[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 629 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 629

  To amend the Federal Crop Insurance Act and the Agricultural Market 
  Transition Act to provide a safety net to producers through cost of 
   production crop insurance coverage, to improve procedures used to 
  determine yields for crop insurance, to improve the noninsured crop 
              assistance program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 16, 1999

 Mr. Baucus (for himself and Mr. Craig) 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 and the Agricultural Market 
  Transition Act to provide a safety net to producers through cost of 
   production crop insurance coverage, to improve procedures used to 
  determine yields for crop insurance, to improve the noninsured crop 
              assistance program, and for other purposes.

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

SECTION. 1. SHORT TITLE.

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

SEC. 2. COST OF PRODUCTION INSURANCE COVERAGE.

    Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) is 
amended--
            (1) in subsection (c), by striking paragraph (5) and 
        inserting the following:
            ``(5) Expected market price.--
                    ``(A) In general.--For the purposes of this title, 
                the Corporation shall establish or approve the price 
                level (referred to in this title as the `expected 
                market price') of each agricultural commodity for which 
                insurance is offered.
                    ``(B) Amount.--The expected market price of an 
                agricultural commodity--
                            ``(i) except as otherwise provided in this 
                        subparagraph, shall be not less than the 
                        projected market price of the agricultural 
                        commodity, as determined by the Corporation;
                            ``(ii) may be based on the actual market 
                        price of the agricultural commodity at the time 
                        of harvest, as determined by the Corporation; 
                        or
                            ``(iii) in the case of cost of production 
                        or similar plans of insurance, shall be the 
                        projected cost of producing the agricultural 
                        commodity, as determined by the Corporation.''; 
                        and
            (2) in subsection (h), by striking paragraph (6) and 
        inserting the following:
            ``(6) Cost of production insurance coverage.--
                    ``(A) In general.--The Corporation shall offer a 
                cost of production plan of insurance that--
                            ``(i) allows producers to select a dollar 
                        amount of coverage per acre of an agricultural 
                        commodity for each production area described in 
                        subparagraph (B) designated by the Corporation; 
                        and
                            ``(ii) is based on the actual or expected 
                        cost of producing the agricultural commodity.
                    ``(B) Size of production area.--For the purposes of 
                this paragraph, a production area shall be determined 
                based on the similar characteristics of the acreage and 
                the use of similar farming practices to produce the 
                agricultural commodity and shall not be limited by the 
                boundaries of a county.
                    ``(C) Consultation with state committees.--Prior to 
                designating a production area described in subparagraph 
                (B), the Corporation shall consult with the appropriate 
                State committee.
                    ``(D) Amount of coverage.--Notwithstanding 
                subsection (c)(4), the dollar amount of coverage per 
                acre of an agricultural commodity shall not exceed 90 
                percent of the cost of production of the agricultural 
                commodity, as determined by the Corporation, in the 
                production area described in subparagraph (B).''.

SEC. 3. YIELD DETERMINATIONS.

    Section 508(g)(2) of the Federal Crop Insurance Act (7 U.S.C. 
1508(g)(2)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``Subject to subparagraph (B),'' 
                and inserting the following:
                            ``(i) In general.--Subject to clause (ii) 
                        and subparagraph (B),'';
                    (B) by adding at the end the following:
                            ``(ii) Rotation practices.--
                                    ``(I) Definition of a producer that 
                                has suffered a loss due to a natural 
                                disaster.--In this clause, the term `a 
                                producer that has suffered a loss due 
                                to a natural disaster' means a producer 
                                that has suffered a loss due to a 
                                natural disaster with respect to a crop 
                                that has resulted in a substantial 
                                reduction in the producer's actual 
                                production history with respect to the 
                                crop, as determined by the Corporation.
                                    ``(II) Yield based on actual 
                                production history.--Subject to 
                                subparagraph (B), in the case of a 
                                producer that has adopted an acceptable 
                                rotation practice, involving 3 or more 
                                agricultural commodities, the yield for 
                                a crop shall be based on the actual 
                                production history for the crop for the 
                                3 preceding crop years during which the 
                                crop was produced on the farm building 
                                up to a production data base of 10 crop 
                                years for which the actual production 
                                history is established.
                                    ``(III) Natural disasters.--For the 
                                purposes of calculating the actual 
                                production history of an agricultural 
                                commodity under this clause, a producer 
                                that has suffered a loss due to a 
                                natural disaster with respect to the 
                                crop may exclude 1 year of production 
                                history for each 4 years of production 
                                history for the crop for which the 
                                producer has purchased crop 
                                insurance.''; and
            (2) in subparagraph (B)--
                    (A) by striking ``assigned a yield'' and inserting 
                ``assigned--
                            ``(i) a yield'';
                    (B) by striking the period at the end and inserting 
                ``; or''; and
                    (C) 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 previously farmed by the 
                                producer; and
                                    ``(III) a producer that rotates a 
                                crop produced on a farm to a crop that 
                                has not been previously produced on the 
                                farm.''.

SEC. 4. NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

    (a) Operation and Administration of Program.--Section 196(a) of the 
Agricultural Market Transition Act (7 U.S.C. 7333(a)) is amended--
            (1) in the first sentence of paragraph (1), by striking 
        ``to provide coverage'' and all that follows through ``Federal 
        Crop Insurance Act (7 U.S.C. 1508(b))''; and
            (2) in paragraph (2), 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, 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(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.''.
    (d) Payments.--Section 196(d)(2)(B) of the Agricultural Market 
Transition Act (7 U.S.C. 7333(d)(2)(B)) is amended by striking ``55 
percent of the average market price for the crop'' and inserting ``100 
percent of the average market price for the crop''.
    (e) Yield Determinations.--Section 196 of the Agricultural Market 
Transition Act (7 U.S.C. 7333) is amended by striking subsection (e) 
and inserting the following:
    ``(e) Yield Determinations.--
            ``(1) Establishment.--The Secretary shall establish farm 
        yields for the purposes of providing noninsured crop disaster 
        assistance under this section.
            ``(2) Actual yields.--Subject to paragraph (3), the 
        Secretary shall determine yields for an eligible crop on the 
        basis of the quantity of production per acre for the crop for 
        the farm for each of the 5 crop years for which the crop was 
        planted immediately preceding the crop year, excluding--
                    ``(A) the crop year with the highest yield per acre 
                on the farm; and
                    ``(B) the crop year with the lowest yield per acre 
                on the farm.
            ``(3) State or county yields.--If insufficient records 
        exist, as determined by the Secretary, to determine the actual 
        yield pursuant to paragraph (2), the Secretary may establish a 
        per acre yield based on State or county yields for an eligible 
        crop on the basis of--
                    ``(A) historical yields, as adjusted by the 
                Secretary to correct for abnormal factors affecting the 
                yields in the historical period; or
                    ``(B) the Secretary's estimate of actual yields for 
                the crop year involved if historical yield data are not 
                available.''.
    (f) 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.''.
    (g) Service Fee.--Section 196 of the Agricultural Market Transition 
Act (7 U.S.C. 7333) (as amended by subsection (f)) is amended by 
inserting after subsection (j) the following:
    ``(k) Service Fee.--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 of $50 for each eligible crop.''.
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