consecutive crop year for which the pro-
ducer is eligible for a discount under sub-
paragraph (A)(i).’’.
SEC. 109. ADJUSTMENTS TO SUBSIDY LEVELS.
(a) IN GENERAL.—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 inserting the fol-
lowing:
‘‘(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 cov-
erage, the amount shall be equal to the sum
of—
‘‘(i) 50 percent of the amount of the
premium 
established 
under 
subsection
(d)(2)(B)(i); and
‘‘(ii) the amount of operating and ad-
ministrative expenses determined under
subsection (d)(2)(B)(ii).
‘‘(C) In the case of additional coverage
equal to or greater than 65 percent of the re-
corded or appraised average yield indemnified
at 100 percent of the expected market price, or
an equivalent coverage, the amount shall be
equal to the sum of—
‘‘(i) 50 percent of the amount of the
premium 
established 
under 
subsection
(d)(2)(C)(i); and
‘‘(ii) the amount of operating and ad-
ministrative expenses determined under
subsection (d)(2)(C)(ii).’’.
(b) APPLICATION.—The amendment made by sub-
section (a) applies beginning with the 2000 crop year.
SEC. 110. SALES CLOSING DATES.
Section 508(f)(2) of the Federal Crop Insurance Act
(7 U.S.C. 1508(f)(2)) is amended by striking the last sen-
tence.
SEC. 111. ASSIGNED YIELDS.
Section 508(g)(2)(B) of the Federal Crop Insurance
Act (7 U.S.C. 1508(g)(2)(B)) is amended—
(1) by striking ‘‘assigned a yield’’ and inserting
‘‘assigned—
‘‘(i) a yield’’;
(2) by striking the period at the end and insert-
ing ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(ii) a yield determined by the Cor-
poration, in the case of—
‘‘(I) a person that has not been
actively engaged in farming for a
share of the production of the insured
crop for more than 2 crop years, as
determined by the Secretary;
‘‘(II) a producer that produces
an agricultural commodity on land
that has not been farmed by the pro-
ducer; and
‘‘(III) a producer that rotates a
crop produced on a farm to a crop
that has not been produced on the
farm.’’.
SEC. 112. ACTUAL PRODUCTION HISTORY ADJUSTMENT
FOR DISASTERS.
Section 508(g)(2) of the Federal Crop Insurance Act
(7 U.S.C. 1508(g)(2)) is amended by adding at the end
the following:
‘‘(E) SUBSTITUTION
OF
TRANSITIONAL
YIELD.—Effective beginning with the 2000 crop
year, if the producer’s yield of an agricultural
commodity in any crop year is less than 85 per-
cent of the transitional yield established by the
Corporation for the agricultural commodity, the
Corporation shall, at the option of the producer,
consider the producer’s yield for the crop year
to be 85 percent of the transitional yield for
the purpose of calculating the actual production
history for a crop of an agricultural commodity
under subparagraph (A).
‘‘(F) CORPORATION’S SHARE OF COSTS.—
In the case of any yield substitution under sub-
paragraph (E), in addition to any other author-
ity to pay any portion of the premium and in-
demnity, the Corporation shall pay—
‘‘(i) the portion of the premium or in-
demnity that represents the increase in
premium associated with the substitution
of the transitional yield under subpara-
graph (E);
‘‘(ii) all additional indemnities associ-
ated with the substitution; and
‘‘(iii) any amounts that result from
the difference in the administrative and op-
erating expenses owed to an approved in-
surance provider as the result of the sub-
stitution.’’.
SEC. 113. PAYMENT OF PORTION OF PREMIUM.
Section 508(h)(2) of the Federal Crop Insurance Act
(7 U.S.C. 1508(h)(2)) is amended in the second sentence
by inserting before the period at the end the following:
‘‘, except that the Corporation shall not pay any portion
of the premium for any plan of insurance that offers cov-
erage for losses associated with a change in price’’.
SEC. 114. LIMITATION ON PREMIUMS INCLUDED IN UNDER-
WRITING GAINS.
Section 508(k) of the Federal Crop Insurance Act (7
U.S.C. 1508(k)) is amended by adding at the end the fol-
lowing:
‘‘(8) LIMITATION ON PREMIUMS INCLUDED IN
UNDERWRITING GAINS.—Notwithstanding any other
provision of law, the reinsurance agreements of the
Corporation shall require that not more than 50 per-
cent of any premium for catastrophic risk protection
under subsection (b) be included in the calculation
of gains or losses of an approved insurance provider
unless the loss ratio for catastrophic risk protection
exceeds 1.0.’’.
TITLE II—ADMINISTRATION
SEC. 201. BOARD OF DIRECTORS OF CORPORATION.
Section 505 of the Federal Crop Insurance Act (7
U.S.C. 1505) is amended by striking subsection (a) and
inserting the following:
‘‘(a) BOARD OF DIRECTORS.—
‘‘(1) IN
GENERAL.—The management of the
Corporation shall be vested in a Board subject to the
general supervision of the Secretary.
‘‘(2) COMPOSITION.—The Board shall consist
of—
‘‘(A) 4 members who are active agricul-
tural producers with or without crop insurance,
with 1 member appointed from each of the 4 re-
gions of the United States (as determined by
the Secretary);
‘‘(B) 1 member who is active in the crop
insurance business;
‘‘(C) 1 member who is active in the rein-
surance business;
‘‘(D) the Under Secretary for Farm and
Foreign Agricultural Services;
‘‘(E) the Under Secretary for Rural Devel-
opment; and
‘‘(F) the Chief Economist of the Depart-
ment of Agriculture.
‘‘(3) APPOINTMENT
AND
TERMS
OF
PRIVATE
SECTOR MEMBERS.—The members of the Board de-
scribed in subparagraphs (A), (B), and (C) of para-
graph (2)—
‘‘(A) shall be appointed by, and hold office
at the pleasure of, the Secretary;
‘‘(B) shall not be otherwise employed by
the Federal Government;
‘‘(C) shall be appointed to staggered 4-year
terms, as determined by the Secretary; and
‘‘(D) shall serve not more than 2 consecu-
tive terms.
‘‘(4) CHAIRPERSON.—The Board shall select a
member of the Board described in subparagraph
(A), (B), or (C) of paragraph (2) to serve as Chair-
person of the Board.
‘‘(5) STAFF.—The Board shall employ or con-
tract with 1 or more individuals who are knowledge-
able and experienced in quantitative mathematics
and actuarial rating to assist the Board in reviewing
and approving policies and materials with respect to
plans of insurance authorized or submitted under
section 508.’’.
SEC. 202. OFFICE OF RISK MANAGEMENT.
(a) ESTABLISHMENT.—Section 226A(a) of the De-
partment of Agriculture Reorganization Act of 1994 (7
U.S.C. 6933(a)) is amended by striking ‘‘independent Of-
fice of Risk Management’’ and inserting ‘‘Office of Risk
Management, which shall be under the direction of the
Board of Directors of the Federal Crop Insurance Cor-
poration’’.
(b) FUNCTIONS.—Section 226A(b) of the Depart-
ment of Agriculture Reorganization Act of 1994 (7 U.S.C.
6933(b)) is amended by striking paragraph (1) and insert-
ing the following:
‘‘(1) Assistance to the Board in developing, re-
viewing, and recommending plans of insurance under
section 508(a)(7) of the Federal Crop Insurance Act
(7 U.S.C. 1508(a)(7)) to ensure that each agricul-
tural commodity (including each new or speciality
crop) is adequately served by plans of insurance.’’.
SEC. 203. OFFICE OF PRIVATE SECTOR PARTNERSHIP.
The Federal Crop Insurance Act is amended by in-
serting after section 507 (7 U.S.C. 1507) the following:
‘‘SEC. 507A. OFFICE OF PRIVATE SECTOR PARTNERSHIP.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish and maintain in the Department an Office of Private
Sector Partnership, which shall be under the direction of
the Board.
‘‘(b) FUNCTIONS.—The Office shall—
‘‘(1) provide at least monthly reports to the
Board on crop insurance issues, which shall be based
on comments received from producers, approved in-
surance providers, and other sources that the Office
considers appropriate;
‘‘(2)(A) review policies and materials with re-
spect to—
‘‘(i) subsidized plans of insurance author-
ized under section 508; and
‘‘(ii) unsubsidized plans of insurance sub-
mitted to the Board under section 508(h); and
‘‘(B) make recommendations to the Board with
respect to approval of the policies and materials;
‘‘(3) administer the reinsurance functions de-
scribed in section 508(k) on behalf of the Corpora-
tion;
‘‘(4) review and make recommendations to the
Board with respect to methodologies for rating plans
of insurance under this title; and
‘‘(5) perform such other functions as the Board
considers appropriate.
‘‘(c) ADMINISTRATOR.—The Office shall be headed
by an Administrator who shall be appointed by the Sec-
retary.
‘‘(d) STAFF.—The Administrator shall appoint such
employees pursuant to title 5, United States Code, as are
necessary for the administration of the Office, including
employees who have commercial reinsurance and actuarial
experience.’’.
SEC. 204. PENALTIES FOR FALSE INFORMATION.
Section 506(n)(1) of the Federal Crop Insurance Act
(7 U.S.C. 1506(n)(1)) is amended—
(1) in subparagraph (A), by inserting ‘‘for each
claim’’ after ‘‘$10,000’’; and
(2) in subparagraph (B), by striking ‘‘non-
insured assistance’’ and inserting ‘‘any loan, pay-
ment, or benefit described in section 1211 of the
Food Security Act of 1985 (16 U.S.C. 3811)’’.
SEC. 205. REGULATIONS.
Section 506(p) of the Federal Crop Insurance Act (7
U.S.C. 1506(p)) is amended—
(1) by striking ‘‘The Secretary’’ and inserting
the following:
‘‘(1) IN GENERAL.—The Secretary’’; and
(2) by adding at the end the following:
‘‘(2) TERMS OF INSURANCE.—
‘‘(A) IN GENERAL.—Regulations issued by
the Secretary and the Corporation specifying
the terms of insurance under section 508 shall
be issued without regard to—
‘‘(i) the notice and comment provi-
sions of section 553 of title 5, United
States Code;
‘‘(ii) the Statement of Policy of the
Secretary of Agriculture effective July 24,
1971 (36 Fed. Reg. 13804), relating to no-
tices of proposed rulemaking and public
participation in rulemaking; and
‘‘(iii) chapter 35 of title 44, United
States Code (commonly known as the ‘Pa-
perwork Reduction Act’).
‘‘(B) CONGRESSIONAL REVIEW OF AGENCY
RULEMAKING.—In carrying out this paragraph,
the Secretary shall use the authority provided
under section 808 of title 5, United States
Code.’’.
SEC. 206. PROGRAM COMPLIANCE.
Section 506(q) of the Federal Crop Insurance Act (7
U.S.C. 1506(q)) is amended—
(1) by redesignating paragraph (2) as para-
graph (6); and
(2) by striking paragraph (1) and inserting the
following:
‘‘(1) IN GENERAL.—Not later than 180 days
after the date of enactment of the Crop Insurance
Equity Act of 1999, the Corporation shall establish
a program for monitoring compliance with this title
by all Federal crop insurance participants, including
producers, agents, adjusters, and approved insurance
providers.
‘‘(2) CONSULTATION.—The Corporation shall
consult with approved insurance providers in devel-
oping the compliance program.
‘‘(3) OVERSIGHT
OF
LOSS
ADJUSTMENT.—As
part of the compliance program, the Corporation
shall provide for a mechanism to independently re-
view the performance of loss adjusters.
‘‘(4) PROGRAM
REVIEW.—Not later than 90
days after the date of enactment of the Crop Insur-
ance Equity Act of 1999, the Corporation shall sub-
mit to the Board and the Office of Private Sector
Partnership for their review the proposed compliance
program under this subsection.
‘‘(5) ANNUAL REPORTS.—Beginning with fiscal
year 2001, the Corporation shall submit an annual
report to the Committee on Agriculture of the House
of Representatives, the Committee on Agriculture,
Nutrition, and Forestry of the Senate, the Board,
and the Office of Private Sector Partnership con-
cerning the compliance program established under
this subsection, including any recommendations for
legislative or administrative changes that could fur-
ther improve program compliance.’’.
SEC. 207. PAYMENTS BY COOPERATIVE ASSOCIATIONS.
Section 507(e) of the Federal Crop Insurance Act (7
U.S.C. 1507(e)) is amended—
(1) by striking ‘‘(e) In’’ and inserting the fol-
lowing:
‘‘(e) COOPERATIVE ASSOCIATIONS.—
‘‘(1) IN GENERAL.—In’’; and
(2) by adding at the end the following:
‘‘(2) PAYMENTS.—A cooperative association de-
scribed in paragraph (1) that is licensed and acts as
an agent or approved insurance provider with re-
spect to any plan of insurance offered under this
title may provide to the members of the association
all or part of any funds received from the Corpora-
tion under this title.’’.
SEC. 208. LIMITATION ON DOUBLE INSURANCE.
Section 508(a) of the Federal Crop Insurance Act (7
U.S.C. 1508(a)) (as amended by section 104) is amended
by adding at the end the following:
‘‘(11) LIMITATION ON DOUBLE INSURANCE.—
The Corporation may offer plans of insurance or re-
insurance for only 1 agricultural commodity on spe-
cific acreage during a crop year, unless—
‘‘(A) there is an established practice of
double-cropping in an area, as determined by
the Corporation;
‘‘(B) the additional plan of insurance is of-
fered with respect to an agricultural commodity
that is customarily double-cropped in the area;
and
‘‘(C) the producer has a history of double
cropping or the acreage has historically been
double-cropped.’’.
SEC. 209. CONSULTATION WITH STATE COMMITTEES OF
FARM SERVICE AGENCY.
Section 508(a) of the Federal Crop Insurance Act (7
U.S.C. 1508(a)) (as amended by section 208) is amended
by adding at the end the following:
‘‘(12) CONSULTATION
WITH
STATE
COMMIT-
TEES OF FARM SERVICE AGENCY.—The Corporation
shall establish a mechanism under which State com-
mittees of the Farm Service Agency are consulted
concerning policies of insurance offered in a State
under this title.’’.
SEC. 210. RECORDS AND REPORTING.
(a) CATASTROPHIC
RISK
PROTECTION.—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,’’ and inserting ‘‘to the
extent required by the Corporation, provide to the Sec-
retary, acting through the Farm Service Agency,’’.
(b) NONINSURED CROP DISASTER ASSISTANCE PRO-
GRAM.—Section 196(b) of the Agricultural Market Transi-
tion Act (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 Farm Service
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. 211. FEES FOR PLANS OF INSURANCE.
Section 508(h)(5) of the Federal Crop Insurance Act
(7 U.S.C. 1508(h)(5))) is amended—
(1) by striking ‘‘Any policy’’ and inserting the
following:
‘‘(A) IN GENERAL.—Any policy’’; and
(2) by adding at the end the following:
‘‘(B) FEES
FOR
NEW
PLANS
OF
INSUR-
ANCE.—
‘‘(i) IN GENERAL.—If an approved in-
surance provider elects to sell a plan of in-
surance that was developed by another ap-
proved insurance provider after the date of
enactment of this subparagraph and the
plan of insurance offered coverage that was
not available for any crop at the time the
plan of insurance was approved by the
Board (as determined by the Corporation),
the approved insurance provider that devel-
oped the plan of insurance shall have the
right to receive a fee from the approved in-
surance provider that elects to sell the plan
of insurance.
‘‘(ii) AMOUNT.—
‘‘(I) IN
GENERAL.—Subject to
subclause (II), the amount of the fee
that is payable by an approved insur-
ance provider for a plan of insurance
under clause (i) shall be an amount
that is—
‘‘(aa) determined by the ap-
proved insurance provider that
developed the plan; and
‘‘(bb) 
approved 
by 
the
Board.
‘‘(II) 
APPROVAL.—The 
Board
shall not approve the amount of a fee
under clause (i) if the amount of the
fee unnecessarily inhibits the use of
the plan of insurance, as determined
by the Board.
‘‘(C) PAYMENTS.—The Corporation shall
annually—
‘‘(i) collect from an approved insur-
ance provider the amount of any fees that
are payable by the approved insurance pro-
vider under subparagraph (B); and
‘‘(ii) credit any fees that are payable
to an approved insurance provider under
subparagraph (B).’’.
SEC. 212. FLEXIBLE SUBSIDY PILOT PROGRAM.
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:
‘‘(11) FLEXIBLE SUBSIDY PILOT PROGRAM.—
For each of the 2000 through 2002 crop years, the
Corporation shall carry out a pilot program under
which flexible subsidies are provided under this title
to encourage private sector innovation through ex-
clusive marketing rights and premium rate competi-
tion.’’.
SEC. 213. REINSURANCE AGREEMENTS.
Section 508(k) of the Federal Crop Insurance Act (7
U.S.C. 1508(k)) is amended by striking paragraph (3) and
inserting the following:
‘‘(3) REINSURANCE AGREEMENTS.—
‘‘(A) SHARE OF RISK.—Each reinsurance
agreement of the Corporation with a reinsured
company shall require the reinsured company to
bear a sufficient share of any potential loss
under the agreement so as to ensure that the
reinsured company will sell and service policies
of insurance in a sound and prudent manner,
taking into consideration the financial condition
of the reinsured company and the availability of
private reinsurance.
‘‘(B) COMPLIANCE.—To promote program
compliance and integrity, the Corporation, after
notice and an opportunity for a hearing on the
record—
‘‘(i)(I) shall assess civil fines in an
amount not to exceed $10,000 per viola-
tion against agents, loss adjusters, and ap-
proved insurance providers that are deter-
mined by the Corporation to have recur-
ring compliance problems; and
‘‘(II) may deposit any civil fines col-
lected under subclause (I) in the insurance
fund established under section 516(c); and
‘‘(ii) shall disqualify the agents, loss
adjusters, and approved insurance pro-
viders described in clause (i)(I) from par-
ticipation in the Federal crop insurance
program for a period not to exceed 5 years.
‘‘(C) REVIEW OF AGREEMENTS.—As soon
as practicable after the date of enactment of
this subparagraph and regularly thereafter, in
consultation with the Office of Private Sector
Partnership, the Corporation shall review the
Standard Reinsurance Agreement issued by the
Corporation to ensure that the allocation of risk
between the Corporation and the reinsured
companies is equitable, as determined by the
Corporation.’’.
SEC. 214. FUNDING.
Section 516 of the Federal Crop Insurance Act (7
U.S.C. 1516) is amended—
(1) in subsection (a)(2)—
(A) in subparagraph (A), by striking
‘‘and’’ at the end;
(B) in subparagraph (B), by striking the
period at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(C) salaries and expenses of the Office of
Private Sector Partnership.’’;
(2) in subsection (b)(1)—
(A) in subparagraph (B), by striking ‘‘;
and’’ and inserting a semicolon;
(B) in subparagraph (C), by striking the
period at the end and inserting a semicolon;
and
(C) by adding at the end the following:
‘‘(D) salaries and expenses of the Office of
Private Sector Partnership, but not to exceed
$5,000,000 for each fiscal year;
‘‘(E) administrative expenses of collecting
information under section 508(f)(3); and
‘‘(F) payment of fees in accordance with
section 508(h)(5)(B).’’; and
(3) in subsection (c)(1), by inserting ‘‘, fees
under section 508(h)(5)(B), civil fines under section
508(k)(3)(B)(i)(II),’’ after ‘‘premium income’’.
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