[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2092 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2092

 To reform the Federal crop insurance program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                 May 10 (legislative day, May 2), 1994

 Mr. Heflin introduced the following bill; which was read twice and 
        referred to the Committee on Agriculture, Nutrition, and 
        Forestry

_______________________________________________________________________

                                 A BILL


 
 To reform the Federal crop insurance program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``The Farmers' Risk 
Management Act of 1994''.
    (b) References to Federal Crop Insurance Act.--Except as otherwise 
expressly provided, whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Federal Crop Insurance Act (7 U.S.C. 1501 et 
seq.).

SEC. 2. CROP INSURANCE AMENDMENTS.

    (a) Management of Corporation.--The second sentence of section 
505(a) (7 U.S.C. 1505(a)) is amended--
            (1) by striking ``program, the Under Secretary'' and 
        inserting ``program, 1 additional Under Secretary''; and
            (2) by striking ``responsible for the farm credit programs 
        of the Department of Agriculture'' and inserting ``, as 
        designated by the Secretary of Agriculture (referred to in this 
        title as the `Secretary')''.
    (b) General Powers.--Section 506 (7 U.S.C. 1506) is amended--
            (1) by redesignating subsections (j) through (n) as 
        subsections (k) through (o), respectively;
            (2) by inserting after subsection (i) the following new 
        subsection:
    ``(j) Settling Claims.--The Corporation shall have the authority to 
make final and conclusive settlement and adjustment of any claim by or 
against the Corporation or a fiscal officer of the Corporation.'';
            (3) in subsection (l) (as so redesignated)--
                    (A) in the first sentence, by inserting ``, and 
                issue regulations,'' after ``agreements''; and
                    (B) in the second sentence, by striking ``contracts 
                or agreements'' each place it appears and inserting 
                ``contracts, agreements, or regulations'';
            (4) in subsection (n)(1) (as so redesignated), by striking 
        subparagraph (B) and inserting the following new subparagraph:
                    ``(B) disqualify the person from purchasing 
                catastrophic risk protection or receiving noninsured 
                assistance for a period of not to exceed 2 years, or 
                from receiving any other benefit under this title for a 
                period of not to exceed 10 years.'';
            (5) in subsection (o)(1) (as so redesignated), by striking 
        ``from obtaining adequate Federal crop insurance, as determined 
        by the Corporation'' and inserting ``(as defined by the 
        Secretary) from obtaining Federal crop insurance''; and
            (6) by adding at the end the following new subsection:
    ``(p) Regulations.--The Secretary and the Corporation are each 
authorized to issue such regulations as are necessary to carry out this 
title.''.
    (c) Personnel.--Section 507 (7 U.S.C. 1507) is amended--
            (1) in subsection (a), by striking ``, and county crop 
        insurance committeemen'';
            (2) in subsection (c), by striking ``, in which case the 
        agent or broker'' and all that follows through ``the agent or 
        broker has caused the error or omission''; and
            (3) in subsection (d), by striking ``of this Act,'' and all 
        that follows through ``agency''.
    (d) Crop Insurance.--Section 508 (7 U.S.C. 1508) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Authority To Offer Insurance.--
            ``(1) In general.--If sufficient actuarial data are 
        available (as determined by the Board), the Corporation may 
        insure, or provide reinsurance for insurers of, producers of 
        agricultural commodities grown in the United States under 1 or 
        more plans of insurance determined by the Board to be adapted 
        to the agricultural commodity concerned. To qualify for 
        coverage under a plan of insurance, the losses of the insured 
        commodity shall be due to drought, flood, or other natural 
        disaster (as determined by the Secretary).
            ``(2) Period.--Except in the case of tobacco, insurance 
        shall not extend beyond the period during which the insured 
        commodity is in the field. As used in the preceding sentence, 
        in the case of aquacultural species, the term `field' means the 
        environment in which the commodity is produced.
            ``(3) Exclusions.--Insurance provided under this subsection 
        shall not cover losses due to--
                    ``(A) the neglect or malfeasance of the producer;
                    ``(B) the failure of the producer to reseed to the 
                same crop in such areas and under such circumstances as 
                it is customary to so reseed; or
                    ``(C) the failure of the producer to follow good 
                farming practices (as determined by the 
                Corporation).'';
            (2) by striking subsections (c), (e), (g), (l), and (n);
            (3) by redesignating subsections (b), (d), (f), (h), (i), 
        (j), (k), and (m) as subsections (g) through (n), respectively;
            (4) by inserting after subsection (a) the following new 
        subsections:
    ``(b) Catastrophic Risk Protection.--
            ``(1) In general.--The Corporation shall offer a 
        catastrophic risk protection plan to indemnify producers for 
        crop loss due to loss of yield and prevented planting when the 
        producer is unable, because of drought, flood, or other natural 
        disaster (as determined by the Secretary), to plant other crops 
        for harvest on the acreage for the crop year.
            ``(2) Amount of coverage.--Catastrophic risk protection 
        shall offer a producer 50 percent loss in yield coverage, on an 
        individual yield or area yield basis, indemnified at 60 percent 
        of the expected market price, or a comparable coverage (as 
        determined by the Corporation).
            ``(3) Yield and loss basis.--A producer shall have the 
        option of basing the catastrophic coverage of the producer on 
        an individual yield and loss basis or on an area yield and loss 
        basis, if both options are offered by the Corporation.
            ``(4) Administrative fee.--
                    ``(A) In general.--As a condition of catastrophic 
                risk protection, a producer shall pay an administrative 
                fee. The administrative fee shall be $50 per crop per 
                county, but not to exceed $100 per producer per county. 
                The administrative fee shall be paid at the service 
                point, at the local office of the United States 
                Department of Agriculture (referred to in this title as 
                the `Department'), or to the approved private insurance 
                provider, at the time of application.
                    ``(B) Fee waivers.--The administrative fee shall be 
                waived--
                            ``(i) for farmers of limited resources (as 
                        defined by the Corporation); or
                            ``(ii) if the producer elects to purchase 
                        additional protection at 65 percent or more of 
                        the recorded or appraised average yield and 100 
                        percent of the expected market price, or an 
                        equivalent coverage, offered by an approved 
                        crop insurance provider.
                    ``(C) Use of fees collected.--Funds collected as 
                administrative fees shall be available, subject to 
                appropriations, for salaries and expenses of the 
                Corporation.
            ``(5) Participation requirement.--A producer may obtain a 
        catastrophic risk coverage plan for a crop of the producer on 
        land in the county only if the producer obtains such a plan for 
        the crop of the producer on all insurable land of the producer 
        in the county.
            ``(6) Eligibility for department programs.--
                    ``(A) In general.--To be eligible for any price 
                support, production adjustment, or conservation program 
                administered by the Secretary for any crop, or for 
                loans under any program of the Farmers Home 
                Administration or any successor agency, the producer 
                must obtain at least the catastrophic level of 
                insurance for each crop of economic significance grown 
                on each farm in the county in which the producer has an 
                interest, if insurance is available in the county for 
                the crop.
                    ``(B) Definition.--As used in this paragraph, the 
                term `crop of economic significance' means a crop that 
                has contributed, or is expected to contribute, 10 
                percent or more of the total expected value of all 
                crops grown by the producer.
            ``(7) Limitation due to risk.--The Board may limit 
        insurance in any county or area, or on any farm, on the basis 
        of the insurance risk concerned.
    ``(c) General Coverage Levels.--
            ``(1) In general.--The Corporation shall offer plans of 
        insurance that provide levels of coverage that are greater than 
        the level available under catastrophic risk protection under 
        subsection (b). A producer may purchase such a plan only from 
        an approved private insurance provider, if the private 
        insurance is available. Nothing in this paragraph restricts the 
        Corporation from offering insurance plans if coverage from 
        private insurance providers is unavailable.
            ``(2) Transfer of insurance files.--If a producer has 
        already applied for catastrophic risk protection at the local 
        office of the Department and elects to purchase additional 
        coverage--
                    ``(A) the insurance file for the producer shall be 
                transferred to the approved private insurance provider 
                servicing the additional coverage policy; and
                    ``(B) the administrative fee for the crop for which 
                additional coverage at 65 percent or more of the 
                recorded or appraised average yield and 100 percent of 
                the expected market price, or an equivalent coverage, 
                is obtained shall be refunded to the producer.
            ``(3) Yield and loss basis.--A producer shall have the 
        option of purchasing additional coverage based on an individual 
        yield and loss basis or on an area yield and loss basis, if 
        both options are offered by the Corporation.
            ``(4) Level of coverage.--The level of coverage shall be 
        dollar denominated and 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).
            ``(5) Price level.--The Corporation shall establish a price 
        level for each commodity on which insurance is offered that--
                    ``(A) shall not be less than the projected market 
                price for the commodity (as determined by the 
                Corporation); or
                    ``(B) at the discretion of the Corporation, may be 
                based on the actual market price at the time of harvest 
                (as determined by the Corporation).
            ``(6) Price elections.--
                    ``(A) In general.--Subject to subparagraph (B), 
                insurance coverage shall be made available to the 
                producer on the basis of any price election that equals 
                or is less than the price election established by the 
                Board. The coverage shall be quoted in terms of dollars 
                per acre.
                    ``(B) Minimum price elections.--The Corporation may 
                establish minimum price elections below which levels of 
                insurance shall not be offered.
            ``(7) Substitute coverage for fire and hail.--
                    ``(A) In general.--For levels of coverage 65 
                percent or more of the recorded or appraised average 
                yield and 100 percent of the expected market price, or 
                an equivalent coverage, the producer may elect to 
                delete from the insurance coverage provided under this 
                title coverage against damage caused by fire and hail, 
                if an equivalent or greater dollar amount of coverage 
                for damage caused by fire and hail is obtained from a 
                private fire or hail insurance provider.
                    ``(B) Credit for substitute coverage.--Upon written 
                notice of an election under subparagraph (A) to the 
                company issuing the policy providing coverage under 
                this title and submission of evidence of substitute 
                coverage on the commodity insured, the premium of the 
                producer shall be reduced by an amount determined by 
                the Corporation to be actuarially appropriate, taking 
                into account the actuarial value of the remaining 
                coverage provided by the Corporation. The producer 
                shall not be given a reduction for an amount of premium 
                determined to be greater than the actuarial value of 
                the protection against losses caused by fire and hail 
                that is included in the coverage under this title for 
                the crop.
            ``(8) State premium subsidies.--The Board may enter into 
        agreements with any State or agency of a State under which the 
        State or agency may pay to the approved insurance provider an 
        additional premium subsidy to further reduce the portion of the 
        premium paid by farmers in the State.
            ``(9) Limitation due to risk.--The Board may limit or 
        refuse insurance in any county or area, or on any farm, on the 
        basis of the insurance risk concerned.
    ``(d) Premiums.--
            ``(1) Rates.--
                    ``(A) In general.--The Corporation shall fix 
                adequate premiums for all the plans of insurance of the 
                Corporation at such rates as the Board determines are 
                actuarially sufficient to attain an expected loss ratio 
                of not greater than 1.1.
                    ``(B) Catastrophic risk protection.--For 
                catastrophic risk protection coverage, the amount of 
                premium shall be sufficient to cover anticipated losses 
                and a reasonable reserve.
                    ``(C) Additional coverage.--For levels of coverage 
                below 65 percent of the recorded or appraised average 
                yield and 100 percent of the expected market price, or 
                an equivalent coverage, but greater than catastrophic 
                risk protection coverage, the amount of premium shall 
                be sufficient to cover anticipated losses, a reasonable 
                reserve, and an amount for operating and administrative 
                expenses (as determined by the Corporation) that is 
                less than the amount established for coverage at 65 
                percent and 100 percent of the expected market price, 
                or an equivalent coverage.
                    ``(D) High coverage.--For levels of coverage of at 
                least 65 percent of the recorded or appraised average 
                yield and 100 percent of the expected market price, or 
                an equivalent coverage, the amount of premium shall be 
                sufficient to cover anticipated losses, a reasonable 
                reserve, and an amount to pay the operating and 
                administrative expenses (as determined by the 
                Corporation on an industrywide basis as a percentage of 
                the total premium).
            ``(2) Payment of part of premium.--For the purpose of 
        encouraging the broadest possible participation, the 
        Corporation shall pay a part of the premium equivalent to--
                    ``(A) for catastrophic risk protection coverage, an 
                amount equal to the premium established under paragraph 
                (1)(B);
                    ``(B) for levels of coverage below 65 percent of 
                the recorded or appraised average yield and 100 percent 
                of the expected market price, or an equivalent 
                coverage, but greater than catastrophic risk 
                protection, an amount equal to sum of the amount of 
                premium established for catastrophic risk protection 
                coverage, a reasonable reserve, and the amount for 
                operating and administrative expenses established under 
                paragraph (1)(C); and
                    ``(C) for levels of coverage at or greater than 65 
                percent of the recorded and appraised yield and 100 
                percent of the expected market price, or an equivalent 
                coverage, on an individual or area basis, an amount 
                equal to the sum of the premium established for 50 
                percent loss in yield indemnified at 75 percent of the 
                expected market price, a reasonable reserve, and the 
                amount for operating and administrative expenses 
                established under paragraph (1)(D).
            ``(3) Reductions by private providers.--If a private 
        insurance provider determines that the provider may provide 
        insurance more efficiently than the expense reimbursement 
        amount set by the Corporation, the private insurance provider 
        may, with the approval of the Board, reduce the premium charged 
        the insured by the amount of the efficiency. A reduction 
        pursuant to the preceding sentence shall be subject to such 
        rules, limitations, and procedures as are established by the 
        Corporation.
    ``(e) Eligibility.--
            ``(1) In general.--To participate in catastrophic risk 
        protection coverage under this section, a producer shall submit 
        an application at the local office of the Department or to an 
        approved private crop insurance provider.
            ``(2) Sales closing date.--For coverage under this title, 
        each producer shall purchase crop insurance on or before the 
        sales closing date for the crop by providing the required 
        information and executing the required documents. Subject to 
        the goal of ensuring actuarial soundness for the crop insurance 
        program, the sales closing date shall be established by the 
        Corporation to maximize convenience to producers in obtaining 
        benefits under price and production adjustment programs of the 
        Department.
            ``(3) Records.--For coverage under this title, each 
        producer shall provide records, acceptable to the Corporation, 
        of previous acreage and production or accept a yield determined 
        by the Corporation.
            ``(4) Reporting.--For coverage under this title, each 
        producer shall report acreage planted and prevented from 
        planting by the designated acreage reporting date for the crop 
        and location as established by the Corporation.
    ``(f) Yield Determinations.--
            ``(1) In general.--Subject to paragraph (2), the 
        Corporation shall implement crop insurance underwriting rules 
        that ensure that yield coverage is provided to all producers 
        participating in the Federal crop insurance program.
            ``(2) Yield coverage plans.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                crop insurance yield for a farm for a crop of a 
                commodity produced during a crop year shall be based 
                on, as determined by the producer--
                            ``(i) if the crop was produced on the farm 
                        during each of the 4 crop years immediately 
                        preceding the crop year, the actual yield per 
                        harvested acre for the crop on the basis of the 
                        average of the yield per harvested acre for the 
                        crop for the farm for each of the 10 crop years 
                        immediately preceding the crop year, excluding 
                        the crop year with the highest yield per 
                        harvested acre, the crop year with the lowest 
                        yield per harvested acre, and any crop year in 
                        which the crop was not planted on the farm; or
                            ``(ii) in the case of a program crop (as 
                        defined in section 502(3) of the Agricultural 
                        Act of 1949 (7 U.S.C. 1462(3)), the farm 
                        program payment yield for the farm for the crop 
                        determined under section 505 of such Act (7 
                        U.S.C. 1465).
                    ``(B) Assigned yield.--If the producer does not 
                provide satisfactory evidence of the yield of a 
                commodity under subparagraph (A), the producer shall be 
                assigned, as the crop insurance yield of the producer, 
                not less than 65 percent of the transitional yield of 
                the producer (adjusted to reflect actual production 
                reflected in the records acceptable to the Corporation 
                for continuous years), as specified in regulations 
                issued by the Corporation based on production history 
                requirements.
                    ``(C) Area yield.--The Corporation may offer a crop 
                insurance plan based on an area yield that allows an 
                insured producer to qualify for an indemnity if a loss 
                has occurred in an area (as specified by the 
                Corporation) in which the farm of the producer is 
                located. Under an area yield plan, an insured producer 
                shall be allowed to select the level of area production 
                at which an indemnity will be paid consistent with such 
                terms and conditions as are established by the 
                Corporation.
                    ``(D) Commodity-by-commodity basis.--A producer may 
                choose between individual yield or area yield coverage, 
                if available, on a commodity-by-commodity basis.
            ``(3) Notice.--The Corporation shall ensure that producers 
        are given adequate notice of the yield coverage provisions of 
        this section in advance of the crop insurance application 
        period for the crops to which the provisions first will 
        apply.'';
            (5) in subsection (g) (as so redesignated)--
                    (A) in paragraph (1), by striking ``(a)'' and 
                inserting ``(c)'';
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Preparation of policies.--A policy or other material 
        submitted to the Board under this subsection may be prepared 
        without regard to the limitations specified in this title, 
        including the requirements concerning the levels of coverage 
        and rates and the requirement that a price level for each 
        commodity insured shall equal the projected market price for 
        the commodity as established by the Board. The policy may be 
        subsidized only at an amount equivalent to coverage authorized 
        under this title.'';
                    (C) in paragraph (3)--
                            (i) in the first sentence, by striking 
                        ``taking into consideration the risks covered 
                        by the policy or other material''; and
                            (ii) in the second sentence, by inserting 
                        ``with a private insurance provider'' after 
                        ``reinsurance agreement''; and
                    (D) by striking paragraph (4) and inserting the 
                following new paragraph:
            ``(4) Required publication.--Any policy, provision of a 
        policy, or rate approved under this subsection shall be 
        published as a notice in the Federal Register and made 
        available to each person who contracts with or is reinsured by 
        the Corporation under the same terms and conditions as are 
        applicable between the Corporation and the submitting 
        person.'';
            (6) by striking subsection (i) (as so redesignated) and 
        inserting the following new subsection:
    ``(i) Claims for Losses.--
            ``(1) In general.--The Corporation may provide for 
        adjustment and payment of claims for losses as provided under 
        subsection (a) under rules prescribed by the Board. The rules 
        prescribed by the Board shall establish standards to ensure 
        that all claims for losses are adjusted, to the extent 
        practicable, in a uniform and timely manner.
            ``(2) Denial of claims.--
                    ``(A) In general.--Subject to subparagraph (B), if 
                a claim for indemnity is denied by the Corporation, an 
                action on the claim may be brought against the 
                Corporation and the insurance provider in the United 
                States District Court for the district in which the 
                insured farm is located.
                    ``(B) Statute of limitations.--A suit on the claim 
                may be brought not later than 1 year after the date on 
                which written notice of denial of the claim is provided 
                to the claimant.'';
            (7) by striking subsection (j) (as so redesignated) and 
        inserting the following new subsection:
    ``(j) Reinsurance.--Notwithstanding any other provision of this 
title, the Corporation shall, to the maximum extent practicable, 
provide reinsurance, on such terms and conditions as the Board 
determines to be consistent with subsections (b) and (c) and sound 
reinsurance principles, to insurers (as defined by the Corporation) 
that insure producers of any agricultural commodity under 1 or more 
plans acceptable to the Corporation. Each reinsurance agreement of the 
Corporation with a reinsured company shall require the reinsured 
company to bear a sufficient share of any potential loss under the 
agreement so as to ensure that the reinsured company will sell and 
service policies of insurance in a sound and prudent manner, taking 
into consideration the availability of private reinsurance.'';
            (8) in subsection (k) (as so redesignated), by striking 
        ``provide'' and inserting ``offer plans of'';
            (9) by striking subsection (n) (as so redesignated) and 
        inserting the following new subsection:
    ``(n) Information Collection on Crop Insurance.--The Corporation 
shall make available to producers through local offices of the 
Department--
            ``(1) current and complete information on all aspects of 
        Federal crop insurance; and
            ``(2) a listing of insurance agents for the crop 
        insurance.''; and
            (10) by adding at the end the following new subsection:
    ``(o) Cost of Production Insurance.--The Corporation shall make 
available to producers crop insurance that is based on the actual cost 
of production of the producer. The insurance shall be otherwise 
comparable to the other insurance made available under this section.''.
    (e) Crop Insurance Yield Coverage.--Section 508A (7 U.S.C. 1508a) 
is repealed.
    (f) Tax Exemption.--Section 511 (7 U.S.C. 1511) is amended by 
inserting after ``The Corporation, including'' the following: ``the 
contracts of insurance of the Corporation and premiums on the 
contracts, whether insured directly or reinsured by the Corporation,''.
    (g) Funding.--Section 516 (7 U.S.C. 1516) is amended to read as 
follows:

``SEC. 516. FUNDING.

    ``(a) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary, including funds collected as 
administrative fees under section 508(b), to cover the administrative 
and operating expenses of the Corporation.
    ``(b) Insurance Fund.--
            ``(1) In general.--The Corporation shall establish an 
        insurance fund for the deposit of premium income, income from 
        reinsurance operations, and appropriations made available under 
        this title. The Corporation shall pay amounts due under 
        reinsurance agreements of the Corporation under section 508(j) 
        with private insurance providers, including premium subsidies, 
        from the fund.
            ``(2) Source of funding.--There are appropriated, without 
        fiscal year limitation, such sums as are necessary to carry out 
        the insurance fund established under paragraph (1).''.
    (h) Producer Eligibility.--Section 520 (7 U.S.C. 1520) is amended 
to read as follows:

``SEC. 520. PRODUCER ELIGIBILITY.

    ``Except as otherwise provided in this title, a producer shall not 
be denied insurance under this title if--
            ``(1) for purposes of catastrophic risk protection 
        coverage, the producer is a person (as defined by the 
        Secretary); and
            ``(2) for purposes of any other plan of insurance, the 
        producer is 18 years of age and has a bona fide insurable 
        interest in a crop as an owner-operator, landlord, tenant, or 
        sharecropper.''.

SEC. 3. ADVISORY COMMITTEE FOR FEDERAL CROP INSURANCE.

    The Act is amended by inserting after section 514 (7 U.S.C. 1514) 
the following new section:

``SEC. 515. ADVISORY COMMITTEE FOR FEDERAL CROP INSURANCE.

    ``(a) Establishment.--The Secretary may establish within the 
Department a committee to be known as the `Advisory Committee for 
Federal Crop Insurance' (referred to in this section as the `Advisory 
Committee'), which shall remain in existence until September 30, 1998.
    ``(b) Membership.--The Advisory Committee shall be composed of--
            ``(1) the Manager of the Corporation;
            ``(2) the Secretary or a designee; and
            ``(3) not fewer than 10 representatives of organizations or 
        agencies involved with the Federal crop insurance program, 
        which may include insurance companies, insurance agents, farm 
        producer organizations, experts on agronomic practices, and 
        banking and lending institutions.
    ``(c) Administrative Provisions.--
            ``(1) Terms.--Members of the Advisory Committee shall be 
        appointed by the Secretary for a term of not more than 2 years 
        from nominations made by the participating organizations and 
        agencies referred to in subsection (b). The terms of the 
        members shall be staggered.
            ``(2) Chairperson.--The Advisory Committee shall be chaired 
        by the Manager of the Corporation.
            ``(3) Meetings.--The Advisory Committee shall meet at least 
        annually. The meetings of the Advisory Committee shall be 
        publicly announced in advance and shall be open to the public. 
        Appropriate records of the activities of the Advisory Committee 
        shall be kept and made available to the public on request.
    ``(d) Primary Responsibility.--The primary responsibility of the 
Advisory Committee shall be to advise the Secretary on the 
implementation of this title and on other issues related to crop 
insurance (as determined by the Manager of the Corporation).
    ``(e) Reports.--Not later than June 30 of each year, the Advisory 
Committee shall prepare, and submit to the Secretary, a report 
specifying the conclusions of the Advisory Committee on--
            ``(1) the progress toward implementation of this title;
            ``(2) the actuarial soundness of the Federal crop insurance 
        program; and
            ``(3) the rate of participation in the catastrophic and the 
        additional coverage programs under this title.''.

SEC. 4. NONINSURED ASSISTANCE PROGRAM.

    The Act (7 U.S.C. 1501 et seq.) is amended by adding at the end the 
following new section:

``SEC. 521. NONINSURED ASSISTANCE PROGRAM.

    ``(a) Eligibility.--
            ``(1) In general.--The Corporation shall establish a 
        noninsured assistance program to provide coverage equivalent to 
        the catastrophic risk protection insurance described in section 
        508(b) for crops for which catastrophic risk protection 
        insurance is not available. Crops covered shall include all 
        commercial crops and commodities for which catastrophic risk 
        protection coverage is not available and that are produced for 
        food or fiber on a commercial basis but shall not include 
        livestock. Noninsured assistance shall not cover losses due 
        to--
                    ``(A) the neglect or malfeasance of the producer;
                    ``(B) the failure of the producer to reseed to the 
                same crop in such areas and under such circumstances as 
                it is customary to so reseed; or
                    ``(C) the failure of the producer to follow good 
                farming practices (as determined by the Corporation).
            ``(2) Applications.--To be eligible for assistance under 
        this section, a producer shall make a timely application for 
        noninsured assistance at the local office of the Department.
            ``(3) Records.--A producer shall provide records, 
        acceptable to the Corporation, of previous crop acreage and 
        production, or the producer shall accept a yield determined by 
        the Corporation.
            ``(4) Acreage reports.--A producer shall report acreage 
        planted and prevented from being planted by the designated 
        acreage reporting date for the crop and location as established 
        by the Corporation.
            ``(5) Area average yield.--A producer of a nonprogram crop 
        shall not be eligible for noninsured assistance unless the area 
        (as determined by the Corporation) average yield, or an 
        equivalent measure if yield data are not available, for the 
        crop is less than 65 percent of the expected area yield 
        established by the Corporation.
            ``(6) Prevented planting payments.--The Corporation shall 
        make a prevented planting noninsured assistance payment if the 
        producer is prevented from planting more than 35 percent of the 
        acreage intended for the crop because of drought, flood, or 
        other natural disaster (as determined by the Secretary).
            ``(7) Reduced yield payments.--If, because of drought, 
        flood, or other natural disaster (as determined by the 
        Secretary), the total quantity of the crop that a producer is 
        able to harvest on any farm is less than 50 percent of the 
        expected area yield for the crop (as determined by the 
        Corporation) factored for the interest of the producer for the 
        crop, the Corporation shall make a reduced yield noninsured 
        assistance payment.
            ``(8) Income limitation.--
                    ``(A) In general.--A person who has qualifying 
                gross revenues in excess of $2,000,000 during the 
                taxable year (as determined by the Secretary) shall not 
                be eligible to receive any noninsured assistance 
                payment under this section in the year.
                    ``(B) Definition.--As used in this paragraph, the 
                term `qualifying gross revenues' means--
                            ``(i) if a majority of the gross revenue of 
                        the person is received from farming, ranching, 
                        and forestry operations, the gross revenue from 
                        the farming, ranching, and forestry operations 
                        of the person; and
                            ``(ii) if less than a majority of the gross 
                        revenue of the person is received from farming, 
                        ranching, and forestry operations, the gross 
                        revenue of the person from all sources.
    ``(b) Payment Rate.--If the producer is eligible for noninsured 
assistance under this section, payments shall be made for losses in 
excess of 50 percent of the established yield for the crop at 60 
percent of the average market price for the crop, or any comparable 
coverage (as determined by the Corporation).
    ``(c) Farm Yields.--
            ``(1) In general.--The Corporation shall establish 
        noninsured assistance program farm yields for crops for the 
        purposes of this section.
            ``(2) Actual yield.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                crop insurance yield for a farm for a crop of a 
                commodity produced during a crop year shall be based 
                on, as determined by the producer--
                            ``(i) if the crop was produced on the farm 
                        during each of the 4 crop years immediately 
                        preceding the crop year, the actual yield per 
                        harvested acre for the crop on the basis of the 
                        average of the yield per harvested acre for the 
                        crop for the farm for each of the 10 crop years 
                        immediately preceding the crop year, excluding 
                        the crop year with the highest yield per 
                        harvested acre, the crop year with the lowest 
                        yield per harvested acre, and any crop year in 
                        which the crop was not planted on the farm; or
                            ``(ii) in the case of a program crop (as 
                        defined in section 502(3) of the Agricultural 
                        Act of 1949 (7 U.S.C. 1462(3)), the farm 
                        program payment yield for the farm for the crop 
                        determined under section 505 of such Act (7 
                        U.S.C. 1465).
                    ``(B) Assigned yield.--If the producer does not 
                provide satisfactory evidence of the yield of a 
                commodity under subparagraph (A), the producer shall be 
                assigned, as the crop insurance yield of the producer, 
                not less than 65 percent of the transitional yield of 
                the producer (adjusted to reflect actual production 
                reflected in the records acceptable to the Corporation 
                for continuous years), as specified in regulations 
                issued by the Corporation based on production history 
                requirements.
    ``(d) Payment of Losses.--Payments for noninsured assistance losses 
under this section shall be made from the insurance fund established 
under section 516(b) and shall be reimbursed from appropriations made 
available under this title. The losses shall not be included in 
calculating the premiums charged to producers for insurance.
    ``(e) Payment Limitation.--
            ``(1) In general.--The total amount of payments that a 
        person shall be entitled to receive annually under this section 
        may not exceed $100,000.
            ``(2) Definition of person.--The Corporation shall issue 
        regulations defining the term `person', which shall conform, to 
        the extent practicable, to the regulations defining the term 
        `person' issued under section 1001 of the Food Security Act of 
        1985 (7 U.S.C. 1308).''.

SEC. 5. CONFORMING AMENDMENTS.

    (a) Price Support Programs.--
            (1) Rice.--Section 101B(c) of the Agricultural Act of 1949 
        (7 U.S.C. 1441-2(c)) is amended--
                    (A) in paragraph (1), by striking subparagraph (F); 
                and
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Crop insurance requirement.--As a condition of 
        receiving any benefit (including payments) under this section, 
        the producer must obtain at least catastrophic risk protection 
        insurance coverage for the crop and crop year in which the 
        benefit is sought, if the coverage is offered by the Federal 
        Crop Insurance Corporation.''.
            (2) Cotton.--Section 103(h) of such Act (7 U.S.C. 1444(h)) 
        is amended by adding at the end the following new paragraph:
    ``(17) As a condition of receiving any benefit (including payments) 
under this section, the producer must obtain at least catastrophic risk 
protection insurance coverage for the crop and crop year in which the 
benefit is sought, if the coverage is offered by the Federal Crop 
Insurance Corporation.''.
            (3) Upland cotton.--Section 103B(c) of such Act (7 U.S.C. 
        1444-2(c)) is amended--
                    (A) in paragraph (1), by striking subparagraph (F); 
                and
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Crop insurance requirement.--As a condition of 
        receiving any benefit (including payments) under this section, 
        the producer must obtain at least catastrophic risk protection 
        insurance coverage for the crop and crop year in which the 
        benefit is sought, if the coverage is offered by the Federal 
        Crop Insurance Corporation.''.
            (4) Feed grains.--Section 105B(c) of such Act (7 U.S.C. 
        1444f(c)) is amended--
                    (A) in paragraph (1), by striking subparagraph (G); 
                and
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Crop insurance requirement.--As a condition of 
        receiving any benefit (including payments) under this section, 
        the producer must obtain at least catastrophic risk protection 
        insurance coverage for the crop and crop year in which the 
        benefit is sought, if the coverage is offered by the Federal 
        Crop Insurance Corporation.''.
            (5) Wheat.--Section 107B(c) of such Act (7 U.S.C. 1445b-
        3a(c)) is amended--
                    (A) in paragraph (1), by striking subparagraph (G); 
                and
                    (B) by striking paragraph (2) and inserting the 
                following new paragraph:
            ``(2) Crop insurance requirement.--As a condition of 
        receiving any benefit (including payments) under this section, 
        the producer must obtain at least catastrophic risk protection 
        insurance coverage for the crop and crop year in which the 
        benefit is sought, if the coverage is offered by the Federal 
        Crop Insurance Corporation.''.
            (6) Peanuts.--Section 108B of such Act (7 U.S.C. 1445c-3) 
        is amended--
                    (A) by redesignating subsection (h) as subsection 
                (i); and
                    (B) by inserting after subsection (g) the following 
                new subsection:
    ``(h) Crop Insurance Requirement.--As a condition of receiving any 
benefit (including payments) under this section, the producer must 
obtain at least catastrophic risk protection insurance coverage for the 
crop and crop year in which the benefit is sought, if the coverage is 
offered by the Federal Crop Insurance Corporation.''.
            (7) Oilseeds.--Section 205 of such Act (7 U.S.C. 1446f) is 
        amended--
                    (A) by redesignating subsection (n) as subsection 
                (o); and
                    (B) by inserting after subsection (m) the following 
                new subsection:
    ``(n) Crop Insurance Requirement.--As a condition of receiving any 
benefit (including payments) under this section, the producer must 
obtain at least catastrophic risk protection insurance coverage for the 
crop and crop year in which the benefit is sought, if the coverage is 
offered by the Federal Crop Insurance Corporation.''.
            (8) Sugar.--Section 206 of such Act (7 U.S.C 1446g) is 
        amended--
                    (A) by redesignating subsection (j) as subsection 
                (k); and
                    (B) by inserting after subsection (i) the following 
                new subsection:
    ``(j) Crop Insurance Requirement.--As a condition of receiving any 
benefit under this section, the producer must obtain at least 
catastrophic risk protection insurance coverage for the crop and crop 
year in which the benefit is sought, if the coverage is offered by the 
Federal Crop Insurance Corporation.''.
            (9) Honey.--Section 207 of such Act (7 U.S.C. 1446h) is 
        amended--
                    (A) by redesignating subsection (j) as subsection 
                (k); and
                    (B) by inserting after subsection (i) the following 
                new subsection:
    ``(j) Crop Insurance Requirement.--As a condition of receiving any 
benefit (including payments) under this section, the producer must 
obtain at least catastrophic risk protection insurance coverage for the 
crop and crop year in which the benefit is sought, if the coverage is 
offered by the Federal Crop Insurance Corporation.''.
            (10) Disaster payments.--Section 208 of such Act (7 U.S.C. 
        1446i) is repealed.
    (b) Emergency Disaster Assistance.--Subtitle B of title XXII of the 
Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 1421 
note) is amended by striking chapter 3.
    (c) Emergency Appropriations.--Section 251(b)(2)(D)(i) of the 
Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
901(b)(2)(D)(i)) is amended by adding at the end the following new 
sentence: ``The preceding sentence shall not apply to appropriations to 
cover agricultural crop disaster assistance.''.
    (d) Cross-References.--
            (1) The first sentence of section 506(d) (7 U.S.C. 1506(d)) 
        is amended by striking ``508(f)'' and inserting ``508(i)''.
            (2) The last sentence of section 507(c) (7 U.S.C. 1507(c)) 
        is amended by striking ``508(b)'' and inserting ``508(g)''.
            (3) Section 518 (7 U.S.C. 1518) is amended by striking 
        ``(i)'' and inserting ``(k)''.

SEC. 6. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), this Act and 
the amendments made by this Act shall become effective on the date of 
enactment of this Act.
    (b) Exceptions.--The amendments made by sections 2 through 4 shall 
become effective beginning with the crop year immediately following the 
date of enactment of this Act.

                                 <all>

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