[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1401 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1401

To amend the Federal Crop Insurance Act to promote the development and 
use of affordable crop insurance policies designed to meet the specific 
     needs of producers of specialty crops, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 20, 1999

Mr. Graham (for himself, Mr. Mack, Mrs. Boxer, Mrs. Feinstein, and Mr. 
   Bingaman) introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
To amend the Federal Crop Insurance Act to promote the development and 
use of affordable crop insurance policies designed to meet the specific 
     needs of producers of specialty crops, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Specialty Crop Insurance Act of 
1999''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1)(A) crop insurance policies under the Federal crop 
        insurance program must be developed through a streamlined and 
        simplified process to meet the specific needs of producers of 
        specialty crops, while providing sufficient and affordable crop 
        insurance coverage; and
            (B) current crop insurance policies available for specialty 
        crops, which the Risk Management Agency of the Department of 
        Agriculture has based on the needs of producers of program 
        crops, do not cover the unique characteristics associated with 
        the planting, growing, and harvesting of specialty crops;
            (2) the types of crop insurance policies needed for the 
        wide variety of specialty crops are not sufficient and are not 
        being developed quickly enough to meet producers' needs;
            (3) current application of the noninsured crop disaster 
        assistance program under section 196 of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 7333) to specialty 
        crops has not been sufficient to address disastrous situations;
            (4) the Federal crop insurance program is one of the few 
        programs available to specialty crop producers that directly 
        provide incentives and risk management tools, and therefore 
        benefit specialty crops;
            (5)(A) the current contribution of specialty crops to the 
        actuarial soundness of the Federal crop insurance program is 
        positive;
            (B) despite the high market value of specialty crops, the 
        average loss ratio for specialty crops (as calculated by 
        dividing claims payments by total premiums) from the time that 
        the specialty crop insurance was offered through 1998 was 
        reported by the General Accounting Office to be .99; and
            (C) the average loss ratio for specialty crops is less than 
        the average loss ratio for nonspecialty crops of 1.12;
            (6)(A) specialty crops represent an important segment to 
        United States agriculture and the United States economy as a 
        whole; and
            (B) the National Agricultural Statistics Service of the 
        Department of Agriculture reported in the 1997 Census of 
        Agriculture that the total value of fruits, nuts, berries, 
        tobacco, nursery and greenhouse vegetables, melons, and sweet 
        corn represented 36 percent, or $98,000,000,000, of the total 
        value of United States crops;
            (7) involvement of trade associations and cooperatives in 
        group purchasing will expand coverage, educate growers, spread 
        risk, and increase overall program participation; and
            (8)(A) the Federal Agriculture Improvement and Reform Act 
        of 1996 (Public Law 104-127) shifted agricultural policy away 
        from traditional price support programs to more market-oriented 
        and risk-bearing policies; and
            (B) at the same time, the exposure of specialty crop 
        producers to market volatility, natural disasters, and the 
        pressure to reduce inputs has increased, thus increasing the 
        need for innovation, education, and outreach to provide 
        specialty crop producers with the tools needed to make informed 
        decisions regarding risk management, production, and marketing.
    (b) Purposes.--The purposes of this Act are--
            (1) to develop a Federal crop insurance program to meet the 
        needs of producers of specialty crops, while achieving the 
        overall objectives of the Federal crop insurance program--
                    (A) to offer products that economically provide 
                sufficient risk management tools for agricultural 
                producers; and
                    (B) to increase producer participation in the 
                program;
            (2) to promote the development of crop insurance policies 
        for specialty crops that are flexible enough to respond to 
        changing conditions and are actuarially sound; and
            (3) to reduce the reliance on, and eventually eliminate the 
        need for, the noninsured crop disaster assistance program under 
        section 196 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 7333), which provides basic coverage for 
        specialty crops for which catastrophic risk protection under 
        section 508(b) of the Federal Crop Insurance Act (7 U.S.C. 
        1508(b)) is not available.

SEC. 3. SPECIALTY CROPS.

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

``SEC. 522. SPECIALTY CROPS.

    ``(a) Definitions.--In this section:
            ``(1) Program crop.--The term `program crop' has the 
        meaning given the term `loan commodity' in section 102 of the 
        Agricultural Market Transition Act (7 U.S.C. 7202).
            ``(2) Specialty crop.--
                    ``(A) In general.--The term `specialty crop' means 
                an agricultural commodity other than a program crop.
                    ``(B) Inclusions.--The term `specialty crop' 
                includes fruits, nuts, vegetables, greenhouse and 
                nursery plants, timber, and turfgrass.
            ``(3) Specialty crop administrator.--The term `specialty 
        crop administrator' means a nonprofit corporation that is--
                    ``(A) established with the approval of the National 
                Association of Insurance Commissioners;
                    ``(B) organized to--
                            ``(i) develop, assess, and rate new and 
                        existing crop insurance policies;
                            ``(ii) accumulate, tabulate, and analyze 
                        relevant annual statistics acquired by standard 
                        reinsurance agreement holders;
                            ``(iii) operate as a crop insurance 
                        advisory organization and a crop insurance 
                        statistical organization;
                            ``(iv) provide statistics, loss expenses, 
                        actuarial analyses, actuarial formulas, 
                        procedures, forms, and information to standard 
                        reinsurance agreement holders and other 
                        purchasers;
                            ``(v) consult and meet with groups or 
                        individuals throughout the United States having 
                        an interest in crop insurance, including 
                        representatives of Federal, State, and local 
                        governments, colleges and universities, 
                        producers, and trade organizations;
                            ``(vi) develop, provide, and publicize 
                        procedures and forms for adjustment of crop 
                        losses; and
                            ``(vii) carry out research, training, and 
                        education activities to promote improved 
                        knowledge and understanding of the applicable 
                        aspects of crop insurance.
    ``(b) Transfer of Crop Insurance Program Functions for Specialty 
Crops.--
            ``(1) Purpose.--The purpose of this subsection is to 
        authorize a contract between the Corporation and the specialty 
        crop administrator that will enable greater flexibility, 
        increased expertise, and a more rapid response needed for the 
        development and maintenance of specialty crop insurance 
        products and policies tailored to the different crops, 
        varieties, growing conditions, planting dates, harvesting 
        dates, geographical regions, and variable changes in crop value 
        associated with specialty crops.
            ``(2) Contract for transfer.--Not later than 120 days after 
        the date of enactment of this section, the Corporation shall 
        offer to enter into a contract with the specialty crop 
        administrator, under which the specialty crop administrator 
        will assume responsibility from the Risk Management Agency 
        for--
                    ``(A) the administration of crop insurance 
                products, policies, and other risk management tools for 
                specialty crops under the Federal crop insurance 
                program;
                    ``(B) the development of revised or new products, 
                policies, and risk management tools for specialty 
                crops; and
                    ``(C) the procedures, data collection, research, 
                and forms-adjusting activities related to that 
                administration and development.
            ``(3) Exception.--Nothing in paragraph (2) authorizes or 
        requires the transfer to the specialty crop administrator of 
        the responsibility of the Risk Management Agency over 
        reinsurance and compliance oversight activities carried out 
        under the Federal crop insurance program.-
            ``(4) Specialty crop administrator program advisory 
        committee.--
                    ``(A) Establishment.--As part of the contract 
                described in paragraph (2), the Corporation shall 
                authorize the specialty crop administrator to establish 
                such advisory committees on a State or regional basis 
                as the specialty crop administrator considers necessary 
                for each specialty crop program.
                    ``(B) Membership.--Each advisory committee may 
                consist of--
                            ``(i) the specialty crop administrator;
                            ``(ii) representatives from each State or 
                        region in which the specialty crop program is 
                        administered;
                            ``(iii) producers;
                            ``(iv) commodity group representatives;
                            ``(v) representatives from association 
                        groups or cooperatives through which an 
                        insurance product is offered (if applicable);
                            ``(vi) members of the land grant university 
                        system relevant to the program area and region 
                        of the committee; and
                            ``(vii) representatives of the insurance 
                        companies actively engaged in selling and 
                        servicing the program.
                    ``(C) Duties.--Each advisory committee shall--
                            ``(i) meet on an annual basis or more 
                        frequently as necessary to review the specialty 
                        crop program within the State or region; and
                            ``(ii) report to the specialty crop 
                        administrator and the Board of Directors of the 
                        Corporation.
            ``(5) Board authority.--
                    ``(A) In general.--Except as otherwise provided by 
                this subsection, the Board shall retain authority over 
                all program decisions, policies, risk management tools, 
                loss adjustment procedures, forms, rates and premiums 
                associated with specialty crops.
                    ``(B) Types of authority.--In carrying out 
                subparagraph (A), the Board may order, on reasonable 
                notice--
                            ``(i) changes or adjustments in priorities;
                            ``(ii) changes in policies or programs;
                            ``(iii) changes in procedures or forms;
                            ``(iv) changes in rates; or
                            ``(v) adoption of other risk management 
                        tools, on a pilot or permanent basis.
            ``(6) Priorities for specialty crop administrator.--
                    ``(A) Initial establishment.--Not later than 90 
                days after the date on which the contract described in 
                paragraph (2) is entered into, the Corporation shall 
                establish the initial priorities of the specialty crop 
                administrator.
                    ``(B) Continuing establishment.--After the 
                establishment of the initial priorities, during the 
                fourth quarter of each fiscal year, the Corporation 
                shall establish the priorities of the specialty crop 
                administrator for the next fiscal year.
                    ``(C) Solicitation of proposed initial 
                priorities.--
                            ``(i) In general.--The Corporation shall 
                        solicit proposed initial priorities for the 
                        specialty crop administrator from--
                                    ``(I) Members of Congress;
                                    ``(II) the Risk Management Agency 
                                and other agencies of the Department;
                                    ``(III) the specialty crop 
                                administrator;
                                    ``(IV) advisory committees 
                                established by the specialty crop 
                                administrator under paragraph (4);
                                    ``(V) approved insurance providers;
                                    ``(VI) associations of producers;
                                    ``(VII) commodity groups;
                                    ``(VIII) insurance agents; and
                                    ``(IX) the public.
                            ``(ii) Procedures for receipt of proposed 
                        priorities.--The Corporation shall--
                                    ``(I) establish procedures to 
                                ensure that proposed priorities are 
                                received by the Corporation in a timely 
                                fashion so that the priorities can be 
                                established in accordance with the 
                                schedule established under subparagraph 
                                (A); and
                                    ``(II) publish the procedures in 
                                the Federal Register not later than 5 
                                days after the date of adoption of the 
                                procedures.
            ``(7) Policy approval procedures.--
                    ``(A) In general.--The specialty crop administrator 
                shall submit all insurance plans, products, policies, 
                procedures, and other material that the specialty crop 
                administrator develops for specialty crops to the Board 
                for approval and reinsurance.
                    ``(B) Submission to risk management agency.--
                            ``(i) In general.--After development by the 
                        specialty crop administrator of a proposed 
                        program for a new policy or a proposed program 
                        to revise a previously published policy for a 
                        specialty crop and before submission of the 
                        proposed program (referred to in this paragraph 
                        as the `proposed program') for approval to the 
                        Board, the specialty crop administrator shall 
                        submit the proposed program to the Risk 
                        Management Agency for review and comment.
                            ``(ii) Comments from other agencies.--
                                    ``(I) In general.--The Risk 
                                Management Agency shall promptly 
                                forward copies of the proposed program 
                                to the Office of Management and Budget 
                                and to any other agency that is 
                                required to review a new or revised 
                                crop insurance policy under this title 
                                or other law.
                                    ``(II) Deadline for analyses.--
                                Notwithstanding any other provision of 
                                law, each agency shall complete an 
                                analysis of, and preparation of 
                                comments with respect to, the proposed 
                                program during the 75-day period 
                                described in subparagraph (C) (referred 
                                to in this subsection as the `75-day 
                                period').
                            ``(iii) Public comment.--
                                    ``(I) Publication.--The Risk 
                                Management Agency shall--
                                            ``(aa) promptly publish the 
                                        proposed program in the Federal 
                                        Register; and
                                            ``(bb) direct that all 
                                        comments be provided to the 
                                        Risk Management Agency not 
                                        later than 45 days after the 
                                        date of publication.
                                    ``(II) Distribution of comments.--
                                The Risk Management Agency shall make 
                                available copies of all comments 
                                received under subclause (I)(bb), upon 
                                request, to the specialty crop 
                                administrator, the Board, or any member 
                                of the Board.
                    ``(C) Provision of comments to specialty crop 
                administrator.--Not later than 75 days after the date 
                of receipt of the proposed program, the Risk Management 
                Agency shall provide to--
                            ``(i) the specialty crop administrator in 
                        writing any comments that the Risk Management 
                        Agency has regarding the proposed program and 
                        the comments of other agencies under 
                        subparagraph (B)(ii); and
                            ``(ii) the specialty crop administrator and 
                        the Board a summary of public comments received 
                        under subparagraph (B)(iii) during the 75-day 
                        period.
                    ``(D) Response to risk management agency 
                comments.--If the Risk Management Agency provides 
                comments under subparagraph (C) during the 75-day 
                period, the specialty crop administrator shall--
                            ``(i) consider the comments of the Risk 
                        Management Agency and make appropriate 
                        revisions to the proposed program; and
                            ``(ii) after carrying out clause (i), 
                        submit the proposed program to the Board for 
                        approval.
                    ``(E) Effect of failure of risk management agency 
                to provide comments.--If the Risk Management Agency 
                does not provide comments under subparagraph (C) during 
                the 75-day period--
                            ``(i) the specialty crop administrator may 
                        submit the proposed program to the Board for 
                        consideration;
                            ``(ii) the specialty crop administrator 
                        shall advise the Board of the absence of timely 
                        comments by the Risk Management Agency; and
                            ``(iii) the absence of timely comments 
                        shall be deemed to constitute the concurrence 
                        of the Risk Management Agency with the proposed 
                        program.
                    ``(F) Completeness of proposed programs submitted 
                to board.--A proposed program submitted by the 
                specialty crop administrator to the Board for approval 
                shall be sufficiently complete so that, if approved by 
                the Board, the program can be priced and sold to 
                producers without any necessity for further policy 
                development, actuarial study, initial premium rating, 
                or similar activity.
                    ``(G) Consideration of proposed programs by 
                board.--
                            ``(i) Public meeting.--After receiving from 
                        the specialty crop administrator for approval a 
                        proposed program, the Board shall consider the 
                        proposed program at a public meeting held not 
                        later than 45 days after receipt of the 
                        proposed program.
                            ``(ii) Public review.--Copies of the 
                        proposed program shall be available for public 
                        review by any interested person.
                    ``(H) Approval or disapproval of proposed programs 
                by board.--
                            ``(i) In general.--Not later than 30 days 
                        after the date of the public meeting under 
                        subparagraph (G)(i), the Board shall approve or 
                        disapprove the proposed program.
                            ``(ii) Disapproval.--
                                    ``(I) Statement of reasons.--If the 
                                Board disapproves a proposed program 
                                submitted by the specialty crop 
                                administrator, the Board, not later 
                                than 30 days after the vote by the 
                                Board disapproving the proposed 
                                program, shall provide to the specialty 
                                crop administrator a written statement 
                                of the reasons for the disapproval that 
                                is sufficiently detailed to permit the 
                                specialty crop administrator to prepare 
                                and resubmit a revised proposed program 
                                that the specialty crop administrator 
                                reasonably can assume will be approved 
                                by the Board.
                                    ``(II) Procedures.--Submission to 
                                and review by the Risk Management 
                                Agency and the Board of a revised 
                                proposed program shall be in accordance 
                                with the procedures established by this 
                                paragraph.
                            ``(iii) Approval.--After approving a 
                        proposed program, the Board shall publish in 
                        the Federal Register not later than 5 days 
                        after the vote of approval--
                                    ``(I) a description of the proposed 
                                program;
                                    ``(II) a statement that the 
                                proposed program is an approved 
                                insurance policy; and
                                    ``(III) a statement of the date on 
                                which the approved insurance policy 
                                will be available to approved insurance 
                                providers.
                    ``(I) Procedures for distribution of information to 
                approved insurance providers.--The Board shall ensure 
                that the specialty crop administrator has established 
                procedures for distributing actuarial data and loss 
                adjustment procedures to approved insurance providers 
                and their agents and adjusters in order to permit the 
                timely processing and sale of any policy or adjustment 
                of losses approved by the Board under this section.
            ``(8) Continuing authority of specialty crop 
        administrator.--The specialty crop administrator--
                    ``(A) in connection with the administration of 
                policies for specialty crops, including policies 
                developed by the specialty crop administrator, may 
                monitor the policies for their actuarial soundness and 
                recommend to the Board adjustments in premium rates and 
                other changes that promote an actuarially sound system 
                of crop insurance; but
                    ``(B) may not change the coverage under any policy 
                without approval by the Board.
            ``(9) Reports to under secretary for farm and foreign 
        agricultural services.--The specialty crop administrator shall 
        report periodically, but not less often than quarterly, to the 
        Under Secretary for Farm and Foreign Agricultural Services on 
        the progress of the specialty crop administrator in developing 
        proposed programs for new policies or proposed programs to 
revise previously published policies for specialty crops.
            ``(10) Report by comptroller general.--Not later than 5 
        years after the date of enactment of this section, the 
        Comptroller General of the United States shall submit to 
        Congress a report that reviews the actuarial soundness of the 
        specialty crop program established under this section and 
        evaluates the adequacy of the program to meet the needs of 
        specialty crops.
    ``(c) Research and Other Assistance for New or Revised Crop 
Insurance Products for Specialty Crops.--To encourage the development 
of new or revised crop insurance policies and other materials for 
specialty crops and submission of those insurance policies and other 
materials to the Corporation under section 508(h), the specialty crop 
administrator may--
            ``(1) make grants on a competitive basis for the research 
        and development of insurance products for underserved specialty 
        crops;
            ``(2) reimburse research costs associated with product 
        development;
            ``(3) enter into contracts for the research and development 
        of insurance products for underserved specialty crops; and
            ``(4) enter into contracts and reimburse costs associated 
        with the reassessment and reformatting of existing insurance 
        products for specialty crops.
    ``(d) Funding for Specialty Crop Coverage.--
            ``(1) Maintenance of effort.--Expenditures from the 
        insurance fund established under section 516(c) for the benefit 
        of specialty crops shall be maintained at a level equal to, at 
        a minimum, the greatest of the following:
                    ``(A) The level of expenditures for specialty crops 
                for the reinsurance year in effect as of the date of 
                enactment of this section.
                    ``(B) The percentage expended for specialty crops 
                of the total expenditures from the insurance fund for 
                that reinsurance year.
                    ``(C) $50,000,000 for each fiscal year.
            ``(2) Use of savings.--Any Federal crop insurance program 
        savings resulting from the reforms required by this section and 
        from the phase-out of the noninsured crop disaster assistance 
        program should be applied only to the crop insurance program 
        for specialty crops.
    ``(e) Minimum Catastrophic Risk Protection Financing and Coverage 
for Specialty Crops.--Except as otherwise specifically provided by law, 
the Corporation shall not change the following aspects of the 
catastrophic risk protection plan required to be offered to producers 
of specialty crops under section 508(b):
            ``(1) Catastrophic risk protection shall offer a producer 
        coverage for a 50 percent loss in yield, on an individual yield 
        or area yield basis, indemnified at 55 percent of the expected 
        market price, or a comparable coverage (as determined by the 
        Corporation), as specified in section 508(b)(2)(A)(ii).
            ``(2) The administrative fee for catastrophic risk 
        protection may not exceed $60 per crop, as specified in section 
        508(b)(5).
            ``(3) The Corporation shall pay the premium established for 
        catastrophic risk protection under section 508(d)(2)(A).
            ``(4) The 11 percent level of excess loss adjustment 
        expense and the existing underwriting gain formula shall be 
        maintained.
    ``(f) Retention of Minimum Subsidy Levels for Additional Coverage 
for Specialty Crops.--Except as otherwise specifically provided by law, 
the percentage of the premium for additional coverage for a specialty 
crop paid by the Corporation under section 508(e) may not be reduced 
below the percentage in effect on the date of enactment of this section 
for that same level of additional coverage.
    ``(g) Premium Discounts and Surcharges.--
            ``(1) In general.--Notwithstanding sections 506(o) and 
        508(d)(1), the Corporation may provide a discount for, or 
        impose a surcharge on, the amount of the premium payable by an 
        individual producer for catastrophic risk protection or 
        additional coverage for a specialty crop based on the 
        producer's actual loss experience.
            ``(2) Amount.--
                    ``(A) In general.--The Corporation shall base the 
                amount of the discount or surcharge for a specialty 
                crop of an individual producer on the actuarial 
                experience of the producer with the specialty crop as 
                compared to the actuarial experience of other producers 
                in the region that produce the specialty crop.
                    ``(B) Limitation on surcharges.--The Corporation 
                shall not apply a surcharge on the amount of the 
                premium payable by an individual producer under 
                paragraph (1) if the losses experienced by the producer 
                are the result of damaging weather or related condition 
                that is beyond the control of the producer.
    ``(h) Time Periods for Purchase of Coverage for Specialty Crops.--
            ``(1) Minimum sales closing date.--Subject to paragraph 
        (2), the sales closing date for obtaining coverage for a 
        specialty crop under this title may not expire before the end 
        of the 120-day period beginning on the date of the final 
        release of materials for policies from the Risk Management 
        Agency and the specialty crop administrator.
            ``(2) Release of product delayed to following crop year.--
        If the date of release of an insurance product for a specialty 
        crop for a crop year does not allow sufficient time for the 
        dissemination of policies and related materials or jeopardizes 
        the integrity and actuarial soundness of the crop insurance 
        program for specialty crops, the Board may delay the release 
        and offering of the product until the following crop year.
            ``(3) Purchase during insurance period.--A producer of a 
        specialty crop may purchase new coverage for the specialty 
        crop, or increase coverage levels, at any time during the 
        insurance period, subject to a 30-day waiting period for the 
        coverage to take effect to permit an inspection to verify 
        acceptability by the insurance provider.
    ``(i) Authorized Payment of Fees Required for Catastrophic Risk 
Protection on Behalf of Producers.--
            ``(1) Payment by cooperatives or trade associations.--A 
        cooperative association of agricultural producers or a 
        nonprofit trade association may pay, on behalf of its members, 
        the basic fee or additional fee required for catastrophic risk 
        protection for a specialty crop under section 508(b)(5).
            ``(2) Treatment of payment.--A licensing fee or other 
        payment made by an insurance provider to the cooperative 
        association or trade association in connection with the 
        issuance of catastrophic risk protection or additional coverage 
        under this title to members of the cooperative association or 
        trade association shall not be considered to be a rebate to the 
        members under the standard reinsurance agreement between the 
        Corporation and the insurance provider if the members are 
        informed in advance of the fee or payment.
            ``(3) Maximum amount of endorsement fees or other 
        payments.--Any endorsement fee or other payment paid by an 
        insurance provider to a cooperative association or trade 
        association that is allowed under State law shall not exceed 
        the amount of fees or premiums paid by the insurance provider 
        for the coverage involved.
            ``(4) Authorization.--In order to purchase catastrophic 
        risk protection for an individual member, a cooperative 
        association or trade association must have the written 
        authorization of the individual member in advance of the group 
        purchase.
    ``(j) Enforcement.--
            ``(1) In general.--For the purpose of discouraging the 
        submission of false claims or the intentional destruction of an 
        insured crop, the functions of sales agent and adjuster may not 
        be conducted by the same person.
            ``(2) Purchase of catastrophic risk protection by 
        cooperatives and trade associations.--
                    ``(A) Compliance.--A cooperative association or 
                trade association that purchases catastrophic risk 
                protection for members under subsection (i) shall 
                provide such information to the Risk Management Agency 
                as is required to ensure the compliance of the members 
                with this title.
                    ``(B) Unfair profits.--The Risk Management Agency 
                shall ensure that cooperative associations and trade 
                associations do not profit unfairly from the sale of 
                catastrophic risk protection, or offering of premium 
                discounts, to members of the associations.
                    ``(C) Similar coverage.--A member may not 
                individually purchase catastrophic risk protection for 
                the same crop and time period that is covered by the 
                cooperative association or trade association payment 
                under subsection (i).
            ``(3) Nonpreemption.--Except as otherwise specifically 
        provided in this section, nothing in this section preempts any 
        State insurance law.
    ``(k) Partnerships for Risk Management Development and 
Implementation.--
            ``(1) Purpose.--The purpose of this subsection is authorize 
        the Risk Management Agency to enter into partnerships with 
        public and private entities for the purpose of increasing the 
        availability of risk management tools for specialty crop 
        producers.
            ``(2) Authority.--The Risk Management Agency is authorized 
        to use each fiscal year not more than $20,000,000 of funds made 
        available under section 516(b)(2) to enter into partnerships 
        with the Cooperative State Research, Education, and Extension 
        Service, the Agricultural Research Service, the National 
        Oceanic and Atmospheric Administration, and other appropriate 
        public and private entities with demonstrated capabilities in 
        developing and implementing risk management and marketing 
        options for specialty crops.
            ``(3) Objectives.--The Risk Management Agency may enter 
        into a partnership under paragraph (2) to--
                    ``(A) enhance the notice and timeliness of notice 
                of weather conditions that could negatively affect 
                specialty 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;
                    ``(B) develop a multifaceted approach to pest 
                management to decrease inputs, decrease the development 
                of pest resistance, and increase the effectiveness of 
                pest prevention applications;
                    ``(C) develop a multifaceted approach to 
                fertilization to decrease inputs, decrease excessive 
                nutrient loading to the environment, and increase 
                application efficiency;
                    ``(D) develop or improve techniques for planning, 
                breeding, growing, maintaining, harvesting, storage, 
                and shipping that will address quality and quantity 
                challenges for specialty crops and livestock associated 
                with year-to-year and regional variations;
                    ``(E) clarify labor requirements and assist 
                producers in complying with requirements that allow 
                specialty crop producers to better meet the physically 
                intense and time-compressed planting, tending, and 
                harvesting requirements associated with specialty crop 
                production;
                    ``(F) 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; and
                    ``(G) develop other risk management tools that 
                specialty crop producers can use to further increase 
                their economic and production stability.
    ``(l) Study of New Specialty Crop Insurance Products.--
            ``(1) In general.--As part of the contract described in 
        subsection (b), the Corporation and the specialty crop 
        administrator shall jointly study the feasibility of developing 
        new insurance products for specialty crops, including products 
        based on the cost of production or adjusted gross income, 
quality-based policies, or an intermediate base program with a higher 
coverage and cost than catastrophic risk protection offered on the date 
of enactment of this section.
            ``(2) Submission of results.--Not later than 1 year after 
        the date of enactment of this section, the Secretary and the 
        specialty crop administrator shall submit to Congress a report 
        containing the results of the study required by this 
        subsection.
    ``(m) Administration and Expansion of Gross Revenue Pilot Programs 
for Specialty Crops.--
            ``(1) Administration.--As part of the contract described in 
        subsection (b), the Corporation shall use the specialty crop 
        administrator to administer the gross revenue pilot programs 
        that are in effect for specialty crops.
            ``(2) Expansion.--For crop year 2000, the pilot programs 
        shall be expanded to include any additional counties in the 
        States of Arizona, California, Florida, Georgia, Idaho, Maine, 
        Michigan, New Mexico, New York, North Carolina, Oregon, Texas, 
        and other States that are determined appropriate by the 
        specialty crop administrator.''.

SEC. 4. BOARD OF DIRECTORS OF CORPORATION.

    Section 505 of the Federal Crop Insurance Act (7 U.S.C. 1505) is 
amended by striking subsection (a) and inserting the following:
    ``(a) Board of Directors.--
            ``(1) In general.--The management of the Corporation shall 
        be vested in a Board subject to the general supervision of the 
        Secretary.
            ``(2) Composition.--The Board shall consist of--
                    ``(A) 4 members who are active agricultural 
                producers with or without crop insurance, representing 
                the various regions and agricultural commodities of the 
                United States;
                    ``(B) 1 member who is active in the crop insurance 
                business;
                    ``(C) 1 member who represents specialty crop 
                production;
                    ``(D) 1 member who represents cooperatives and 
                trade associations;
                    ``(E) the Under Secretary for Farm and Foreign 
                Agricultural Services, who shall serve as chairperson;
                    ``(F) 1 additional Under Secretary of Agriculture 
                (as designated by the Secretary of Agriculture); and
                    ``(G) the Chief Economist of the Department of 
                Agriculture.
            ``(3) Appointment and terms of private sector members.--The 
        members of the Board described in subparagraphs (A) through (D) 
        of paragraph (2)--
                    ``(A) shall be appointed by, and hold office at the 
                pleasure of, the Secretary;
                    ``(B) shall not be otherwise employed by the 
                Federal Government;
                    ``(C) shall be appointed to staggered 4-year terms, 
                as determined by the Secretary; and
                    ``(D) shall serve not more than 2 consecutive 
                terms.
            ``(4) Specialty crops.--The Board shall have independent 
        oversight authority over all program decisions with respect to 
        specialty crops made by the Corporation, the Risk Management 
        Agency, and the specialty crop administrator (under the 
        contract described in section 522(b)).
            ``(5) Maintenance of board independence.--No official or 
        employee of the Corporation, the Risk Management Agency, or the 
        specialty crop administrator may serve on the Board.''.

SEC. 5. FEES COLLECTED BY APPROVED INSURANCE PROVIDERS.

    Section 508(b)(5)(D) of the Federal Crop Insurance Act (7 U.S.C. 
1508(b)(5)(D)) is amended--
            (1) in clause (i), by striking ``The amounts'' and 
        inserting ``Except as provided in clause (ii), the amounts''; 
        and
            (2) by striking clause (ii) and inserting the following:
                            ``(ii) Fees collected by approved insurance 
                        providers.--Not more than $120 of the 
                        administrative fees paid by a producer for 
                        catastrophic risk coverage for specialty crops 
                        that are collected by an approved insurance 
                        provider shall be retained by the provider as a 
                        payment for operating and administrative 
                        expenses incurred for the delivery of 
                        catastrophic risk protection.''.

SEC. 6. PILOT PROGRAM AUTHORITY.

    Section 508(m) of the Federal Crop Insurance Act (7 U.S.C. 1508(m)) 
is amended by adding at the end the following:
            ``(4) Pilot programs.--Except as otherwise provided in this 
        title, in carrying out a pilot program of insurance or 
        reinsurance under this title, the 18 Corporation and the 
        Secretary may--
                    ``(A) offer the pilot program on a regional, State, 
                or national basis, based on the interests of affected 
                producers and the interests and risks of the 
                Corporation;
                    ``(B) operate the pilot program for a period of up 
                to 3 years; and
                    ``(C) extend the duration of the pilot program for 
                additional periods, as determined by the Corporation 
                and the Secretary, respectively.''.

SEC. 7. EXPANSION OF REVENUE INSURANCE.

    Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) is 
amended by--
            (1) in subsection (a)(1) by striking the second sentence 
        and inserting ``To qualify for coverage under a plan of 
        insurance, the losses associated with the insured commodity 
        must be due to a change in the price level or drought, flood, 
        or other natural disaster (as determined by the 
        Corporation).''; and
            (2) striking subsection (h)(9).

SEC. 8. FUNDING FOR PARTNERSHIPS FOR RISK MANAGEMENT DEVELOPMENT AND 
              IMPLEMENTATION.

    Section 516(b)(2) of the Federal Crop Insurance Act (7 U.S.C. 
1516(b)(2)) is amended by adding at the end the following:
                    ``(C) Partnerships for risk management development 
                and implementation.--For each of the 2000 and 
                subsequent reinsurance years, the Corporation may pay 
                from the insurance fund established under subsection 
                (c) $20,000,000 to carry out section 522(k).''.

SEC. 9. NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

    Section 196(c) of the Agricultural Market Transition Act (7 U.S.C. 
7333(c)) is amended--
            (1) by striking paragraph (1);
            (2) in paragraph (2)--
                    (A) by striking ``Subject to paragraph (1), the'' 
                and inserting ``The''; and
                    (B) by striking ``because of drought, flood, or 
                other natural disaster, as determined by the 
                Secretary'';
            (3) in paragraph (3)--
                    (A) by striking ``Subject to paragraph (1), the'' 
                and inserting ``The''; and
                    (B) by striking ``, because of drought, flood, or 
                other natural disaster as determined by the 
                Secretary,'';
            (4) by redesignating paragraphs (2) and (3) as paragraphs 
        (1) and (2), respectively; and
            (5) by adding at the end the following:
            ``(3) Area trigger.--The Secretary shall provide assistance 
        to individual producers without any requirement of an area 
        loss.''.

SEC. 10. EFFECTIVE DATE AND APPLICATION.

    This Act and the amendments made by this Act--
            (1) take effect on the date of enactment of this Act; and
            (2) shall apply beginning with the 2000 crop year for a 
        specialty crop.
                                 <all>