Assisting Family Farmers through Insurance Reform Measures Act

Bill: 118-hr-5698
Sponsor: full_name: Rep. Blumenauer, Earl [D-OR-3]
Introduced: 2023-09-26
Policy area: Agriculture and Food
Subjects: Agricultural insurance

Agricultural prices, subsidies, credit
Latest action: action_date: 2024-01-11
text: Referred to the Subcommittee on General Farm Commodities, Risk Management, and Credit.

Summaries:

tv_txt: I 118th CONGRESS 1st Session H. R. 5698 IN THE HOUSE OF REPRESENTATIVES September 26, 2023 Mr. Blumenauer introduced the following bill; which was referred to the Committee on Agriculture A BILL To amend the Federal Crop Insurance Act to reduce Federal spending on crop insurance, and for other purposes.

1. Short title This Act may be cited as the Assisting Family Farmers through Insurance Reform Measures Act or the AFFIRM Act . 2. Crop insurance premium subsidies disclosure in the public interest Section 502(c)(2) of the Federal Crop Insurance Act ( 7 U.S.C. 1502(c)(2) ) is amended— (1) by redesignating subparagraphs (A) and (B) as subparagraphs (C) and (D), respectively; and (2) by inserting before subparagraph (C) (as so redesignated) the following: (A) Disclosure in the public interest Notwithstanding paragraph (1) or any other provision of law, except as provided in subparagraph (B), the Secretary shall on an annual basis make available to the public— (i) (I) the name of each individual or entity that obtained a federally subsidized crop insurance, livestock, or forage policy or plan of insurance during the previous reinsurance year; (II) the amount of premium subsidy received by the individual or entity from the Corporation; and (III) the amount of any Federal portion of indemnities paid in the event of a loss for that reinsurance year for each policy associated with that individual or entity; and (ii) for each private insurance provider, a description by the name of the private insurance provider of— (I) the underwriting gains earned through participation in the federally subsidized crop insurance program; and (II) the amount paid under this subtitle for— (aa) administrative and operating expenses; (bb) any Federal portion of indemnities and reinsurance; and (cc) any other purpose. (B) Limitation The Secretary shall not disclose under subparagraph (A) information relating to individuals and entities covered by a catastrophic risk protection plan offered under section 508(b). . 3. Adjusted gross income and per person limitations on share of insurance premiums paid by corporation Section 508(e)(1) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(1) ) is amended— (1) by striking For the purpose and inserting the following: (A) Payment authority Subject to subparagraphs (B) and (C), for the purpose ; and (2) by adding at the end the following: (B) Adjusted gross income limitation The Corporation shall not pay a part of the premium for additional coverage for any person or legal entity that has an average adjusted gross income (as defined in section 1001D(a) of the Food Security Act of 1985 (7 U.S.C. 1308–3a(a))) that is greater than $250,000. (C) Per person limitation The Corporation shall not pay more than $125,000 for any reinsurance year to any person or legal entity for premiums under this section. . 4. Prohibition on premium subsidy for harvest price policies Section 508(e) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e) ) is amended by adding at the end the following: (9) Prohibition on premium subsidy for harvest price policies Notwithstanding any other provision of law, beginning with the 2023 reinsurance year, the Corporation shall not pay any amount of premium subsidy in the case of a policy or plan of insurance that is based on the actual market price of an agricultural commodity on the date of harvest. . 5. Prohibition on premium subsidy for producers not engaged in active personal labor or active personal management Section 508(e) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e) ), as amended by section 4, is further amended by adding at the end the following: (10) Prohibition on premium subsidy for producers not engaged in active personal labor active personal management (A) In general Notwithstanding any other provision of law, beginning with the 2023 reinsurance year, the Corporation shall not pay any amount of premium subsidy to a producer that is not engaged in active personal labor or active personal management with respect to the farming operation pursuant to which such subsidy would apply. (B) Definitions In this paragraph: (i) Active personal labor The term active personal labor means, with respect to a producer, physical labor and activities personally performed by the producer on a farming operation— (I) that— (aa) are necessary to such farming operation, including land preparation, planting, cultivating, harvesting and marketing of agricultural commodities; (bb) establish or maintain conserving cover crops or conserving use acreages; or (cc) are required for livestock operations; and (II) for, with respect to a crop year, a period of at least— (aa) 1,000 hours; or (bb) 50 percent of the total hours that would be required to conduct a farming operation comparable in size to the producer’s share in the farming operation, as determined by the Corporation. (ii) Active personal management The term active personal management means management activities personally performed on a farming operation— (I) by a person with a direct or indirect ownership interest in that farming operation; (II) on a regular continuous, and substantial basis; and (III) for, with respect to a crop year, a period of at least— (aa) 500 hours; or (bb) 50 percent of the total management hours required for that farming operation on an annual basis, as determined by the Corporation. . 6. Maximum amount of additional prevented planting coverage Section 508(h)(6) of the Agricultural Adjustment Act of 1938 ( 7 U.S.C. 1508(h)(6) ) is amended by adding at the end the following: (D) Maximum amount of coverage A crop loss of a producer may only be covered by the additional prevented planting coverage if, during the 3-year period preceding such loss, such producer had less than or equal to 2 crop losses covered by the additional prevented planting coverage. . 7. Premium reduction Section 508(i) of the Agricultural Adjustment Act of 1938 ( 7 U.S.C. 1508(i) ) is amended by adding at the end the following: (5) Premium reduction If the Corporation makes a determination that a producer has received 3 or more indemnities under a plan of insurance for the same type of loss during a 4-year period, the Corporation shall, with respect to such producer, reduce the premium rate of such plan by 15 percent (except in no case may such premium rate be less than zero). . 8. Cap on overall rate of return for crop insurance providers Section 508(k)(3) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k)(3) ) is amended— (1) by striking the paragraph designation and heading and all that follows through The and inserting the following: (3) Risk (A) Share of risk The ; and (2) by adding at the end the following: (B) Limitation on average rate of return The target average rate of return for reinsured companies for the 2023 reinsurance year and each subsequent reinsurance year shall be 8.9 percent of retained premiums. . 9. Cap on reimbursements for administrative and operating expenses of crop insurance providers Section 508(k)(4) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k)(4) ) is amended by adding at the end the following: (G) Additional cap on reimbursements (i) In general Notwithstanding subparagraphs (A) through (F), the total amount of reimbursements for administrative and operating costs for the 2023 reinsurance year for all types of policies and plans of insurance shall not exceed $900,000,000. (ii) Adjustment For the 2024 reinsurance year and each subsequent reinsurance year, the dollar amount in effect pursuant to clause (i) shall be increased by the inflation factor established for the administrative and operating costs limitation in the 2011 Standard Reinsurance Agreement. . 10. Renegotiation of standard reinsurance agreement Section 508(k)(8) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k)(8) ) is amended by striking subparagraph (F).