I 112th CONGRESS 1st Session H. R. 3107 IN THE HOUSE OF REPRESENTATIVES October 5, 2011 Mr. Neugebauer introduced the following bill; which was referred to the Committee on Agriculture A BILL To amend the Federal Crop Insurance Act to provide producers with the opportunity to purchase crop insurance coverage based on both an individual yield and loss basis and an area yield and loss basis in order to allow producers to cover all or a portion of their deductible under the individual yield and loss policy, to improve the accuracy of actual production history determinations, and for other purposes.
1.
Short title
This Act may be cited as the Crop Risk Options Plan Act of 2011.
2.
Total coverage option for crop insurance based on both an individual yield and loss basis and an area yield and loss basis
(a)
Availability of total coverage option
Section 508(c) of the Federal Crop Insurance Act (7 U.S.C. 1508(c)) is amended by striking paragraph (3) and inserting the following new paragraph: (3)
Yield and loss basis options
A producer shall have the option of purchasing additional coverage based on— (A)
Individual yield and loss basis
A producer shall have the option of purchasing additional coverage based on an individual yield and loss basis. (B)
Area yield and loss basis
If area coverage is offered by the Corporation in an area, a producer shall have the option of purchasing additional coverage based on an area yield and loss basis instead of an individual yield and loss basis. (C)
Total coverage option
If area coverage is offered by the Corporation in an area, a producer shall have the option of purchasing additional coverage based on an individual yield and loss basis, supplemented with coverage based on an area yield and loss basis to cover all or a portion of the deductible under the individual yield and loss policy. . (b)
Level of coverage
Section 508(c) of the Federal Crop Insurance Act (7 U.S.C. 1508(c)) is amended by striking paragraph (4) and inserting the following new paragraph: (4)
Level of coverage
(A)
Dollar denomination and percentage of yield
Except as provided in subparagraph (C), the level of coverage shall be dollar denominated and may be purchased at any level not to exceed 85 percent of the individual yield or 95 percent of the area yield (as determined by the Corporation). (B)
Information
The Corporation shall provide producers with information on catastrophic risk and additional coverage in terms of dollar coverage (within the allowable limits of coverage provided in this paragraph). (C)
Total coverage option
(i)
In general
Notwithstanding subparagraph (A), in the case of the total coverage option described in paragraph (3)(C), the Corporation shall offer producers the opportunity to purchase coverage in combination with a policy or plan of insurance offered under this Act that would allow indemnities to be paid to a producer equal to some or all of the deductible under such policy or plan of insurance, if sufficient area data is available (as determined by the Corporation). (ii)
Trigger
The coverage described in paragraph (3)(C) and clause (i) would be triggered only if the losses in the area exceed 10 percent of normal levels (as determined by the Corporation). (iii)
Limitation
Indemnities paid under the coverage described in paragraph (3)(C) and clause (i) cannot exceed the amount of the deductible applicable under the underlying policy or plan of insurance. . (c)
Premium
Section 508(d)(2)(B) of the Federal Crop Insurance Act (7 U.S.C. 1508(d)(2)(B)) is amended by inserting after not based on individual yield the following: or that combines an individual yield and loss basis and an area yield and loss basis. (d)
Payment of Portion of Premium by Corporation
Section 508(e)(2) of the Federal Crop Insurance Act (7 U.S.C. 1508(e)(2)) is amended by adding at the end the following new subparagraph: (H)In the case of the total coverage option described in subsection (c)(3)(C), the amount shall be equal to not less than 60 percent of the additional premium associated with this coverage. . (e)
Effective date
The Federal Crop Insurance Corporation shall begin to provide additional coverage based on an individual yield and loss basis, supplemented with coverage based on an area yield and loss basis, not later than one year after the date of the enactment of this Act.
3.
Determination of actual production history
(a)
Use of seven-Year olympic average
Section 508(g)(2)(A) of the Federal Crop Insurance Act (7 U.S.C. 1508(g)(2)(A)) is amended by striking 10 consecutive crop years and inserting 7 consecutive crop years (excluding the year in which the actual production history is greatest and the year in which the actual production history is lowest). (b)
Data sources
Section 508(g)(2) of the Federal Crop Insurance Act (7 U.S.C. 1508(g)(2)) is amended by adding at the end the following new subparagraph: (E)
Sources of yield data
To determine yields under this paragraph, the Corporation shall use data collected by the Risk Management Agency or the National Agricultural Statistics Service, or both. .