[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2239 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2239

   To amend the Federal Crop Insurance Act to improve crop insurance 
          coverage and administration, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 16, 1999

 Mr. Chambliss (for himself, Mr. Berry, Mr. Pickering, Mr. Bishop, Mr. 
 Cooksey, Mr. Hayes, Mr. Kingston, Mr. Boyd, Mr. Everett, Mr. Norwood, 
and Mr. Shows) introduced the following bill; which was referred to the 
                        Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
   To amend the Federal Crop Insurance Act to improve crop insurance 
          coverage and administration, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Crop Insurance 
Equalization Act of 1999''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--CROP INSURANCE COVERAGE

Sec. 101. Prevented planting.
Sec. 102. Alternative rating methodologies.
Sec. 103. Quality adjustment.
Sec. 104. Low-risk producer pilot program.
Sec. 105. Catastrophic risk protection.
Sec. 106. Loss adjustment.
Sec. 107. Cost of production plans of insurance.
Sec. 108. Discounts.
Sec. 109. Adjustments to subsidy levels for catastrophic risk 
                            protection and additional coverage.
Sec. 110. Sales closing dates.
Sec. 111. Assigned yields.
Sec. 112. Actual production history adjustment for disasters.
Sec. 113. Payment of portion of premium.
Sec. 114. Limitation on premiums included in underwriting gains.
Sec. 115. Noninsured crop assistance program.
                        TITLE II--ADMINISTRATION

Sec. 201. Board of Directors of Corporation.
Sec. 202. Office of Risk Management.
Sec. 203. Office of Private Sector Partnership.
Sec. 204. Penalties for false information.
Sec. 205. Regulations.
Sec. 206. Program compliance.
Sec. 207. Payments by cooperative associations.
Sec. 208. Limitation on double insurance.
Sec. 209. Consultation with State committees of Farm Service Agency.
Sec. 210. Records and reporting.
Sec. 211. Fees for plans of insurance.
Sec. 212. Flexible subsidy pilot program.
Sec. 213. Reinsurance agreements.
Sec. 214. Funding.

                    TITLE I--CROP INSURANCE COVERAGE

SEC. 101. PREVENTED PLANTING.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
is amended by adding at the end the following:
            ``(7) Prevented planting.--
                    ``(A) In general.--The Corporation shall offer 
                coverage for prevented planting of an agricultural 
                commodity only as an endorsement to a policy.
                    ``(B) Equal coverage.--For each agricultural 
                commodity for which prevented planting coverage is 
                available, the Corporation shall offer an equal level 
                of prevented planting coverage.
                    ``(C) Planting of substitute agricultural 
                commodities.--In the case of prevented planting 
                coverage that is offered under this paragraph, the 
                Corporation shall allow producers that have the 
                coverage, and that are eligible to receive a prevented 
                planting indemnity, to plant an agricultural commodity, 
                other than the commodity covered by the prevented 
                planting coverage, on the acreage that the producer has 
                been prevented from planting to the original 
                agricultural commodity.
                    ``(D) Ineligibility for coverage.--A substitute 
                agricultural commodity described in subparagraph (C) 
                shall not be eligible for coverage under a plan of 
                insurance under this title.''.

SEC. 102. ALTERNATIVE RATING METHODOLOGIES.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 101) is amended by adding at the end the 
following:
            ``(8) Alternative rating methodologies.--
                    ``(A) In general.--Not later than September 30, 
                2000, the Corporation shall develop and implement 
                alternative methodologies for rating plans of insurance 
                under subsections (b) and (c), and rates for the plans 
                of insurance, that take into account--
                            ``(i) producers that elect not to 
                        participate in the Federal crop insurance 
                        program established under this title; and
                            ``(ii) producers that elect only to obtain 
                        catastrophic risk protection under subsection 
                        (b).
                    ``(B) Review and adjustment.--Effective for the 
                2001 and subsequent crop years, the Corporation shall 
                review and make any necessary adjustments to 
                methodologies and rates established under this 
                paragraph, based on (as determined by the 
                Corporation)--
                            ``(i) expected future losses, with 
                        appropriate adjustment of any historical data 
                        used in rating to remove--
                                    ``(I) the impact of adverse 
                                selection; and
                                    ``(II) data that no longer reflects 
                                the productive capacity of the area;
                            ``(ii) program errors; and
                            ``(iii) any other factor that can cause 
                        errors in methodologies and rates.
                    ``(C) Implementation.--In developing, implementing, 
                and adjusting rating methodologies and rates under this 
                paragraph, the Corporation shall--
                            ``(i) use methodologies for rating plans of 
                        insurance under subsections (b) and (c) that 
                        result in the lowest premiums payable by 
                        producers of an agricultural commodity in a 
                        geographic area, as determined by the 
                        Corporation; and
                            ``(ii) update the manner in which rates are 
                        applied at the individual producer level, as 
                        determined by the Corporation.
                    ``(D) Priority.--In developing, implementing, and 
                adjusting alternative methodologies for rating plans of 
                insurance under subsections (b) and (c) for 
                agricultural commodities, the Corporation shall provide 
                the highest priority to agricultural commodities with 
                (as determined by the Corporation)--
                            ``(i) the largest average acreage; and
                            ``(ii) the lowest percentage of producers 
                        that purchased coverage under subsection 
                        (c).''.

SEC. 103. QUALITY ADJUSTMENT.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 102) is amended by adding at the end the 
following:
            ``(9) Quality adjustment policies.--The Corporation shall 
        offer, only as an endorsement to a policy, coverage that 
        permits a reduction in the quantity of production of an 
        agricultural commodity produced during a crop year, or any 
        similar adjustment, that results from the agricultural 
        commodity not meeting the quality standards established in the 
        policy.''.

SEC. 104. LOW-RISK PRODUCER PILOT PROGRAM.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 103) is amended by adding at the end the 
following:
            ``(10) Low-risk producer pilot program.--
                    ``(A) In general.--For each of the 2000 through 
                2003 crop years, the Corporation shall carry out a 
                pilot program that is designed to encourage 
                participation in the Federal crop insurance program 
                established under this title by producers who rarely 
                suffer insurable losses.
                    ``(B) Scope.--The Corporation shall carry out the 
                pilot program in at least 40 counties that are 
                determined by the Corporation to be adequate to provide 
                a comprehensive evaluation of the feasibility, 
                effectiveness, and demand among producers for a low-
                risk producer program.
                    ``(C) Premium refund.--Notwithstanding section 
                506(o) and subsection (d)(1), if a producer 
                participating in the pilot program incurs a yield loss 
                in any crop year that is more than 10 percent but not 
                more than 35 percent of the yield determined under 
                subsection (g), the Corporation shall--
                            ``(i) refund all or part, as determined by 
                        the Corporation, of the premium that was paid 
                        by the producer for a plan of insurance for the 
                        crop that incurred the qualifying loss; or
                            ``(ii) apply the amount to be refunded 
                        under clause (i) against the premium payable by 
                        the producer for equivalent coverage for the 
                        subsequent crop year.
                    ``(D) Regulations.--The Corporation shall 
                promulgate such regulations as are necessary to carry 
                out the pilot program.''.

SEC. 105. CATASTROPHIC RISK PROTECTION.

    Section 508(b)(2)(A) of the Federal Crop Insurance Act (7 U.S.C. 
1508(b)(2)(A)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by striking ``each of the 1999 and subsequent 
                crop years'' and inserting ``the 1999 crop year''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following:
                            ``(iii) in the case of each of the 2000 and 
                        subsequent crop years, catastrophic risk 
                        protection shall offer a producer coverage for 
                        a 60 percent loss in yield, on an individual 
                        yield or area yield basis, indemnified at 70 
                        percent of the expected market price, or a 
                        comparable coverage (as determined by the 
                        Corporation).''.

SEC. 106. LOSS ADJUSTMENT.

    Section 508(b)(11) of the Federal Crop Insurance Act (7 U.S.C. 
1508(b)(11)) is amended by striking ``11 percent'' and all that follows 
through the end of the paragraph and inserting ``$50 for each claim 
that is adjusted under this subsection.''.

SEC. 107. COST OF PRODUCTION PLANS OF INSURANCE.

    (a) In General.--Section 508(c) of the Federal Crop Insurance Act 
(7 U.S.C. 1508(c)) is amended by striking paragraph (5) and inserting 
the following:
            ``(5) Expected market price.--
                    ``(A) In general.--For the purposes of this title, 
                the Corporation shall establish or approve the price 
                level (referred to in this title as the `expected 
                market price') of each agricultural commodity for which 
                insurance is offered.
                    ``(B) Amount.--The expected market price of an 
                agricultural commodity--
                            ``(i) except as otherwise provided in this 
                        subparagraph, shall be not less than the 
                        projected market price of the agricultural 
                        commodity, as determined by the Corporation;
                            ``(ii) may be based on the actual market 
                        price of the agricultural commodity at the time 
                        of harvest, as determined by the Corporation; 
                        or
                            ``(iii) in the case of cost of production 
                        or similar plans of insurance, shall be the 
                        projected cost of producing the agricultural 
                        commodity, as determined by the Corporation in 
                        consultation with land-grant colleges and 
                        universities.''.
    (b) Conforming Amendments.--Section 508(h) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(h)) is amended--
            (1) by striking paragraph (9); and
            (2) by redesignating paragraph (10) as paragraph (9).

SEC. 108. DISCOUNTS.

    Section 508(d) of the Federal Crop Insurance Act (7 U.S.C. 1508(d)) 
is amended by adding at the end the following:
            ``(3) Discounts.--
                    ``(A) In general.--Notwithstanding section 506(o) 
                and paragraph (1), the Corporation shall provide a 
discount in the premium payable by the producer for a plan of insurance 
under subsections (b) and (c) for an agricultural commodity in a county 
if the producer--
                            ``(i) during each of the preceding 5 
                        consecutive crop years--
                                    ``(I) has obtained insurance under 
                                this title for the agricultural 
                                commodity; and
                                    ``(II) has not filed any claim 
                                under the insurance;
                            ``(ii) if offered by the Corporation, 
                        elects to have unit coverage that reduces the 
                        risk of loss below the risk of loss that is 
                        expected for a unit comprised of all insurable 
                        acreage of the agricultural commodity in the 
                        county;
                            ``(iii) implements innovative farming 
                        management practices that reduce the risk of 
                        insurable loss, as determined by the 
                        Corporation; or
                            ``(iv) provides to the Corporation evidence 
                        that another producer willfully and 
                        intentionally provided false or inaccurate 
                        information to the Corporation or to any 
                        insurer with respect to an insurance plan or 
                        policy under this title, and the Corporation 
                        assesses a civil penalty under section 506(n) 
                        based at least in part on that evidence.
                    ``(B) Amount.--
                            ``(i) In general.--Subject to clause (ii), 
                        the amount of the discount provided to a 
                        producer for a crop year under subparagraph (A) 
                        shall be determined by the Corporation.
                            ``(ii) No claim discount.--The amount of 
                        the discount provided to a producer for a crop 
                        year under subparagraph (A)(i) shall increase 
                        for each additional consecutive crop year for 
                        which the producer is eligible for a discount 
                        under subparagraph (A)(i).''.

SEC. 109. ADJUSTMENTS TO SUBSIDY LEVELS FOR CATASTROPHIC RISK 
              PROTECTION AND ADDITIONAL COVERAGE.

    Section 508(e) of the Federal Crop Insurance Act (7 U.S.C. 1508(e)) 
is amended by striking paragraph (2) and inserting the following:
            ``(2) Amount of payment.--Beginning with the 2000 crop 
        year, the amount of the premium to be paid by the Corporation 
        shall be as follows:
                    ``(A) In the case of catastrophic risk protection, 
                the amount shall be equal to a percentage of the 
                premium established for catastrophic risk protection 
                under subsection (d)(2)(A), as follows:
                            ``(i) For the 2000 crop year, 100 percent.
                            ``(ii) For the 2001 crop year, 75 percent.
                            ``(iii) For the 2002 and subsequent crop 
                        years, 50 percent.
                    ``(B) In the case of additional coverage below 65 
                percent of the recorded or appraised average yield 
                indemnified at 100 percent of the expected market 
                price, or an equivalent coverage, the amount shall be 
                equal to the sum of--
                            ``(i) 50 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(B)(ii).
                    ``(C) In the case of additional coverage equal to 
                or greater than 65 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or an equivalent coverage, the 
                amount shall be equal to the sum of--
                            ``(i) 50 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(C)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(C)(ii).''.

SEC. 110. SALES CLOSING DATES.

    Section 508(f)(2) of the Federal Crop Insurance Act (7 U.S.C. 
1508(f)(2)) is amended by striking the last sentence.

SEC. 111. ASSIGNED YIELDS.

    Section 508(g)(2)(B) of the Federal Crop Insurance Act (7 U.S.C. 
1508(g)(2)(B)) is amended--
            (1) by striking ``assigned a yield'' and inserting 
        ``assigned--
                            ``(i) a yield'';
            (2) by striking the period at the end and inserting ``; 
        or''; and
            (3) by adding at the end the following:
                            ``(ii) a yield determined by the 
                        Corporation, in the case of--
                                    ``(I) a person that has not been 
                                actively engaged in farming for a share 
                                of the production of the insured crop 
                                for more than 2 crop years, as 
                                determined by the Secretary;
                                    ``(II) a producer that produces an 
                                agricultural commodity on land that has 
                                not been farmed by the producer; and
                                    ``(III) a producer that rotates a 
                                crop produced on a farm to a crop that 
                                has not been produced on the farm.''.

SEC. 112. ACTUAL PRODUCTION HISTORY ADJUSTMENT FOR DISASTERS.

    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) Substitution of transitional yield.--
                Effective beginning with the 2000 crop year, if the 
                producer's yield of an agricultural commodity in any 
                crop year is less than 85 percent of the transitional 
                yield established by the Corporation for the 
                agricultural commodity, the Corporation shall, at the 
                option of the producer, consider the producer's yield 
                for the crop year to be 85 percent of the transitional 
                yield for the purpose of calculating the actual 
                production history for a crop of an agricultural 
                commodity under subparagraph (A).
                    ``(F) Corporation's share of costs.--In the case of 
                any yield substitution under subparagraph (E), in 
                addition to any other authority to pay any portion of 
                the premium and indemnity, the Corporation shall pay--
                            ``(i) the portion of the premium or 
                        indemnity that represents the increase in 
                        premium associated with the substitution of the 
                        transitional yield under subparagraph (E);
                            ``(ii) all additional indemnities 
                        associated with the substitution; and
                            ``(iii) any amounts that result from the 
                        difference in the administrative and operating 
                        expenses owed to an approved insurance provider 
                        as the result of the substitution.''.

SEC. 113. PAYMENT OF PORTION OF PREMIUM.

    Section 508(h)(2) of the Federal Crop Insurance Act (7 U.S.C. 
1508(h)(2)) is amended in the second sentence by inserting before the 
period at the end the following: ``, except that the Corporation shall 
not pay any portion of the premium for any plan of insurance that 
offers coverage for losses associated with a change in price''.

SEC. 114. LIMITATION ON PREMIUMS INCLUDED IN UNDERWRITING GAINS.

    Section 508(k) of the Federal Crop Insurance Act (7 U.S.C. 1508(k)) 
is amended by adding at the end the following:
            ``(8) Limitation on premiums included in underwriting 
        gains.--Notwithstanding any other provision of law, the 
        reinsurance agreements of the Corporation shall require that 
        not more than 50 percent of any premium for catastrophic risk 
        protection under subsection (b) be included in the calculation 
        of gains or losses of an approved insurance provider unless the 
        loss ratio for catastrophic risk protection exceeds 1.0.''.

SEC. 115. NONINSURED CROP ASSISTANCE PROGRAM.

    (a) Inclusion of Isolated Producers.--Subsection (b) of section 196 
of the Agricultural Market Transition Act (7 U.S.C. 7333) is amended by 
adding at the end the following:
            ``(4) Inclusion of isolated producers.--The Secretary may 
        not declare a producer to be ineligible for assistance under 
        this section for an eligible crop because of an lack of other 
        production of the same crop in the producer's area if the 
        successful harvest of the eligible crop in the area for at 
        least 2 years has been proven or demonstrated.''.
    (b) Waiver or Reduction of Required Area Loss Threshold.--
Subsection (c)(1) of such section is amended by adding at the end the 
following: ``The Secretary may completely waive application of this 
paragraph or reduce the required area loss imposed as a condition on 
the provision of assistance under this section to producers otherwise 
satisfying paragraph (2) or (3).''.
    (c) Change in Required Individual Loss Threshold.--Subsection 
(c)(3) and subsection (d)(1) of such section are both amended by 
inserting ``(or, beginning with the 2000 crop year, 60 percent)'' after 
``50 percent''.
    (d) Increase in Percentage of Market Price.--Subsection (d)(2) of 
such section is amended--
            (1) by striking ``or'' at the end of subparagraph (A);
            (2) in subparagraph (B)--
                    (A) by striking ``each of the 1999 and subsequent 
                crop years'' and inserting ``the 1999 crop year''; and
                    (B) by striking ``; by'' and inserting ``; or''; 
                and
            (3) by adding at the end the following:
            ``(C) in the case of each of the 2000 and subsequent crop 
        years, 70 percent of the average market price for the crop (or 
        any comparable coverage determined by the Secretary); by''.
    (e) Gross Income Limitation.--Subsection (i)(4) of such section is 
amended by striking ``the amount specified in section 2266(a) of the 
Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 1421 
note) (as in effect on November 28, 1990)'' and inserting 
``$4,000,000''.

                        TITLE II--ADMINISTRATION

SEC. 201. BOARD OF DIRECTORS OF CORPORATION.

    Section 505 of the Federal Crop Insurance Act (7 U.S.C. 1505) is 
amended by striking subsection (a) and inserting the following:
    ``(a) Board of Directors.--
            ``(1) In general.--The management of the Corporation shall 
        be vested in a Board subject to the general supervision of the 
        Secretary.
            ``(2) Composition.--The Board shall consist of--
                    ``(A) 4 members who are active agricultural 
                producers with or without crop insurance, with 1 member 
                appointed from each of the 4 regions of the United 
                States (as determined by the Secretary);
                    ``(B) 1 member who is active in the crop insurance 
                business;
                    ``(C) 1 member who is active in the reinsurance 
                business;
                    ``(D) the Under Secretary for Farm and Foreign 
                Agricultural Services;
                    ``(E) the Under Secretary for Rural Development; 
                and
                    ``(F) the Chief Economist of the Department of 
                Agriculture.
            ``(3) Appointment and terms of private sector members.--The 
        members of the Board described in subparagraphs (A), (B), and 
        (C) of paragraph (2)--
                    ``(A) shall be appointed by, and hold office at the 
                pleasure of, the Secretary;
                    ``(B) shall not be otherwise employed by the 
                Federal Government;
                    ``(C) shall be appointed to staggered 4-year terms, 
                as determined by the Secretary; and
                    ``(D) shall serve not more than 2 consecutive 
                terms.
            ``(4) Chairperson.--The Board shall select a member of the 
        Board described in subparagraph (A), (B), or (C) of paragraph 
        (2) to serve as Chairperson of the Board.
            ``(5) Staff.--The Board shall employ or contract with 1 or 
        more individuals who are knowledgeable and experienced in 
        quantitative mathematics and actuarial rating to assist the 
        Board in reviewing and approving policies and materials with 
        respect to plans of insurance authorized or submitted under 
        section 508.''.

SEC. 202. OFFICE OF RISK MANAGEMENT.

    (a) Establishment.--Section 226A(a) of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 6933(a)) is amended by 
striking ``independent Office of Risk Management'' and inserting 
``Office of Risk Management, which shall be under the direction of the  
Board of Directors of the Federal Crop Insurance Corporation''.
    (b) Functions.--Section 226A(b) of the Department of Agriculture 
Reorganization Act of 1994 (7 U.S.C. 6933(b)) is amended by striking 
paragraph (1) and inserting the following:
            ``(1) Assistance to the Board in developing, reviewing, and 
        recommending plans of insurance under section 508(a)(7) of the 
        Federal Crop Insurance Act (7 U.S.C. 1508(a)(7)) to ensure that 
        each agricultural commodity (including each new or speciality 
        crop) is adequately served by plans of insurance.''.

SEC. 203. OFFICE OF PRIVATE SECTOR PARTNERSHIP.

    The Federal Crop Insurance Act is amended by inserting after 
section 507 (7 U.S.C. 1507) the following:

``SEC. 507A. OFFICE OF PRIVATE SECTOR PARTNERSHIP.

    ``(a) Establishment.--The Secretary shall establish and maintain in 
the Department an Office of Private Sector Partnership, which shall be 
under the direction of the Board.
    ``(b) Functions.--The Office shall--
            ``(1) provide at least monthly reports to the Board on crop 
        insurance issues, which shall be based on comments received 
        from producers, approved insurance providers, and other sources 
        that the Office considers appropriate;
            ``(2)(A) review policies and materials with respect to--
                    ``(i) subsidized plans of insurance authorized 
                under section 508; and
                    ``(ii) unsubsidized plans of insurance submitted to 
                the Board under section 508(h); and
            ``(B) make recommendations to the Board with respect to 
        approval of the policies and materials;
            ``(3) administer the reinsurance functions described in 
        section 508(k) on behalf of the Corporation;
            ``(4) review and make recommendations to the Board with 
        respect to methodologies for rating plans of insurance under 
        this title; and
            ``(5) perform such other functions as the Board considers 
        appropriate.
    ``(c) Administrator.--The Office shall be headed by an 
Administrator who shall be appointed by the Secretary.
    ``(d) Staff.--The Administrator shall appoint such employees 
pursuant to title 5, United States Code, as are necessary for the 
administration of the Office, including employees who have commercial 
reinsurance and actuarial experience.''.

SEC. 204. PENALTIES FOR FALSE INFORMATION.

    Section 506(n)(1) of the Federal Crop Insurance Act (7 U.S.C. 
1506(n)(1)) is amended--
            (1) in subparagraph (A), by inserting ``for each claim'' 
        after ``$10,000''; and
            (2) in subparagraph (B), by striking ``noninsured 
        assistance'' and inserting ``any loan, payment, or benefit 
        described in section 1211 of the Food Security Act of 1985 (16 
        U.S.C. 3811)''.

SEC. 205. REGULATIONS.

    Section 506(p) of the Federal Crop Insurance Act (7 U.S.C. 1506(p)) 
is amended--
            (1) by striking ``The Secretary'' and inserting the 
        following:
            ``(1) In general.--The Secretary''; and
            (2) by adding at the end the following:
            ``(2) Terms of insurance.--
                    ``(A) In general.--Regulations issued by the 
                Secretary and the Corporation specifying the terms of 
                insurance under section 508 shall be issued without 
                regard to--
                            ``(i) the notice and comment provisions of 
                        section 553 of title 5, United States Code;
                            ``(ii) the Statement of Policy of the 
                        Secretary of Agriculture effective July 24, 
                        1971 (36 Fed. Reg. 13804), relating to notices 
                        of proposed rulemaking and public participation 
                        in rulemaking; and
                            ``(iii) chapter 35 of title 44, United 
                        States Code (commonly known as the `Paperwork 
                        Reduction Act').
                    ``(B) Congressional review of agency rulemaking.--
                In carrying out this paragraph, the Secretary shall use 
                the authority provided under section 808 of title 5, 
                United States Code.''.

SEC. 206. PROGRAM COMPLIANCE.

    Section 506(q) of the Federal Crop Insurance Act (7 U.S.C. 1506(q)) 
is amended--
            (1) by redesignating paragraph (2) as paragraph (6); and
            (2) by striking paragraph (1) and inserting the following:
            ``(1) In general.--Not later than 180 days after the date 
        of enactment of the Crop Insurance Equalization Act of 1999, 
        the Corporation shall establish a program for monitoring 
        compliance with this title by all Federal crop insurance 
        participants, including producers, agents, adjusters, and 
        approved insurance providers.
            ``(2) Consultation.--The Corporation shall consult with 
        approved insurance providers in developing the compliance 
        program.
            ``(3) Oversight of loss adjustment.--As part of the 
        compliance program, the Corporation shall provide for a 
        mechanism to independently review the performance of loss 
        adjusters.
            ``(4) Program review.--Not later than 90 days after the 
        date of enactment of the Crop Insurance Equalization Act of 
        1999, the Corporation shall submit to the Board and the Office 
        of Private Sector Partnership for their review the proposed 
        compliance program under this subsection.
            ``(5) Annual reports.--Beginning with fiscal year 2001, the 
        Corporation shall submit an annual report to the Committee on 
        Agriculture of the House of Representatives, the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate, the Board, 
        and the Office of Private Sector Partnership concerning the 
        compliance program established under  this subsection, 
including any recommendations for legislative or administrative changes 
that could further improve program compliance.''.

SEC. 207. PAYMENTS BY COOPERATIVE ASSOCIATIONS.

    Section 507(e) of the Federal Crop Insurance Act (7 U.S.C. 1507(e)) 
is amended--
            (1) by striking ``(e) In'' and inserting the following:
    ``(e) Cooperative Associations.--
            ``(1) In general.--In''; and
            (2) by adding at the end the following:
            ``(2) Payments.--A cooperative association described in 
        paragraph (1) that is licensed and acts as an agent or approved 
        insurance provider with respect to any plan of insurance 
        offered under this title may provide to the members of the 
        association all or part of any funds received from the 
        Corporation under this title.''.

SEC. 208. LIMITATION ON DOUBLE INSURANCE.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 104) is amended by adding at the end the 
following:
            ``(11) Limitation on double insurance.--The Corporation may 
        offer plans of insurance or reinsurance for only 1 agricultural 
        commodity on specific acreage during a crop year, unless--
                    ``(A) there is an established practice of double-
                cropping in an area, as determined by the Corporation;
                    ``(B) the additional plan of insurance is offered 
                with respect to an agricultural commodity that is 
                customarily double-cropped in the area; and
                    ``(C) the producer has a history of double cropping 
                or the acreage has historically been double-cropped.''.

SEC. 209. CONSULTATION WITH STATE COMMITTEES OF FARM SERVICE AGENCY.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 208) is amended by adding at the end the 
following:
            ``(12) Consultation with state committees of farm service 
        agency.--The Corporation shall establish a mechanism under 
        which State committees of the Farm Service Agency are consulted 
        concerning policies of insurance offered in a State under this 
        title.''.

SEC. 210. RECORDS AND REPORTING.

    (a) Catastrophic Risk Protection.--Section 508(f)(3)(A) of the 
Federal Crop Insurance Act (7 U.S.C. 1508(f)(3)(A)) is amended by 
striking ``provide, to the extent required by the Corporation,'' and 
inserting ``to the extent required by the Corporation, provide to the 
Secretary, acting through the Farm Service Agency,''.
    (b) Noninsured Crop Disaster Assistance Program.--Section 196(b) of 
the Agricultural Market Transition Act (7 U.S.C. 7333(b)) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Records.--To be eligible for assistance under this 
        section, a producer shall provide annually to the Secretary, 
        acting through the Farm Service Agency, records of crop 
        acreage, acreage yields, and production for each eligible 
        crop.''; and
            (2) in paragraph (3), by inserting ``annual'' after ``shall 
        provide''.

SEC. 211. FEES FOR PLANS OF INSURANCE.

    Section 508(h)(5) of the Federal Crop Insurance Act (7 U.S.C. 
1508(h)(5)) is amended--
            (1) by striking ``Any policy'' and inserting the following:
                    ``(A) In general.--Any policy''; and
            (2) by adding at the end the following:
                    ``(B) Fees for new plans of insurance.--
                            ``(i) In general.--If an approved insurance 
                        provider elects to sell a plan of insurance 
                        that was developed by another approved 
                        insurance provider after the date of enactment 
                        of this subparagraph and the plan of insurance 
                        offered coverage that was not available for any 
                        crop at the time the plan of insurance was 
                        approved by the Board (as determined by the 
                        Corporation), the approved insurance provider 
                        that developed the plan of insurance shall have 
                        the right to receive a fee from the approved 
                        insurance provider that elects to sell the plan 
                        of insurance.
                            ``(ii) Amount.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the amount of the fee 
                                that is payable by an approved 
                                insurance provider for a plan of 
                                insurance under clause (i) shall be an 
                                amount that is--
                                            ``(aa) determined by the 
                                        approved insurance provider 
                                        that developed the plan; and
                                            ``(bb) approved by the 
                                        Board.
                                    ``(II) Approval.--The Board shall 
                                not approve the amount of a fee under 
                                clause (i) if the amount of the fee 
                                unnecessarily inhibits the use of the 
                                plan of insurance, as determined by the 
                                Board.
                    ``(C) Payments.--The Corporation shall annually--
                            ``(i) collect from an approved insurance 
                        provider the amount of any fees that are 
                        payable by the approved insurance provider 
                        under subparagraph (B); and
                            ``(ii) credit any fees that are payable to 
                        an approved insurance provider under 
                        subparagraph (B).''.

SEC. 212. FLEXIBLE SUBSIDY PILOT PROGRAM.

    Section 508(h) of the Federal Crop Insurance Act (7 U.S.C. 1508(h)) 
is amended by adding at the end the following:
            ``(11) Flexible subsidy pilot program.--For each of the 
        2000 through 2002 crop years, the Corporation shall carry out a 
        pilot program under which flexible subsidies are provided under 
        this title to encourage private sector innovation through 
        exclusive marketing rights and premium rate competition.''.

SEC. 213. REINSURANCE AGREEMENTS.

    Section 508(k) of the Federal Crop Insurance Act (7 U.S.C. 1508(k)) 
is amended by striking paragraph (3) and inserting the following:
            ``(3) Reinsurance agreements.--
                    ``(A) Share of risk.--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 financial condition of the reinsured 
                company and the availability of private reinsurance.
                    ``(B) Compliance.--To promote program compliance 
                and integrity, the Corporation, after notice and an 
                opportunity for a hearing on the record--
                            ``(i)(I) shall assess civil fines in an 
                        amount not to exceed $10,000 per violation 
                        against agents, loss adjusters, and approved 
                        insurance providers that are determined by the 
                        Corporation to have recurring compliance 
                        problems; and
                            ``(II) may deposit any civil fines 
                        collected under subclause (I) in the insurance 
                        fund established under section 516(c); and
                            ``(ii) shall disqualify the agents, loss 
                        adjusters, and approved insurance providers 
                        described in clause (i)(I) from participation 
                        in the Federal crop insurance program for a 
                        period not to exceed 5 years.
                    ``(C) Review of agreements.--As soon as practicable 
                after the date of enactment of this subparagraph and 
                regularly thereafter, in consultation with the Office 
                of Private Sector Partnership, the Corporation shall 
                review the Standard Reinsurance Agreement issued by the 
                Corporation to ensure that the allocation of risk 
                between the Corporation and the reinsured companies is 
                equitable, as determined by the Corporation.''.

SEC. 214. FUNDING.

    Section 516 of the Federal Crop Insurance Act (7 U.S.C. 1516) is 
amended--
            (1) in subsection (a)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(C) salaries and expenses of the Office of 
                Private Sector Partnership.'';
            (2) in subsection (b)(1)--
                    (A) in subparagraph (B), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following:
                    ``(D) salaries and expenses of the Office of 
                Private Sector Partnership, but not to exceed 
                $5,000,000 for each fiscal year;
                    ``(E) administrative expenses of collecting 
                information under section 508(f)(3); and
                    ``(F) payment of fees in accordance with section 
                508(h)(5)(B).''; and
            (3) in subsection (c)(1), by inserting ``, fees under 
        section 508(h)(5)(B), civil fines under section 
        508(k)(3)(B)(i)(II),'' after ``premium income''.
                                 <all>