[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1580 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1580

    To amend the Federal Crop Insurance Act to assist agricultural 
          producers in managing risk, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 13, 1999

Mr. Roberts (for himself, Mr. Kerrey, Mr. Craig, Mr. Burns, Mr. Baucus, 
  Mr. Grassley, Mr. Santorum, Mr. Crapo, Mr. Johnson, Mr. Thomas, Mr. 
 Brownback, Mr. Hagel, Mr. Daschle, Mr. Harkin, Mr. Enzi, Mr. Inhofe, 
and Mr. Conrad) 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 assist agricultural 
          producers in managing risk, 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 ``Risk Management 
for the 21st Century Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

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

Sec. 101. Prevented planting.
Sec. 102. Alternative rating methodologies.
Sec. 103. Quality adjustment.
Sec. 104. Catastrophic risk protection.
Sec. 105. Payment of portion of premium by Corporation.
Sec. 106. Additional premium subsidy for risk management activities.
Sec. 107. Assigned yields.
Sec. 108. Multiyear disaster actual production history adjustment.
Sec. 109. Noninsured crop disaster assistance program.
                        TITLE II--PILOT PROGRAMS

Sec. 201. Administration and expansion of gross revenue pilot programs 
                            for specialty crops.
Sec. 202. Low-risk producer pilot program.
Sec. 203. Revenue insurance pilot program for hog and cattle producers.
Sec. 204. Pilot program for coverage of specialty crops and uninsured 
                            commodities and livestock through whole 
                            farm revenue insurance.
Sec. 205. Options pilot program for cattle and hog producers.
Sec. 206. Funding for pilot programs.
                       TITLE III--ADMINISTRATION

Sec. 301. Board of Directors of Corporation.
Sec. 302. Office of Risk Management.
Sec. 303. Office of Private Sector Partnership.
Sec. 304. Penalties for false information.
Sec. 305. Regulations.
Sec. 306. Program compliance.
Sec. 307. Specialty crops.
Sec. 308. Adequate coverage for agricultural commodities.
Sec. 309. Limitation on double insurance.
Sec. 310. Consultation with State committees of Farm Service Agency.
Sec. 311. Fees for plans of insurance.
Sec. 312. Reinsurance agreements.
                        TITLE IV--MISCELLANEOUS

Sec. 401. Definitions.
Sec. 402. Effective date.

                    TITLE I--CROP INSURANCE COVERAGE

SEC. 101. PREVENTED PLANTING.

    (a) In General.--Section 508(a) of the Federal Crop Insurance Act 
(7 U.S.C. 1508(a)) is amended by adding at the end the following:
            ``(7) Prevented planting.--
                    ``(A) 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.
                    ``(B) Area conditions required for payment.--The 
                Corporation shall limit prevented planting payments to 
                producers to 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.
                    ``(C) Substitute commodity.--
                            ``(i) Authority to plant.--Subject to 
                        clause (iv), a producer that has prevented 
                        planting coverage and 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 under 
                        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 Agricultural Market 
                        Transition Act (7 U.S.C. 7333). For purposes of 
                        paragraph (7) of subsection (b), the substitute 
                        commodity shall be deemed to have at least 
                        catastrophic risk protection so as to satisfy 
                        the requirements of that paragraph.
                            ``(iii) Effect on actual production 
                        history.--If a producer plants a substitute 
                        agricultural commodity under 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 that 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 under 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.''.
    (b) Effective Date.--The amendment made by subsection (a) shall be 
reflected in the rates for applicable plans of insurance not later than 
crop year 2001.

SEC. 102. ALTERNATIVE RATING METHODOLOGIES.

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

SEC. 103. QUALITY ADJUSTMENT.

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

SEC. 104. CATASTROPHIC RISK PROTECTION.

    Section 508(b)(2) of the Federal Crop Insurance Act (7 U.S.C. 
1508(b)(2)) is amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (C)''; and
            (2) by adding at the end the following:
                    ``(C) Rerating.--The Office of Risk Management 
                shall rerate the levels of catastrophic risk protection 
                offered for each of the 2000 spring crop year, 2001 
                fall crop year, and subsequent crop years.''.

SEC. 105. PAYMENT OF PORTION OF PREMIUM BY CORPORATION.

    (a) Expected Market Price.--Section 508(c) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(c)) is amended by striking paragraph (5) 
and inserting the following:
            ``(5) Expected market price.--
                    ``(A) In general.--For the purposes of this title, 
                the Corporation shall establish or approve the price 
                level (referred to in this title as the `expected 
                market price') of each agricultural commodity for which 
                insurance is offered.
                    ``(B) Amount.--The expected market price of an 
                agricultural commodity--
                            ``(i) except as otherwise provided in this 
                        subparagraph, shall be not less than the 
                        projected market price of the agricultural 
                        commodity, as determined by the Corporation;
                            ``(ii) may be based on the actual market 
                        price of the agricultural commodity at the time 
                        of harvest, as determined by the Corporation;
                            ``(iii) in the case of revenue and other 
                        similar plans of insurance, shall be the actual 
                        market price of the agricultural commodity, as 
                        determined by the Corporation; or
                            ``(iv) 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.''.
    (b) Premium Amounts.--Section 508(d)(2) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(d)(2)) is amended by striking subparagraph 
(C) and inserting the following:
                    ``(C) In the case of additional coverage at greater 
                than or equal to 65 percent of the recorded or 
                appraised average yield indemnified at 100 percent of 
                the expected market price, or an equivalent coverage, 
                but less than 75 percent of the recorded or appraised 
                average yield indemnified at 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.
                    ``(D) In the case of additional coverage equal to 
                or greater than 75 percent of the recorded or appraised 
                average yield indemnified at 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.''.
    (c) Payment of Portion of Premium by Corporation.--Section 508(e) 
of the Federal Crop Insurance Act (7 U.S.C. 1508(e)) is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) In general.--
                    ``(A) Mandatory payments.--For the purpose of 
                encouraging the broadest possible participation of 
                producers in the crop insurance plans of insurance 
                authorized to be insured or reinsured under subsections 
                (b) and (c), the Corporation shall pay a part of the 
                premium in the amounts determined under this 
                subsection.
                    ``(B) Discretionary payments.--In the case of a 
                plan of insurance approved by the Corporation under 
                subsections (a)(7) and (h), the Corporation may pay a 
                part of the premium in the amounts not to exceed the 
                amounts determined under this subsection.''; and
            (2) in paragraph (2), by striking subparagraphs (B) and (C) 
        and inserting the following:
                    ``(B) In the case of additional coverage less than 
                or equal to 50 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or an equivalent coverage, the 
                amount shall be equal to the sum of--
                            ``(i) 55 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(B)(ii).
                    ``(C) In the case of additional coverage at greater 
                than 50 percent, but less than 65 percent, of the 
                recorded or appraised average yield indemnified at 100 
                percent of the expected market price, or an equivalent 
                coverage, the amount shall be equal to the sum of--
                            ``(i) 45 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(B)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(B)(ii).
                    ``(D) In the case of coverage at greater than or 
                equal to 65 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or an equivalent coverage, but 
                less than 75 percent of the recorded or appraised 
                average yield indemnified at 100 percent of the 
                expected market price, or an equivalent coverage, the 
                amount shall be equal to the sum of--
                            ``(i) 50 percent of the amount of the 
                        premium established under subsection 
                        (d)(2)(C)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(C)(ii).
                    ``(E) In the case of coverage equal to or greater 
                than 75 percent of the recorded or appraised average 
                yield indemnified at 100 percent of the expected market 
                price, or an equivalent coverage, the amount shall be 
                equal to the sum of--
                            ``(i) 55 percent of the amount of the 
                        premium established for coverage at 75 percent 
                        of the recorded or appraised average yield 
                        indemnified at 100 percent of the expected 
                        market price under subsection (d)(2)(D)(i); and
                            ``(ii) the amount of operating and 
                        administrative expenses determined under 
                        subsection (d)(2)(D)(ii).''.
    (d) Conforming Amendment.--Section 508(h)(2) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(h)(2)) is amended by striking the second 
sentence.

SEC. 106. ADDITIONAL PREMIUM SUBSIDY FOR RISK MANAGEMENT ACTIVITIES.

    Section 508(e) of the Federal Crop Insurance Act (7 U.S.C. 1508(e)) 
is amended--
            (1) in paragraph (2), by striking ``The amount'' and 
        inserting ``Subject to paragraph (5), the amount''; and
            (2) by adding at the end the following:
            ``(5) Risk management activities.--The amount of the 
        premium payable by the Corporation for a plan of insurance 
        issued to a producer for a covered year under paragraph (2) 
        shall be increased by an amount equal to 5 percent of the 
        premium payable by the producer if the producer obtains or uses 
        for the covered year at least 2 of the following risk 
        management practices:
                    ``(A) Future or option.--The producer may hedge 
                price, revenue, or production risk by entering into at 
                least 1 standard exchange-traded contract for a future 
                or option on a principal agricultural commodity 
                produced on the farm.
                    ``(B) Cash forward or other marketing contract.--
                The producer may cover at least 20 percent of the value 
                of a principal agricultural commodity produced on the 
                farm with a cash forward or other type of marketing 
                contract.
                    ``(C) Agricultural marketing and risk management 
                education.--The producer may attend an agricultural 
                marketing or risk management class, including a seminar 
                or class conducted by a broker licensed by a futures 
                exchange.
                    ``(D) Agricultural trade option.--The producer may 
                hedge price, revenue, or production risk on at least 10 
                percent of the value of a principal agricultural 
commodity produced on the farm by purchasing an agricultural trade 
option.
                    ``(E) Trust.--The producer may make a deposit of at 
                least 10 percent of the payments of the producer under 
                the Agricultural Market Transition Act (7 U.S.C. 7201 
                et seq.) into a trust authorized by statute for 
                eligible farming businesses that may be established to 
                accept tax deductible contributions.
                    ``(F) Financial risk reduction.--The producer may 
                reduce farm financial risk by reducing debt in an 
                amount that reduces leverage or by increasing 
                liquidity, as determined by the Secretary.''.

SEC. 107. ASSIGNED YIELDS.

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

SEC. 108. MULTIYEAR DISASTER ACTUAL PRODUCTION HISTORY ADJUSTMENT.

    Section 508(g) of the Federal Crop Insurance Act (7 U.S.C. 1508(g)) 
is amended by adding at the end the following:
            ``(4) Transitional adjustment for disasters.--
                    ``(A) Definition of a producer that has suffered a 
                multiyear disaster.--In this paragraph, the term `a 
                producer that has suffered a multiyear disaster' means 
                a producer that has suffered a natural disaster during 
                at least 3 of the immediately preceding 5 crop years 
                that resulted in a cumulative reduction of at least 25 
                percent in the actual production history of the crop of 
                an agricultural commodity.
                    ``(B) Elimination of certain years of production 
                history.--Effective beginning with the 2000 crop year, 
                for the purpose of calculating the actual production 
                history for a crop of an agricultural commodity, a 
                producer that has suffered a multiyear disaster with 
                respect to the crop may exclude 1 year of production 
                history for each 5 years included in the actual 
                production history calculation of the crop for which 
                the producer purchased crop insurance.
                    ``(C) Corporation's share of changed costs.--In the 
                case of an exclusion under subparagraph (B), in 
                addition to any other authority to pay any portion of 
                premium, the Corporation shall pay--
                            ``(i) the portion of the premium that 
                        represents the increase in premium associated 
                        with the exclusion;
                            ``(ii) all additional indemnities 
                        associated with the exclusion; and
                            ``(iii) any amounts that result from the 
                        difference in the administrative and operating 
                        expenses owed to an approved insurance provider 
                        as the result of an adjustment in actual 
                        production history under this paragraph.
                    ``(D) Increase in actual production history after 
                exclusions.--In the case of a producer that has 
                received an exclusion under subparagraph (B), the 
                Corporation shall not limit the increase of the actual 
                production history based on the producer's actual 
                production of the crop of an agricultural commodity in 
                succeeding crop years until the actual production 
                history for the producer reaches the level for the crop 
                year immediately preceding the first year of the 
                multiyear disaster.
                    ``(E) Termination of exclusion authority.--The 
                authority to apply this paragraph to a producer shall 
                terminate with respect to the first crop year in which 
                crop insurance is available to the producer that 
                adequately insures against natural disasters that occur 
                in multiple crop years, as determined by the 
                Corporation.''.

SEC. 109. NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

    (a) Operation and Administration of Program.--Section 196(a)(2) of 
the Agricultural Market Transition Act (7 U.S.C. 7333(a)(2)) is amended 
by adding at the end the following:
                    ``(C) Combination of similar types or varieties.--
                At the option of the Secretary, all types or varieties 
                of a crop or commodity described in subparagraph (A) or 
                (B) may be considered to be a single eligible crop 
                under this section.''.
    (b) Records.--Section 196(b) of the Agricultural Market Transition 
Act (7 U.S.C. 7333(b)) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Records.--To be eligible for assistance under this 
        section, on payment of the service fee, a producer shall 
        provide annually to the Secretary records of crop acreage, 
        acreage yields, and production for each crop, as required by 
        the Secretary.''; and
            (2) in paragraph (3), by inserting ``annual'' after ``shall 
        provide''.
    (c) Loss Requirements.--Section 196 of the Agricultural Market 
Transition Act (7 U.S.C. 7333) is amended by striking subsection (c) 
and inserting the following:
    ``(c) Loss Requirements.--
            ``(1) Disaster.--To be eligible for assistance under this 
        section, a producer of an eligible crop shall have suffered a 
        loss of a noninsured commodity as the result of a natural 
        disaster described in subsection (a)(3).
            ``(2) Assistance.--On the declaration of a natural disaster 
        described in subsection (a)(3), the Secretary shall make 
        assistance under this section to producers of an eligible crop 
        that have suffered a loss as a result of the disaster.
            ``(3) Area trigger.--The Secretary may provide assistance 
        to individual producers without any requirement of an area 
        loss.''.
    (d) New Eligible Crops.--Section 196 of the Agricultural Market 
Transition Act (7 U.S.C. 7333) is amended--
            (1) in subsection (d)(1)--
                    (A) by inserting ``(except as provided in 
                subsection (j))'' after ``percent''; and
                    (B) by inserting ``determined under subsection 
                (e)'' after ``for the crop'';
            (2) by redesignating subsection (j) as subsection (l); and
            (3) by inserting after subsection (i) the following:
    ``(j) New Eligible Crops.--
            ``(1) In general.--Subject to paragraph (2), if a producer 
        produces an eligible crop that is new to an area (as determined 
        by the Secretary), a payment for the producer shall be computed 
        by substituting the following percentages of yields for the 
        percentages of yields specified in subsection (d)(1):
                    ``(A) In the case of the first crop year of the 
                eligible crop produced by the producer, 35 percent of 
                the established yield for the crop determined under 
                subsection (e).
                    ``(B) In the case of each of the second through 
                fourth years of the eligible crop produced by the 
                producer--
                            ``(i) 45 percent of the established yield 
                        for the crop determined under subsection (e); 
                        or
                            ``(ii) if the producer received a payment 
                        under this section for the first crop year of 
                        the eligible crop produced by the producer, 35 
                        percent of the established yield for the crop 
                        determined under subsection (e).
            ``(2) Temporary ineligibility.--If a producer of an 
        eligible crop described in paragraph (1) receives a payment 
        under this section in both the first and second crop years of 
        the eligible crop, the producer shall be ineligible for a 
        payment under this section until the producer has successfully 
        produced the crop for at least 3 consecutive crop years with no 
        loss reported, as determined by the Secretary.''.
    (e) Service Fee.--Section 196 of the Agricultural Market Transition 
Act (7 U.S.C. 7333) (as amended by subsection (d)) is amended by 
inserting after subsection (j) the following:
    ``(k) Service Fee.--
            ``(1) In general.--To be eligible to receive assistance for 
        an eligible crop for a crop year under this section, a producer 
        shall pay to the Secretary a service fee for each eligible crop 
        in an amount that is equal to the per policy fee for 
        catastrophic risk protection otherwise available under section 
        508(b) of the Federal Crop Insurance Act (7 U.S.C. 1508(b)).
            ``(2) Use.--The Secretary shall use service fees collected 
        under this subsection to offset the administrative and 
        operating expenses of carrying out this section.''.

                        TITLE II--PILOT PROGRAMS

SEC. 201. ADMINISTRATION AND EXPANSION OF GROSS REVENUE PILOT PROGRAMS 
              FOR SPECIALTY CROPS.

    Section 507(g) of the Federal Crop Insurance Act (7 U.S.C. 1507(g)) 
is amended by adding at the end the following:
            ``(4) Administration and expansion of gross revenue pilot 
        programs for specialty crops.--
                    ``(A) Administration.--The Specialty Crops 
                Coordinator shall administer the gross revenue pilot 
                programs that are in effect for specialty crops.
                    ``(B) 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, and Texas and other States that 
                are determined by the Specialty Crops Coordinator to be 
                appropriate for inclusion.''.

SEC. 202. LOW-RISK PRODUCER PILOT PROGRAM.

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

SEC. 203. REVENUE INSURANCE PILOT PROGRAM FOR HOG AND CATTLE PRODUCERS.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 202) is amended by adding at the end the 
following:
            ``(11) Revenue insurance pilot program for hog and cattle 
        producers.--
                    ``(A) In general.--The Secretary shall carry out a 
                pilot program in a limited number of counties under 
                which an eligible producer of hogs or cattle described 
                in subparagraph (B) may elect to receive insurance, 
                through approved insurance providers with reinsurance 
                provided through futures markets, against loss of 
                revenue.
                    ``(B) Eligible producers.--The Secretary shall 
                offer revenue insurance under this paragraph to--
                            ``(i) hog producers in Hardin, Scott, and 
                        Warren counties of the State of Iowa; and
                            ``(ii) cattle producers in Sioux, Jackson, 
                        and Wayne counties in the State of Iowa.
                    ``(C) Coverage.--Under the pilot program, a 
                participating producer may elect coverage that is based 
                on the expected gross profit of the producer from the 
                sale of slaughter-ready hogs or cattle during a covered 
                year.
                    ``(D) Whole farm coverage.--The Secretary shall 
                permit a participating producer that produces corn or 
                soybeans to--
                            ``(i) combine coverage for the corn or 
                        soybeans under this title and coverage for hogs 
                        or cattle under this paragraph; and
                            ``(ii) obtain a lower rate of premium for 
                        the combined coverage.
                    ``(E) Funding.--From funds made available to carry 
                out this title, the Secretary shall use not more than 
                $200,000 to carry out this paragraph.''.

SEC. 204. PILOT PROGRAM FOR COVERAGE OF SPECIALTY CROPS AND UNINSURED 
              COMMODITIES AND LIVESTOCK THROUGH WHOLE FARM REVENUE 
              INSURANCE.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 203) is amended by adding at the end the 
following:
            ``(12) Pilot program for coverage of specialty crops and 
        uninsured commodities and livestock through whole farm revenue 
        insurance.--The Secretary shall carry out (directly or by 
        contract) a pilot program in a limited number of counties, as 
        determined by the Secretary, to determine the feasibility of 
        using whole farm revenue insurance to insure--
                    ``(A) specialty crops that are insured under this 
                title; and
                    ``(B) commodities and livestock that are not 
                insured under this title.''.

SEC. 205. OPTIONS PILOT PROGRAM FOR CATTLE AND HOG PRODUCERS.

    Section 191 of the Agricultural Market Transition Act (7 U.S.C. 
7331) is amended--
            (1) in the first sentence of subsection (a), by inserting 
        ``and cattle and hogs'' after ``under this title''; and
            (2) in subsection (c)(1), by inserting before the semicolon 
        the following: ``, except that this paragraph shall not apply 
        to a cattle or hog producer''.

SEC. 206. FUNDING FOR PILOT PROGRAMS.

    Section 516(b) of the Federal Crop Insurance Act (7 U.S.C. 1516(b)) 
is amended by adding at the end the following:
            ``(3) Pilot programs.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), from funds made available to carry 
                out this title, the Secretary shall use not more than 
                $50,000,000 for any fiscal year to carry out pilot 
                programs under this title.
                    ``(B)) Revenue insurance pilot program for hog and 
                cattle producers.--Subparagraph (A) shall not apply to 
                the revenue insurance pilot program for hog and cattle 
                producers carried out under section 508(a)(11).''.

                       TITLE III--ADMINISTRATION

SEC. 301. BOARD OF DIRECTORS OF CORPORATION.

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

SEC. 302. OFFICE OF RISK MANAGEMENT.

    Section 226A of the Department of Agriculture Reorganization Act of 
1994 (7 U.S.C. 6933) is amended--
            (1) by redesignating subsections (a) through (d) as 
        subsections (b) through (e), respectively;
            (2) by inserting after the section heading the following:
    ``(a) Definition of Specialty Crop.--In this section, the term 
`specialty crop' has the meaning given the term in section 502(b) of 
the Federal Crop Insurance Act (7 U.S.C. 1502(b)).'';
            (3) by striking subsection (b) (as so redesignated) and 
        inserting the following:
    ``(b) Establishment.--The Secretary shall establish and maintain in 
the Department an Office of Risk Management, which shall be under the 
direction of the Board of Directors of the Federal Crop Insurance 
Corporation.'';
            (4) in subsection (c) (as so redesignated)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) Assistance to the Board in developing, reviewing, and 
        recommending plans of insurance under section 508(a)(7) of the 
        Federal Crop Insurance Act (7 U.S.C. 1508(a)(7)) to ensure that 
        each agricultural commodity (including each new or specialty 
        crop) is adequately served by plans of insurance.'';
                    (B) in paragraph (3), by inserting before the 
                period at the end the following: ``, except that the 
                Office shall not impose a limitation on the quantity of 
                livestock that may be covered by any whole farm revenue 
                insurance pilot program conducted by the Office'';
                    (C) by redesignating paragraph (4) as paragraph 
                (5); and
                    (D) by inserting after paragraph (3) the following:
            ``(4) Administration of the research and development 
        programs of the Office (directly or by contract) for each of 
        the 2001 and subsequent crop years, including--
                    ``(A) as 1 of the 3 highest research and 
                development priorities of the Office, development of a 
                pasture, range, and forage program to promote land 
                stewardship; and
                    ``(B) the use of at least 50 percent of the funds 
                used by the Office for each fiscal year for research 
                and development programs on research and development 
                activities related to specialty crops, with at least 50 
                percent of the funds expended each fiscal year for the 
                activities by entering into contracts.''; and
            (5) by adding at the end the following:
    ``(f) Partnerships for Risk Management Development and 
Implementation.--
            ``(1) Purpose.--The purpose of this subsection is to 
        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 for each fiscal year not more than $20,000,000 of funds 
        made available under section 516(b)(2) of the Federal Crop 
        Insurance Act (7 U.S.C. 1516(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.''.

SEC. 303. OFFICE OF PRIVATE SECTOR PARTNERSHIP.

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

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

    ``(a) Establishment.--Not later than 90 days after the date of 
enactment of this section, the Secretary shall establish and maintain 
in the Department an Office of Private Sector Partnership, which shall 
be under the direction of the Board.
    ``(b) Functions.--The Office shall--
            ``(1) provide at least monthly reports to the Board on crop 
        insurance issues, which shall be based on comments received 
        from producers, approved insurance providers, and other sources 
        that the Office considers appropriate;
            ``(2)(A) review policies and materials with respect to--
                    ``(i) subsidized plans of insurance authorized 
                under section 508; and
                    ``(ii) unsubsidized plans of insurance submitted to 
                the Board under section 508(h); and
            ``(B) make recommendations to the Board with respect to 
        approval of the policies and materials, including 
        recommendations with respect to the disapproval of any policies 
        and materials that contain terms or conditions that promote 
        fraud;
            ``(3) make recommendations to the Board to encourage 
        cooperation between United States attorneys, the Corporation, 
        and approved insurance providers to minimize fraud in 
        connection with an insurance plan or policy under this title;
            ``(4) administer the reinsurance functions described in 
        section 508(k) on behalf of the Corporation;
            ``(5) review and make recommendations to the Board with 
        respect to methodologies for rating plans of insurance under 
        this title; and
            ``(6) perform such other functions as the Board considers 
        appropriate.
    ``(c) Administrator.--The Office shall be headed by an 
Administrator who shall be appointed by the Secretary.
    ``(d) Staff.--The Administrator shall appoint such employees 
pursuant to title 5, United States Code, as are necessary for the 
administration of the Office, including employees who have commercial 
reinsurance, actuarial, and specialty crop experience.''.
    (b) Funding.--Section 516 of the Federal Crop Insurance Act (7 
U.S.C. 1516) is amended--
            (1) in subsection (a)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(C) salaries and expenses of the Office of 
                Private Sector Partnership.''; and
            (2) in subsection (b)(1)--
                    (A) in subparagraph (B), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following:
                    ``(D) salaries and expenses of the Office of 
                Private Sector Partnership, but not to exceed 
                $5,000,000 for each fiscal year; and''.

SEC. 304. PENALTIES FOR FALSE INFORMATION.

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

SEC. 305. REGULATIONS.

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

SEC. 306. PROGRAM COMPLIANCE.

    Section 506(q) of the Federal Crop Insurance Act (7 U.S.C. 1506(q)) 
is amended--
            (1) by redesignating paragraph (2) as paragraph (6); and
            (2) by striking paragraph (1) and inserting the following:
            ``(1) In general.--Not later than 180 days after the date 
        of enactment of the Risk Management for the 21st Century Act, 
        the Corporation shall establish a program for monitoring 
        compliance with this title by all Federal crop insurance 
        participants, including producers, agents, adjusters, and 
        approved insurance providers.
            ``(2) Consultation.--The Corporation shall consult with 
        approved insurance providers in developing the compliance 
        program.
            ``(3) Oversight of loss adjustment.--As part of the 
        compliance program, the Corporation shall provide for a 
        mechanism to independently review the performance of loss 
        adjusters.
            ``(4) Program review.--Not later than 90 days after the 
        date of enactment of the Risk Management for the 21st Century 
        Act, the Corporation shall submit to the Board and the Office 
        of Private Sector Partnership for their review the proposed 
        compliance program under this subsection.
            ``(5) Annual reports.--Beginning with fiscal year 2001, the 
        Corporation shall submit an annual report to the Committee on 
        Agriculture of the House of Representatives, the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate, the Board, 
        and the Office of Private Sector Partnership concerning the 
        compliance program established under this subsection, including 
        any recommendations for legislative or administrative changes 
        that could further improve program compliance.''.

SEC. 307. SPECIALTY CROPS.

    (a) In General.--Section 507(g) of the Federal Crop Insurance Act 
(7 U.S.C. 1507(g)) (as amended by section 201) is amended by adding at 
the end the following:
            ``(5) Research and other assistance for new or revised crop 
        insurance policies 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 Crops Coordinator may--
                    ``(A) make grants on a competitive basis for the 
                research and development of insurance policies for 
                underserved specialty crops;
                    ``(B) reimburse research costs associated with 
                product development;
                    ``(C) enter into contracts for the research and 
                development of insurance policies for underserved 
                specialty crops; and
                    ``(D) enter into contracts and reimburse costs 
                associated with the reassessment and reformatting of 
                existing insurance policies for specialty crops.
            ``(6) Time periods for purchase of coverage for specialty 
        crops.--
                    ``(A) Sales closing date.--Subject to subparagraph 
                (B), 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 Crops 
                Coordinator.
                    ``(B) 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 shall delay the release and 
                offering of the product until the following crop year.
                    ``(C) 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.''.
    (b) Study of New Specialty Crop Insurance Policies.--
            (1) In general.--The Federal Crop Insurance Corporation and 
        the Specialty Crops Coordinator shall jointly study the 
        feasibility of developing new insurance policies for specialty 
        crops, including policies 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 Act.
            (2) Submission of results.--Not later than 1 year after the 
        date of enactment of this Act, the Corporation and the 
        Specialty Crops Coordinator shall submit to Congress a report 
        containing the results of the study required by this 
        subsection.

SEC. 308. ADEQUATE COVERAGE FOR AGRICULTURAL COMMODITIES.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 204) is amended by adding at the end the 
following:
            ``(13) Adequate coverage for agricultural commodities.--
                    ``(A) Review.--The Board shall review the plans of 
                insurance that are offered by approved insurance 
                providers under this Act to determine if each 
                agricultural commodity (including each new or specialty 
                crop) is adequately served by the plans.
                    ``(B) Recommendations.--If the Board determines 
                that an agricultural commodity (including a new or 
                specialty crop) is not adequately served by the plans, 
                the Board may recommend to the Office of Risk 
                Management that the Office--
                            ``(i) develop or (through the Corporation) 
                        contract to develop plans of insurance for the 
                        agricultural commodity; and
                            ``(ii) provide the plans to approved 
                        insurance providers, to be offered for sale to 
                        producers.
                    ``(C) Participation percentages.--
                            ``(i) In general.--The Secretary shall 
                        annually review the participation percentage of 
                        eligible acreage insured under this Act with 
                        respect to each State and county and with 
                        respect to each agricultural commodity.
                            ``(ii) Determination.--If the Secretary 
                        determines that the participation percentage in 
                        a State or county for an agricultural commodity 
                        is more than 75 percent below the aggregate 
                        national average participation percentage for 
                        the agricultural commodity, and the Secretary 
                        determines that there is no acceptable reason 
                        for the disparity, the Secretary shall 
                        implement program changes necessary to adjust 
                        the participation percentage in the State or 
                        county to not less than 75 percent below the 
                        national average.
                            ``(iii) Authority.--The Secretary shall 
                        carry out this subparagraph without regard to 
                        any other provision of law.''.

SEC. 309. LIMITATION ON DOUBLE INSURANCE.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 308) is amended by adding at the end the 
following:
            ``(14) Limitation on double insurance.--The Corporation may 
        offer plans of insurance or reinsurance for only 1 agricultural 
        commodity on specific acreage during a crop year, unless--
                    ``(A) there is an established practice of double-
                cropping in an area, as determined by the Corporation;
                    ``(B) the additional plan of insurance is offered 
                with respect to an agricultural commodity that is 
                customarily double-cropped in the area; and
                    ``(C) the producer has a history of double cropping 
                or the acreage has historically been double-cropped.''.

SEC. 310. CONSULTATION WITH STATE COMMITTEES OF FARM SERVICE AGENCY.

    Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) 
(as amended by section 309) is amended by adding at the end the 
following:
            ``(15) Consultation with state committees of farm service 
        agency.--The Corporation shall establish a mechanism under 
        which State committees of the Farm Service Agency are consulted 
        concerning policies of insurance offered in a State under this 
        title.''.

SEC. 311. FEES FOR PLANS OF INSURANCE.

    (a) In General.--Section 508(h)(5) of the Federal Crop Insurance 
Act (7 U.S.C. 1508(h)(5))) is amended--
            (1) by striking ``Any policy'' and inserting the following:
                    ``(A) In general.--Any policy''; and
            (2) by adding at the end the following:
                    ``(B) Fees for existing plans of insurance.--
                            ``(i) In general.--Effective beginning with 
                        the 2000 reinsurance year, if an approved 
                        insurance provider elects to sell a plan of 
                        insurance that was developed by another 
                        approved insurance provider and the plan of 
                        insurance was approved by the Board before 
                        January 1, 1999, the approved insurance 
                        provider that developed the plan of insurance 
                        shall have the right to receive a fee from the 
                        approved insurance provider that elects to sell 
                        the plan of insurance.
                            ``(ii) Amount.--The amount of the fee that 
                        is payable by an approved insurance provider 
                        for a plan of insurance under clause (i) shall 
                        be--
                                    ``(I) for each of the first 5 crop 
                                years that the plan is sold, $2.00 for 
                                each policy under the plan that is sold 
                                by the approved insurance provider;
                                    ``(II) for each of the next 3 crop 
                                years that the plan is sold, $1.00 for 
                                each policy under the plan that is sold 
                                by the approved insurance provider; and
                                    ``(III) for each crop year 
                                thereafter that the plan is sold, 50 
                                cents for each policy under the plan 
                                that is sold by the approved insurance 
                                provider.
                    ``(C) Fees for new plans of insurance.--
                            ``(i) In general.--Effective beginning with 
                        the 2000 reinsurance year, if an approved 
                        insurance provider elects to sell a plan of 
                        insurance that was developed by another 
                        approved insurance provider, the plan of 
                        insurance was approved by the Board on or after 
                        January 1, 1999, and the plan of insurance was 
                        not available at the time the plan of insurance 
                        was approved by the Board, the approved 
                        insurance provider that developed the plan of 
                        insurance shall have the right to receive a fee 
                        from the approved insurance provider that 
                        elects to sell the plan of insurance.
                            ``(ii) Amount.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the amount of the fee 
                                that is payable by an approved 
                                insurance provider for a plan of 
                                insurance under clause (i) shall be an 
                                amount that is--
                                            ``(aa) determined by the 
                                        approved insurance provider 
                                        that developed the plan; and
                                            ``(bb) approved by the 
                                        Board.
                                    ``(II) Approval.--The Board shall 
                                not approve the amount of a fee under 
                                clause (i) if the amount of the fee 
                                unnecessarily inhibits the use of the 
                                plan of insurance, as determined by the 
                                Board.
                    ``(D) Payments.--The Corporation shall annually--
                            ``(i) collect from an approved insurance 
                        provider the amount of any fees that are 
                        payable by the approved insurance provider 
                        under subparagraphs (B) and (C); and
                            ``(ii) credit any fees that are payable to 
                        an approved insurance provider under 
                        subparagraphs (B) and (C).
                    ``(E) Exceptions.--In the case of a policy 
                developed by an approved insurance provider that does 
                not conduct business in a State--
                            ``(i) the approved policy may be marketed 
                        in the State by another approved insurance 
                        provider if the approved insurance provider 
                        marketing the policy pays any fee for marketing 
                        the policy imposed by the developing provider; 
                        and
                            ``(ii) the developing provider shall not 
                        deny payment of a fee by another provider to 
                        maintain full marketing rights of the approved 
                        policy.''.
    (b) Funding.--Section 516 of the Federal Crop Insurance Act (7 
U.S.C. 1516) (as amended by section 303(b)(2)) is amended--
            (1) in subsection (b)(1), by adding at the end the 
        following:
                    ``(E) payment of fees in accordance with section 
                508(h)(5)(C).''; and
            (2) in subsection (c)(1), by inserting ``and fees'' after 
        ``premium income''.

SEC. 312. REINSURANCE AGREEMENTS.

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

                        TITLE IV--MISCELLANEOUS

SEC. 401. DEFINITIONS.

    Section 502(b) of the Federal Crop Insurance Act (7 U.S.C. 1502(b)) 
is amended--
            (1) by redesignating paragraphs (7) and (8) as paragraphs 
        (8) and (10), respectively;
            (2) by inserting after paragraph (6) the following:
            ``(7) 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).''; and
            (3) by inserting after paragraph (8) (as so redesignated) 
        the following:
            ``(9) 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.''.

SEC. 402. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this Act and 
the amendments made by this Act take effect on the date of enactment of 
this Act.
    (b) Exceptions.--The amendments made by sections 101, 103, 105, 
106, 108, 109, 201, 202, 203, 204, 205, 206, 302(f), and 307 take 
effect on October 1, 2000.
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