I
106TH CONGRESS
1ST SESSION
H. R. 2559
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 Federal crop
insurance program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 20, 1999
Mr. COMBEST (for himself, Mr. EWING, Mr. BARRETT of Nebraska, Mr.
BLUNT, Mr. CANADY of Florida, Mr. WHITFIELD, Mr. BEREUTER, Mr.
SESSIONS, and Mr. HAYES) introduced the following bill; which was re-
ferred to the Committee on Agriculture
A BILL
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.
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’’.
100 percent of the expected market price, or an
equivalent coverage, the amount shall be equal
to the sum of—
‘‘(i) 35 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:
‘‘(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
‘‘(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.
Section 508(g) of the Federal Crop Insurance Act (7
U.S.C. 1508(g)) is amended by adding at the end the fol-
lowing 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.
‘‘(B) EXCLUSION
OF
YIELDS
FOR
PRO-
DUCERS
WITH
10-YEAR
PRODUCTION
HIS-
TORY.—If, by the 2000 crop year, the producer
has an established actual production history of
10 consecutive crop years for which an agricul-
tural commodity was produced, the Corporation
shall—
‘‘(i) exclude for the 2000 crop year, at
the election of the producer, any 2 years of
production history for that commodity se-
lected by the producer from that 10-year
history; and
‘‘(ii) continue the exclusion of the
years of production history selected under
clause (i) for the subsequent applicable
crop years.
‘‘(C) EXCLUSION
OF
YIELD
FOR
PRO-
DUCERS WITH 5-YEAR PRODUCTION HISTORY.—
If, by the 2000 crop year, the producer has an
established actual production history of at least
5 consecutive crop years for which an agricul-
tural commodity was produced, but less than 10
years, the Corporation shall—
‘‘(i) exclude for the 2000 crop year, at
the election of the producer, any 1 year of
production history for that commodity se-
lected by the producer from that history;
and
‘‘(ii) continue the exclusion of the
year of production history selected under
clause (i) for the subsequent applicable
crop years.
‘‘(D) PERCENTAGE
LIMITATION
ON
RE-
DUCTION.—Beginning with the 2000 crop year,
the Corporation may not reduce the producer’s
actual production history for an agricultural
commodity by more than 5 percent from one
year to the next as a result of a decrease in the
production of that agricultural commodity in a
crop year.’’.
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) ADJUSTMENT.—If, before the 2000
crop year, the Corporation determines that pre-
mium rates are excessive for an agricultural
commodity relative to the requirements of sub-
section (d)(2)(B), the Corporation shall make
appropriate adjustments in the premium rates
for that area for that agricultural commodity in
time for the 2000 crop year.’’.
SEC. 105. CONDUCT OF PILOT PROGRAMS, INCLUDING
LIVESTOCK.
(a) REPEAL OF OBSOLETE PILOT PROGRAMS.—Sec-
tion 508(h) of the Federal Crop Insurance Act (7 U.S.C.
1508(h)) is amended by striking paragraphs (6) and (8).
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
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 $55,000,000 for any 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—
(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).’’.
(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:
‘‘(D) Costs associated with the conduct of
livestock pilot programs carried out under sec-
tion 508(h)(10).’’.
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.—The Corporation
may provide a performance-based discount for a pro-
ducer of an agricultural commodity who has good in-
surance or production experience relative to other
producers of that agricultural commodity in the
same area, as determined by the Corporation, except
that any such discount shall be consistent with sec-
tion 506(o)(2).’’.
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
equivalent to the coverage available under
paragraph (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.—Not-
withstanding any other subparagraph of
this paragraph, a cooperative association of
agricultural producers or a nonprofit trade
association may pay, on behalf of a mem-
ber of the association who consents to be
insured under such an arrangement, all or
a portion of the fees imposed under sub-
paragraphs (A) and (B) for catastrophic
risk protection. At the election of the mem-
ber, the amount that would be paid on be-
half of the member for catastrophic risk
protection may be used by the member to
purchase additional coverage under this
title.
‘‘(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
the members under any reinsurance agree-
ment between the Corporation and the in-
surance provider if the members are in-
formed in advance of the fee or payment.
The amount of any such licensing fee or
other payment in excess of the amount
paid by the cooperative association or trade
association under clause (i) shall be dis-
tributed to the producers whose participa-
tion in the Federal crop insurance program
prompted the licensing fee or other pay-
ment to be made.
‘‘(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 producer 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.’’.
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) DISCOUNT.—In the case of an
election under clause (i), the Corporation
shall provide a discount 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 value of prevented
planting coverage.
‘‘(C) SUBSTITUTE COMMODITY.—
‘‘(i) AUTHORITY TO PLANT.—A pro-
ducer who has prevented planting coverage
and who is eligible to receive an indemnity
under such coverage may plant an agricul-
tural commodity, other than the com-
modity covered by the prevented planting
coverage, on the acreage originally pre-
vented 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).
‘‘(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 com-
modity covered by the prevented planting
coverage equal to 60 percent of the pro-
ducer’s actual production history for the
original commodity for purposes of deter-
mining the producer’s actual production
history for the original commodity for sub-
sequent crop years.’’.
SEC. 111. SALES CLOSING DATE.
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. 112. AREA LOSS REQUIREMENTS TO TRIGGER ASSIST-
ANCE FOR NONINSURED CROP DISASTER AS-
SISTANCE PROGRAM.
Section 196(c)(1) of the Federal Agriculture Im-
provement and Reform Act of 1996 (7 U.S.C. 7333(c)(1))
is amended by striking paragraph (1) and inserting the
following new paragraph:
(1) by striking ‘‘A producer’’ and inserting the
following:
‘‘(A) REDUCED AREA YIELD.—Except as
provided in subparagraph (B), a producer’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) DISASTER
DECLARATION.—A pro-
ducer of an eligible crop may also receive non-
insured crop disaster assistance if the pro-
ducer’s affected crop acreage is located in an
area where eligible crops were substantially af-
fected by a natural disaster resulting in a Presi-
dential declaration of major disaster issued
under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5170) or a designation as a disaster
area by the Secretary under subpart A of part
1945 of title 7, Code of Federal Regulations.’’.
SEC. 113. 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’’ each place
it appears and inserting ‘‘adjusted gross in-
come’’; 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. 114. 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
(8), as added by section 110, the following new paragraph:
‘‘(9) 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-
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.’’.
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
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 ongoing monitoring by the
Farm Service Agency 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.
‘‘(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 reinsured
companies under the standard reinsurance
agreement.
‘‘(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
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’’.
SEC. 203. SANCTIONS FOR FALSE INFORMATION.
(a) CLARIFICATION OF PERSONS COVERED.—Section
506(n)(1) of the Federal Crop Insurance Act (7 U.S.C.
1506(n)) is amended by striking ‘‘If a person’’ and insert-
ing ‘‘If a producer, an agent, a loss adjuster, an approved
insurance provider, or any other person’’.
(b) 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) in paragraph (1), by striking ‘‘on the
record—’’ and all that follows through the end of
the paragraph and inserting ‘‘on the record, impose
one or more of the sanctions specified in paragraph
(2).’’;
(3) 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
(4) by inserting after paragraph (1) the fol-
lowing new paragraph:
‘‘(2) AUTHORIZED SANCTIONS.—The following
sanctions may be imposed for a violation under
paragraph (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 by the person as a result of the
false or inaccurate 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—
‘‘(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.’’.
(c) 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 any insurer.’’.
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
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).’’.
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.
‘‘(F) One person experienced in the regula-
tion of insurance.
‘‘(G) Four active farmers who are policy
holders and who are from different geographic
areas of the United States.
‘‘(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:
(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
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-