IIB
106TH CONGRESS
1ST SESSION
H. R. 2559
IN THE SENATE OF THE UNITED STATES
SEPTEMBER 30, 1999
Received; read twice and referred to the Committee on Agriculture, Nutrition,
and Forestry
AN ACT
To amend the Federal Crop Insurance Act to strengthen
the safety net for agricultural producers by providing
greater access to more affordable risk management tools
and improved protection from production and income
loss, to improve the efficiency and integrity of the Fed-
eral crop insurance program, and for other purposes.
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Agricultural Risk Protection Act of 1999’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—STRENGTHENING THE FARM SAFETY NET
Sec. 101. Premium schedule for additional coverage.
Sec. 102. Premium schedule for other plans of insurance.
Sec. 103. Adjustment in actual production history to establish insurable yields.
Sec. 104. Review and adjustment in rating methodologies.
Sec. 105. Conduct of pilot programs, including livestock.
Sec. 106. Cost of production as a price election.
Sec. 107. Premium discounts for good performance.
Sec. 108. Options for catastrophic risk protection.
Sec. 109. Authority for nonprofit associations to pay fees on behalf of pro-
ducers.
Sec. 110. Elections regarding prevented planting coverage.
Sec. 111. Limitations under noninsured crop disaster assistance program.
Sec. 112. Quality grade loss adjustment.
TITLE II—IMPROVING PROGRAM INTEGRITY
Sec. 201. Limitation on double insurance.
Sec. 202. Improving program compliance and integrity.
Sec. 203. Sanctions for false information.
Sec. 204. Protection of confidential information.
Sec. 205. Records and reporting.
Sec. 206. Compliance with State licensing requirements.
TITLE III—ADMINISTRATION
Sec. 301. Board of Directors of Corporation.
Sec. 302. Promotion of submission of policies and related materials.
Sec. 303. Research and development, including contracts regarding underserved
commodities.
Sec. 304. Funding for reimbursement and research and development.
Sec. 305. Board consideration of submitted policies and materials.
Sec. 306. Contracting for rating of plans of insurance.
Sec. 307. Electronic availability of crop insurance information.
Sec. 308. Fees for use of new policies and plans of insurance.
Sec. 309. Clarification of producer requirement to follow good farming prac-
tices.
Sec. 310. Reimbursements and negotiation of standard reinsurance agreement.
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TITLE IV—EFFECTIVE DATE AND IMPLEMENTATION
Sec. 401. Effective date.
Sec. 402. Special rules regarding implementation of certain amendments.
Sec. 403. Savings clause.
Sec. 404. Sense of the Congress.
TITLE I—STRENGTHENING THE
FARM SAFETY NET
SEC. 101. PREMIUM SCHEDULE FOR ADDITIONAL COV-
ERAGE.
(a) PREMIUM AMOUNTS.—Section 508(d)(2) of the
Federal Crop Insurance Act (7 U.S.C. 1508(d)(2)) is
amended by striking subparagraphs (B) and (C) and in-
serting the following new subparagraph:
‘‘(B) In the case of additional coverage
equal to or greater than 50 percent of the re-
corded or appraised average yield indemnified
at not greater than 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, on an industry-wide
basis as a percentage of the amount of the
premium used to define loss ratio.’’.
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(b) PAYMENT SCHEDULE.—Section 508(e)(2) of the
Federal Crop Insurance Act (7 U.S.C. 1508(e)(2)) is
amended by striking subparagraphs (B) and (C) and in-
serting the following new subparagraphs:
‘‘(B) In the case of additional coverage
equal to or greater than 50 percent, but less
than 55 percent, of the recorded or appraised
average yield indemnified at not greater than
100 percent of the expected market price, or an
equivalent coverage, the amount shall be equal
to the sum of—
‘‘(i) 67 percent of the amount of the
premium 
established 
under 
subsection
(d)(2)(B)(i) for the coverage level selected;
and
‘‘(ii) the amount determined under
subsection (d)(2)(B)(ii) for the coverage
level selected to cover operating and ad-
ministrative expenses.
‘‘(C) In the case of additional coverage
equal to or greater than 55 percent, but less
than 65 percent, of the recorded or appraised
average yield indemnified at not greater than
100 percent of the expected market price, or an
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equivalent coverage, the amount shall be equal
to the sum of—
‘‘(i) 64 percent of the amount of the
premium 
established 
under 
subsection
(d)(2)(B)(i) for the coverage level selected;
and
‘‘(ii) the amount determined under
subsection (d)(2)(B)(ii) for the coverage
level selected to cover operating and ad-
ministrative expenses.
‘‘(D) In the case of additional coverage
equal to or greater than 65 percent, but less
than 75 percent, of the recorded or appraised
average yield indemnified at not greater than
100 percent of the expected market price, or an
equivalent coverage, the amount shall be equal
to the sum of—
‘‘(i) 59 percent of the amount of the
premium 
established 
under 
subsection
(d)(2)(B)(i) for the coverage level selected;
and
‘‘(ii) the amount determined under
subsection (d)(2)(B)(ii) for the coverage
level selected to cover operating and ad-
ministrative expenses.
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‘‘(E) In the case of additional coverage
equal to or greater than 75 percent, but less
than 80 percent, of the recorded or appraised
average yield indemnified at not greater than
100 percent of the expected market price, or an
equivalent coverage, the amount shall be equal
to the sum of—
‘‘(i) 54 percent of the amount of the
premium 
established 
under 
subsection
(d)(2)(B)(i) for the coverage level selected;
and
‘‘(ii) the amount determined under
subsection (d)(2)(B)(ii) for the coverage
level selected to cover operating and ad-
ministrative expenses.
‘‘(F) In the case of additional coverage
equal to or greater than 80 percent, but less
than 85 percent, of the recorded or appraised
average yield indemnified at not greater than
100 percent of the expected market price, or an
equivalent coverage, the amount shall be equal
to the sum of—
‘‘(i) 40.6 percent of the amount of the
premium 
established 
under 
subsection
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(d)(2)(B)(i) for the coverage level selected;
and
‘‘(ii) the amount determined under
subsection (d)(2)(B)(ii) for the coverage
level selected to cover operating and ad-
ministrative expenses.
‘‘(G) Subject to subsection (c)(4), in the
case of additional coverage equal to or greater
than 85 percent of the recorded or appraised
average yield indemnified at not greater than
100 percent of the expected market price, or an
equivalent coverage, the amount shall be equal
to the sum of—
‘‘(i) 30.6 percent of the amount of the
premium 
established 
under 
subsection
(d)(2)(B)(i) for the coverage level selected;
and
‘‘(ii) the amount determined under
subsection (d)(2)(B)(ii) for the coverage
level selected to cover operating and ad-
ministrative expenses.’’.
(c) 
PREMIUM
PAYMENT
DISCLOSURE.—Section
508(e) of the Federal Crop Insurance Act (7 U.S.C.
1508(e)) is amended by adding at the end the following
new paragraph:
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‘‘(5) PREMIUM PAYMENT DISCLOSURE.—Each
policy or plan of insurance under this title shall
prominently indicate the dollar amount of the por-
tion of the premium paid by the Corporation under
this subsection or subsection (h)(2).’’.
SEC. 102. PREMIUM SCHEDULE FOR OTHER PLANS OF IN-
SURANCE.
Section 508(h)(2) of the Federal Crop Insurance Act
(7 U.S.C. 1508(h)(2)) is amended—
(1) by striking ‘‘A policy’’ and inserting the fol-
lowing:
‘‘(A) PREPARATION.—A policy’’;
(2) by striking the second sentence; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(B) PREMIUM SCHEDULE.—In the case of
a policy offered under this subsection (except
paragraph (10)) or subsection (m)(4), the Cor-
poration shall pay a portion of the premium of
the policy that shall be equal to—
‘‘(i) the percentage, specified in sub-
section (e) for a similar level of coverage,
of the total amount of the premium used
to define loss ratio; and
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‘‘(ii) the dollar amount of the admin-
istrative and operating expenses that would
be paid by the Corporation under sub-
section (e) for a similar level of coverage.’’.
SEC. 103. ADJUSTMENT IN ACTUAL PRODUCTION HISTORY
TO ESTABLISH INSURABLE YIELDS.
(a) USE
OF
PERCENTAGE
OF
TRANSITIONAL
YIELD.—Section 508(g) of the Federal Crop Insurance
Act (7 U.S.C. 1508(g)) is amended by adding at the end
the following new paragraph:
‘‘(4) ADJUSTMENT
IN
ACTUAL
PRODUCTION
HISTORY TO ESTABLISH INSURABLE YIELDS.—
‘‘(A) APPLICATION.—This paragraph shall
apply whenever the Corporation uses the actual
production history of the producer to establish
insurable yields for an agricultural commodity
for the 2001 and subsequent crop years.
‘‘(B) ELECTION TO USE PERCENTAGE OF
TRANSITIONAL YIELD.—If, for one or more of
the crop years used to establish the producer’s
actual production history of an agricultural
commodity, the producer’s recorded or ap-
praised yield of the commodity was less than 60
percent of the applicable transitional yield, as
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determined by the Corporation, the Corporation
shall, at the election of the producer—
‘‘(i) exclude any of such recorded or
appraised yield; and
‘‘(ii) replace each excluded yield with
a yield equal to 60 percent of the applica-
ble transitional yield.’’.
(b) APH ADJUSTMENT TO REFLECT PARTICIPATION
IN MAJOR PEST CONTROL EFFORTS.—Section 508(g) of
the Federal Crop Insurance Act (7 U.S.C. 1508(g)) is
amended by inserting after paragraph (4), as added by
subsection (a), the following new paragraph:
‘‘(5) ADJUSTMENT
TO
REFLECT
INCREASED
YIELDS
FROM
SUCCESSFUL
PEST
CONTROL
EF-
FORTS.—
‘‘(A) SITUATIONS
JUSTIFYING
ADJUST-
MENT.—The Corporation shall develop a meth-
odology for adjusting the actual production his-
tory of a producer when each of the following
apply:
‘‘(i) The producer’s farm is located in
an area where systematic, area-wide efforts
have been undertaken using certain oper-
ations or measures, or the producer’s farm
is a location at which certain operations or
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measures have been undertaken, to detect,
eradicate, suppress, or control, or at least
to prevent or retard the spread of, a plant
disease or plant pest, including a plant
pest covered by the definition in section
102 of the Department of Agriculture Or-
ganic Act of 1944 (7 U.S.C. 147a).
‘‘(ii) The presence of the plant disease
or plant pest has been found to adversely
affect the yield of the agricultural com-
modity for which the producer is applying
for insurance.
‘‘(iii) The efforts described in clause
(i) have been effective.
‘‘(B) ADJUSTMENT AMOUNT.—The amount
by which the Corporation adjusts the actual
production history of a producer of an agricul-
tural commodity shall reflect the degree to
which the success of the systematic, area-wide
efforts described in paragraph (1)(A), on aver-
age, increases the yield of the commodity on the
producer’s farm, as determined by the Corpora-
tion.’’.
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SEC. 104. REVIEW AND ADJUSTMENT IN RATING METH-
ODOLOGIES.
Section 508(a) of the Federal Crop Insurance Act (7
U.S.C. 1508(a)) is amended by adding at the end the fol-
lowing:
‘‘(7) REVIEW AND ADJUSTMENT OF RATES.—
‘‘(A) REVIEW
REQUIRED.—To maximize
participation in the Federal crop insurance pro-
gram and to ensure equity for producers, the
Corporation shall periodically review the meth-
odologies employed for rating plans of insur-
ance under this title consistent with section
507(c)(2).
‘‘(B) PREMIUM
ADJUSTMENT.—The Cor-
poration shall analyze the rating and loss his-
tory of approved policies and plans of insurance
for agricultural commodities by area. If the
Corporation makes a determination that pre-
mium rates are excessive for an agricultural
commodity in an area relative to the require-
ments of subsection (d)(2)(B) for that area,
then, in the 2000 crop year or as soon as prac-
ticable after the determination is made, the
Corporation shall make appropriate adjust-
ments in the premium rates for that area for
that agricultural commodity.’’.
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sistent with the guidelines established under
subparagraph (A), except as follows:
‘‘(i) Not later than 60 days after sub-
mission of the proposed pilot program, the
Corporation shall provide an applicant with
notification of its intent to recommend dis-
approval of the proposal to the Board.
‘‘(ii) Not later than 90 days after the
proposed pilot program is submitted to the
Board, the Board shall make a determina-
tion to approve or disapprove the pilot pro-
gram. Any determination by the Board to
disapprove the pilot program shall be ac-
companied by a complete explanation of
the reasons for the Board’s decision to
deny approval. In the event the Board fails
to make a determination within the pre-
scribed time period, the pilot program sub-
mitted shall be deemed approved by the
Board for the initial reinsurance year des-
ignated for the pilot program, except in the
case where the Board and the applicant
agree to an extension.’’.
(d) LIVESTOCK PILOT PROGRAMS.—
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(1) PROGRAMS REQUIRED.—Section 508(h) of
the Federal Crop Insurance Act (7 U.S.C. 1508(h))
is amended by striking paragraph (10) and inserting
the following new paragraph:
‘‘(10) LIVESTOCK PILOT PROGRAMS.—
‘‘(A) PROGRAMS REQUIRED.—
‘‘(i) NUMBER
AND
TYPES
OF
PRO-
GRAMS.—The Corporation shall conduct
two or more pilot programs to evaluate the
effectiveness of risk management tools for
livestock producers, including the use of—
‘‘(I) futures and options con-
tracts and policies and plans of insur-
ance that provide livestock producers
with reasonable protection from the fi-
nancial risks of price or income fluc-
tuations inherent in the production
and marketing of livestock, provide
protection for production losses, and
otherwise protect the interests of live-
stock producers; and
‘‘(II) policies and plans of insur-
ance that, notwithstanding the second
sentence of subsection (a)(1), and
subject to the exclusions in subsection
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(a)(3), provide livestock producers
with reasonable protection from liabil-
ity to mitigate or compensate for ad-
verse environmental impacts from pro-
ducers’ operations caused by natural
disasters, unusual weather or climatic
conditions, third-party acts, or other
forces or occurrences beyond the pro-
ducers’ control, and with coverage to
satisfy obligations established by law
for closure of producers’ operations.
‘‘(ii) PURPOSE
OF
PROGRAMS.—To
the maximum extent practicable, the Cor-
poration shall evaluate the greatest num-
ber and variety of pilot programs described
in clause (i) to determine which of the of-
fered risk management tools are best suit-
ed to protect livestock producers from the
financial risks associated with the produc-
tion and marketing of livestock.
‘‘(B) IMPLEMENTATION; 
ASSISTANCE.—
The Corporation shall begin conducting live-
stock pilot programs under this paragraph dur-
ing fiscal year 2001, and any policy or plan of
insurance offered under this paragraph may be
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prepared without regard to the limitations con-
tained in this title. As part of such a pilot pro-
gram, the Corporation may provide assistance
to producers to purchase futures and options
contracts or policies and plans of insurance of-
fered under that pilot program. However, no ac-
tion may be undertaken with respect to a risk
under this paragraph if the Corporation deter-
mines that insurance protection for livestock
producers against the risk is generally available
from private companies.
‘‘(C) LOCATION.—The Corporation shall
conduct the livestock pilot programs under this
paragraph in a number of counties that is de-
termined by the Corporation to be adequate to
provide a comprehensive evaluation of the feasi-
bility, effectiveness, and demand among pro-
ducers for the risk management tools evaluated
in the pilot programs.
‘‘(D) ELIGIBLE PRODUCERS; LIVESTOCK.—
Any producer of a type of livestock covered by
a pilot program under this paragraph who owns
or operates a farm or ranch in a county selected
as a location for that pilot program shall be eli-
gible to participate in that pilot program. In
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this paragraph, the term ‘livestock’ means cat-
tle, sheep, swine, goats, and poultry.
‘‘(E) RELATION
TO
OTHER
LAWS.—The
terms and conditions of any policy or plan of
insurance offered under this paragraph that is
reinsured by the Corporation is not subject to
the jurisdiction of the Commodity Futures
Trading Commission or the Securities and Ex-
change Commission or considered as accounts,
agreements (including any transaction which is
of the character of, or is commonly known to
the trade as, an ‘option’, ‘privilege’, ‘indemnity’,
‘bid’, ‘offer’, ‘put’, ‘call’, ‘advance guaranty’, or
‘decline guaranty’), or transactions involving
contracts of sale of a commodity for future de-
livery, traded or executed on a contract market
for the purposes of the Commodity Exchange
Act (7 U.S.C. 1 et seq.). Nothing in this sub-
paragraph is intended to affect the jurisdiction
of the Commodity Futures Trading Commission
or the applicability of the Commodity Exchange
Act to any transaction conducted on a des-
ignated contract market (as that term is used
in such Act) by an approved insurance provider
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to offset the provider’s risk under a plan or pol-
icy of insurance under this paragraph.
‘‘(F) LIMITATION
ON
EXPENDITURES.—
The Corporation shall conduct all livestock pro-
grams under this title so that, to the maximum
extent practicable, all costs associated with con-
ducting the livestock programs (other than re-
search and development costs covered by para-
graph (6) or subsection (m)(4)) are not ex-
pected to exceed the following:
‘‘(i) $20,000,000 for fiscal year 2001.
‘‘(ii) $30,000,000 for fiscal year 2002.
‘‘(iii) $40,000,000 for fiscal year
2003.
‘‘(iv) $55,000,000 for fiscal year 2004
and each subsequent fiscal year.’’.
(2) CONFORMING AMENDMENT TO DEFINITION
OF AGRICULTURAL COMMODITY.—Section 518 of the
Federal Crop Insurance Act (7 U.S.C. 1518) is
amended by striking ‘‘livestock and’’ after ‘‘com-
modity, excluding’’.
(e) FUNDING OF LIVESTOCK PILOT PROGRAMS.—
(1) AUTHORIZATION
OF
APPROPRIATIONS.—
Section 516(a)(2) of the Federal Crop Insurance Act
(7 U.S.C. 1516(a)(2)) is amended—
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(A) by striking ‘‘years—’’ and inserting
‘‘years the following:’’;
(B) by capitalizing the first letter of the
first word of each subparagraph;
(C) by striking ‘‘; and’’ at the end of sub-
paragraph (A) and inserting a period; and
(D) by adding at the end the following new
subparagraph:
‘‘(C) Costs associated with the conduct of
livestock pilot programs carried out under sec-
tion 508(h)(10), subject to subparagraph (F) of
such section.’’.
(2) 
USE
OF
INSURANCE
FUND.—Section
516(b)(1) of the Federal Crop Insurance Act (7
U.S.C. 1516(b)(1)) is amended—
(A) by striking ‘‘including—’’ and insert-
ing ‘‘including the following:’’;
(B) by capitalizing the first letter of the
first word of each subparagraph;
(C) by striking the semicolon at the end of
subparagraph (A) and inserting a period;
(D) by striking ‘‘; and’’ at the end of sub-
paragraph (B) and inserting a period; and
(E) by adding at the end the following new
subparagraph:
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‘‘(D) Costs associated with the conduct of
livestock pilot programs carried out under sec-
tion 508(h)(10), subject to subparagraph (F) of
such section.’’.
SEC. 106. COST OF PRODUCTION AS A PRICE ELECTION.
Section 508(c)(5) of the Federal Crop Insurance Act
(7 U.S.C. 1508(c)(5)) is amended—
(1) by striking ‘‘The Corporation shall establish
a price’’ in the matter preceding subparagraph (A)
and inserting ‘‘For purposes of this title, the Cor-
poration shall establish or approve a price’’;
(2) by striking ‘‘or’’ at the end of subparagraph
(A);
(3) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; or’’; and
(4) by adding at the end the following—
‘‘(C) in the case of cost of production or
similar plans of insurance, shall be the pro-
jected cost of producing the agricultural com-
modity (as determined by the Corporation).’’.
SEC. 107. PREMIUM DISCOUNTS FOR GOOD PERFORMANCE.
Section 508(d) of the Federal Crop Insurance Act (7
U.S.C. 1508(d)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(3) PREMIUM DISCOUNTS.—
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‘‘(A) PERFORMANCE-BASED
DISCOUNT.—
The Corporation may provide a performance-
based premium discount for a producer of an
agricultural commodity who has good insurance
or production experience relative to other pro-
ducers of that agricultural commodity in the
same area, as determined by the Corporation.
‘‘(B) DISCOUNT FOR REDUCED PRICE FOR
CERTAIN COMMODITIES.—A producer who in-
sured wheat, barley, oats, or rye during at least
2 of the 1995 through 1999 crop years may be
eligible to receive an additional 20 percent pre-
mium discount on the producer-paid premium
for any 2000 crop policy if the producer dem-
onstrates that the producer’s wheat, barley,
oats, or rye crop was subjected to a discounted
price due to Scab or Vomitoxin damage, or
both, during any 2 years of that period. The
2000 insured crop or crops need not be wheat,
barley, oats, or rye to qualify for the discount
under this subparagraph. The 2 years of insur-
ance and the 2 years of discounted prices need
not be the same.’’.
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SEC. 108. OPTIONS FOR CATASTROPHIC RISK PROTECTION.
Section 508(b) of the Federal Crop Insurance Act (7
U.S.C. 1508(b)) is amended by striking paragraph (3) and
inserting the following new paragraph:
‘‘(3) 
ALTERNATIVE
CATASTROPHIC
COV-
ERAGE.—Beginning with the 2000 crop year, the
Corporation shall offer producers of an agricultural
commodity the option of selecting either of the fol-
lowing:
‘‘(A) The catastrophic risk protection cov-
erage available under paragraph (2)(A).
‘‘(B) An alternative catastrophic risk pro-
tection coverage that—
‘‘(i) indemnifies the producer on an
area yield and loss basis if such a plan of
insurance is offered for the agricultural
commodity in the county in which the farm
is located;
‘‘(ii) provides, on a uniform national
basis, a higher combination of yield and
price protection than the coverage available
under paragraph (2)(A); and
‘‘(iii) the Corporation determines is
comparable to the coverage available under
paragraph (2)(A) for purposes of sub-
section (e)(2)(A).’’.
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SEC. 109. AUTHORITY FOR NONPROFIT ASSOCIATIONS TO
PAY FEES ON BEHALF OF PRODUCERS.
Section 508(b)(5) of the Federal Crop Insurance Act
(7 U.S.C. 1508(b)(5)) is amended by adding at the end
the following new subparagraph:
‘‘(F) PAYMENT OF FEES ON BEHALF OF
PRODUCERS.—
‘‘(i) PAYMENT
AUTHORIZED.—Not-
withstanding any other subparagraph of
this paragraph, a cooperative association of
agricultural producers or a nonprofit trade
association may pay to the Corporation, on
behalf of a member of the association who
consents to be insured under such an ar-
rangement, all or a portion of the fees im-
posed under subparagraphs (A) and (B)
for catastrophic risk protection.
‘‘(ii) 
TREATMENT
OF
LICENSING
FEES.—A licensing fee or other payment
made by the insurance provider to the co-
operative association or trade association
in connection with the issuance of cata-
strophic risk protection or additional cov-
erage under this section to members of the
cooperative association or trade association
shall not be considered to be a rebate to
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the members if the members are informed
in advance of the fee or payment.
‘‘(iii) SELECTION OF PROVIDER; DE-
LIVERY.—Nothing in this subparagraph
shall be construed so as to limit the ability
of a producer to choose the licensed insur-
ance agent or other approved insurance
provider from whom the member will pur-
chase a policy or plan of insurance or to
refuse coverage for which a payment is of-
fered to be made under clause (i). A policy
or plan of insurance for which a payment
is made under clause (i) shall be delivered
by a licensed insurance agent or other ap-
proved insurance provider.
‘‘(iv) ADDITIONAL
COVERAGE
EN-
COURAGED.—Cooperatives and trade asso-
ciations and any approved insurance pro-
vider with whom a licensing fee or other
arrangement under this subparagraph is
made shall encourage producer members to
purchase appropriate levels of additional
coverage in order to meet the risk manage-
ment needs of such member producers.’’.
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SEC. 110. ELECTIONS REGARDING PREVENTED PLANTING
COVERAGE.
Section 508(a) of the Federal Crop Insurance Act (7
U.S.C. 1508(a)) is amended by inserting after paragraph
(7), as added by section 104, the following new paragraph:
‘‘(8) PREVENTED PLANTING COVERAGE.—
‘‘(A) ELECTION
NOT
TO
RECEIVE
COV-
ERAGE.—
‘‘(i) ELECTION.—A producer may
elect not to receive coverage for prevented
planting of an agricultural commodity.
‘‘(ii) REDUCTION.—In the case of an
election under clause (i), the Corporation
shall provide a reduction in the premium
payable by the producer for a plan of in-
surance in an amount equal to the pre-
mium for the prevented planting coverage,
as determined by the Corporation.
‘‘(B) EQUAL COVERAGE.—For each agri-
cultural commodity for which prevented plant-
ing coverage is available, the Corporation shall
offer an equal percentage level of prevented
planting coverage.
‘‘(C) AREA
CONDITIONS
REQUIRED
FOR
PAYMENT.—The Corporation shall limit pre-
vented planting payments to producers to those
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situations in which producers in the area in
which the farm is located are generally affected
by the conditions that prevent an agricultural
commodity from being planted.
‘‘(D) SUBSTITUTE COMMODITY.—
‘‘(i) AUTHORITY TO PLANT.—Subject
to clause (iv), a producer who has pre-
vented planting coverage and who is eligi-
ble to receive an indemnity under such cov-
erage may plant an agricultural com-
modity, other than the commodity covered
by the prevented planting coverage, on the
acreage originally prevented from being
planted.
‘‘(ii) NONAVAILABILITY
OF
INSUR-
ANCE.—A substitute agricultural com-
modity planted as authorized by clause (i)
for harvest in the same crop year shall not
be eligible for coverage under a policy or
plan of insurance under this title or for
noninsured crop disaster assistance under
section 196 of the Federal Agriculture Im-
provement and Reform Act of 1996 (7
U.S.C. 7333). For purposes of subsection
(b)(7) only, the substitute commodity shall
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be deemed to have at least catastrophic
risk protection so as to satisfy the require-
ments of that subsection.
‘‘(iii) EFFECT
ON
ACTUAL
PRODUC-
TION
HISTORY.—If a producer plants a
substitute agricultural commodity as au-
thorized by clause (i) for a crop year, the
Corporation shall assign the producer a re-
corded yield, for that crop year for the
commodity that was prevented from being
planting, equal to 60 percent of the pro-
ducer’s actual production history for such
commodity for purposes of determining the
producer’s actual production history for
subsequent crop years.
‘‘(iv) EFFECT ON PREVENTED PLANT-
ING
PAYMENT.—If a producer plants a
substitute agricultural commodity as au-
thorized by clause (i) before the latest
planting date established by the Corpora-
tion for the agricultural commodity pre-
vented from being planted, the Corporation
shall not make a prevented planting pay-
ment with regard to the commodity pre-
vented from being planted.’’.
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SEC. 111. LIMITATIONS UNDER NONINSURED CROP DIS-
ASTER ASSISTANCE PROGRAM.
(b) LIMITATION.—Section 196(i) of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7333(i)) is amended—
(1) in paragraph (1)(B)—
(A) by striking ‘‘GROSS REVENUES’’ in the
subparagraph heading and inserting ‘‘AD-
JUSTED GROSS INCOME’’; and
(B) by striking ‘‘gross revenue’’ and ‘‘gross
revenues’’ each place they appear and inserting
‘‘adjusted gross income’’; and
(2) by striking paragraph (4) and inserting the
following new paragraph:
‘‘(4) LIMITATION.—A person who has quali-
fying adjusted gross income in excess of $2,000,000
during the taxable year shall not be eligible to re-
ceive any noninsured crop disaster assistance pay-
ment under this section.’’.
SEC. 112. QUALITY GRADE LOSS ADJUSTMENT.
Section 508(a) of the Federal Crop Insurance Act (7
U.S.C. 1508(a)) is amended by inserting after paragraph
(8), as added by section 110, the following new paragraph:
‘‘(9) QUALITY
GRADE
LOSS
ADJUSTMENT.—
Consistent with subsection (m)(4), by the 2000 crop
year, the Corporation shall enter into a contract to
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analyze its quality loss adjustment procedures and
make such adjustments as may be necessary to more
accurately reflect local quality discounts that are ap-
plied to agricultural commodities insured under this
title, taking into consideration the actuarial sound-
ness of the adjustment and the prevention of fraud,
waste and abuse.’’.
TITLE II—IMPROVING PROGRAM
INTEGRITY
SEC. 201. LIMITATION ON DOUBLE INSURANCE.
Section 508(a) of the Federal Crop Insurance Act (7
U.S.C. 1508(a)) is amended by inserting after paragraph
(9), as added by section 112, the following new paragraph:
‘‘(10) LIMITATION ON DOUBLE INSURANCE.—
‘‘(A) RESTRICTED TO CATASTROPHIC RISK
PROTECTION.—Except for situations covered by
subparagraph (B), no policy or plan of insur-
ance may be offered under this title for more
than one agricultural commodity planted on the
same acreage in the same crop year unless the
coverage for the additional crop is limited to
catastrophic risk protection available under sub-
section (b).
‘‘(B) 
EXCEPTION
FOR
DOUBLE-CROP-
PING.—A policy or plan of insurance may be of-
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fered under this title for an agricultural com-
modity and for an additional agricultural com-
modity when both agricultural commodities are
normally harvested within the same crop year
on the same acreage if the following conditions
are met:
‘‘(i) There is an established practice
of double-cropping in the area and the ad-
ditional agricultural commodity is custom-
arily double-cropped in the area with the
first agricultural commodity, as determined
by the Corporation.
‘‘(ii) A policy or plan of insurance for
the first agricultural commodity and the
additional agricultural commodity is avail-
able under this title.
‘‘(iii) The additional commodity is
planted on or before the final planting date
or late planting date for that additional
commodity, as established by the Corpora-
tion.’’.
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SEC. 202. IMPROVING PROGRAM COMPLIANCE AND INTEG-
RITY.
(a) ADDITIONAL METHODS.—Section 506(q) of the
Federal Crop Insurance Act (7 U.S.C. 1506(q)) is
amended—
(1) by redesignating paragraphs (1) and (2) as
paragraphs (2) and (3);
(2) by inserting after the subsection heading
the following new paragraph (1):
‘‘(1) PURPOSE.—The purpose of this subsection
is to improve compliance with the Federal crop in-
surance program and to improve program integ-
rity.’’; and
(3) by adding at the end the following new
paragraphs:
‘‘(4) RECONCILING PRODUCER INFORMATION.—
The Secretary shall develop and implement a coordi-
nated plan for the Corporation and the Adminis-
trator of the Farm Service Agency to reconcile all
relevant information received by the Corporation or
the Farm Service Agency from a producer who ob-
tains crop insurance coverage under this title. Begin-
ning with the 2000 crop year, the Secretary shall re-
quire that the Corporation and the Farm Service
Agency reconcile such producer-derived information
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on at least an annual basis in order to identify and
address any discrepancies.
‘‘(5) IDENTIFICATION
AND
ELIMINATION
OF
FRAUD, WASTE, AND ABUSE.—
‘‘(A) FSA MONITORING
PROGRAM.—The
Secretary shall develop and implement a coordi-
nated plan for the Farm Service Agency to as-
sist the Corporation in the ongoing monitoring
of programs carried out under this title,
including—
‘‘(i) conducting fact finding relative to
allegations of program fraud, waste, and
abuse, both at the request of the Corpora-
tion or on its own initiative after consulta-
tion with the Corporation;
‘‘(ii) reporting any allegation of fraud,
waste, and abuse or identified program
vulnerabilities to the Corporation in a
timely manner; and
‘‘(iii) assisting the Corporation and
approved insurance providers in auditing a
statistically appropriate number of claims
made under any policy or plan of insurance
under this title.
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‘‘(B) USE OF FIELD INFRASTRUCTURE.—
The plan required by this paragraph shall use
the field infrastructure of the Farm Service
Agency, and the Secretary shall ensure that rel-
evant Farm Service Agency personnel are ap-
propriately trained for any responsibilities as-
signed to them under the plan. At a minimum,
such personnel shall receive the same level of
training and pass the same basic competency
tests as required of loss adjusters of approved
insurance providers.
‘‘(C) MAINTENANCE
OF
PROVIDER
EF-
FORT; COOPERATION.—The activities of the
Farm Service Agency under this paragraph do
not affect the responsibility of approved insur-
ance providers to conduct any audits of claims
or other program reviews required by the Cor-
poration. If an insurance provider reports to the
Corporation that it suspects intentional mis-
representation, fraud, waste, or abuse, the Cor-
poration shall make a determination and pro-
vide a written response within 90 days after re-
ceiving the report. The insurance provider and
the Corporation shall take coordinated action in
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any case where misrepresentation, fraud, waste,
or abuse has occurred.
‘‘(6) CONSULTATION
WITH
STATE
COMMIT-
TEES.—The Corporation shall establish a mecha-
nism under which State committees of the Farm
Service Agency are consulted concerning policies and
plans of insurance offered in a State under this title.
‘‘(7) ANNUAL
REPORT
ON
COMPLIANCE
EF-
FORTS.—The Secretary shall submit to the Com-
mittee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate an annual report con-
taining findings relative to the efforts undertaken
pursuant to paragraphs (4) and (5). The report
shall identify specific occurrences of waste, fraud,
and abuse and contain an outline of actions that
have been or are being taken to eliminate the identi-
fied waste, fraud, and abuse.’’.
(b) TECHNICAL CORRECTION.—Paragraph (3) of sec-
tion 506(q) of the Federal Crop Insurance Act (7 U.S.C.
1506(q)), as redesignated by subsection (a), is amended
by striking ‘‘this subsection’’ and inserting ‘‘this para-
graph’’.
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SEC. 203. SANCTIONS FOR FALSE INFORMATION.
(a) AUTHORIZED SANCTIONS.—Section 506(n) of the
Federal Crop Insurance Act (7 U.S.C. 1506(n)) is
amended—
(1) in the subsection heading, by striking
‘‘PENALTIES’’ and inserting ‘‘SANCTIONS FOR VIO-
LATIONS’’;
(2) by redesignating paragraph (2) as para-
graph (3) and, in such paragraph, by striking ‘‘PEN-
ALTY’’ and ‘‘assessing penalties’’ and inserting
‘‘SANCTION’’ and ‘‘imposing a sanction’’, respec-
tively; and
(3) by striking paragraph (1) and inserting the
following new paragraphs:
‘‘(1) FALSE INFORMATION.—If a producer, an
agent, a loss adjuster, an approved insurance pro-
vider, or any other person willfully and intentionally
provides any false or inaccurate information to the
Corporation or to an approved insurance provider
with respect to a policy or plan of insurance under
this title, the Corporation may, after notice and an
opportunity for a hearing on the record, impose one
or more of the sanctions specified in paragraph (2).
‘‘(2) AUTHORIZED SANCTIONS.—The following
sanctions may be imposed for a violation under
paragraph (1):
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‘‘(A) The Corporation may impose a civil
fine for each violation not to exceed the greater
of—
‘‘(i) the amount of the pecuniary gain
obtained as a result of the false or inac-
curate information provided; or
‘‘(ii) $10,000.
‘‘(B) If the violation is committed by a
producer, the producer may be disqualified for
a period of up to 5 years from—
‘‘(i) participating in, or receiving any
benefit provided under this title, the non-
insured crop disaster assistance program
under section 196 of the Federal Agri-
culture Improvement and Reform Act of
1996 (7 U.S.C. 7333), the Agricultural
Market Transition Act (7 U.S.C. 7201 et
seq.), the Agricultural Act of 1949 (7
U.S.C. 1421 et seq.), the Commodity Cred-
it Corporation Charter Act (15 U.S.C. 714
et seq.), or the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1281 et seq.);
‘‘(ii) receiving any loan made, insured,
or guaranteed under the Consolidated
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Farm and Rural Development Act (7
U.S.C. 1921 et seq.);
‘‘(iii) receiving any benefit provided,
or indemnity made available, under any
other law to assist a producer of an agri-
cultural commodity due to a crop loss or a
decline in commodity prices; or
‘‘(iv) receiving any cost share assist-
ance for conservation or any other assist-
ance provided under title XII of the Food
Security Act (16 U.S.C. 3801 et seq.).
‘‘(C) If the violation is committed by an
agent, loss adjuster, approved insurance pro-
vider, or any other person (other than a pro-
ducer), the violator may be disqualified for a
period of up to 5 years from participating in,
or receiving any benefit provided under this
title.
‘‘(D) If the violation is committed by a
producer, the Corporation may require the pro-
ducer to forfeit any premium owed under the
policy, notwithstanding a denial of claim or col-
lection of an overpayment, if the false or inac-
curate information was material.’’.
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(b) DISCLOSURE OF SANCTIONS.—Section 506(n) of
the Federal Crop Insurance Act (7 U.S.C. 1506(n)) is
amended by adding at the end the following new para-
graph:
‘‘(4) DISCLOSURE OF SANCTIONS.—Each policy
or plan of insurance under this title shall promi-
nently indicate the sanctions prescribed under para-
graph (2) for willfully and intentionally providing
false or inaccurate information to the Corporation or
to an approved insurance provider.’’.
SEC. 204. PROTECTION OF CONFIDENTIAL INFORMATION.
Section 502 of the Federal Crop Insurance Act (7
U.S.C. 1502) is amended by adding at the end the fol-
lowing new subsection:
‘‘(c) PROTECTION
OF
CONFIDENTIAL
INFORMA-
TION.—
‘‘(1) AUTHORIZED DISCLOSURE.—In the case of
information furnished by a producer to participate in
or receive any benefit under this title, the Secretary,
any other officer or employee of the Department or
an agency thereof, an approved insurance provider
and its employees and contractors, and any other
person may not disclose the information to the pub-
lic, unless the information has been transformed into
a statistical or aggregate form that does not allow
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the identification of the person who supplied par-
ticular information.
‘‘(2) VIOLATIONS; PENALTIES.—Subsection (c)
of section 1770 of the Food Security Act of 1985 (7
U.S.C. 2276) shall apply with respect to the release
of information collected in any manner or for any
purpose prohibited by paragraph (1).’’.
SEC. 205. RECORDS AND REPORTING.
(a) CONDITION OF OBTAINING COVERAGE.—Section
508(f)(3)(A) of the Federal Crop Insurance Act (7 U.S.C.
1508(f)(3)(A)) is amended by striking ‘‘provide, to the ex-
tent required by the Corporation, records acceptable to the
Corporation of historical acreage and production of the
crops for which the insurance is sought’’ and inserting
‘‘provide annually records acceptable to the Secretary re-
garding crop acreage, acreage yields, and production for
each agricultural commodity insured under this title’’.
(b) COORDINATION OF RECORDS.—Section 506(h) of
the Federal Crop Insurance Act (7 U.S.C. 1506(h)) is
amended—
(1) by striking ‘‘The Corporation’’ and insert-
ing the following:
‘‘(1) IN GENERAL.—The Corporation’’; and
(2) by adding at the end the following new
paragraph:
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‘‘(2) COORDINATION AND USE OF RECORDS.—
‘‘(A) COORDINATION
BETWEEN
AGEN-
CIES.—The Secretary shall ensure that record-
keeping and reporting requirements under this
title and section 196 of the Federal Agriculture
Improvement and Reform Act of 1996 (7
U.S.C. 7333) are coordinated by the Corpora-
tion and the Farm Service Agency to avoid du-
plication of such records, to streamline proce-
dures involved with the submission of such
records, and to enhance the accuracy of such
records.
‘‘(B) USE OF RECORDS.—Notwithstanding
section 502(c), records submitted in accordance
with this title and section 196 of the Federal
Agriculture Improvement and Reform Act of
1996 (7 U.S.C. 7333) shall be available to
agencies and local offices of the Department,
appropriate State and Federal agencies and di-
visions, and approved insurance providers for
use in carrying out this title and such section
196 as well as other agricultural programs and
related responsibilities.’’.
(c) NONINSURED CROP DISASTER ASSISTANCE PRO-
GRAM.—Section 196(b) of the Federal Agriculture Im-
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provement and Reform Act of 1996 (7 U.S.C. 7333(b))
is amended—
(1) by striking paragraph (2) and inserting the
following:
‘‘(2) RECORDS.—To be eligible for assistance
under this section, a producer shall provide annually
to the Secretary, acting through the Agency, records
of crop acreage, acreage yields, and production for
each eligible crop.’’; and
(2) in paragraph (3), by inserting ‘‘annual’’
after ‘‘shall provide’’.
SEC. 206. COMPLIANCE WITH STATE LICENSING REQUIRE-
MENTS.
Section 508 of the Federal Crop Insurance Act (7
U.S.C. 1508) is amended by adding at the end the fol-
lowing new subsection:
‘‘(o) COMPLIANCE WITH STATE LICENSING RE-
QUIREMENTS.—Any person who sells or solicits the pur-
chase of a policy or plan of insurance under this title, in-
cluding catastrophic risk protection, in any State shall be
licensed and otherwise qualified to do business in that
State.’’.
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TITLE III—ADMINISTRATION
SEC. 301. BOARD OF DIRECTORS OF CORPORATION.
(a) CHANGE IN COMPOSITION.—Section 505 of the
Federal Crop Insurance Act (7 U.S.C. 1505) is amended
by striking the section heading, ‘‘SEC. 505.’’, and sub-
section (a) and inserting the following:
‘‘SEC. 505. MANAGEMENT OF CORPORATION.
‘‘(a) BOARD OF DIRECTORS.—
‘‘(1) ESTABLISHMENT.—The management of
the Corporation shall be vested in a Board of Direc-
tors subject to the general supervision of the Sec-
retary.
‘‘(2) COMPOSITION.—The Board shall consist of
only the following members:
‘‘(A) The manager of the Corporation, who
shall serve as a nonvoting ex officio member.
‘‘(B) The Under Secretary of Agriculture
responsible for the Federal crop insurance pro-
gram.
‘‘(C) One additional Under Secretary of
Agriculture (as designated by the Secretary).
‘‘(D) The Chief Economist of the Depart-
ment of Agriculture.
‘‘(E) One person experienced in the crop
insurance business.
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‘‘(F) One person experienced in the regula-
tion of insurance.
‘‘(G) Four active producers who are policy
holders, are from different geographic areas of
the United States, and represent a cross-section
of agricultural commodities grown in the United
States. At least one of the four shall be a spe-
cialty crop producer.
‘‘(3) APPOINTMENT OF PRIVATE SECTOR MEM-
BERS.—The members of the Board described in sub-
paragraphs (E), (F), and (G) of paragraph (2)—
‘‘(A) shall be appointed by, and hold office
at the pleasure of, the Secretary; and
‘‘(B) shall not be otherwise employed by
the Federal Government.
‘‘(4) CHAIRPERSON.—The Board shall select a
member of the Board to serve as Chairperson.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect 30 days after the date of
the enactment of this Act.
(c) EFFECT ON EXISTING BOARD.—A member of the
Board of Directors of the Federal Crop Insurance Cor-
poration on the effective date specified in subsection (b)
may continue to serve as a member of the Board until
the earlier of the following:
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(1) The date the replacement Board is ap-
pointed.
(2) The end of the 180-day period beginning on
the effective date specified in subsection (b).
SEC. 302. PROMOTION OF SUBMISSION OF POLICIES AND
RELATED MATERIALS.
(a) REIMBURSEMENT AUTHORITY.—Section 508(h)
of the Federal Crop Insurance Act (7 U.S.C. 1508(h)),
as amended by section 105(a) of this Act, is amended by
inserting after paragraph (5) the following new paragraph:
‘‘(6) REIMBURSEMENT OF RESEARCH, DEVEL-
OPMENT, AND MAINTENANCE COSTS.—
‘‘(A) REIMBURSEMENT
PROVIDED.—Sub-
ject to the conditions of this paragraph, the
Corporation shall provide a payment to reim-
burse an applicant for research, development,
and maintenance costs directly related to a pol-
icy or other material that is—
‘‘(i) submitted to, and approved by,
the Board under this subsection for rein-
surance; and
‘‘(ii) if applicable, offered for sale to
producers.
‘‘(B) DURATION.—Payments under sub-
paragraph (A) may be made available beginning
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in fiscal year 2001. Payments with respect to
the maintenance of an approved policy or other
material may be provided for a period of not
more than 4 reinsurance years following Board
approval. Upon the expiration of that 4-year pe-
riod, or earlier upon the agreement of the Cor-
poration and the person receiving the payment,
the Corporation shall assume responsibility for
maintenance of a successful policy, as deter-
mined by the Corporation based on the market
share attained by the policy, the total number
of policies sold, the total amount of premium
paid, and the performance of the policy in the
States where the policy is sold.
‘‘(C) TREATMENT
OF
PAYMENT.—Pay-
ments made under subparagraph (A) for a pol-
icy or other material shall be considered as pay-
ment in full for the research and development
conducted with regard to the policy or material
and any property rights to the policy or mate-
rial.
‘‘(D) 
REIMBURSEMENT
AMOUNT.—The
Corporation shall determine the amount of the
payment under subparagraph (A) for an ap-
proved policy or other material based on the
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complexity of the policy or material and the size
of the area in which the policy or material is ex-
pected to be used.’’.
(b) ISSUANCE OF REGULATIONS.—Not later than Oc-
tober 1, 2000, the Corporation shall issue final regulations
to carry out the amendment made by subsection (a).
SEC. 303. RESEARCH AND DEVELOPMENT, INCLUDING CON-
TRACTS REGARDING UNDERSERVED COM-
MODITIES.
(a) SUPPORT FOR PRIVATE RESEARCH AND DEVEL-
OPMENT.—Section 508(m) of the Federal Crop Insurance
Act (7 U.S.C. 1508(m)) is amended by adding at the end
the following new paragraph:
‘‘(4) PRIVATE RESEARCH AND DEVELOPMENT
OF POLICIES AND OTHER MATERIALS.—
‘‘(A) USE OF REIMBURSEMENT AUTHOR-
ITY.—To encourage and promote the necessary
research and development for policies, plans of
insurance, and related materials, including poli-
cies, plans, and materials under the livestock
pilot programs under subsection (h)(10), the
Corporation shall make full use of private re-
sources by providing payment for research and
development for approved policies and plans of
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insurance, and related materials, pursuant to
subsection (h)(6).
‘‘(B) CONTRACTS FOR UNDERSERVED COM-
MODITIES.—
‘‘(i) DEVELOPMENT
OF
PRODUCTS
AND RELATED MATERIALS.—In the event
the Corporation determines that an agri-
cultural commodity, including a specialty
crop, is not adequately served by policies
and plans of insurance and related mate-
rials submitted under subsection (h) or any
other provision of this title, the Corpora-
tion may enter into a contract, under pro-
cedures prescribed by the Corporation, di-
rectly with any person or entity with expe-
rience in crop insurance or farm or ranch
risk management, including universities,
providers of crop insurance, and trade and
research organizations, to carry out re-
search and development for policies and
plans of insurance and related materials
for that agricultural commodity without re-
gard to the limitations contained in this
title.
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‘‘(ii) TYPES OF CONTRACTS.—A con-
tract under this subparagraph may provide
for research and development regarding
new or expanded policies and plans of in-
surance and related materials, including
policies based on adjusted gross income,
cost-of-production, quality losses, and an
intermediate base program with a higher
coverage and cost than catastrophic risk
protection.
‘‘(iii) DELAYED EFFECTIVE DATE FOR
CONTRACTS.—A 
contract 
entered 
into
under this subparagraph may not take ef-
fect before October 1, 2000.
‘‘(iv) USE
OF
RESULTING
POLICIES
AND PLANS.—The Corporation may offer
any policy or plan of insurance developed
under this subparagraph that is approved
by the Board.
‘‘(C) CONTRACT FOR REVENUE COVERAGE
PLAN.—The Corporation shall enter into a con-
tract for research and development regarding
one or more revenue coverage plans designed to
enable producers to take maximum advantage
of fluctuations in market prices and thereby
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maximize revenue realized from the sale of a
crop. Such a plan may include market instru-
ments currently available or may involve the de-
velopment of new instruments to achieve this
goal. Not later than 15 months after the date
of the enactment of this paragraph, the Cor-
poration shall submit to Congress a report con-
taining the results of the contract.’’.
(b) RELIANCE ON PRIVATE DEVELOPMENT OF NEW
POLICIES.—Section 508(m)(2) of the Federal Crop Insur-
ance Act (7 U.S.C. 1508(m)(2)) is amended—
(1) by striking ‘‘EXCEPTION.—No action’’ and
inserting—
‘‘(2) EXCEPTIONS.—
‘‘(A) PRIVATE AVAILABILITY.—No action’’;
and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) PROHIBITED RESEARCH AND DEVEL-
OPMENT
BY
CORPORATION.—Notwithstanding
paragraphs (1) and (5), on and after October 1,
2000, the Corporation shall not conduct re-
search and development for any new policy or
plan of insurance for an agricultural commodity
offered under this title. Any policy or plan of
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insurance developed by the Corporation under
this title before that date shall, at the discretion
of the Corporation, continue to be offered for
sale to producers.’’.
(c) PARTNERSHIPS FOR RISK MANAGEMENT DEVEL-
OPMENT AND IMPLEMENTATION.—Section 508(m) of the
Federal Crop Insurance Act (7 U.S.C. 1508(m)) is
amended by inserting after paragraph (4), as added by
subsection (a), the following new paragraph:
‘‘(5) PARTNERSHIPS
FOR
RISK
MANAGEMENT
DEVELOPMENT AND IMPLEMENTATION.—
‘‘(A) PURPOSE.—The purpose of this para-
graph is to authorize the Corporation to enter
into partnerships with public and private enti-
ties for the purpose of increasing the avail-
ability of loss mitigation, financial, and other
risk management tools for crop producers, with
priority given to risk management tools for pro-
ducers of agricultural commodities covered by
section 196 of the Federal Agriculture Improve-
ment and Reform Act of 1996 (7 U.S.C. 7333)
and specialty and underserved commodity pro-
ducers.
‘‘(B) AUTHORITY.—Subject to subpara-
graphs (D) and (E), the Corporation may enter
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into partnerships with the Cooperative State
Research, Education, and Extension Service,
the Agricultural Research Service, the National
Oceanic Atmospheric Administration, and other
appropriate public and private entities with
demonstrated capabilities in developing and im-
plementing risk management and marketing op-
tions for specialty crops and underserved com-
modities.
‘‘(C) OBJECTIVES.—The Corporation may
enter into a partnership under subparagraph
(B)—
‘‘(i) to enhance the notice and timeli-
ness of notice of weather conditions that
could negatively affect crop yields, quality,
and final product use in order to allow pro-
ducers to take preventive actions to in-
crease end-product profitability and mar-
ketability and to reduce the possibility of
crop insurance claims;
‘‘(ii) to develop a multifaceted ap-
proach to pest management and fertiliza-
tion to decrease inputs, decrease environ-
mental exposure, and increase application
efficiency;
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‘‘(iii) to develop or improve techniques
for planning, breeding, planting, growing,
maintaining, harvesting, storing, shipping,
and marketing that will address quality
and quantity challenges associated with
year-to-year and regional variations;
‘‘(iv) to clarify labor requirements and
assist producers in complying with require-
ments to better meet the physically intense
and time-compressed planting, tending,
and harvesting requirements associated
with the production of specialty crops and
underserved commodities;
‘‘(v) to provide assistance to State for-
esters or equivalent officials for the pre-
scribed use of burning on private forest
land for the prevention, control, and sup-
pression of fire;
‘‘(vi) to provide producers with train-
ing and informational opportunities so that
they will be better able to use financial
management, crop insurance, marketing
contracts, and other existing and emerging
risk management tools; and
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‘‘(vii) to develop other risk manage-
ment tools to further increase economic
and production stability.
‘‘(D) FUNDING SOURCE.—If the Corpora-
tion determines that the entire amount avail-
able to provide reimbursement payments under
subsection (h) and contract payments under
paragraph (4) (in this subparagraph referred to
as ‘reimbursement and contract payments’) for
a fiscal year is not needed for such purposes,
the Corporation may use a portion of the excess
amount to carry out this paragraph, subject to
the following:
‘‘(i) During fiscal years 2001 through
2004, amounts available for reimburse-
ment and contract payments may be used
to carry out this paragraph only if the
total amount to be used for reimbursement
and contract payments is less than
$44,000,000 
for 
fiscal 
year 
2001,
$47,000,000 
for 
fiscal 
year 
2002,
$50,000,000 for fiscal year 2003, and
$52,000,000 for fiscal year 2004.
‘‘(ii) During fiscal years 2001 through
2004, the total amount used to carry out
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this paragraph for a fiscal year may not
exceed the difference between the amount
specified in clause (i) for that fiscal year
and the amount actually used for reim-
bursement and contract payments.
‘‘(E) DELAYED
AUTHORITY.—The Cor-
poration may not enter into a partnership
under the authority of this paragraph before
October 1, 2000.’’.
SEC. 304. FUNDING FOR REIMBURSEMENT AND RESEARCH
AND DEVELOPMENT.
(a) EXPENDITURES.—Section 508(h)(6) of the Fed-
eral Crop Insurance Act (7 U.S.C. 1508(h)(6)), as added
by section 302(a) of this Act, is amended by adding at
the end the following new subparagraph:
‘‘(E) EXPENDITURES.—
‘‘(i) SPECIALTY CROPS.—Of the total
amount made available to provide pay-
ments under this paragraph and subsection
(m)(4)(B) for a fiscal year, $25,000,000
shall be reserved for research and develop-
ment 
contracts 
under 
subsection
(m)(4)(B). The Corporation may use a
portion of the reserved amount for other
purposes under this paragraph, with pri-
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ority given to underserved commodities, if
the Corporation determines that the entire
amount is not needed for such contracts. If
the reserved amount is insufficient for a
fiscal year, the Corporation may use
amounts in excess of the reserved amount
for such contracts.
‘‘(ii) LIMITATION.—In providing pay-
ments under this paragraph and subsection
(m)(4)(B), the Corporation shall not obli-
gate or expend more than $55,000,000
during any fiscal year.’’.
(b) FUNDING.—
(1) AUTHORIZATION
OF
APPROPRIATIONS.—
Section 516(a)(2) of the Federal Crop Insurance Act
(7 U.S.C. 1516(a)(2)) is amended by adding at the
end the following new subparagraph:
‘‘(D) Costs associated with the reimburse-
ment for research, development, and mainte-
nance costs of approved policies and other ma-
terials provided under section 508(h)(6) and
contracting for research and development under
section 508(m)(4)(B).’’.
(2) 
USE
OF
INSURANCE
FUND.—Section
516(b)(1) of the Federal Crop Insurance Act (7
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U.S.C. 1516(b)(1)) is amended by adding at the end
the following new subparagraph:
‘‘(E) Reimbursement for research, develop-
ment, and maintenance costs of approved poli-
cies and other materials provided under section
508(h)(6) and contracting for research and de-
velopment under section 508(m)(4)(B).’’.
SEC. 305. BOARD CONSIDERATION OF SUBMITTED POLI-
CIES AND MATERIALS.
(a) PERSONS AUTHORIZED TO SUBMIT.—Section
508(h)(1) of the Federal Crop Insurance Act (7 U.S.C.
1508(h)(1)) is amended by inserting after ‘‘a person’’ the
following: ‘‘(including an approved insurance provider, a
college or university, a cooperative or trade association,
or any other person)’’.
(b) SALE BY APPROVED INSURANCE PROVIDERS.—
Section 508(h)(3) of the Federal Crop Insurance Act (7
U.S.C. 1508(h)(3)) is amended by inserting after ‘‘for
sale’’ the following: ‘‘by approved insurance providers’’.
(c) TIME
PERIODS
FOR
APPROVAL
OR
DIS-
APPROVAL.—Section 508(h)(4)(A) of the Federal Crop In-
surance Act (7 U.S.C. 1508(h)(4)(A)), as amended by sec-
tion 105(c), is amended—
(1) in clause (iii), as redesignated by section
105(c), by striking ‘‘of the applicant.’’ and all that
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follows through the end of the clause and inserting
‘‘, and such application, as modified, shall be consid-
ered by the Board in the manner provided in clause
(iv) within the 30-day period beginning on the date
the modified application is submitted. Any notifica-
tion of intent to disapprove a policy or other mate-
rial submitted under this subsection shall be accom-
panied by a complete explanation as to the reasons
for the Board’s intention to deny approval.’’; and
(2) by striking clause (iv), as redesignated by
section 105(c), and inserting the following new
clause:
‘‘(iv) Not later than 120 days after a
policy or other material is submitted under
this subsection, the Board shall make a de-
termination to approve or disapprove such
policy or material. Any determination by
the Board to disapprove any policy or
other material shall be accompanied by a
complete explanation of the reasons for the
Board’s decision to deny approval. In the
event the Board fails to make a determina-
tion within the prescribed time period, the
submitted policy or other material shall be
deemed approved by the Board for the ini-
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tial reinsurance year designated for the
policy or material, except in the case where
the Board and the applicant agree to an
extension.’’.
(d) FUNDING TO EXPEDITE CONSIDERATION.—Ef-
fective October 1, 2000, section 516(b)(2) of the Federal
Crop Insurance Act (7 U.S.C. 1516(b)(2)) is amended—
(1) by striking ‘‘RESEARCH AND DEVELOPMENT
EXPENSES.—’’ and inserting ‘‘POLICY
CONSIDER-
ATION EXPENSES.—’’; and
(2) in subparagraph (A), by striking ‘‘research
and development expenses of the Corporation’’ and
inserting ‘‘costs associated with considering for ap-
proval or disapproval policies and other materials
under subsections (h) and (m)(4) of section 508,
costs associated with implementing such subsection
(m)(4), and costs to contract out for assistance in
considering such policies and other materials’’.
SEC. 306. CONTRACTING FOR RATING OF PLANS OF INSUR-
ANCE.
Section 507(c)(2) of the Federal Crop Insurance Act
(7 U.S.C. 1507(c)(2)) is amended—
(1) by striking ‘‘actuarial, loss adjustment,’’
and inserting ‘‘actuarial services, services relating to
loss adjustment and rating plans of insurance,’’; and
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(2) by inserting after ‘‘private sector’’ the fol-
lowing: ‘‘and to enable the Corporation to con-
centrate on regulating the provision of insurance
under this title and evaluating new products and
materials submitted under section 508(h)’’.
SEC. 307. ELECTRONIC AVAILABILITY OF CROP INSURANCE
INFORMATION.
Section 508(a)(5) of the Federal Crop Insurance Act
(7 U.S.C. 1508(a)(5)) is amended—
(1) by redesignating subparagraphs (A) and
(B) as clauses (i) and (ii) and moving such clauses
2 ems to the right;
(2) by striking ‘‘The Corporation’’ and insert-
ing the following:
‘‘(A) AVAILABLE INFORMATION.—The Cor-
poration’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(B) USE
OF
ELECTRONIC
METHODS.—
The Corporation shall make the information de-
scribed in subparagraph (A) available electroni-
cally to producers and approved insurance pro-
viders. To the maximum extent practicable, the
Corporation shall also allow producers and ap-
proved insurance providers to use electronic
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methods to submit information required by the
Corporation.’’.
SEC. 308. FEES FOR USE OF NEW POLICIES AND PLANS OF
INSURANCE.
Section 508(h) of the Federal Crop Insurance Act (7
U.S.C. 1508(h)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(11) FEES FOR NEW POLICIES AND PLANS OF
INSURANCE.—
‘‘(A) AUTHORITY TO IMPOSE FEE.—Effec-
tive beginning with fiscal year 2001, if a person
develops a new policy or plan of insurance and
does not apply for reimbursement of research,
development, and maintenance costs under
paragraph (6), the person shall have the right
to receive a fee from any approved insurance
provider that elects to sell the new policy or
plan of insurance. Notwithstanding paragraph
(5), once the right to collect a fee is asserted
with respect to a new policy or plan of insur-
ance, no approved insurance provider may offer
the new policy or plan of insurance in the ab-
sence of a fee agreement with the person who
developed the policy or plan.
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‘‘(B) DEFINITION.—For purposes of this
paragraph only, the term ‘new policy or plan of
insurance’ means a policy or plan of insurance
that was approved by the Board on or after Oc-
tober 1, 2000, and was not available at the time
the policy or plan of insurance was approved by
the Board.
‘‘(C) AMOUNT.—The amount of the fee
that is payable by an approved insurance pro-
vider to offer a new policy or a plan of insur-
ance under subparagraph (A) shall be an
amount that is determined by the person that
developed the new policy or plan of insurance,
subject to the approval of the Board under sub-
paragraph (D).
‘‘(D) APPROVAL.—The Board shall ap-
prove the amount of a fee determined under
subparagraph (C) for a new policy or plan of
insurance unless the Board can demonstrate
that the fee amount—
‘‘(i) is unreasonable in relation to the
research and development costs associated
with the new policy or plan of insurance;
and
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‘‘(ii) unnecessarily inhibits the use of
the new policy or plan of insurance.’’.
SEC. 309. CLARIFICATION OF PRODUCER REQUIREMENT TO
FOLLOW GOOD FARMING PRACTICES.
Section 508(a)(3)(C) of the Federal Crop Insurance
Act (7 U.S.C. 1508(a)(3)(C)) is amended by inserting
after ‘‘good farming practices’’ the following: ‘‘, including
scientifically sound sustainable and organic farming prac-
tices’’.
SEC. 310. REIMBURSEMENTS AND RENEGOTIATION OF
STANDARD REINSURANCE AGREEMENT.
(a) REIMBURSEMENT RATE CHANGES.—
(1) 
CAT 
LOSS
ADJUSTMENT.—Section
508(b)(11) of the Federal Crop Insurance Act (7
U.S.C. 1508(b)(11)) is amended by striking ‘‘11
percent’’ and inserting ‘‘8 percent’’.
(2) REIMBURSEMENT
FOR
ADMINISTRATIVE
AND OPERATING COSTS.—Section 508(k)(4)(A)(ii) of
the 
Federal 
Crop 
Insurance 
Act 
(7 
U.S.C.
1508(k)(4)(A)(ii)) is amended by striking ‘‘24.5 per-
cent’’ and inserting ‘‘24 percent’’.
(3) 
APPLICATION
OF
AMENDMENTS.—The
amendments made by this subsection shall apply
with respect to the 2001 and subsequent reinsurance
years.
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(b) RENEGOTIATION.—Effective for the 2002 rein-
surance year, the Federal Crop Insurance Corporation
may renegotiate the Standard Reinsurance Agreement.
TITLE IV—EFFECTIVE DATE AND
IMPLEMENTATION
SEC. 401. EFFECTIVE DATE.
Except as provided in sections 301(b) and 305(d),
this Act and the amendments made by this Act shall take
effect on the date of the enactment of this Act. The actual
implementation by the Secretary of Agriculture and the
Federal Crop Insurance Corporation of an amendment
made by this Act shall depend on the terms of the amend-
ment or, in the absence of an express implementation date
in the amendment, the special rules specified in section
402.
SEC. 402. SPECIAL RULES REGARDING IMPLEMENTATION
OF CERTAIN AMENDMENTS.
(a) IMPLEMENTATION FOR 2000 CROP YEAR.—The
amendments made by the following sections of this Act
shall apply beginning with the 2000 crop year:
(1) Section 104, relating to review and adjust-
ment in rating methodologies.
(2) Section 106, relating to cost of production
as a price election.
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(3) Section 107, relating to premium discounts
for good performance.
(4) Section 202, relating to improving program
compliance and integrity.
(5) Section 203, relating to sanctions for false
information.
(6) Section 204, relating to protection of con-
fidential information.
(7) Section 205, relating to records and report-
ing.
(8) Section 206, relating to compliance with
State licensing requirements.
(9) Section 309, relating to requirement to fol-
low good farming practices.
(b) IMPLEMENTATION FOR FISCAL YEAR 2000.—The
amendments made by the following sections of this Act
shall apply beginning with fiscal year 2000:
(1) Section 105(a), relating to repeal of obso-
lete pilot programs.
(2) Subsections (a), (b), and (c) of section 305,
relating to Board consideration of submitted policies
and materials.
(3) Section 306, relating to contracting for rat-
ing plans of insurance.
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(4) Section 307, relating to electronic avail-
ability of crop insurance information.
(c) IMPLEMENTATION FOR 2001 CROP YEAR.—The
amendments made by the following sections of this Act
shall apply beginning with the 2001 crop year:
(1) Section 101, relating to premium schedule
for additional coverage.
(2) Section 102, relating to premium schedule
for other plans of insurance.
(3) Section 103(b), relating to adjustment in
production history to reflect pest control.
(4) Section 109, relating to authority for non-
profit associations to pay fees on behalf of pro-
ducers.
(5) Section 110, relating to elections regarding
prevented planting coverage.
(6) Section 111, relating to limitations under
noninsured crop disaster assistance program.
(7) Section 201, relating to limitation on double
insurance.
(d) IMPLEMENTATION FOR FISCAL YEAR 2001.—The
amendments made by the following sections of this Act
shall apply beginning with fiscal year 2001:
(1) Section 105(b), relating to general require-
ments applicable to pilot programs.
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(2) Section 304, relating to funding for reim-
bursement and research and development.
SEC. 403. SAVINGS CLAUSE.
The Federal Crop Insurance Act (7 U.S.C. 1501 et
seq.) and section 196 of the Federal Agriculture Improve-
ment and Reform Act of 1996 (7 U.S.C. 7333), as in ef-
fect on day before the date of the enactment of this Act,
shall continue to apply with respect to the 1999 crop year
and shall apply with respect to the 2000 crop year, to the
extent the application of an amendment made by this Act
is delayed under section 402 or by the terms of the amend-
ment.
SEC. 404. SENSE OF THE CONGRESS.
It is the Sense of the Congress that the Department
of Agriculture should ensure the full participation of mi-
nority and limited-resource farmers and ranchers in the
programs operating under the Federal Crop Insurance
Act, as amended by the Agriculture Risk Protection Act
of 1999.
Passed the House of Representatives September 29,
1999.
Attest:
JEFF TRANDAHL,
Clerk.