[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2559 Referred in Senate (RFS)]

  1st Session
                                H. R. 2559


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 30, 1999

  Received; read twice and referred to the Committee on Agriculture, 
                        Nutrition, and Forestry

_______________________________________________________________________

                                 AN ACT


 
 To amend the Federal Crop Insurance Act to strengthen the safety net 
    for agricultural producers by providing greater access to more 
     affordable risk management tools and improved protection from 
production and income loss, to improve the efficiency and integrity of 
      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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Agricultural Risk 
Protection 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--STRENGTHENING THE FARM SAFETY NET

Sec. 101. Premium schedule for additional coverage.
Sec. 102. Premium schedule for other plans of insurance.
Sec. 103. Adjustment in actual production history to establish 
                            insurable yields.
Sec. 104. Review and adjustment in rating methodologies.
Sec. 105. Conduct of pilot programs, including livestock.
Sec. 106. Cost of production as a price election.
Sec. 107. Premium discounts for good performance.
Sec. 108. Options for catastrophic risk protection.
Sec. 109. Authority for nonprofit associations to pay fees on behalf of 
                            producers.
Sec. 110. Elections regarding prevented planting coverage.
Sec. 111. Limitations under noninsured crop disaster assistance 
                            program.
Sec. 112. Quality grade loss adjustment.
                 TITLE II--IMPROVING PROGRAM INTEGRITY

Sec. 201. Limitation on double insurance.
Sec. 202. Improving program compliance and integrity.
Sec. 203. Sanctions for false information.
Sec. 204. Protection of confidential information.
Sec. 205. Records and reporting.
Sec. 206. Compliance with State licensing requirements.
                       TITLE III--ADMINISTRATION

Sec. 301. Board of Directors of Corporation.
Sec. 302. Promotion of submission of policies and related materials.
Sec. 303. Research and development, including contracts regarding 
                            underserved commodities.
Sec. 304. Funding for reimbursement and research and development.
Sec. 305. Board consideration of submitted policies and materials.
Sec. 306. Contracting for rating of plans of insurance.
Sec. 307. Electronic availability of crop insurance information.
Sec. 308. Fees for use of new policies and plans of insurance.
Sec. 309. Clarification of producer requirement to follow good farming 
                            practices.
Sec. 310. Reimbursements and negotiation of standard reinsurance 
                            agreement.
              TITLE IV--EFFECTIVE DATE AND IMPLEMENTATION

Sec. 401. Effective date.
Sec. 402. Special rules regarding implementation of certain amendments.
Sec. 403. Savings clause.
Sec. 404. Sense of the Congress.

               TITLE I--STRENGTHENING THE FARM SAFETY NET

SEC. 101. PREMIUM SCHEDULE FOR ADDITIONAL COVERAGE.

    (a) Premium Amounts.--Section 508(d)(2) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(d)(2)) is amended by striking 
subparagraphs (B) and (C) and inserting the following new subparagraph:
                    ``(B) In the case of additional coverage equal to 
                or greater than 50 percent of the recorded or appraised 
                average yield indemnified at not greater than 100 
                percent of the expected market price, or an equivalent 
                coverage, the amount of the premium shall--
                            ``(i) be sufficient to cover anticipated 
                        losses and a reasonable reserve; and
                            ``(ii) include an amount for operating and 
                        administrative expenses, as determined by the 
                        Corporation, on an industry-wide basis as a 
                        percentage of the amount of the premium used to 
                        define loss ratio.''.
    (b) Payment Schedule.--Section 508(e)(2) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(e)(2)) is amended by striking 
subparagraphs (B) and (C) and inserting the following new 
subparagraphs:
                    ``(B) In the case of additional coverage equal to 
                or greater than 50 percent, but less than 55 percent, 
                of the recorded or appraised average yield indemnified 
                at not greater than 100 percent of the expected market 
                price, or an equivalent coverage, the amount shall be 
                equal to the sum of--
                            ``(i) 67 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i) for the coverage level selected; 
                        and
                            ``(ii) the amount determined under 
                        subsection (d)(2)(B)(ii) for the coverage level 
                        selected to cover operating and administrative 
                        expenses.
                    ``(C) In the case of additional coverage equal to 
                or greater than 55 percent, but less than 65 percent, 
                of the recorded or appraised average yield indemnified 
                at not greater than 100 percent of the expected market 
                price, or an equivalent coverage, the amount shall be 
                equal to the sum of--
                            ``(i) 64 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i) for the coverage level selected; 
                        and
                            ``(ii) the amount determined under 
                        subsection (d)(2)(B)(ii) for the coverage level 
                        selected to cover operating and administrative 
                        expenses.
                    ``(D) In the case of additional coverage equal to 
                or greater than 65 percent, but less than 75 percent, 
                of the recorded or appraised average yield indemnified 
                at not greater than 100 percent of the expected market 
                price, or an equivalent coverage, the amount shall be 
                equal to the sum of--
                            ``(i) 59 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i) for the coverage level selected; 
                        and
                            ``(ii) the amount determined under 
                        subsection (d)(2)(B)(ii) for the coverage level 
                        selected to cover operating and administrative 
                        expenses.
                    ``(E) In the case of additional coverage equal to 
                or greater than 75 percent, but less than 80 percent, 
                of the recorded or appraised average yield indemnified 
                at not greater than 100 percent of the expected market 
                price, or an equivalent coverage, the amount shall be 
                equal to the sum of--
                            ``(i) 54 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i) for the coverage level selected; 
                        and
                            ``(ii) the amount determined under 
                        subsection (d)(2)(B)(ii) for the coverage level 
                        selected to cover operating and administrative 
                        expenses.
                    ``(F) In the case of additional coverage equal to 
                or greater than 80 percent, but less than 85 percent, 
                of the recorded or appraised average yield indemnified 
                at not greater than 100 percent of the expected market 
                price, or an equivalent coverage, the amount shall be 
                equal to the sum of--
                            ``(i) 40.6 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i) for the coverage level selected; 
                        and
                            ``(ii) the amount determined under 
                        subsection (d)(2)(B)(ii) for the coverage level 
                        selected to cover operating and administrative 
                        expenses.
                    ``(G) Subject to subsection (c)(4), in the case of 
                additional coverage equal to or greater than 85 percent 
                of the recorded or appraised average yield indemnified 
                at not greater than 100 percent of the expected market 
                price, or an equivalent coverage, the amount shall be 
                equal to the sum of--
                            ``(i) 30.6 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i) for the coverage level selected; 
                        and
                            ``(ii) the amount determined under 
                        subsection (d)(2)(B)(ii) for the coverage level 
                        selected to cover operating and administrative 
                        expenses.''.
    (c) Premium Payment Disclosure.--Section 508(e) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(e)) is amended by adding at the end the 
following new paragraph:
            ``(5) Premium payment disclosure.--Each policy or plan of 
        insurance under this title shall prominently indicate the 
        dollar amount of the portion of the premium paid by the 
        Corporation under this subsection or subsection (h)(2).''.

SEC. 102. PREMIUM SCHEDULE FOR OTHER PLANS OF INSURANCE.

    Section 508(h)(2) of the Federal Crop Insurance Act (7 U.S.C. 
1508(h)(2)) is amended--
            (1) by striking ``A policy'' and inserting the following:
                    ``(A) Preparation.--A policy'';
            (2) by striking the second sentence; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) Premium schedule.--In the case of a policy 
                offered under this subsection (except paragraph (10)) 
                or subsection (m)(4), the Corporation shall pay a 
                portion of the premium of the policy that shall be 
                equal to--
                            ``(i) the percentage, specified in 
                        subsection (e) for a similar level of coverage, 
                        of the total amount of the premium used to 
                        define loss ratio; and
                            ``(ii) the dollar amount of the 
                        administrative and operating expenses that 
                        would be paid by the Corporation under 
                        subsection (e) for a similar level of 
                        coverage.''.

SEC. 103. ADJUSTMENT IN ACTUAL PRODUCTION HISTORY TO ESTABLISH 
              INSURABLE YIELDS.

    (a) Use of Percentage of Transitional Yield.--Section 508(g) of the 
Federal Crop Insurance Act (7 U.S.C. 1508(g)) is amended by adding at 
the end the following new paragraph:
            ``(4) Adjustment in actual production history to establish 
        insurable yields.--
                    ``(A) Application.--This paragraph shall apply 
                whenever the Corporation uses the actual production 
                history of the producer to establish insurable yields 
                for an agricultural commodity for the 2001 and 
                subsequent crop years.
                    ``(B) Election to use percentage of transitional 
                yield.--If, for one or more of the crop years used to 
                establish the producer's actual production history of 
                an agricultural commodity, the producer's recorded or 
                appraised yield of the commodity was less than 60 
                percent of the applicable transitional yield, as 
                determined by the Corporation, the Corporation shall, 
                at the election of the producer--
                            ``(i) exclude any of such recorded or 
                        appraised yield; and
                            ``(ii) replace each excluded yield with a 
                        yield equal to 60 percent of the applicable 
                        transitional yield.''.
    (b) APH Adjustment To Reflect Participation in Major Pest Control 
Efforts.--Section 508(g) of the Federal Crop Insurance Act (7 U.S.C. 
1508(g)) is amended by inserting after paragraph (4), as added by 
subsection (a), the following new paragraph:
            ``(5) Adjustment to reflect increased yields from 
        successful pest control efforts.--
                    ``(A) Situations justifying adjustment.--The 
                Corporation shall develop a methodology for adjusting 
                the actual production history of a producer when each 
                of the following apply:
                            ``(i) The producer's farm is located in an 
                        area where systematic, area-wide efforts have 
                        been undertaken using certain operations or 
                        measures, or the producer's farm is a location 
                        at which certain operations or measures have 
                        been undertaken, to detect, eradicate, 
                        suppress, or control, or at least to prevent or 
                        retard the spread of, a plant disease or plant 
                        pest, including a plant pest covered by the 
                        definition in section 102 of the Department of 
                        Agriculture Organic Act of 1944 (7 U.S.C. 
                        147a).
                            ``(ii) The presence of the plant disease or 
                        plant pest has been found to adversely affect 
                        the yield of the agricultural commodity for 
                        which the producer is applying for insurance.
                            ``(iii) The efforts described in clause (i) 
                        have been effective.
                    ``(B) Adjustment amount.--The amount by which the 
                Corporation adjusts the actual production history of a 
                producer of an agricultural commodity shall reflect the 
                degree to which the success of the systematic, area-
                wide efforts described in paragraph (1)(A), on average, 
                increases the yield of the commodity on the producer's 
                farm, as determined by the Corporation.''.

SEC. 104. REVIEW AND ADJUSTMENT IN RATING METHODOLOGIES.

    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) Review and adjustment of rates.--
                    ``(A) Review required.--To maximize participation 
                in the Federal crop insurance program and to ensure 
                equity for producers, the Corporation shall 
                periodically review the methodologies employed for 
                rating plans of insurance under this title consistent 
                with section 507(c)(2).
                    ``(B) Premium adjustment.--The Corporation shall 
                analyze the rating and loss history of approved 
                policies and plans of insurance for agricultural 
                commodities by area. If the Corporation makes a 
                determination that premium rates are excessive for an 
                agricultural commodity in an area relative to the 
                requirements of subsection (d)(2)(B) for that area, 
                then, in the 2000 crop year or as soon as practicable 
                after the determination is made, the Corporation shall 
                make appropriate adjustments in the premium rates for 
                that area for that agricultural commodity.''.

SEC. 105. CONDUCT OF PILOT PROGRAMS, INCLUDING LIVESTOCK.

    (a) Repeal of Obsolete Pilot Programs.--Section 508(h) of the 
Federal Crop Insurance Act (7 U.S.C. 1508(h)) is amended by striking 
paragraphs (6) and (8).
    (b) General Requirements.--Section 508(h) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(h)) is amended by inserting after 
paragraph (7) the following new paragraph:
            ``(8) General requirements applicable to pilot programs.--
        In conducting any pilot program of insurance or reinsurance 
        authorized or required by this title, the Corporation--
                    ``(A) may offer the pilot program on a regional, 
                whole State, or national basis after considering the 
                interests of affected producers and the interests of 
                and risks to the Corporation;
                    ``(B) may operate the pilot program, including any 
                modifications thereof, for a period of up to 3 years; 
                and
                    ``(C) may extend the time period for the pilot 
                program for additional periods, as determined 
                appropriate by the Corporation.''.
    (c) Expedited Consideration.--Section 508(h)(4) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(h)(4)) is amended--
            (1) by redesignating subparagraphs (A), (B), (C), and (D) 
        as clauses (i), (ii), (iii), and (iv), respectively;
            (2) by moving the text of the clauses (as so designated) 2 
        ems to the right;
            (3) by striking ``The Corporation'' in the first sentence 
        and inserting the following:
                    ``(A) Guidelines required.--Not later than 180 days 
                after the date of the enactment of the Agricultural 
                Risk Protection Act of 1999, the Corporation''; and
            (4) by adding at the end the following new subparagraph:
                    ``(B) Expedited consideration of proposed pilot 
                programs.--The regulations required by subparagraph (A) 
                shall include streamlined guidelines for the 
                submission, and Board review, of pilot programs that 
                the Board determines are limited in scope and duration 
                and involve a reduced level of liability to the Federal 
                Government, and an increased level of risk to approved 
                insurance providers participating in the pilot program, 
                relative to other policies or materials submitted under 
                this subsection. The streamlined guidelines shall be 
                consistent with the guidelines established under 
                subparagraph (A), except as follows:
                            ``(i) Not later than 60 days after 
                        submission of the proposed pilot program, the 
                        Corporation shall provide an applicant with 
                        notification of its intent to recommend 
                        disapproval of the proposal to the Board.
                            ``(ii) Not later than 90 days after the 
                        proposed pilot program is submitted to the 
                        Board, the Board shall make a determination to 
                        approve or disapprove the pilot program. Any 
                        determination by the Board to disapprove the 
                        pilot program shall be accompanied by a 
                        complete explanation of the reasons for the 
                        Board's decision to deny approval. In the event 
                        the Board fails to make a determination within 
                        the prescribed time period, the pilot program 
                        submitted shall be deemed approved by the Board 
                        for the initial reinsurance year designated for 
                        the pilot program, except in the case where the 
                        Board and the applicant agree to an 
                        extension.''.
    (d) Livestock Pilot Programs.--
            (1) Programs required.--Section 508(h) of the Federal Crop 
        Insurance Act (7 U.S.C. 1508(h)) is amended by striking 
        paragraph (10) and inserting the following new paragraph:
            ``(10) Livestock pilot programs.--
                    ``(A) Programs required.--
                            ``(i) Number and types of programs.--The 
                        Corporation shall conduct two or more pilot 
                        programs to evaluate the effectiveness of risk 
                        management tools for livestock producers, 
                        including the use of--
                                    ``(I) futures and options contracts 
                                and policies and plans of insurance 
                                that provide livestock producers with 
                                reasonable protection from the 
                                financial risks of price or income 
                                fluctuations inherent in the production 
                                and marketing of livestock, provide 
                                protection for production losses, and 
                                otherwise protect the interests of 
                                livestock producers; and
                                    ``(II) policies and plans of 
                                insurance that, notwithstanding the 
                                second sentence of subsection (a)(1), 
                                and subject to the exclusions in 
                                subsection (a)(3), provide livestock 
                                producers with reasonable protection 
                                from liability to mitigate or 
                                compensate for adverse environmental 
                                impacts from producers' operations 
                                caused by natural disasters, unusual 
                                weather or climatic conditions, third-
                                party acts, or other forces or 
                                occurrences beyond the producers' 
                                control, and with coverage to satisfy 
                                obligations established by law for 
                                closure of producers' operations.
                            ``(ii) Purpose of programs.--To the maximum 
                        extent practicable, the Corporation shall 
                        evaluate the greatest number and variety of 
                        pilot programs described in clause (i) to 
                        determine which of the offered risk management 
                        tools are best suited to protect livestock 
                        producers from the financial risks associated 
                        with the production and marketing of livestock.
                    ``(B) Implementation; assistance.--The Corporation 
                shall begin conducting livestock pilot programs under 
                this paragraph during fiscal year 2001, and any policy 
                or plan of insurance offered under this paragraph may 
                be prepared without regard to the limitations contained 
                in this title. As part of such a pilot program, the 
                Corporation may provide assistance to producers to 
                purchase futures and options contracts or policies and 
                plans of insurance offered under that pilot program. 
                However, no action may be undertaken with respect to a 
                risk under this paragraph if the Corporation determines 
                that insurance protection for livestock producers 
                against the risk is generally available from private 
                companies.
                    ``(C) Location.--The Corporation shall conduct the 
                livestock pilot programs under this paragraph in a 
                number of counties that is determined by the 
                Corporation to be adequate to provide a comprehensive 
                evaluation of the feasibility, effectiveness, and 
                demand among producers for the risk management tools 
                evaluated in the pilot programs.
                    ``(D) Eligible producers; livestock.--Any producer 
                of a type of livestock covered by a pilot program under 
                this paragraph who owns or operates a farm or ranch in 
                a county selected as a location for that pilot program 
                shall be eligible to participate in that pilot program. 
                In this paragraph, the term `livestock' means cattle, 
                sheep, swine, goats, and poultry.
                    ``(E) Relation to other laws.--The terms and 
                conditions of any policy or plan of insurance offered 
                under this paragraph that is reinsured by the 
                Corporation is not subject to the jurisdiction of the 
                Commodity Futures Trading Commission or the Securities 
                and Exchange Commission or considered as accounts, 
                agreements (including any transaction which is of the 
                character of, or is commonly known to the trade as, an 
                `option', `privilege', `indemnity', `bid', `offer', 
                `put', `call', `advance guaranty', or `decline 
                guaranty'), or transactions involving contracts of sale 
                of a commodity for future delivery, traded or executed 
                on a contract market for the purposes of the Commodity 
                Exchange Act (7 U.S.C. 1 et seq.). Nothing in this 
                subparagraph is intended to affect the jurisdiction of 
                the Commodity Futures Trading Commission or the 
                applicability of the Commodity Exchange Act to any 
                transaction conducted on a designated contract market 
                (as that term is used in such Act) by an approved 
                insurance provider to offset the provider's risk under 
                a plan or policy of insurance under this paragraph.
                    ``(F) Limitation on expenditures.--The Corporation 
                shall conduct all livestock programs under this title 
                so that, to the maximum extent practicable, all costs 
                associated with conducting the livestock programs 
                (other than research and development costs covered by 
                paragraph (6) or subsection (m)(4)) are not expected to 
                exceed the following:
                            ``(i) $20,000,000 for fiscal year 2001.
                            ``(ii) $30,000,000 for fiscal year 2002.
                            ``(iii) $40,000,000 for fiscal year 2003.
                            ``(iv) $55,000,000 for fiscal year 2004 and 
                        each subsequent fiscal year.''.
            (2) Conforming amendment to definition of agricultural 
        commodity.--Section 518 of the Federal Crop Insurance Act (7 
        U.S.C. 1518) is amended by striking ``livestock and'' after 
        ``commodity, excluding''.
    (e) Funding of Livestock Pilot Programs.--
            (1) Authorization of appropriations.--Section 516(a)(2) of 
        the Federal Crop Insurance Act (7 U.S.C. 1516(a)(2)) is 
        amended--
                    (A) by striking ``years--'' and inserting ``years 
                the following:'';
                    (B) by capitalizing the first letter of the first 
                word of each subparagraph;
                    (C) by striking ``; and'' at the end of 
                subparagraph (A) and inserting a period; and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(C) Costs associated with the conduct of 
                livestock pilot programs carried out under section 
                508(h)(10), subject to subparagraph (F) of such 
                section.''.
            (2) Use of insurance fund.--Section 516(b)(1) of the 
        Federal Crop Insurance Act (7 U.S.C. 1516(b)(1)) is amended--
                    (A) by striking ``including--'' and inserting 
                ``including the following:'';
                    (B) by capitalizing the first letter of the first 
                word of each subparagraph;
                    (C) by striking the semicolon at the end of 
                subparagraph (A) and inserting a period;
                    (D) by striking ``; and'' at the end of 
                subparagraph (B) and inserting a period; and
                    (E) by adding at the end the following new 
                subparagraph:
                    ``(D) Costs associated with the conduct of 
                livestock pilot programs carried out under section 
                508(h)(10), subject to subparagraph (F) of such 
                section.''.

SEC. 106. COST OF PRODUCTION AS A PRICE ELECTION.

    Section 508(c)(5) of the Federal Crop Insurance Act (7 U.S.C. 
1508(c)(5)) is amended--
            (1) by striking ``The Corporation shall establish a price'' 
        in the matter preceding subparagraph (A) and inserting ``For 
        purposes of this title, the Corporation shall establish or 
        approve a price'';
            (2) by striking ``or'' at the end of subparagraph (A);
            (3) by striking the period at the end of subparagraph (B) 
        and inserting ``; or''; and
            (4) by adding at the end the following--
                    ``(C) 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).''.

SEC. 107. PREMIUM DISCOUNTS FOR GOOD PERFORMANCE.

    Section 508(d) of the Federal Crop Insurance Act (7 U.S.C. 1508(d)) 
is amended by adding at the end the following new paragraph:
            ``(3) Premium discounts.--
                    ``(A) Performance-based discount.--The Corporation 
                may provide a performance-based premium discount for a 
                producer of an agricultural commodity who has good 
                insurance or production experience relative to other 
                producers of that agricultural commodity in the same 
                area, as determined by the Corporation.
                    ``(B) Discount for reduced price for certain 
                commodities.--A producer who insured wheat, barley, 
                oats, or rye during at least 2 of the 1995 through 1999 
                crop years may be eligible to receive an additional 20 
                percent premium discount on the producer-paid premium 
                for any 2000 crop policy if the producer demonstrates 
                that the producer's wheat, barley, oats, or rye crop 
                was subjected to a discounted price due to Scab or 
                Vomitoxin damage, or both, during any 2 years of that 
                period. The 2000 insured crop or crops need not be 
                wheat, barley, oats, or rye to qualify for the discount 
                under this subparagraph. The 2 years of insurance and 
                the 2 years of discounted prices need not be the 
                same.''.

SEC. 108. OPTIONS FOR CATASTROPHIC RISK PROTECTION.

    Section 508(b) of the Federal Crop Insurance Act (7 U.S.C. 1508(b)) 
is amended by striking paragraph (3) and inserting the following new 
paragraph:
            ``(3) Alternative catastrophic coverage.--Beginning with 
        the 2000 crop year, the Corporation shall offer producers of an 
        agricultural commodity the option of selecting either of the 
        following:
                    ``(A) The catastrophic risk protection coverage 
                available under paragraph (2)(A).
                    ``(B) An alternative catastrophic risk protection 
                coverage that--
                            ``(i) indemnifies the producer on an area 
                        yield and loss basis if such a plan of 
                        insurance is offered for the agricultural 
                        commodity in the county in which the farm is 
                        located;
                            ``(ii) provides, on a uniform national 
                        basis, a higher combination of yield and price 
                        protection than the coverage available under 
                        paragraph (2)(A); and
                            ``(iii) the Corporation determines is 
                        comparable to the coverage available under 
                        paragraph (2)(A) for purposes of subsection 
                        (e)(2)(A).''.

SEC. 109. AUTHORITY FOR NONPROFIT ASSOCIATIONS TO PAY FEES ON BEHALF OF 
              PRODUCERS.

    Section 508(b)(5) of the Federal Crop Insurance Act (7 U.S.C. 
1508(b)(5)) is amended by adding at the end the following new 
subparagraph:
                    ``(F) Payment of fees on behalf of producers.--
                            ``(i) Payment authorized.--Notwithstanding 
                        any other subparagraph of this paragraph, a 
                        cooperative association of agricultural 
                        producers or a nonprofit trade association may 
                        pay to the Corporation, on behalf of a member 
                        of the association who consents to be insured 
                        under such an arrangement, all or a portion of 
                        the fees imposed under subparagraphs (A) and 
                        (B) for catastrophic risk protection.
                            ``(ii) Treatment of licensing fees.--A 
                        licensing fee or other payment made by the 
                        insurance provider to the cooperative 
                        association or trade association in connection 
                        with the issuance of catastrophic risk 
                        protection or additional coverage under this 
                        section to members of the cooperative 
                        association or trade association shall not be 
                        considered to be a rebate to the members if the 
                        members are informed in advance of the fee or 
                        payment.
                            ``(iii) Selection of provider; delivery.--
                        Nothing in this subparagraph shall be construed 
                        so as to limit the ability of a producer to 
                        choose the licensed insurance agent or other 
                        approved insurance provider from whom the 
                        member will purchase a policy or plan of 
                        insurance or to refuse coverage for which a 
                        payment is offered to be made under clause (i). 
                        A policy or plan of insurance for which a 
                        payment is made under clause (i) shall be 
                        delivered by a licensed insurance agent or 
                        other approved insurance provider.
                            ``(iv) Additional coverage encouraged.--
                        Cooperatives and trade associations and any 
                        approved insurance provider with whom a 
                        licensing fee or other arrangement under this 
                        subparagraph is made shall encourage producer 
                        members to purchase appropriate levels of 
                        additional coverage in order to meet the risk 
                        management needs of such member producers.''.

SEC. 110. ELECTIONS REGARDING PREVENTED PLANTING COVERAGE.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
is amended by inserting after paragraph (7), as added by section 104, 
the following new paragraph:
            ``(8) Prevented planting coverage.--
                    ``(A) Election not to receive coverage.--
                            ``(i) Election.--A producer may elect not 
                        to receive coverage for prevented planting of 
                        an agricultural commodity.
                            ``(ii) Reduction.--In the case of an 
                        election under clause (i), the Corporation 
                        shall provide a reduction in the premium 
                        payable by the producer for a plan of insurance 
                        in an amount equal to the premium for the 
                        prevented planting coverage, as determined by 
                        the Corporation.
                    ``(B) Equal coverage.--For each agricultural 
                commodity for which prevented planting coverage is 
                available, the Corporation shall offer an equal 
                percentage level of prevented planting coverage.
                    ``(C) Area conditions required for payment.--The 
                Corporation shall limit prevented planting payments to 
                producers to those situations in which producers in the 
                area in which the farm is located are generally 
                affected by the conditions that prevent an agricultural 
                commodity from being planted.
                    ``(D) Substitute commodity.--
                            ``(i) Authority to plant.--Subject to 
                        clause (iv), a producer who has prevented 
                        planting coverage and who is eligible to 
                        receive an indemnity under such coverage may 
                        plant an agricultural commodity, other than the 
                        commodity covered by the prevented planting 
                        coverage, on the acreage originally prevented 
                        from being planted.
                            ``(ii) Nonavailability of insurance.--A 
                        substitute agricultural commodity planted as 
                        authorized by clause (i) for harvest in the 
                        same crop year shall not be eligible for 
                        coverage under a policy or plan of insurance 
                        under this title or for noninsured crop 
                        disaster assistance under section 196 of the 
                        Federal Agriculture Improvement and Reform Act 
                        of 1996 (7 U.S.C. 7333). For purposes of 
                        subsection (b)(7) only, the substitute 
                        commodity shall be deemed to have at least 
                        catastrophic risk protection so as to satisfy 
                        the requirements of that subsection.
                            ``(iii) Effect on actual production 
                        history.--If a producer plants a substitute 
                        agricultural commodity as authorized by clause 
                        (i) for a crop year, the Corporation shall 
                        assign the producer a recorded yield, for that 
                        crop year for the commodity that was prevented 
                        from being planting, equal to 60 percent of the 
                        producer's actual production history for such 
                        commodity for purposes of determining the 
                        producer's actual production history for 
                        subsequent crop years.
                            ``(iv) Effect on prevented planting 
                        payment.--If a producer plants a substitute 
                        agricultural commodity as authorized by clause 
                        (i) before the latest planting date established 
                        by the Corporation for the agricultural 
                        commodity prevented from being planted, the 
                        Corporation shall not make a prevented planting 
                        payment with regard to the commodity prevented 
                        from being planted.''.

SEC. 111. LIMITATIONS UNDER NONINSURED CROP DISASTER ASSISTANCE 
              PROGRAM.

    (b) Limitation.--Section 196(i) of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7333(i)) is amended--
            (1) in paragraph (1)(B)--
                    (A) by striking ``gross revenues'' in the 
                subparagraph heading and inserting ``adjusted gross 
                income''; and
                    (B) by striking ``gross revenue'' and ``gross 
                revenues'' each place they appear and inserting 
                ``adjusted gross income''; and
            (2) by striking paragraph (4) and inserting the following 
        new paragraph:
            ``(4) Limitation.--A person who has qualifying adjusted 
        gross income in excess of $2,000,000 during the taxable year 
        shall not be eligible to receive any noninsured crop disaster 
        assistance payment under this section.''.

SEC. 112. QUALITY GRADE LOSS ADJUSTMENT.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
is amended by inserting after paragraph (8), as added by section 110, 
the following new paragraph:
            ``(9) Quality grade loss adjustment.--Consistent with 
        subsection (m)(4), by the 2000 crop year, the Corporation shall 
        enter into a contract to analyze its quality loss adjustment 
        procedures and make such adjustments as may be necessary to 
        more accurately reflect local quality discounts that are 
        applied to agricultural commodities insured under this title, 
        taking into consideration the actuarial soundness of the 
        adjustment and the prevention of fraud, waste and abuse.''.

                 TITLE II--IMPROVING PROGRAM INTEGRITY

SEC. 201. LIMITATION ON DOUBLE INSURANCE.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
is amended by inserting after paragraph (9), as added by section 112, 
the following new paragraph:
            ``(10) Limitation on double insurance.--
                    ``(A) Restricted to catastrophic risk protection.--
                Except for situations covered by subparagraph (B), no 
                policy or plan of insurance may be offered under this 
                title for more than one agricultural commodity planted 
                on the same acreage in the same crop year unless the 
                coverage for the additional crop is limited to 
                catastrophic risk protection available under subsection 
                (b).
                    ``(B) Exception for double-cropping.--A policy or 
                plan of insurance may be offered under this title for 
                an agricultural commodity and for an additional 
                agricultural commodity when both agricultural 
                commodities are normally harvested within the same crop 
                year on the same acreage if the following conditions 
                are met:
                            ``(i) There is an established practice of 
                        double-cropping in the area and the additional 
                        agricultural commodity is customarily double-
                        cropped in the area with the first agricultural 
                        commodity, as determined by the Corporation.
                            ``(ii) A policy or plan of insurance for 
                        the first agricultural commodity and the 
                        additional agricultural commodity is available 
                        under this title.
                            ``(iii) The additional commodity is planted 
                        on or before the final planting date or late 
                        planting date for that additional commodity, as 
                        established by the Corporation.''.

SEC. 202. IMPROVING PROGRAM COMPLIANCE AND INTEGRITY.

    (a) Additional Methods.--Section 506(q) of the Federal Crop 
Insurance Act (7 U.S.C. 1506(q)) is amended--
            (1) by redesignating paragraphs (1) and (2) as paragraphs 
        (2) and (3);
            (2) by inserting after the subsection heading the following 
        new paragraph (1):
            ``(1) Purpose.--The purpose of this subsection is to 
        improve compliance with the Federal crop insurance program and 
        to improve program integrity.''; and
            (3) by adding at the end the following new paragraphs:
            ``(4) Reconciling producer information.--The Secretary 
        shall develop and implement a coordinated plan for the 
        Corporation and the Administrator of the Farm Service Agency to 
        reconcile all relevant information received by the Corporation 
        or the Farm Service Agency from a producer who obtains crop 
        insurance coverage under this title. Beginning with the 2000 
        crop year, the Secretary shall require that the Corporation and 
        the Farm Service Agency reconcile such producer-derived 
        information on at least an annual basis in order to identify 
        and address any discrepancies.
            ``(5) Identification and elimination of fraud, waste, and 
        abuse.--
                    ``(A) FSA monitoring program.--The Secretary shall 
                develop and implement a coordinated plan for the Farm 
                Service Agency to assist the Corporation in the ongoing 
                monitoring of programs carried out under this title, 
                including--
                            ``(i) conducting fact finding relative to 
                        allegations of program fraud, waste, and abuse, 
                        both at the request of the Corporation or on 
                        its own initiative after consultation with the 
                        Corporation;
                            ``(ii) reporting any allegation of fraud, 
                        waste, and abuse or identified program 
                        vulnerabilities to the Corporation in a timely 
                        manner; and
                            ``(iii) assisting the Corporation and 
                        approved insurance providers in auditing a 
                        statistically appropriate number of claims made 
                        under any policy or plan of insurance under 
                        this title.
                    ``(B) Use of field infrastructure.--The plan 
                required by this paragraph shall use the field 
                infrastructure of the Farm Service Agency, and the 
                Secretary shall ensure that relevant Farm Service 
                Agency personnel are appropriately trained for any 
                responsibilities assigned to them under the plan. At a 
                minimum, such personnel shall receive the same level of 
                training and pass the same basic competency tests as 
                required of loss adjusters of approved insurance 
                providers.
                    ``(C) Maintenance of provider effort; 
                cooperation.--The activities of the Farm Service Agency 
                under this paragraph do not affect the responsibility 
                of approved insurance providers to conduct any audits 
                of claims or other program reviews required by the 
                Corporation. If an insurance provider reports to the 
                Corporation that it suspects intentional 
                misrepresentation, fraud, waste, or abuse, the 
                Corporation shall make a determination and provide a 
                written response within 90 days after receiving the 
                report. The insurance provider and the Corporation 
                shall take coordinated action in any case where 
                misrepresentation, fraud, waste, or abuse has occurred.
            ``(6) Consultation with State committees.--The Corporation 
        shall establish a mechanism under which State committees of the 
        Farm Service Agency are consulted concerning policies and plans 
        of insurance offered in a State under this title.
            ``(7) Annual report on compliance efforts.--The Secretary 
        shall submit to the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, Nutrition, 
        and Forestry of the Senate an annual report containing findings 
        relative to the efforts undertaken pursuant to paragraphs (4) 
        and (5). The report shall identify specific occurrences of 
        waste, fraud, and abuse and contain an outline of actions that 
        have been or are being taken to eliminate the identified waste, 
        fraud, and abuse.''.
    (b) Technical Correction.--Paragraph (3) of section 506(q) of the 
Federal Crop Insurance Act (7 U.S.C. 1506(q)), as redesignated by 
subsection (a), is amended by striking ``this subsection'' and 
inserting ``this paragraph''.

SEC. 203. SANCTIONS FOR FALSE INFORMATION.

    (a) Authorized Sanctions.--Section 506(n) of the Federal Crop 
Insurance Act (7 U.S.C. 1506(n)) is amended--
            (1) in the subsection heading, by striking ``Penalties'' 
        and inserting ``Sanctions for Violations'';
            (2) by redesignating paragraph (2) as paragraph (3) and, in 
        such paragraph, by striking ``penalty'' and ``assessing 
        penalties'' and inserting ``sanction'' and ``imposing a 
        sanction'', respectively; and
            (3) by striking paragraph (1) and inserting the following 
        new paragraphs:
            ``(1) False information.--If a producer, an agent, a loss 
        adjuster, an approved insurance provider, or any other person 
        willfully and intentionally provides any false or inaccurate 
        information to the Corporation or to an approved insurance 
        provider with respect to a policy or plan of insurance under 
        this title, the Corporation may, after notice and an 
        opportunity for a hearing on the record, impose one or more of 
        the sanctions specified in paragraph (2).
            ``(2) Authorized sanctions.--The following sanctions may be 
        imposed for a violation under paragraph (1):
                    ``(A) The Corporation may impose a civil fine for 
                each violation not to exceed the greater of--
                            ``(i) the amount of the pecuniary gain 
                        obtained as a result of the false or inaccurate 
                        information provided; or
                            ``(ii) $10,000.
                    ``(B) If the violation is committed by a producer, 
                the producer may be disqualified for a period of up to 
                5 years from--
                            ``(i) participating in, or receiving any 
                        benefit provided under this title, the 
                        noninsured crop disaster assistance program 
                        under section 196 of the Federal Agriculture 
                        Improvement and Reform Act of 1996 (7 U.S.C. 
                        7333), the Agricultural Market Transition Act 
                        (7 U.S.C. 7201 et seq.), the Agricultural Act 
                        of 1949 (7 U.S.C. 1421 et seq.), the Commodity 
                        Credit Corporation Charter Act (15 U.S.C. 714 
                        et seq.), or the Agricultural Adjustment Act of 
                        1938 (7 U.S.C. 1281 et seq.);
                            ``(ii) receiving any loan made, insured, or 
                        guaranteed under the Consolidated Farm and 
                        Rural Development Act (7 U.S.C. 1921 et seq.);
                            ``(iii) receiving any benefit provided, or 
                        indemnity made available, under any other law 
                        to assist a producer of an agricultural 
                        commodity due to a crop loss or a decline in 
                        commodity prices; or
                            ``(iv) receiving any cost share assistance 
                        for conservation or any other assistance 
                        provided under title XII of the Food Security 
                        Act (16 U.S.C. 3801 et seq.).
                    ``(C) If the violation is committed by an agent, 
                loss adjuster, approved insurance provider, or any 
                other person (other than a producer), the violator may 
                be disqualified for a period of up to 5 years from 
                participating in, or receiving any benefit provided 
                under this title.
                    ``(D) If the violation is committed by a producer, 
                the Corporation may require the producer to forfeit any 
                premium owed under the policy, notwithstanding a denial 
                of claim or collection of an overpayment, if the false 
                or inaccurate information was material.''.
    (b) Disclosure of Sanctions.--Section 506(n) of the Federal Crop 
Insurance Act (7 U.S.C. 1506(n)) is amended by adding at the end the 
following new paragraph:
            ``(4) Disclosure of sanctions.--Each policy or plan of 
        insurance under this title shall prominently indicate the 
        sanctions prescribed under paragraph (2) for willfully and 
        intentionally providing false or inaccurate information to the 
        Corporation or to an approved insurance provider.''.

SEC. 204. PROTECTION OF CONFIDENTIAL INFORMATION.

    Section 502 of the Federal Crop Insurance Act (7 U.S.C. 1502) is 
amended by adding at the end the following new subsection:
    ``(c) Protection of Confidential Information.--
            ``(1) Authorized disclosure.--In the case of information 
        furnished by a producer to participate in or receive any 
        benefit under this title, the Secretary, any other officer or 
        employee of the Department or an agency thereof, an approved 
        insurance provider and its employees and contractors, and any 
        other person may not disclose the information to the public, 
        unless the information has been transformed into a statistical 
        or aggregate form that does not allow the identification of the 
        person who supplied particular information.
            ``(2) Violations; penalties.--Subsection (c) of section 
        1770 of the Food Security Act of 1985 (7 U.S.C. 2276) shall 
        apply with respect to the release of information collected in 
        any manner or for any purpose prohibited by paragraph (1).''.

SEC. 205. RECORDS AND REPORTING.

    (a) Condition of Obtaining Coverage.--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, records 
acceptable to the Corporation of historical acreage and production of 
the crops for which the insurance is sought'' and inserting ``provide 
annually records acceptable to the Secretary regarding crop acreage, 
acreage yields, and production for each agricultural commodity insured 
under this title''.
    (b) Coordination of Records.--Section 506(h) of the Federal Crop 
Insurance Act (7 U.S.C. 1506(h)) is amended--
            (1) by striking ``The Corporation'' and inserting the 
        following:
            ``(1) In general.--The Corporation''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Coordination and use of records.--
                    ``(A) Coordination between agencies.--The Secretary 
                shall ensure that recordkeeping and reporting 
                requirements under this title and section 196 of the 
                Federal Agriculture Improvement and Reform Act of 1996 
                (7 U.S.C. 7333) are coordinated by the Corporation and 
                the Farm Service Agency to avoid duplication of such 
                records, to streamline procedures involved with the 
                submission of such records, and to enhance the accuracy 
                of such records.
                    ``(B) Use of records.--Notwithstanding section 
                502(c), records submitted in accordance with this title 
                and section 196 of the Federal Agriculture Improvement 
                and Reform Act of 1996 (7 U.S.C. 7333) shall be 
                available to agencies and local offices of the 
                Department, appropriate State and Federal agencies and 
                divisions, and approved insurance providers for use in 
                carrying out this title and such section 196 as well as 
                other agricultural programs and related 
                responsibilities.''.
    (c) Noninsured Crop Disaster Assistance Program.--Section 196(b) of 
the Federal Agriculture Improvement and Reform Act of 1996 (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 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. 206. COMPLIANCE WITH STATE LICENSING REQUIREMENTS.

    Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) is 
amended by adding at the end the following new subsection:
    ``(o) Compliance With State Licensing Requirements.--Any person who 
sells or solicits the purchase of a policy or plan of insurance under 
this title, including catastrophic risk protection, in any State shall 
be licensed and otherwise qualified to do business in that State.''.

                       TITLE III--ADMINISTRATION

SEC. 301. BOARD OF DIRECTORS OF CORPORATION.

    (a) Change in Composition.--Section 505 of the Federal Crop 
Insurance Act (7 U.S.C. 1505) is amended by striking the section 
heading, ``Sec. 505.'', and subsection (a) and inserting the following:

``SEC. 505. MANAGEMENT OF CORPORATION.

    ``(a) Board of Directors.--
            ``(1) Establishment.--The management of the Corporation 
        shall be vested in a Board of Directors subject to the general 
        supervision of the Secretary.
            ``(2) Composition.--The Board shall consist of only the 
        following members:
                    ``(A) The manager of the Corporation, who shall 
                serve as a nonvoting ex officio member.
                    ``(B) The Under Secretary of Agriculture 
                responsible for the Federal crop insurance program.
                    ``(C) One additional Under Secretary of Agriculture 
                (as designated by the Secretary).
                    ``(D) The Chief Economist of the Department of 
                Agriculture.
                    ``(E) One person experienced in the crop insurance 
                business.
                    ``(F) One person experienced in the regulation of 
                insurance.
                    ``(G) Four active producers who are policy holders, 
                are from different geographic areas of the United 
                States, and represent a cross-section of agricultural 
                commodities grown in the United States. At least one of 
                the four shall be a specialty crop producer.
            ``(3) Appointment of private sector members.--The members 
        of the Board described in subparagraphs (E), (F), and (G) of 
        paragraph (2)--
                    ``(A) shall be appointed by, and hold office at the 
                pleasure of, the Secretary; and
                    ``(B) shall not be otherwise employed by the 
                Federal Government.
            ``(4) Chairperson.--The Board shall select a member of the 
        Board to serve as Chairperson.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect 30 days after the date of the enactment of this Act.
    (c) Effect on Existing Board.--A member of the Board of Directors 
of the Federal Crop Insurance Corporation on the effective date 
specified in subsection (b) may continue to serve as a member of the 
Board until the earlier of the following:
            (1) The date the replacement Board is appointed.
            (2) The end of the 180-day period beginning on the 
        effective date specified in subsection (b).

SEC. 302. PROMOTION OF SUBMISSION OF POLICIES AND RELATED MATERIALS.

    (a) Reimbursement Authority.--Section 508(h) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(h)), as amended by section 105(a) of this 
Act, is amended by inserting after paragraph (5) the following new 
paragraph:
            ``(6) Reimbursement of research, development, and 
        maintenance costs.--
                    ``(A) Reimbursement provided.--Subject to the 
                conditions of this paragraph, the Corporation shall 
                provide a payment to reimburse an applicant for 
                research, development, and maintenance costs directly 
                related to a policy or other material that is--
                            ``(i) submitted to, and approved by, the 
                        Board under this subsection for reinsurance; 
                        and
                            ``(ii) if applicable, offered for sale to 
                        producers.
                    ``(B) Duration.--Payments under subparagraph (A) 
                may be made available beginning in fiscal year 2001. 
                Payments with respect to the maintenance of an approved 
                policy or other material may be provided for a period 
                of not more than 4 reinsurance years following Board 
                approval. Upon the expiration of that 4-year period, or 
                earlier upon the agreement of the Corporation and the 
                person receiving the payment, the Corporation shall 
                assume responsibility for maintenance of a successful 
                policy, as determined by the Corporation based on the 
                market share attained by the policy, the total number 
                of policies sold, the total amount of premium paid, and 
                the performance of the policy in the States where the 
                policy is sold.
                    ``(C) Treatment of payment.--Payments made under 
                subparagraph (A) for a policy or other material shall 
                be considered as payment in full for the research and 
                development conducted with regard to the policy or 
                material and any property rights to the policy or 
                material.
                    ``(D) Reimbursement amount.--The Corporation shall 
                determine the amount of the payment under subparagraph 
                (A) for an approved policy or other material based on 
                the complexity of the policy or material and the size 
                of the area in which the policy or material is expected 
                to be used.''.
    (b) Issuance of Regulations.--Not later than October 1, 2000, the 
Corporation shall issue final regulations to carry out the amendment 
made by subsection (a).

SEC. 303. RESEARCH AND DEVELOPMENT, INCLUDING CONTRACTS REGARDING 
              UNDERSERVED COMMODITIES.

    (a) Support for Private Research and Development.--Section 508(m) 
of the Federal Crop Insurance Act (7 U.S.C. 1508(m)) is amended by 
adding at the end the following new paragraph:
            ``(4) Private research and development of policies and 
        other materials.--
                    ``(A) Use of reimbursement authority.--To encourage 
                and promote the necessary research and development for 
                policies, plans of insurance, and related materials, 
                including policies, plans, and materials under the 
                livestock pilot programs under subsection (h)(10), the 
                Corporation shall make full use of private resources by 
                providing payment for research and development for 
                approved policies and plans of insurance, and related 
                materials, pursuant to subsection (h)(6).
                    ``(B) Contracts for underserved commodities.--
                            ``(i) Development of products and related 
                        materials.--In the event the Corporation 
                        determines that an agricultural commodity, 
                        including a specialty crop, is not adequately 
                        served by policies and plans of insurance and 
                        related materials submitted under subsection 
                        (h) or any other provision of this title, the 
                        Corporation may enter into a contract, under 
                        procedures prescribed by the Corporation, 
                        directly with any person or entity with 
                        experience in crop insurance or farm or ranch 
                        risk management, including universities, 
                        providers of crop insurance, and trade and 
                        research organizations, to carry out research 
                        and development for policies and plans of 
                        insurance and related materials for that 
                        agricultural commodity without regard to the 
                        limitations contained in this title.
                            ``(ii) Types of contracts.--A contract 
                        under this subparagraph may provide for 
                        research and development regarding new or 
                        expanded policies and plans of insurance and 
                        related materials, including policies based on 
                        adjusted gross income, cost-of-production, 
                        quality losses, and an intermediate base 
                        program with a higher coverage and cost than 
                        catastrophic risk protection.
                            ``(iii) Delayed effective date for 
                        contracts.--A contract entered into under this 
                        subparagraph may not take effect before October 
                        1, 2000.
                            ``(iv) Use of resulting policies and 
                        plans.--The Corporation may offer any policy or 
                        plan of insurance developed under this 
                        subparagraph that is approved by the Board.
                    ``(C) Contract for revenue coverage plan.--The 
                Corporation shall enter into a contract for research 
                and development regarding one or more revenue coverage 
                plans designed to enable producers to take maximum 
                advantage of fluctuations in market prices and thereby 
                maximize revenue realized from the sale of a crop. Such 
                a plan may include market instruments currently 
                available or may involve the development of new 
                instruments to achieve this goal. Not later than 15 
                months after the date of the enactment of this 
                paragraph, the Corporation shall submit to Congress a 
                report containing the results of the contract.''.
    (b) Reliance on Private Development of New Policies.--Section 
508(m)(2) of the Federal Crop Insurance Act (7 U.S.C. 1508(m)(2)) is 
amended--
            (1) by striking ``Exception.--No action'' and inserting--
            ``(2) Exceptions.--
                    ``(A) Private availability.--No action''; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) Prohibited research and development by 
                corporation.--Notwithstanding paragraphs (1) and (5), 
                on and after October 1, 2000, the Corporation shall not 
                conduct research and development for any new policy or 
                plan of insurance for an agricultural commodity offered 
                under this title. Any policy or plan of insurance 
                developed by the Corporation under this title before 
                that date shall, at the discretion of the Corporation, 
                continue to be offered for sale to producers.''.
    (c) Partnerships for Risk Management Development and 
Implementation.--Section 508(m) of the Federal Crop Insurance Act (7 
U.S.C. 1508(m)) is amended by inserting after paragraph (4), as added 
by subsection (a), the following new paragraph:
            ``(5) Partnerships for risk management development and 
        implementation.--
                    ``(A) Purpose.--The purpose of this paragraph is to 
                authorize the Corporation to enter into partnerships 
                with public and private entities for the purpose of 
                increasing the availability of loss mitigation, 
                financial, and other risk management tools for crop 
                producers, with priority given to risk management tools 
                for producers of agricultural commodities covered by 
                section 196 of the Federal Agriculture Improvement and 
                Reform Act of 1996 (7 U.S.C. 7333) and specialty and 
                underserved commodity producers.
                    ``(B) Authority.--Subject to subparagraphs (D) and 
                (E), the Corporation may enter into partnerships with 
                the Cooperative State Research, Education, and 
                Extension Service, the Agricultural Research Service, 
                the National Oceanic Atmospheric Administration, and 
                other appropriate public and private entities with 
                demonstrated capabilities in developing and 
                implementing risk management and marketing options for 
                specialty crops and underserved commodities.
                    ``(C) Objectives.--The Corporation may enter into a 
                partnership under subparagraph (B)--
                            ``(i) to enhance the notice and timeliness 
                        of notice of weather conditions that could 
                        negatively affect crop yields, quality, and 
                        final product use in order to allow producers 
                        to take preventive actions to increase end-
                        product profitability and marketability and to 
                        reduce the possibility of crop insurance 
                        claims;
                            ``(ii) to develop a multifaceted approach 
                        to pest management and fertilization to 
                        decrease inputs, decrease environmental 
                        exposure, and increase application efficiency;
                            ``(iii) to develop or improve techniques 
                        for planning, breeding, planting, growing, 
                        maintaining, harvesting, storing, shipping, and 
                        marketing that will address quality and 
                        quantity challenges associated with year-to-
                        year and regional variations;
                            ``(iv) to clarify labor requirements and 
                        assist producers in complying with requirements 
                        to better meet the physically intense and time-
                        compressed planting, tending, and harvesting 
                        requirements associated with the production of 
                        specialty crops and underserved commodities;
                            ``(v) to provide assistance to State 
                        foresters or equivalent officials for the 
                        prescribed use of burning on private forest 
                        land for the prevention, control, and 
                        suppression of fire;
                            ``(vi) to provide producers with training 
                        and informational opportunities so that they 
                        will be better able to use financial 
                        management, crop insurance, marketing 
                        contracts, and other existing and emerging risk 
                        management tools; and
                            ``(vii) to develop other risk management 
                        tools to further increase economic and 
                        production stability.
                    ``(D) Funding source.--If the Corporation 
                determines that the entire amount available to provide 
                reimbursement payments under subsection (h) and 
                contract payments under paragraph (4) (in this 
                subparagraph referred to as `reimbursement and contract 
                payments') for a fiscal year is not needed for such 
                purposes, the Corporation may use a portion of the 
                excess amount to carry out this paragraph, subject to 
                the following:
                            ``(i) During fiscal years 2001 through 
                        2004, amounts available for reimbursement and 
                        contract payments may be used to carry out this 
                        paragraph only if the total amount to be used 
                        for reimbursement and contract payments is less 
                        than $44,000,000 for fiscal year 2001, 
                        $47,000,000 for fiscal year 2002, $50,000,000 
                        for fiscal year 2003, and $52,000,000 for 
                        fiscal year 2004.
                            ``(ii) During fiscal years 2001 through 
                        2004, the total amount used to carry out this 
                        paragraph for a fiscal year may not exceed the 
                        difference between the amount specified in 
                        clause (i) for that fiscal year and the amount 
                        actually used for reimbursement and contract 
                        payments.
                    ``(E) Delayed authority.--The Corporation may not 
                enter into a partnership under the authority of this 
                paragraph before October 1, 2000.''.

SEC. 304. FUNDING FOR REIMBURSEMENT AND RESEARCH AND DEVELOPMENT.

    (a) Expenditures.--Section 508(h)(6) of the Federal Crop Insurance 
Act (7 U.S.C. 1508(h)(6)), as added by section 302(a) of this Act, is 
amended by adding at the end the following new subparagraph:
                    ``(E) Expenditures.--
                            ``(i) Specialty crops.--Of the total amount 
                        made available to provide payments under this 
                        paragraph and subsection (m)(4)(B) for a fiscal 
                        year, $25,000,000 shall be reserved for 
                        research and development contracts under 
                        subsection (m)(4)(B). The Corporation may use a 
                        portion of the reserved amount for other 
                        purposes under this paragraph, with priority 
                        given to underserved commodities, if the 
                        Corporation determines that the entire amount 
                        is not needed for such contracts. If the 
                        reserved amount is insufficient for a fiscal 
                        year, the Corporation may use amounts in excess 
                        of the reserved amount for such contracts.
                            ``(ii) Limitation.--In providing payments 
                        under this paragraph and subsection (m)(4)(B), 
                        the Corporation shall not obligate or expend 
                        more than $55,000,000 during any fiscal 
                        year.''.
    (b) Funding.--
            (1) Authorization of appropriations.--Section 516(a)(2) of 
        the Federal Crop Insurance Act (7 U.S.C. 1516(a)(2)) is amended 
        by adding at the end the following new subparagraph:
                    ``(D) Costs associated with the reimbursement for 
                research, development, and maintenance costs of 
                approved policies and other materials provided under 
                section 508(h)(6) and contracting for research and 
                development under section 508(m)(4)(B).''.
            (2) Use of insurance fund.--Section 516(b)(1) of the 
        Federal Crop Insurance Act (7 U.S.C. 1516(b)(1)) is amended by 
        adding at the end the following new subparagraph:
                    ``(E) Reimbursement for research, development, and 
                maintenance costs of approved policies and other 
                materials provided under section 508(h)(6) and 
                contracting for research and development under section 
                508(m)(4)(B).''.

SEC. 305. BOARD CONSIDERATION OF SUBMITTED POLICIES AND MATERIALS.

    (a) Persons Authorized To Submit.--Section 508(h)(1) of the Federal 
Crop Insurance Act (7 U.S.C. 1508(h)(1)) is amended by inserting after 
``a person'' the following: ``(including an approved insurance 
provider, a college or university, a cooperative or trade association, 
or any other person)''.
    (b) Sale by Approved Insurance Providers.--Section 508(h)(3) of the 
Federal Crop Insurance Act (7 U.S.C. 1508(h)(3)) is amended by 
inserting after ``for sale'' the following: ``by approved insurance 
providers''.
    (c) Time Periods for Approval or Disapproval.--Section 508(h)(4)(A) 
of the Federal Crop Insurance Act (7 U.S.C. 1508(h)(4)(A)), as amended 
by section 105(c), is amended--
            (1) in clause (iii), as redesignated by section 105(c), by 
        striking ``of the applicant.'' and all that follows through the 
        end of the clause and inserting 
        ``, and such application, as modified, shall be considered by 
        the Board in the manner provided in clause (iv) within the 30-
        day period beginning on the date the modified application is 
        submitted. Any notification of intent to disapprove a policy or 
        other material submitted under this subsection shall be 
        accompanied by a complete explanation as to the reasons for the 
        Board's intention to deny approval.''; and
            (2) by striking clause (iv), as redesignated by section 
        105(c), and inserting the following new clause:
                            ``(iv) Not later than 120 days after a 
                        policy or other material is submitted under 
                        this subsection, the Board shall make a 
                        determination to approve or disapprove such 
                        policy or material. Any determination by the 
                        Board to disapprove any policy or other 
                        material shall be accompanied by a complete 
                        explanation of the reasons for the Board's 
                        decision to deny approval. In the event the 
                        Board fails to make a determination within the 
                        prescribed time period, the submitted policy or 
                        other material shall be deemed approved by the 
                        Board for the initial reinsurance year 
                        designated for the policy or material, except 
                        in the case where the Board and the applicant 
                        agree to an extension.''.
    (d) Funding To Expedite Consideration.--Effective October 1, 2000, 
section 516(b)(2) of the Federal Crop Insurance Act (7 U.S.C. 
1516(b)(2)) is amended--
            (1) by striking ``Research and development expenses.--'' 
        and inserting ``Policy consideration expenses.--''; and
            (2) in subparagraph (A), by striking ``research and 
        development expenses of the Corporation'' and inserting ``costs 
        associated with considering for approval or disapproval 
        policies and other materials under subsections (h) and (m)(4) 
        of section 508, costs associated with implementing such 
        subsection (m)(4), and costs to contract out for assistance in 
        considering such policies and other materials''.

SEC. 306. CONTRACTING FOR RATING OF PLANS OF INSURANCE.

    Section 507(c)(2) of the Federal Crop Insurance Act (7 U.S.C. 
1507(c)(2)) is amended--
            (1) by striking ``actuarial, loss adjustment,'' and 
        inserting ``actuarial services, services relating to loss 
        adjustment and rating plans of insurance,''; and
            (2) by inserting after ``private sector'' the following: 
        ``and to enable the Corporation to concentrate on regulating 
        the provision of insurance under this title and evaluating new 
        products and materials submitted under section 508(h)''.

SEC. 307. ELECTRONIC AVAILABILITY OF CROP INSURANCE INFORMATION.

    Section 508(a)(5) of the Federal Crop Insurance Act (7 U.S.C. 
1508(a)(5)) is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii) and moving such clauses 2 ems to the right;
            (2) by striking ``The Corporation'' and inserting the 
        following:
                    ``(A) Available information.--The Corporation''; 
                and
            (3) by adding at the end the following new subparagraph:
                    ``(B) Use of electronic methods.--The Corporation 
                shall make the information described in subparagraph 
                (A) available electronically to producers and approved 
                insurance providers. To the maximum extent practicable, 
                the Corporation shall also allow producers and approved 
                insurance providers to use electronic methods to submit 
                information required by the Corporation.''.

SEC. 308. FEES FOR USE OF NEW POLICIES AND PLANS OF INSURANCE.

    Section 508(h) of the Federal Crop Insurance Act (7 U.S.C. 1508(h)) 
is amended by adding at the end the following new paragraph:
            ``(11) Fees for new policies and plans of insurance.--
                    ``(A) Authority to impose fee.--Effective beginning 
                with fiscal year 2001, if a person develops a new 
                policy or plan of insurance and does not apply for 
                reimbursement of research, development, and maintenance 
                costs under paragraph (6), the person shall have the 
                right to receive a fee from any approved insurance 
                provider that elects to sell the new policy or plan of 
                insurance. Notwithstanding paragraph (5), once the 
                right to collect a fee is asserted with respect to a 
                new policy or plan of insurance, no approved insurance 
                provider may offer the new policy or plan of insurance 
                in the absence of a fee agreement with the person who 
                developed the policy or plan.
                    ``(B) Definition.--For purposes of this paragraph 
                only, the term `new policy or plan of insurance' means 
                a policy or plan of insurance that was approved by the 
                Board on or after October 1, 2000, and was not 
                available at the time the policy or plan of insurance 
                was approved by the Board.
                    ``(C) Amount.--The amount of the fee that is 
                payable by an approved insurance provider to offer a 
                new policy or a plan of insurance under subparagraph 
                (A) shall be an amount that is determined by the person 
                that developed the new policy or plan of insurance, 
                subject to the approval of the Board under subparagraph 
                (D).
                    ``(D) Approval.--The Board shall approve the amount 
                of a fee determined under subparagraph (C) for a new 
                policy or plan of insurance unless the Board can 
                demonstrate that the fee amount--
                            ``(i) is unreasonable in relation to the 
                        research and development costs associated with 
                        the new policy or plan of insurance; and
                            ``(ii) unnecessarily inhibits the use of 
                        the new policy or plan of insurance.''.

SEC. 309. CLARIFICATION OF PRODUCER REQUIREMENT TO FOLLOW GOOD FARMING 
              PRACTICES.

    Section 508(a)(3)(C) of the Federal Crop Insurance Act (7 U.S.C. 
1508(a)(3)(C)) is amended by inserting after ``good farming practices'' 
the following: ``, including scientifically sound sustainable and 
organic farming practices''.

SEC. 310. REIMBURSEMENTS AND RENEGOTIATION OF STANDARD REINSURANCE 
              AGREEMENT.

    (a) Reimbursement Rate Changes.--
            (1) CAT 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 inserting ``8 percent''.
            (2) Reimbursement for administrative and operating costs.--
        Section 508(k)(4)(A)(ii) of the Federal Crop Insurance Act (7 
        U.S.C. 1508(k)(4)(A)(ii)) is amended by striking ``24.5 
        percent'' and inserting ``24 percent''.
            (3) Application of amendments.--The amendments made by this 
        subsection shall apply with respect to the 2001 and subsequent 
        reinsurance years.
    (b) Renegotiation.--Effective for the 2002 reinsurance year, the 
Federal Crop Insurance Corporation may renegotiate the Standard 
Reinsurance Agreement.

              TITLE IV--EFFECTIVE DATE AND IMPLEMENTATION

SEC. 401. EFFECTIVE DATE.

    Except as provided in sections 301(b) and 305(d), this Act and the 
amendments made by this Act shall take effect on the date of the 
enactment of this Act. The actual implementation by the Secretary of 
Agriculture and the Federal Crop Insurance Corporation of an amendment 
made by this Act shall depend on the terms of the amendment or, in the 
absence of an express implementation date in the amendment, the special 
rules specified in section 402.

SEC. 402. SPECIAL RULES REGARDING IMPLEMENTATION OF CERTAIN AMENDMENTS.

    (a) Implementation for 2000 Crop Year.--The amendments made by the 
following sections of this Act shall apply beginning with the 2000 crop 
year:
            (1) Section 104, relating to review and adjustment in 
        rating methodologies.
            (2) Section 106, relating to cost of production as a price 
        election.
            (3) Section 107, relating to premium discounts for good 
        performance.
            (4) Section 202, relating to improving program compliance 
        and integrity.
            (5) Section 203, relating to sanctions for false 
        information.
            (6) Section 204, relating to protection of confidential 
        information.
            (7) Section 205, relating to records and reporting.
            (8) Section 206, relating to compliance with State 
        licensing requirements.
            (9) Section 309, relating to requirement to follow good 
        farming practices.
    (b) Implementation for Fiscal Year 2000.--The amendments made by 
the following sections of this Act shall apply beginning with fiscal 
year 2000:
            (1) Section 105(a), relating to repeal of obsolete pilot 
        programs.
            (2) Subsections (a), (b), and (c) of section 305, relating 
        to Board consideration of submitted policies and materials.
            (3) Section 306, relating to contracting for rating plans 
        of insurance.
            (4) Section 307, relating to electronic availability of 
        crop insurance information.
    (c) Implementation for 2001 Crop Year.--The amendments made by the 
following sections of this Act shall apply beginning with the 2001 crop 
year:
            (1) Section 101, relating to premium schedule for 
        additional coverage.
            (2) Section 102, relating to premium schedule for other 
        plans of insurance.
            (3) Section 103(b), relating to adjustment in production 
        history to reflect pest control.
            (4) Section 109, relating to authority for nonprofit 
        associations to pay fees on behalf of producers.
            (5) Section 110, relating to elections regarding prevented 
        planting coverage.
            (6) Section 111, relating to limitations under noninsured 
        crop disaster assistance program.
            (7) Section 201, relating to limitation on double 
        insurance.
    (d) Implementation for Fiscal Year 2001.--The amendments made by 
the following sections of this Act shall apply beginning with fiscal 
year 2001:
            (1) Section 105(b), relating to general requirements 
        applicable to pilot programs.
            (2) Section 304, relating to funding for reimbursement and 
        research and development.

SEC. 403. SAVINGS CLAUSE.

    The Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) and section 
196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 
U.S.C. 7333), as in effect on day before the date of the enactment of 
this Act, shall continue to apply with respect to the 1999 crop year 
and shall apply with respect to the 2000 crop year, to the extent the 
application of an amendment made by this Act is delayed under section 
402 or by the terms of the amendment.

SEC. 404. SENSE OF THE CONGRESS.

    It is the Sense of the Congress that the Department of Agriculture 
should ensure the full participation of minority and limited-resource 
farmers and ranchers in the programs operating under the Federal Crop 
Insurance Act, as amended by the Agriculture Risk Protection Act of 
1999.

            Passed the House of Representatives September 29, 1999.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.