113 S677 IS: Crop Insurance Improvement Act of 2013
U.S. Senate
2013-04-09
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the
Crop Insurance Improvement Act of
2013
.
2.Section 502(c) of the
Federal Crop Insurance Act (7 U.S.C. 1502(c)) is amended by adding at the end
the following:
(4)
(A)Subject
to subparagraph (B), the Farm Service Agency shall, in a timely manner, provide
to an agent or an approved insurance provider authorized by the producer any
information (including Farm Service Agency Form 578s (or any successor form),
maps, or any corrections to those forms or maps) that may assist the agent or
approved insurance provider in insuring the producer under a policy or plan of
insurance under this subtitle.
(B)Except
as provided in subparagraph (C), an agent or approved insurance provider that
receives the information of a producer pursuant to subparagraph (A) shall treat
the information in accordance with paragraph (1).
(C)Nothing
in this section prohibits the sharing of the information of a producer pursuant
to subparagraph (A) between the agent and the approved insurance provider of
the
producer.
.
3.Supplemental
coverage option
(a)Availability of
supplemental coverage optionSection 508(c) of the Federal Crop
Insurance Act (7 U.S.C. 1508(c)) is amended by striking paragraph (3) and
inserting the following:
(3)Yield and loss
basis optionsA producer shall have the option of purchasing
additional coverage based on—
(A)(i)an individual yield and
loss basis; or
(ii)an area yield and loss
basis;
(B)an individual
yield and loss basis, supplemented with coverage based on an area yield and
loss basis to cover a part of the deductible under the individual yield and
loss policy, as authorized in paragraph (4)(C); or
(C)a margin basis
alone or in combination with—
(i)individual yield
and loss coverage; or
(ii)area yield and
loss
coverage.
.
(b)Section 508(c) of the Federal Crop Insurance Act (7
U.S.C. 1508(c)) is amended by striking paragraph (4) and inserting the
following:
(4)
(A)Dollar
denomination and percentage of yieldExcept as provided in
subparagraph (C), the level of coverage—
(i)shall be dollar
denominated; and
(ii)may be purchased
at any level not to exceed 85 percent of the individual yield or 95 percent of
the area yield (as determined by the Corporation).
(B)The
Corporation shall provide producers with information on catastrophic risk and
additional coverage in terms of dollar coverage (within the allowable limits of
coverage provided in this paragraph).
(C)Supplemental
coverage option
(i)Notwithstanding subparagraph (A), in the case of the
supplemental coverage option described in paragraph (3)(B), the Corporation
shall offer producers the opportunity to purchase coverage in combination with
a policy or plan of insurance offered under this subtitle that would allow
indemnities to be paid to a producer equal to part of the deductible under the
policy or plan of insurance, if sufficient area data is available (as
determined by the Corporation).
(ii)Coverage
offered under this subparagraph shall be triggered only if the losses in the
area exceed 10 percent of normal levels (as determined by the
Corporation).
(iii)Subject
to the trigger described in clause (ii) and the deductible imposed by clause
(iv), coverage offered under this subparagraph shall cover the first loss
incurred by the producer, not to exceed the difference between—
(I)100 percent;
and
(II)the coverage
level selected by the producer for the underlying policy or plan of
insurance.
(iv)Coverage
offered under this subparagraph shall be subject to a deductible in an amount
equal to 10 percent of the expected value of the crop of the producer covered
by the underlying policy or plan of insurance, as determined by the
Corporation.
(v)Notwithstanding subsection (d), the premium shall—
(I)be sufficient to
cover anticipated losses and a reasonable reserve; and
(II)include an
amount for operating and administrative expenses established in accordance with
subsection
(k)(4)(F).
.
(c)Payment of
portion of premium by CorporationSection 508(e)(2) of the
Federal Crop Insurance Act (7 U.S.C. 1508(e)(2)) is amended by adding at the
end the following:
(H)In the case of the supplemental coverage
option authorized in subsection (c)(4)(C), the amount shall be equal to the sum
of—
(i)70
percent of the additional premium associated with the coverage; and
(ii)the amount
determined under subsection (c)(4)(C)(v)(II) for the coverage to cover
operating and administrative
expenses.
.
(d)Section 508(k)(4)(F) of the Federal Crop Insurance Act
(7 U.S.C. 1508(k)(4)(F)) is amended by inserting or authorized under
subsection (c)(4)(C)
after of this subparagraph
.
(e)The Federal Crop Insurance Corporation shall begin to
provide additional coverage based on an individual yield and loss basis,
supplemented with coverage based on an area yield and loss basis, not later
than for the 2014 crop year.
4.Permanent
enterprise unit subsidySection 508(e)(5) of the Federal Crop
Insurance Act (7 U.S.C. 1508(e)(5)) is amended by striking subparagraph (A) and
inserting the following:
(A)The Corporation may pay a portion of the premiums for
plans or policies of insurance for which the insurable unit is defined on a
whole farm or enterprise unit basis that is higher than would otherwise be paid
in accordance with paragraph
(2).
.
5.Enterprise units
for irrigated and nonirrigated cropsSection 508(e)(5) of the Federal Crop
Insurance Act (7 U.S.C. 1508(e)(5)) is amended by adding at the end the
following:
(D)Beginning with the 2014 crop year, the Corporation shall
make available separate enterprise units for irrigated and nonirrigated
acreages of crops in
counties.
.
6.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)To determine yields under this paragraph, the
Corporation—
(i)shall use data
collected by the Risk Management Agency or the National Agricultural Statistics
Service, or both; or
(ii)if sufficient
county data is not available, may use other data considered appropriate by the
Secretary.
.
7.Adjustment in
actual production history to establish insurable yieldsSection 508(g)(4)(B) of the Federal Crop
Insurance Act (7 U.S.C. 1508(g)(4)(B)) is amended—
(1)in the matter
preceding clause (i), by inserting for the 2013 crop year or any prior
crop year, or 70 percent of the applicable transitional yield for the 2014 or
any subsequent crop year,
after transitional yield
;
and
(2)in clause (ii),
by striking 60 percent of the applicable transitional yield
and
inserting the applicable percentage of the transitional yield described
in this subparagraph
.
8.Submission and
review of policiesSection
508(h)(1) of the Federal Crop Insurance Act (7 U.S.C. 1508(h)(1)) is
amended—
(1)by redesignating subparagraphs (A) and (B)
as clauses (i) and (ii), respectively, and indenting appropriately;
(2)by striking (1)
In general.—In
addition
and inserting the following:
(1)Submission and
review of policies
(A)In
addition
;
and
(3)by adding at the
end the following:
(B)The
Corporation shall review any policy developed under section 522(c) or any pilot
program developed under section 523 and submit the policy or program to the
Board under this subsection if the Corporation, at the sole discretion of the
Corporation, finds that the policy or program—
(i)will likely
result in a viable and marketable policy consistent with this
subsection;
(ii)would provide
crop insurance coverage in a significantly improved form; and
(iii)adequately
protects the interests of
producers.
.
9.Board review and
approvalSection 508(h) of the
Federal Crop Insurance Act (7 U.S.C. 1508(h)) is amended by striking paragraph
(3) and inserting the following:
(3)Review and
approval by the boardA policy, plan of insurance, or other
material submitted to the Board under this subsection shall be reviewed by the
Board and shall be approved by the Board for reinsurance and for sale by
approved insurance providers to producers at actuarially appropriate rates and
under appropriate terms and conditions if the Board, in the sole discretion of
the Board, determines that—
(A)the interests of
producers are adequately protected;
(B)the rates of
premium and price election methodology are actuarially appropriate;
(C)the terms and
conditions for the proposed policy or plan of insurance are appropriate and
would not unfairly discriminate among producers;
(D)the proposed
policy or plan of insurance will, at the sole discretion of the Board—
(i)likely result in
a viable and marketable policy that can reasonably attain levels of
participation similar to other like policies or plans of insurance;
(ii)provide crop
insurance coverage in a significantly improved form or in a manner that
addresses a recognized flaw or problem in an existing policy; or
(iii)provide a new
kind of coverage for a commodity that previously had no available crop
insurance, or has demonstrated a low level of participation under existing
coverage;
(E)the proposed
policy or plan of insurance will, at the sole discretion of the Board, not have
a significant adverse impact on the crop insurance delivery system; and
(F)the proposed
policy or plan of insurance meets such other requirements as are determined
appropriate by the
Board.
.
10.Budget
limitations on renegotiation of the standard reinsurance
agreementSection 508(k)(8) of
the Federal Crop Insurance Act (7 U.S.C. 1508(k)(8)) is amended by adding at
the end the following:
(F)
(i)The Board shall ensure that any Standard Reinsurance
Agreement negotiated under subparagraph (A)(ii), as compared to the previous
Standard Reinsurance Agreement—
(I)to the maximum
extent practicable, shall be budget neutral; and
(II)in no event, may
significantly depart from budget neutrality.
(ii)To the extent that any budget savings is realized in the
renegotiation of a Standard Reinsurance Agreement under subparagraph (A)(ii),
and the savings are determined not to be a significant departure from budget
neutrality under clause (i), the savings shall be used for programs
administered or managed by the Risk Management
Agency.
.
11.Stacked income
protection plan for producers of upland cotton
(a)Availability of
stacked income protection planThe Federal Crop Insurance Act is amended
by inserting after section 508A (7 U.S.C. 1508a) the following:
508B.Stacked income
protection plan for producers of upland cotton
(a)Beginning
not later than the 2014 crop of upland cotton, if practicable, the Corporation
shall make available to producers of maximum eligible acres of upland cotton an
additional policy (to be known as the Stacked Income Protection
Plan
), which shall provide coverage consistent with the Group Risk
Income Protection Plan (and the associated Harvest Revenue Option Endorsement)
offered by the Corporation for the 2012 crop year.
(b)The Corporation may modify the Stacked Income Protection
Plan on a program-wide basis, except that the Stacked Income Protection Plan
shall comply with the following requirements:
(1)(A)Provide coverage for
revenue loss of not more than 30 percent of expected county revenue, specified
in increments of 5 percent.
(B)The deductible is the minimum percent
of revenue loss at which indemnities are triggered under the plan, not to be
less than 10 percent of the expected county revenue.
(C)Once the deductible is met, any losses
in excess of the deductible will be paid up to the coverage selected by the
producer.
(2)Be offered to
producers of upland cotton in all counties with upland cotton
production—
(A)at a county-wide
level to the fullest extent practicable; or
(B)in counties that
lack sufficient data, on the basis of such larger geographical area as the
Corporation determines to provide sufficient data for purposes of providing the
coverage.
(3)Be purchased in
addition to any other individual or area coverage in effect on the producer’s
acreage or as a stand-alone policy, except that if a producer has an individual
or area coverage for the same acreage, the maximum coverage available under the
Stacked Income Protection Plan shall not exceed the deductible for the
individual or area coverage.
(4)Establish
coverage based on—
(A)an expected price
that is the expected price established under existing Group Risk Income
Protection or area-wide policy offered by the Corporation for the applicable
county (or area) and crop year; and
(B)an expected
county yield that is the higher of—
(i)the expected
county yield established for the existing area-wide plans offered by the
Corporation for the applicable county (or area) and crop year (or, in
geographic areas where area-wide plans are not offered, an expected yield
determined in a manner consistent with those of area-wide plans); or
(ii)(I)the average of the
applicable yield data for the county (or area) for the most recent 5 years,
excluding the highest and lowest observations, from the Risk Management Agency
or the National Agricultural Statistics, or both; or
(II)if sufficient county data is not
available, such other data considered appropriate by the Secretary.
(5)Use a multiplier
factor to establish maximum protection per acre (referred to as a
protection factor
) of not more than 120 percent.
(6)(A)Pay an indemnity based
on the amount that the expected county revenue exceeds the actual county
revenue, as applied to the individual coverage of the producer.
(B)Indemnities under the Stacked Income
Protection Plan shall not include or overlap the amount of the deductible
selected under paragraph (1).
(7)To the maximum
extent practicable, in all counties for which data are available, establish
separate coverage for irrigated and nonirrigated practices.
(8)Notwithstanding
section 508(d), include a premium that—
(A)is sufficient to
cover anticipated losses and a reasonable reserve; and
(B)includes an
amount for operating and administrative expenses established in accordance with
section 508(k)(4)(F).
(c)Relation to
other coverages
(1)Except as provided in paragraph (2), the Stacked Income
Protection Plan is in addition to all other coverages available to producers of
upland cotton.
(2)Acreage
of upland cotton insured under the supplemental coverage option described in
section 508(c)(4)(C) shall not be eligible for the Stacked Income Protection
Plan.
(d)Payment of
portion of premium by corporationSubject to section 508(e)(4),
the amount of premium paid by the Corporation for all qualifying coverage
levels of the Stacked Income Protection Plan shall be—
(1)80 percent of the
amount of the premium established under subsection (b)(8)(A) for the coverage
level selected; and
(2)the amount
determined under subsection (b)(8)(B) to cover administrative and operating
expenses.
.
(b)Section 508(k)(4)(F) of the Federal Crop Insurance Act
(7 U.S.C. 1508(k)(4)(F)) (as amended by section 3(d)) is amended by inserting
or under section 508B
after subsection
(c)(4)(C)
.
12.Authority to
correct errorsSection 515(c)
of the Federal Crop Insurance Act (7 U.S.C. 1515(c)) is amended—
(1)in the first
sentence, by striking The Secretary
and inserting the
following:
(1)The Secretary
;
(2)in the second
sentence, by striking Beginning with
and inserting the
following:
(2)Beginning
with
;
and
(3)by adding at the
end the following:
(3)
(A)The Corporation shall establish procedures that allow an
agent and approved insurance provider within a reasonable amount of time
following the applicable sales closing date to correct information regarding
the entity name, social security number, tax identification number, or such
other eligibility information as determined by the Corporation that is provided
by a producer for the purpose of obtaining coverage under any policy or plan of
insurance made available under this subtitle to ensure that the eligibility
information is consistent with the information reported by the producer to the
Farm Service Agency.
(B)In
accordance with the procedures of the Corporation, procedures under
subparagraph (A) may include any subsequent correction to the eligibility
information described in that subparagraph made by the Farm Service Agency if
the corrections do not allow the producer—
(i)to obtain a
disproportionate benefit under the crop insurance program or any related
program of the Department of Agriculture;
(ii)to avoid
ineligibility requirements for insurance; or
(iii)to avoid an
obligation or requirement under any Federal or State
law.
.
13.Section 515 of the Federal Crop Insurance
Act (7 U.S.C. 1515) is amended—
(1)in subsection (j), by striking paragraph
(1) and inserting the following:
(1)Systems
maintenance and upgrades
(A)The Secretary shall maintain and upgrade the information
management systems of the Corporation used in the administration and
enforcement of this subtitle.
(B)
(i)In maintaining and upgrading the systems, the Secretary
shall ensure that new hardware and software are compatible with the hardware
and software used by other agencies of the Department to maximize data sharing
and promote the purposes of this section.
(ii)Acreage report
streamlining initiative projectAs soon as practicable, the
Secretary shall develop and implement an acreage report streamlining initiative
project to allow producers to report acreage and other information directly to
the Department.
;
and
(2)in subsection
(k), by striking paragraph (1) and inserting the following:
(1)
(A)For purposes of subsection (j)(1), the Corporation may
use, from amounts made available from the insurance fund established under
section 516(c), not more than—
(i)(I)for fiscal year 2014,
$25,000,000; and
(II)for each of
fiscal years 2015 through 2018, $10,000,000; or
(ii)if the Acreage
Crop Reporting Streamlining Initiative (ACRSI) project is substantially
completed by September 30, 2014, not more than $15,000,000 for each of fiscal
years 2015 through 2018.
(B)Not
later than July 1, 2014, the Secretary shall notify the Committee on
Agriculture of the House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate on the status of the substantial
completion of the Acreage Crop Reporting Streamlining Initiative (ACRSI)
project.
.
14.
(a)Section 522(c) of the Federal Crop Insurance Act (7
U.S.C. 1522(c)) is amended—
(1)in the subsection
heading, by striking Contracting
;
(2)in paragraph (1),
in the matter preceding subparagraph (A), by striking may enter into
contracts to carry out research and development to
and inserting
may conduct activities or enter into contracts to carry out research and
development to maintain or improve existing policies or develop new policies
to
;
(3)in paragraph
(2)(A), by inserting conduct research and development or
after
The Corporation may
;
(4)in paragraph (5),
by inserting after expert review in accordance with section 505(e) and
procedures of the Board
after approved by the Board
;
and
(5)in paragraph (6),
by striking a pasture, range, and forage program
and inserting
policies that increase participation by producers of underserved
agricultural commodities, including sweet sorghum, sorghum for biomass,
specialty crops, sugarcane, and dedicated energy crops
.
(b)Section
522(e) of the Federal Crop Insurance Act (7 U.S.C. 1522(e)) is amended—
(1)in paragraph
(2)—
(A)by striking
(A) Authority.—
and inserting (A)
Conducting and contracting for
research and development.—
;
(B)in subparagraph
(A), by inserting conduct research and development and
after
the Corporation may use to
; and
(C)in subparagraph
(B), by inserting conduct research and development and
after
for the fiscal year to
;
(2)in paragraph (3),
in the matter preceding subparagraph (A), by striking to provide either
reimbursement payments or contract payments
; and
(3)by striking
paragraph (4).
15.Biomass and
sweet sorghum energy crop insurance policiesSection 522(c) of the Federal Crop Insurance
Act of 1938 (7 U.S.C. 1522(c)) is amended by adding at the end the
following:
(18)Biomass and
sweet sorghum energy crop insurance policies
(A)The
Corporation shall offer to enter into 1 or more contracts with qualified
entities to carry out research and development regarding—
(i)a
policy to insure biomass sorghum that is grown expressly for the purpose of
producing a feedstock for renewable biofuel, renewable electricity, or biobased
products; and
(ii)a policy to
insure sweet sorghum that is grown for a purpose described in clause
(i).
(B)Research and development with respect to each of the
policies required in subparagraph (A) shall evaluate the effectiveness of risk
management tools for the production of biomass sorghum or sweet sorghum,
including policies and plans of insurance that—
(i)are based on
market prices and yields;
(ii)to the extent
that insufficient data exist to develop a policy based on market prices and
yields, are based on the use of weather indices, including, at a minimum,
excessive or inadequate rainfall, to protect the interests of crop producers;
and
(iii)provide
protection for production or revenue losses, or
both.
.
16.Section 523(a) of the
Federal Crop Insurance Act (7 U.S.C. 1523(a)) is amended—
(1)in paragraph (1),
by inserting , at the sole discretion of the Corporation,
after
may
; and
(2)by striking
paragraph (5).
17.Section 508(b) of
the Federal Crop Insurance Act (7 U.S.C. 1508(b)) is amended—
(1)by striking paragraph (7); and
(2)by redesignating
paragraphs (8) through (11) as paragraphs (7) through (10),
respectively.
18.Repeal of
direct payments
(a)Sections
1103 and 1303 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713,
8753) are repealed.
(b)Continued
application for 2013 crop yearSections 1103 and 1303 of the
Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 8753), as in effect
on the day before the date of enactment of this Act, shall continue to apply
through the 2013 crop year with respect to all covered commodities (as defined
in section 1001 of that Act (7 U.S.C. 8702)) (except pulse crops) and peanuts
on a farm.