the
amount of operating and administrative expenses
established under subsection (d)(2)(C).
‘‘(3) PREMIUM REDUCTION.—If an approved insur-
ance provider determines that the provider may provide
insurance more efficiently than the expense reimburse-
ment amount established by the Corporation, the ap-
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proved insurance provider may reduce, subject to the ap-
proval of the Corporation, the premium charged the in-
sured by an amount corresponding to the efficiency. The
approved insurance provider shall apply to the Corpora-
tion for authority to reduce the premium before making
such a reduction, and the reduction shall be subject to
the rules, limitations, and procedures established by the
Corporation.
‘‘(4) INDIVIDUAL AND AREA CROP INSURANCE COV-
ERAGE.—The Corporation shall allow approved insur-
ance providers to offer a plan of insurance to producers
that combines both individual yield coverage and area
yield coverage at a premium rate determined by the pro-
vider under the following conditions:
‘‘(A) The individual yield coverage shall be
equal to or greater than catastrophic risk protection
as described in subsection (b).
‘‘(B) The combined policy shall include area
yield coverage that is offered by the Corporation or
similar area coverage, as determined by the Cor-
poration.
‘‘(C) The Corporation shall provide reinsurance
on the area yield portion of the combined policy at
the request of the provider, except that the provider
shall agree to pay to the producer any portion of
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‘‘(C) TERMINATION OF AUTHORITY.—The au-
thority provided by this paragraph shall terminate
on the date that is 3 years after the effective date
of this paragraph.
‘‘(h) SUBMISSION
OF POLICIES
AND MATERIALS
TO
BOARD.—
‘‘(1) IN GENERAL.—In addition to any standard
forms or policies that the Board may require be made
available to producers under subsection (c), a person
may prepare for submission or propose to the Board—
‘‘(A) other crop insurance policies and provi-
sions of policies; and
‘‘(B) rates of premiums for multiple peril crop
insurance pertaining to wheat, soybeans, field corn,
and any other crops determined by the Secretary.
‘‘(2) SUBMISSION OF POLICIES.—A policy or other
material submitted to the Board under this subsection
may be prepared without regard to the limitations con-
tained in this title, including the requirements concern-
ing the levels of coverage and rates and the requirement
that a price level for each commodity insured must equal
the expected market price for the commodity as estab-
lished by the Board. In the case of such a policy, the
payment by the Corporation of a portion of the premium