‘‘(E) RELATION
TO
OTHER
LAWS.—The
terms and conditions of any policy or plan of in-
surance offered under this paragraph that is re-
insured by the Corporation is not subject to the
jurisdiction of the Commodity Futures Trading
Commission or the Securities and Exchange
Commission or considered as accounts, agree-
ments (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 ‘de-
cline guaranty’), or transactions involving con-
tracts of sale of a commodity for future delivery,
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 subparagraph
is intended to affect the jurisdiction of the Com-
modity Futures Trading Commission or the ap-
plicability of the Commodity Exchange Act to
any transaction conducted on a designated con-
tract market (as that term is used in such Act)
by an approved insurance provider to offset the
provider’s risk under a plan or policy of insur-
ance under this paragraph.
‘‘(F) LIMITATION ON EXPENDITURES.—The
Corporation shall conduct all livestock programs
under this title so that, to the maximum extent
practicable, all costs associated with conducting
the livestock programs (other than research and
development costs covered by paragraph (6) or
subsection (m)(4)) are not expected 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 Fed-
eral Crop Insurance Act (7 U.S.C. 1518) is amended
by striking ‘‘livestock and’’ after ‘‘commodity, exclud-
ing’’.
(e) FUNDING OF LIVESTOCK PILOT PROGRAMS.—
(1) AUTHORIZATION OF APPROPRIATIONS.—Sec-
tion 516(a)(2) of the Federal Crop Insurance Act (7
U.S.C. 1516(a)(2)) is amended—
(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 inserting
‘‘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:
‘‘(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 Corpora-
tion 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 subpara-
graph (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 projected
cost of producing the agricultural commodity (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.—
‘‘(A) PERFORMANCE-BASED
DISCOUNT.—
The Corporation may provide a performance-
based premium discount for a producer of an ag-
ricultural commodity who has good insurance or
production experience relative to other producers
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, dur-
ing 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 sub-
paragraph. The 2 years of insurance and the 2
years of discounted prices need not be the same.’’.
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 COVERAGE.—
Beginning with the 2000 crop year, the Corporation
shall offer producers of an agricultural commodity the
option of selecting either of the following:
‘‘(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 subsection
(e)(2)(A).’’.
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.—Notwith-
standing any other subparagraph of this
paragraph, a cooperative association of ag-
ricultural 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 coop-
erative association or trade association in
connection with the issuance of catastrophic
risk protection or additional coverage under
this section to members of the cooperative
association or trade association shall not be
considered to be a rebate to 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 pro-
vider from whom the member will purchase
a policy or plan of insurance or to refuse
coverage for which a payment is offered 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 li-
censed insurance agent or other approved
insurance provider.
‘‘(iv) ADDITIONAL COVERAGE ENCOUR-
AGED.—Cooperatives and trade associations
and any approved insurance provider with
whom a licensing fee or other arrangement
under this subparagraph is made shall en-
courage producer members to purchase ap-
propriate levels of additional coverage in
order to meet the risk management needs of
such member producers.’’.
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 plant-
ing 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 insur-
ance in an amount equal to the premium
for the prevented planting coverage, as de-
termined by the Corporation.
‘‘(B) EQUAL COVERAGE.—For each agricul-
tural commodity for which prevented planting
coverage is available, the Corporation shall offer
an equal percentage level of prevented planting
coverage.
‘‘(C) AREA CONDITIONS REQUIRED FOR PAY-
MENT.—The Corporation shall limit prevented
planting payments to producers to those situa-
tions in which producers in the area in which
the farm is located are generally affected by the
conditions that prevent an agricultural com-
modity from being planted.
‘‘(D) SUBSTITUTE COMMODITY.—
‘‘(i) AUTHORITY TO PLANT.—Subject to
clause (iv), a producer who has prevented
planting coverage and who is eligible to re-
ceive an indemnity under such coverage
may plant an agricultural commodity,
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
be deemed to have at least catastrophic risk
protection so as to satisfy the requirements
of that subsection.
‘‘(iii) EFFECT ON ACTUAL PRODUCTION
HISTORY.—If a producer plants a substitute
agricultural commodity as authorized by
clause (i) for a crop year, the Corporation
shall assign the producer a recorded yield,
for that crop year for the commodity that
was prevented from being planting, equal to
60 percent of the producer’s actual produc-
tion history for such commodity for pur-
poses of determining the producer’s actual
production history for subsequent crop
years.
‘‘(iv) EFFECT ON PREVENTED PLANT-
ING PAYMENT.—If a producer plants a sub-
stitute agricultural commodity as author-
ized by clause (i) before the latest planting
date established by the Corporation for the
agricultural commodity prevented from
being planted, the Corporation shall not
make a prevented planting payment with
regard to the commodity prevented from
being planted.’’.
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 ‘‘ADJUSTED
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 qualifying
adjusted gross income in excess of $2,000,000 during
the taxable year shall not be eligible to receive any
noninsured crop disaster assistance payment 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.—Con-
sistent with subsection (m)(4), by the 2000 crop year,
the Corporation shall enter into a contract to analyze
its quality loss adjustment procedures and make such
adjustments as may be necessary to more accurately
reflect local quality discounts that are applied to ag-
ricultural commodities insured under this title, tak-
ing into consideration the actuarial soundness of the
adjustment and the prevention of fraud, waste and
abuse.’’.
SEC. 113. APPLICATION OF AMENDMENTS.
Except where the context specifically provides other-
wise, the amendments made by this title shall apply begin-
ning with the 2000 crop year.
TITLE II—IMPROVING PROGRAM
EFFICIENCIES
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 cat-
astrophic risk protection available under sub-
section (b).
‘‘(B) EXCEPTION FOR DOUBLE-CROPPING.—
A policy or plan of insurance may be offered
under this title for an agricultural commodity
and for an additional agricultural commodity
when both agricultural commodities are nor-
mally 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 addi-
tional 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.’’.
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 insur-
ance program and to improve program integrity.’’;
and
(3) by adding at the end the following new para-
graphs:
‘‘(4) RECONCILING PRODUCER INFORMATION.—
The Secretary shall develop and implement a coordi-
nated plan for the Corporation and the Administrator
of the Farm Service Agency to reconcile all relevant
information received by the Corporation or the Farm
Service Agency from a producer who obtains crop in-
surance coverage under this title. Beginning with the
2000 crop year, the Secretary shall require that the
Corporation and the Farm Service Agency reconcile
such producer-derived information on at least an an-
nual basis in order to identify and address any dis-
crepancies.
‘‘(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 assist
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 Corporation
or on its own initiative after consultation
with the Corporation;
‘‘(ii) reporting any allegation of fraud,
waste, and abuse or identified program
vulnerabilities to the Corporation in a time-
ly 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.
‘‘(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 appro-
priately trained for any responsibilities assigned
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 re-
quired of loss adjusters of approved insurance
providers.
‘‘(C) MAINTENANCE OF PROVIDER EFFORT;
COOPERATION.—The activities of the Farm Serv-
ice Agency under this paragraph do not affect
the responsibility of approved insurance pro-
viders to conduct any audits of claims or other
program reviews required by the Corporation. If
an insurance provider reports to the Corporation
that it suspects intentional misrepresentation,
fraud, waste, or abuse, the Corporation shall
make a determination and provide a written re-
sponse within 90 days after receiving the report.
The insurance provider and the Corporation
shall take coordinated action in any case where
misrepresentation, fraud, waste, or abuse has oc-
curred.
‘‘(6) 
CONSULTATION
WITH
STATE
COMMIT-
TEES.—The Corporation shall establish a mechanism
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 Committee
on Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and For-
estry of the Senate an annual report containing find-
ings relative to the efforts undertaken pursuant to
paragraphs (4) and (5). The report shall identify spe-
cific occurrences of waste, fraud, and abuse and con-
tain an outline of actions that have been or are being
taken to eliminate the identified 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 paragraph’’.
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 ‘‘PEN-
ALTIES’’ and inserting ‘‘SANCTIONS
FOR
VIOLA-
TIONS’’;
(2) by redesignating paragraph (2) as para-
graph (3) and, in such paragraph, by striking ‘‘PEN-
ALTY’’ and ‘‘assessing penalties’’ and inserting ‘‘SANC-
TION’’ and ‘‘imposing a sanction’’, respectively; 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 para-
graph (1):
‘‘(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 pro-
ducer, the producer may be disqualified for a pe-
riod 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 Agriculture
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 Credit 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 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 agricul-
tural commodity due to a crop loss or a de-
cline 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 pe-
riod of up to 5 years from participating in, or
receiving any benefit provided under this title.
‘‘(D) If the violation is committed by a pro-
ducer, the Corporation may require the producer
to forfeit any premium owed under the policy,
notwithstanding a denial of claim or collection
of an overpayment, if the false or inaccurate in-
formation was material.’’.
(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 paragraph:
‘‘(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 following
new subsection:
‘‘(c) PROTECTION OF CONFIDENTIAL INFORMATION.—
‘‘(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 public, unless
the information has been transformed into a statis-
tical or aggregate form that does not allow the identi-
fication of the person who supplied particular infor-
mation.
‘‘(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 inserting
the following:
‘‘(1) IN GENERAL.—The Corporation’’; and
(2) by adding at the end the following new para-
graph:
‘‘(2) COORDINATION AND USE OF RECORDS.—
‘‘(A) COORDINATION BETWEEN AGENCIES.—
The Secretary shall ensure that recordkeeping
and reporting requirements under this title and
section 196 of the Federal Agriculture Improve-
ment and Reform Act of 1996 (7 U.S.C. 7333)
are coordinated by the Corporation and the
Farm Service Agency to avoid duplication of
such records, to streamline procedures involved
with the submission of such records, and to en-
hance 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 Ag-
riculture 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 divisions, and
approved insurance providers for use in carrying
out this title and such section 196 as well as
other agricultural programs and related respon-
sibilities.’’.
(c) NONINSURED CROP DISASTER ASSISTANCE PRO-
GRAM.—Section 196(b) of the Federal Agriculture Improve-
ment 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 following
new subsection:
‘‘(o) COMPLIANCE WITH STATE LICENSING REQUIRE-
MENTS.—Any person who sells or solicits the purchase of
a policy or plan of insurance under this title, including
catastrophic risk protection, in any State shall be licensed
and otherwise qualified to do business in that State.’’.
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 subsection
(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 Directors
subject to the general supervision of the Secretary.
‘‘(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 re-
sponsible for the Federal crop insurance pro-
gram.
‘‘(C) One additional Under Secretary of Ag-
riculture (as designated by the Secretary).
‘‘(D) The Chief Economist of the Depart-
ment of Agriculture.
‘‘(E) One person experienced in the crop in-
surance business.
‘‘(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 sub-
section (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 Corpora-
tion on the effective date specified in subsection (b) may
continue to serve as a member of the Board until the earlier
of the following:
(1) The date the replacement Board is appointed.
(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 in-
serting after paragraph (5) the following new paragraph:
‘‘(6) REIMBURSEMENT OF RESEARCH, DEVELOP-
MENT, AND MAINTENANCE COSTS.—
‘‘(A) REIMBURSEMENT PROVIDED.—Subject
to the conditions of this paragraph, the Corpora-
tion shall provide a payment to reimburse an
applicant for research, development, and mainte-
nance costs directly related to a policy or other
material that is—
‘‘(i) submitted to, and approved by, the
Board under this subsection for reinsurance;
and
‘‘(ii) if applicable, offered for sale to
producers.
‘‘(B) DURATION.—Payments under sub-
paragraph (A) may be made available beginning
in fiscal year 2001. Payments with respect to the
maintenance of an approved policy or other ma-
terial may be provided for a period of not more
than 4 reinsurance years following Board ap-
proval. 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.—Payments
made under subparagraph (A) for a policy or
other material shall be considered as payment in
full for the research and development conducted
with regard to the policy or material and any
property rights to the policy or material.
‘‘(D) REIMBURSEMENT AMOUNT.—The Cor-
poration shall determine the amount of the pay-
ment under subparagraph (A) for an approved
policy or other material based on the complexity
of the policy or material and the size of the area
in which the policy or material is expected to be
used.’’.
(b) ISSUANCE OF REGULATIONS.—Not later than Octo-
ber 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 DEVELOP-
MENT.—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 Cor-
poration shall make full use of private resources
by providing payment for research and develop-
ment for approved policies and plans of insur-
ance, and related materials, pursuant to sub-
section (h)(6).
‘‘(B) CONTRACTS FOR UNDERSERVED COM-
MODITIES.—
‘‘(i) DEVELOPMENT OF PRODUCTS AND
RELATED
MATERIALS.—In the event the
Corporation determines that an agricultural
commodity, including a specialty crop, is
not adequately served by policies and plans
of insurance and related materials sub-
mitted under subsection (h) or any other
provision of this title, the Corporation may
enter into a contract, under procedures pre-
scribed by the Corporation, directly with
any person or entity with experience in
crop insurance or farm or ranch risk man-
agement, including universities, providers of
crop insurance, and trade and research or-
ganizations, to carry out research and de-
velopment for policies and plans of insur-
ance and related materials for that agricul-
tural commodity without regard to the limi-
tations contained in this title.
‘‘(ii) TYPES OF CONTRACTS.—A con-
tract under this subparagraph may provide
for research and development regarding new
or expanded policies and plans of insurance
and related materials, including policies
based on adjusted gross income, cost-of-pro-
duction, 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 effect 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 en-
able producers to take maximum advantage of
fluctuations in market prices and thereby maxi-
mize revenue realized from the sale of a crop.
Such a plan may include market instruments
currently available or may involve the develop-
ment of new instruments to achieve this goal.
Not later than 15 months after the date of the
enactment of this paragraph, the Corporation
shall submit to Congress a report containing 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 research
and development for any new policy or plan of
insurance for an agricultural commodity offered
under this title. Any policy or plan of insurance
developed by the Corporation under this title be-
fore that date shall, at the discretion of the Cor-
poration, continue to be offered for sale to pro-
ducers.’’.
(c) PARTNERSHIPS FOR RISK MANAGEMENT DEVELOP-
MENT AND IMPLEMENTATION.—Section 508(m) of the Fed-
eral 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 DE-
VELOPMENT 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 availability
of loss mitigation, financial, and other risk man-
agement tools for crop producers, with priority
given to risk management tools for producers of
agricultural commodities covered by section 196
of the Federal Agriculture Improvement and Re-
form Act of 1996 (7 U.S.C. 7333) and specialty
and underserved commodity producers.
‘‘(B) AUTHORITY.—Subject to subpara-
graphs (D) and (E), the Corporation may enter
into partnerships with the Cooperative State Re-
search, Education, and Extension Service, the
Agricultural Research Service, the National Oce-
anic Atmospheric Administration, and other ap-
propriate public and private entities with dem-
onstrated capabilities in developing and imple-
menting 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 increase
end-product profitability and marketability
and to reduce the possibility of crop insur-
ance 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;
‘‘(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 under-
served 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 suppression
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
‘‘(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 available
to provide reimbursement payments under sub-
section (h) and contract payments under para-
graph (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 reimbursement
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
this paragraph for a fiscal year may not ex-
ceed the difference between the amount spec-
ified in clause (i) for that fiscal year and
the amount actually used for reimbursement
and contract payments.
‘‘(E) DELAYED AUTHORITY.—The Corpora-
tion 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 Federal
Crop Insurance Act (7 U.S.C. 1508(h)(6)), as added by sec-
tion 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 priority given to un-
derserved 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 dur-
ing any fiscal year.’’.
(b) FUNDING.—
(1) AUTHORIZATION OF APPROPRIATIONS.—Sec-
tion 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 mate-
rials provided under section 508(h)(6) and con-
tracting for research and development under sec-
tion 508(m)(4)(B).’’.
(2) 
USE
OF
INSURANCE
FUND.—Section
516(b)(1) of the Federal Crop Insurance Act (7
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 devel-
opment under section 508(m)(4)(B).’’.
SEC. 305. BOARD CONSIDERATION OF SUBMITTED POLICIES
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
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 material
submitted under this subsection shall be accompanied
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 com-
plete 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-
tial reinsurance year designated for the pol-
icy or material, except in the case where the
Board and the applicant agree to an exten-
sion.’’.
(d) FUNDING TO EXPEDITE CONSIDERATION.—Effec-
tive 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 in-
serting ‘‘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
(2) by inserting after ‘‘private sector’’ the fol-
lowing: ‘‘and to enable the Corporation to concentrate
on regulating the provision of insurance under this
title and evaluating new products and materials sub-
mitted 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 inserting
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
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, de-
velopment, and maintenance costs under para-
graph (6), the person shall have the right to re-
ceive a fee from any approved insurance pro-
vider 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 insurance, no ap-
proved insurance provider may offer the new
policy or plan of insurance in the absence of a
fee agreement with the person who developed the
policy or plan.
‘‘(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 provider to
offer a new policy or a plan of insurance under
subparagraph (A) shall be an amount that is de-
termined by the person that developed the new
policy or plan of insurance, subject to the ap-
proval of the Board under subparagraph (D).
‘‘(D) APPROVAL.—The Board shall approve
the amount of a fee determined under subpara-
graph (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
‘‘(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