[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 534 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 534

   To amend the Federal Crop Insurance Act to modify the provisions 
    governing yield averages, to provide late planting coverage and 
          prevented planting coverage, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                March 9 (legislative day, March 3), 1993

Mr. Durenberger (for himself, Mr. Daschle, Mr. Pressler, Mr. Burns, Mr. 
   Dorgan, Mr. Conrad, Mr. Grassley, Mr. Kempthorne, and Mr. Gorton) 
introduced the following bill; which was read twice and referred to the 
           Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
   To amend the Federal Crop Insurance Act to modify the provisions 
    governing yield averages, to provide late planting coverage and 
          prevented planting coverage, 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.

    This Act may be cited as the ``Federal Crop Insurance Fairness 
Act''.

SEC. 2. LEVELS OF COVERAGE IN EXCESS OF 75 PERCENT OF RECORDED OR 
              APPRAISED AVERAGE YIELD.

    Subsection (a) of section 508 of the Federal Crop Insurance Act (7 
U.S.C. 1508(a)) is amended to read as follows:
    ``(a) Authority to Offer Insurance.--
            ``(1) In general.--If sufficient actuarial data are 
        available, as determined by the Board, the Corporation may 
        insure producers of agricultural commodities grown in the 
        United States under any plan or plans of insurance determined 
        by the Board to be adapted to the agricultural commodity 
        involved.
            ``(2) Causes.--The insurance shall be against loss of the 
        insured commodity due to unavoidable causes, including drought, 
        flood, hail, wind, frost, winterkill, lightning, fire, 
        excessive rain, snow, wildlife, hurricane, tornado, insect 
        infestation, plant disease, and such other unavoidable causes 
        as may be determined by the Board.
            ``(3) Period.--
                    ``(A) In general.--Except in the case of tobacco, 
                insurance shall not extend beyond the period the 
                insured commodity is in the field.
                    ``(B) Definition of field.--For purposes of 
                subparagraph (A), in the case of aquacultural species, 
                the term `field' means the environment in which the 
                commodity is produced.
            ``(4) Standard yield coverage.--
                    ``(A) In general.--Subject to subparagraph (B), any 
                insurance offered against loss in yield shall make 
                available to producers protection against loss in yield 
                that covers 75 percent of the recorded or appraised 
                average yield of the commodity on the insured farm for 
                a representative period.
                    ``(B) Adjustments.--Average yields established 
                under subparagraph (A) shall be subject to such 
                adjustments as the Board may prescribe to the end that 
                the average yields fixed for farms in the same area, 
                that are subject to the same conditions, may be fair 
                and just.
            ``(5) Lesser yield coverage.--In addition, the Corporation 
        shall make available to producers lesser levels of yield 
        coverage, including a level of coverage at 50 percent of the 
        recorded or appraised average yield, as adjusted.
            ``(6) Adjusted yields.--In the case of any commodity for 
        which the Agricultural Stabilization and Conservation Service 
        has established for the farming unit involved an adjusted yield 
        for the purposes of programs administered by the Service (or a 
        yield for crop insurance purposes under this title), if the 
        yield is greater than the recorded or the appraised yield, as 
        established by the Corporation, of a commodity on the farming 
        unit, insurance coverage may be provided to cover against the 
        loss in yield of the commodity on the basis of the adjusted 
        yield for the commodity established by the Service rather than 
        the recorded or appraised yield as established by the 
        Corporation.
            ``(7) Additional premiums.--Additional insurance under this 
        subsection shall be provided for an additional premium (for 
        which no premium subsidy or administrative subsidy may be 
        provided) set at such rate as the Board determines--
                    ``(A) appropriate to reflect accurately the 
                increased risk involved; and
                    ``(B) actuarially sufficient to--
                            ``(i) cover claims for losses on the 
                        insurance; and
                            ``(ii) establish a reasonable reserve 
                        against unforeseen losses.
            ``(8) Levels of coverage in excess of 75 percent of 
        recorded or appraised average yield.--The Corporation may make 
        available to producers on a farm located in a growing area a 
        level of coverage in excess of 75 percent of the recorded or 
        appraised average yield, as adjusted, if the Corporation 
        determines that normal variations in yield in the growing area 
        have not resulted in the payment of claims for losses while the 
        level of coverage is limited to 75 percent.
            ``(9) Maximum level of coverage.--Except as provided in 
        paragraphs (6) through (8), the Corporation may not make 
        available to producers any level of coverage in excess of 75 
        percent of the recorded or appraised average yield, as 
        adjusted.
            ``(10) Projected market price option.--One of the price 
        elections offered shall approximate (but be not less than 90 
        percent of) the projected market price for the commodity 
        involved, as determined by the Board.
            ``(11) Uninsured losses.--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 areas and under circumstances where it is 
                customary to so reseed; or
                    ``(C) the failure of the producer to follow 
                established good farming practices.
            ``(12) Insurance risks.--The Board may limit or refuse 
        insurance in any county or area, or on any farm, on the basis 
        of the insurance risk involved.
            ``(13) Agricultural income in counties.--Insurance shall 
        not be provided on any agricultural commodity in any county in 
        which the Board determines that the income from the commodity 
        constitutes an unimportant part of the total agricultural 
        income of the county, except that insurance may be provided for 
        producers on farms situated in a local producing area bordering 
        on a county with a crop-insurance program.
            ``(14) Annual reports.--The Corporation shall report 
        annually to Congress the results of the operations of the 
        Corporation as to each commodity insured.
            ``(15) Project market price level.--Beginning with the 1992 
        crop year, the Corporation shall establish a price level for 
        each commodity on which insurance is offered that shall not be 
        less than the projected market price for the commodity, as 
        determined by the Board.
            ``(16) Price election.--Insurance coverage shall be made 
        available to a producer on the basis of any price election that 
        equals or is less than that established by the Board. The 
        coverage shall be quoted in terms of dollars per acre.''.

SEC. 3. LATE PLANTING COVERAGE.

    Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) is 
amended by adding at the end the following new subsection:
    ``(n) Late Planting Coverage.--
            ``(1) In general.--Producers on a farm entering into a crop 
        insurance contract under this Act shall be offered late 
        planting coverage that would permit planting after the final 
        planting date for a commodity by up to 25 days for coverage 
        under the contract.
            ``(2) Reduction of coverage.--If the producers on a farm 
        purchase late planting coverage under paragraph (1), the yield 
        guarantee shall be reduced by--
                    ``(A) 1 percent per day for each of the 1st through 
                10th days planting is delayed beyond the normal final 
                planting date;
                    ``(B) 2 percent per day for each of the 11th 
                through 25th days planting is delayed beyond the normal 
                final planting date; and
                    ``(C) such other amounts as can be demonstrated to 
                offset the additional insurer risk of providing the 
                coverage.
            ``(3) Presumption of coverage.--The producers on a farm 
        shall have late planting coverage as part of a basic policy of 
        insurance under this Act unless the producers notify the 
        Corporation that the producers waive late planting coverage.
            ``(4) Raises in premiums.--If the Corporation determines 
        that late planting coverage would raise premiums to such an 
        extent as to discourage participation in the program 
        established by this Act, the Corporation shall offer late 
        planting as a separate endorsement.''.

SEC. 4. PREVENTED PLANTING COVERAGE.

    Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) (as 
amended by section 3 of this Act) is further amended by adding at the 
end the following new subsection:
    ``(o) Prevented Planting Coverage.--
            ``(1) In general.--Producers on a farm entering into a crop 
        insurance contract under this Act shall have prevented planting 
        coverage as part of the basic policy of insurance under this 
        Act.
            ``(2) Coverage.--If the producers on a farm are prevented 
        from planting a crop of a covered commodity as the result of 
        excess moisture, drought, or other natural disaster, the 
        producers shall be eligible for coverage equal to 50 percent of 
        the guaranteed level of coverage for the crop.
            ``(3) Substitute crop.--The producers on a farm shall have 
        the option of planting a substitute crop, in lieu of an insured 
        crop, as part of the basic policy of insurance under this Act. 
        The value of the substitute crop shall offset the remaining 
        guaranteed level of coverage for the insured crop.
            ``(4) Presumption of coverage.--The producers on a farm 
        shall have prevented planting coverage as part of a basic 
        policy of insurance made available under this Act unless the 
        producers notify the Corporation that the producers waive 
        prevented planting coverage.
            ``(5) Raises in premiums.--If the Corporation determines 
        that prevented planting coverage would raise premiums to such 
        an extent as to discourage participation in the program 
        established by this Act, the Corporation shall offer prevented 
        planting as a separate endorsement.''.

SEC. 5. ELIMINATION OF PENALTY FOR DE MINIMIS YIELDS.

    Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) (as 
amended by section 4 of this Act) is further amended by adding at the 
end the following new subsection:
    ``(p) De Minimis Yields.--The Corporation shall, to the extent 
practicable, establish a procedure under which a producer of an insured 
crop that has suffered a disaster loss shall not have deducted from the 
indemnity payment attributable to the loss any amount for actual 
production of the crop if the estimated market value of the actual 
production is less than the cost to the producer of harvesting the 
production.''.

SEC. 6. YIELD AVERAGES.

    Section 508A(b) of the Federal Crop Insurance Act (7 U.S.C. 
1508a(b)) is amended by adding at the end the following new paragraph:
            ``(4) Yield averages.--
                    ``(A) In general.--Yield coverage under this 
                section shall be based on the average of a producer's 
                actual proven crop yields for a commodity over no less 
                than 4 crop years and no more than 10 crop years, as 
                determined under this paragraph.
                    ``(B) Establishing a minimum level of insurance 
                protection.--The Corporation shall establish a minimum 
                level of insurance protection for those covered 
                producers who have had reduced yields due to natural 
                disasters.
                    ``(C) Use of transitional or actual yields.--
                Transitional yield data may only be used to establish a 
                yield for the producers on a farm to the extent the 
                producers have not established actual production 
                history for the first 4 crop years the producers 
                operate the farm. After producers establish actual 
                production history for the first 4 crop years the 
                producers operate the farm, yield coverage under this 
                section shall be based only on the actual production 
                history for the commodity for the farm.
                    ``(D) Use of yields for previous crop years.--In 
                the case of producers on a farm who operate a new 
                parcel of land, for crop insurance purposes, the 
                producers may elect to apply--
                            ``(i) the previous yield history for the 
                        land, if the Corporation determines the yield 
                        data to be actuarially sound; or
                            ``(ii) transitional yield data to the 
                        parcel of land.
                    ``(E) Nonstandard classification procedures.--The 
                Corporation shall make adjustments in the Nonstandard 
                Classification procedures established under subpart O 
                of part 400 of chapter IV of subtitle B of title 7, 
                Code of Federal Regulations, to account for producer 
                yield declines due to recurrent natural disasters.
                    ``(F) Definition of transitional yield.--For 
                purposes of this paragraph, the term `transitional 
                yield' means the countywide average used by the 
                Corporation to establish a yield for the producers on a 
                farm if there are no actual production records 
                available for the producers.''.

                                 <all>