[Congressional Record Volume 140, Number 124 (Thursday, August 25, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 25, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                   FEDERAL CROP INSURANCE REFORM ACT

  Mr. FORD. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of calendar No. 507, S. 2095, 
the Federal Crop Insurance Reform Act of 1994.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill will be stated by title.
  The bill clerk read as follows:

A bill (S. 2095) to reform the Federal crop insurance program, and for 
                             other purposes

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on Agriculture, Nutrition 
and Forestry, with an amendment to strike out all after the enacting 
clause and inserting in lieu thereof the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS; REFERENCES.

       (a) Short Title.--This Act may be cited as the ``Federal 
     Crop Insurance Reform Act of 1994''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents; references.

      TITLE I--CATASTROPHIC RISK AND ADDITIONAL COVERAGE INSURANCE

Sec. 101. Authority to offer insurance.
Sec. 102. Catastrophic risk protection.
Sec. 103. General coverage levels.
Sec. 104. Premiums.
Sec. 105. Eligibility.
Sec. 106. Yield determinations.
Sec. 107. Insurance policies.
Sec. 108. Claims for losses.
Sec. 109. Reinsurance.
Sec. 110. Funding.
Sec. 111. Advisory Committee for Federal Crop Insurance.
Sec. 112. Management of Corporation.

                TITLE II--NONINSURED ASSISTANCE PROGRAM

Sec. 201. Noninsured assistance program.
Sec. 202. Payment and income limitations.

                        TITLE III--MISCELLANEOUS

Sec. 301. Ineligibility for catastrophic risk and noninsured assistance 
              payments.
Sec. 302. Prevented planting.
Sec. 303. Conforming amendments.
Sec. 304. Effective dates.
Sec. 305. Termination of authority.
       (c) References to Federal Crop Insurance Act.--Except as 
     otherwise expressly provided, whenever in this Act an 
     amendment or repeal is expressed in terms of an amendment to, 
     or repeal of, a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of the Federal Crop Insurance Act (7 U.S.C. 1501 et 
     seq.).
      TITLE I--CATASTROPHIC RISK AND ADDITIONAL COVERAGE INSURANCE

     SEC. 101. AUTHORITY TO OFFER INSURANCE.

       Section 508 (7 U.S.C. 1508) is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Authority to Offer Insurance.--
       ``(1) In general.--If sufficient actuarial data are 
     available (as determined by the Corporation), the Corporation 
     may insure, or provide reinsurance for insurers of, producers 
     of agricultural commodities grown in the United States under 
     1 or more plans of insurance determined by the Corporation to 
     be adapted to the agricultural commodity concerned. To 
     qualify for coverage under a plan of insurance, the losses of 
     the insured commodity shall be due to drought, flood, or 
     other natural disaster (as determined by the Secretary).
       ``(2) Period.--Except in the cases of tobacco and potatoes, 
     insurance shall not extend beyond the period during which the 
     insured commodity is in the field. As used in the preceding 
     sentence, in the case of aquacultural species, the term 
     `field' means the environment in which the commodity is 
     produced.
       ``(3) Exclusions.--Insurance provided under this subsection 
     shall not cover losses due to--
       ``(A) the neglect or malfeasance of the producer;
       ``(B) the failure of the producer to reseed to the same 
     crop in such areas and under such circumstances as it is 
     customary to so reseed; or
       ``(C) the failure of the producer to follow good farming 
     practices (as determined by the Secretary).'';
       (2) by striking subsections (c), (e), (g), (l), and (n); 
     and
       (3) by redesignating subsections (b), (d), (f), (h), (i), 
     (j), (k), and (m) as subsections (g) through (n), 
     respectively.

     SEC. 102. CATASTROPHIC RISK PROTECTION.

       Section 508 (7 U.S.C. 1508) (as amended by section 101) is 
     further amended by inserting after subsection (a) the 
     following new subsection:
       ``(b) Catastrophic Risk Protection.--
       ``(1) In general.--The Corporation shall offer a 
     catastrophic risk protection plan to indemnify producers for 
     crop loss due to loss of yield or prevented planting when the 
     producer is unable, because of drought, flood, or other 
     natural disaster (as determined by the Secretary), to plant 
     crops for harvest on the acreage for that crop year.
       ``(2) Amount of coverage.--Catastrophic risk protection 
     shall offer a producer 50 percent loss in yield coverage, on 
     an individual yield or area yield basis, indemnified at 60 
     percent of the expected market price, or a comparable 
     coverage (as determined by the Corporation).
       ``(3) Payment.--A catastrophic risk payment may reflect a 
     reduction that is proportionate to the lack of out-of-pocket 
     expenses associated with the failure to plant, grow, or 
     harvest the crop, as determined by the Corporation.
       ``(4) Yield and loss basis.--A producer shall have the 
     option of basing the catastrophic coverage of the producer on 
     an individual yield and loss basis or on an area yield and 
     loss basis, if both options are offered by the Corporation.
       ``(5) Sale of catastrophic risk coverage.--
       ``(A) In general.--Catastrophic risk coverage may be 
     offered by--
       ``(i) private insurance providers, if available in an area; 
     and
       ``(ii) at the option of the Secretary that is based on 
     considerations of need, local offices of the United States 
     Department of Agriculture (referred to in this title as the 
     `Department').
       ``(B) Need.--For purposes of considering need under 
     subparagraph (A)(ii), the Secretary may take into account the 
     most efficient and cost-effective use of resources, the 
     availability of personnel, fairness to local producers, the 
     needs and convenience of local producers, and the 
     availability of private insurance carriers.
       ``(6) Administrative fee.--
       ``(A) In general.--As a condition of catastrophic risk 
     protection, a producer shall pay an administrative fee. The 
     administrative fee shall be $50 per crop per county, but not 
     to exceed $100 per producer per county. The administrative 
     fee shall be paid at the service point, at the local office 
     of the Department, or to the approved insurance provider, at 
     the time of application.
       ``(B) Fee waivers.--The administrative fee shall be 
     waived--
       ``(i) for farmers of limited resources (as defined by the 
     Corporation); or
       ``(ii) if the producer elects to purchase additional 
     protection at 65 percent or more of the recorded or appraised 
     average yield and 100 percent of the expected market price, 
     or an equivalent coverage, offered by an approved insurance 
     provider.
       ``(C) Use of fees collected.--Funds collected as 
     administrative fees shall be retained by the Department or 
     the approved insurance provider for operating and 
     administrative expenses for the delivery of catastrophic risk 
     protection policies.
       ``(7) Participation requirement.--A producer may obtain 
     catastrophic risk coverage for a crop of the producer on land 
     in the county only if the producer obtains such coverage for 
     the crop on all insurable land of the producer in that 
     county.
       ``(8) Eligibility for department programs.--
       ``(A) In general.--To be eligible for any price support or 
     production adjustment program or any benefit described in 
     section 371 of the Consolidated Farm and Rural Development 
     Act, the producer must obtain at least the catastrophic level 
     of insurance for each crop of economic significance grown on 
     each farm in the county in which the producer has an 
     interest, if insurance is available in the county for the 
     crop.
       ``(B) Definition of crop of economic significance.--As used 
     in this paragraph, the term `crop of economic significance' 
     means a crop that has contributed, or is expected to 
     contribute, 10 percent or more of the total expected value of 
     all crops grown by the producer.
       ``(9) Limitation due to risk.--The Corporation may limit 
     catastrophic risk coverage in any county or area, or on any 
     farm, on the basis of the insurance risk concerned.
       ``(10) Simplification.--
       ``(A) Catastrophic risk protection plans.--In developing 
     and carrying out the policies and procedures for a 
     catastrophic risk protection plan under this title, the 
     Corporation shall, to the maximum extent practicable, 
     minimize the paperwork required and the complexity and costs 
     of procedures governing applications for, processing, and 
     servicing of the plan for all parties involved.
       ``(B) Other plans.--To the extent that the policies and 
     procedures developed under subparagraph (A) may be applied to 
     other plans of insurance offered under this title without 
     jeopardizing the actuarial soundness or integrity of the crop 
     insurance program, the Corporation shall apply the policies 
     and procedures to the other plans of insurance within a 
     reasonable period of time (as determined by the Corporation) 
     after the effective date of this paragraph.''.

     SEC. 103. GENERAL COVERAGE LEVELS.

       Section 508 (7 U.S.C. 1508) (as amended by section 102) is 
     further amended by inserting after subsection (b) the 
     following new subsection:
       ``(c) General Coverage Levels.--
       ``(1) In general.--The Corporation shall offer plans of 
     insurance that provide levels of coverage that are greater 
     than the level available under catastrophic risk protection 
     under subsection (b). A producer may purchase such a plan 
     only from an approved insurance provider, if the private 
     insurance is available. Nothing in this paragraph restricts 
     the Corporation from offering insurance plans if coverage 
     from private insurance providers is unavailable.
       ``(2) Transfer of insurance files.--If a producer has 
     already applied for catastrophic risk protection at the local 
     office of the Department and elects to purchase additional 
     coverage, the insurance file for the crop of the producer 
     shall be transferred to the approved insurance provider 
     servicing the additional coverage crop policy.
       ``(3) Yield and loss basis.--A producer shall have the 
     option of purchasing additional coverage based on an 
     individual yield and loss basis or on an area yield and loss 
     basis, if both options are offered by the Corporation.
       ``(4) Level of coverage.--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). By the 
     beginning of the 1996 crop year, 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).
       ``(5) Price level.--The Corporation shall establish a price 
     level for each commodity on which insurance is offered that--
       ``(A) shall not be less than the projected market price for 
     the commodity (as determined by the Corporation); or
       ``(B) at the discretion of the Corporation, may be based on 
     the actual market price at the time of harvest (as determined 
     by the Corporation).
       ``(6) Price elections.--
       ``(A) In general.--Subject to subparagraph (B), insurance 
     coverage shall be made available to the producer on the basis 
     of any price election that equals or is less than the price 
     election established by the Corporation. The coverage shall 
     be quoted in terms of dollars per acre.
       ``(B) Minimum price elections.--The Corporation may 
     establish minimum price elections below which levels of 
     insurance shall not be offered.
       ``(C) Wheat varieties.--The Corporation shall, over a 
     period of time as determined practicable by the Corporation, 
     offer producers different price elections for varieties of 
     wheat, in addition to the standard price election, that 
     reflect different market prices, as determined by the 
     Corporation. The Corporation shall offer additional coverage 
     for each variety determined under this subparagraph and 
     charge a premium for each variety that is actuarially sound.
       ``(7) Substitute coverage for fire and hail.--
       ``(A) In general.--For levels of coverage 65 percent or 
     more of the recorded or appraised average yield and 100 
     percent of the expected market price, or an equivalent 
     coverage, the producer may elect to delete from the insurance 
     coverage provided under this title coverage against damage 
     caused by fire or hail, if an equivalent or greater dollar 
     amount of coverage for damage caused by fire or hail is 
     obtained from a private fire or hail insurance provider.
       ``(B) Credit for substitute coverage.--On written notice of 
     an election under subparagraph (A) to the company issuing the 
     policy providing coverage under this title and submission of 
     evidence of substitute coverage on the commodity insured, the 
     premium of the producer shall be reduced by an amount 
     determined by the Corporation to be actuarially appropriate, 
     taking into account the actuarial value of the remaining 
     coverage provided by the Corporation. The producer shall not 
     be given a reduction for an amount of premium determined to 
     be greater than the actuarial value of the protection against 
     losses caused by fire or hail that is included in the 
     coverage under this title for the crop.
       ``(8) State premium subsidies.--The Corporation may enter 
     into agreements with any State or agency of a State under 
     which the State or agency may pay to the approved insurance 
     provider an additional premium subsidy to further reduce the 
     portion of the premium paid by the producers in the State.
       ``(9) Limitation due to risk.--The Corporation may limit or 
     refuse insurance in any county or area, or on any farm, on 
     the basis of the insurance risk concerned.
       ``(10) Administrative fee.--
       ``(A) In general.--As a condition of coverage that is in 
     addition to catastrophic risk protection but less than 65 
     percent of the recorded or appraised average yield and 100 
     percent of the expected market price, or an equivalent 
     coverage, a producer shall pay an administrative fee. The 
     administrative fee shall be $50 per crop per county, but not 
     to exceed $100 per producer per county. The administrative 
     fee shall be paid to the approved insurance provider or the 
     Department, as applicable, at the time of application.
       ``(B) Fee waivers.--The administrative fee shall be 
     waived--
       ``(i) for farmers of limited resources (as defined by the 
     Corporation); or
       ``(ii) if the producer elects to purchase additional 
     protection at 65 percent or more of the recorded or appraised 
     average yield and 100 percent of the expected market price, 
     or an equivalent coverage, offered by an approved insurance 
     provider.
       ``(C) Use of fees collected.--Funds collected as 
     administrative fees shall be retained by the approved 
     insurance provider or the Department, as applicable, for 
     operating and administrative expenses.''.

     SEC. 104. PREMIUMS.

       Section 508 (7 U.S.C. 1508) (as amended by section 103) is 
     further amended by inserting after subsection (c) the 
     following new subsection:
       ``(d) Premiums.--
       ``(1) Levels.--
       ``(A) Catastrophic risk protection.--For catastrophic risk 
     protection coverage, the amount of premium shall be 
     sufficient to cover anticipated losses and a reasonable 
     reserve.
       ``(B) Additional coverage.--For levels of coverage below 65 
     percent of the recorded or appraised average yield and 100 
     percent of the expected market price, or an equivalent 
     coverage, but greater than catastrophic risk protection 
     coverage, the amount of premium shall be sufficient to cover 
     anticipated losses, a reasonable reserve, and an amount for 
     operating and administrative expenses (as determined by the 
     Corporation) that is less than the amount established for 
     coverage at 65 percent of the recorded or appraised average 
     yield and 100 percent of the expected market price, or an 
     equivalent coverage.
       ``(C) High coverage.--For levels of coverage of at least 65 
     percent of the recorded or appraised average yield and 100 
     percent of the expected market price, or an equivalent 
     coverage, the amount of premium shall be sufficient to cover 
     anticipated losses, a reasonable reserve, and an amount to 
     pay the operating and administrative expenses (as determined 
     by the Corporation) on an industry-wide basis as a percentage 
     of the total premium.
       ``(2) Payment of part of premium.--For the purpose of 
     encouraging the broadest possible participation, the 
     Corporation shall pay a part of the premium equivalent to--
       ``(A) for catastrophic risk protection coverage, an amount 
     equal to the premium established under paragraph (1)(A);
       ``(B) for levels of coverage below 65 percent of the 
     recorded and appraised average yield and 100 percent of the 
     expected market price, or an equivalent coverage, but greater 
     than catastrophic risk protection, an amount equal to the sum 
     of the amount of premium established for catastrophic risk 
     protection coverage and the amount for operating and 
     administrative expenses established under paragraph (1)(B); 
     and
       ``(C) for levels of coverage at or greater than 65 percent 
     of the recorded and appraised yield and 100 percent of the 
     expected market price, or an equivalent coverage, on an 
     individual or area basis, an amount equal to the sum of--
       ``(i) the premium established for--

       ``(I) in the case of each of the 1995 and 1996 crop years, 
     50 percent loss in yield indemnified at 80 percent of the 
     expected market price;
       ``(II) in the case of the 1997 crop year, 50 percent loss 
     in yield indemnified at 77.5 percent of the expected market 
     price; and
       ``(III) in the case of the 1998 and each subsequent crop 
     year, 50 percent loss in yield indemnified at 75 percent of 
     the expected market price; and

       ``(ii) the amount for operating and administrative expenses 
     established under paragraph (1)(C).
       ``(3) Reductions by private providers.--If a private 
     insurance provider determines that the provider may provide 
     insurance more efficiently than the expense reimbursement 
     amount set by the Corporation, the private insurance provider 
     may, with the approval of the Corporation, reduce the premium 
     charged the insured by the amount of the efficiency. A 
     reduction pursuant to the preceding sentence shall be subject 
     to such rules, limitations, and procedures as are established 
     by the Corporation.
       ``(4) Individual and area crop insurance coverage.--
       ``(A) In general.--The Corporation shall allow an approved 
     insurance provider to offer a producer a plan of insurance 
     that provides a level of coverage that is greater than that 
     provided under catastrophic risk protection at a premium rate 
     determined by the provider if the provider agrees to bear 
     (depending on the type of coverage involved) portions of the 
     underwriting risk, and operating and administrative expenses, 
     that result from the additional level of coverage.
       ``(B) Combined coverages.--To provide the additional level 
     of coverage to an insured producer under subparagraph (A), a 
     provider may combine--
       ``(i) individual crop insurance coverage; and
       ``(ii) area crop insurance coverage provided by the 
     Corporation through the provider to the producer that is 
     based on area yields in a manner that allows the producer to 
     qualify for an indemnity if a loss has occurred in a 
     specified area (as defined by the Corporation) in which the 
     farm of the producer is located.
       ``(C) Indemnity.--If a producer qualifies for an indemnity 
     under an area crop insurance policy described in subparagraph 
     (B)(ii), the Corporation shall provide to--
       ``(i) the provider, an amount that is the lesser of--

       ``(I) the indemnity under the individual crop insurance 
     coverage; or
       ``(II) the indemnity under the area crop insurance 
     coverage; and

       ``(ii) the producer, the remainder of the indemnity.
       ``(D) Subsidy.--If a provider combines individual crop 
     insurance coverage and area crop insurance coverage under 
     subparagraph (B), the Corporation shall pay a part of the 
     premium equivalent to--
       ``(i) for individual crop insurance coverage, an amount 
     equal to the premium established for catastrophic risk 
     protection coverage; and
       ``(ii) for area crop insurance coverage, an amount equal to 
     the premium established for 50 percent loss in yield 
     indemnified at 15 percent of the expected market price on an 
     individual basis, plus the amount of operating and 
     administrative expenses for the area coverage (as established 
     under paragraph (1)(C)).
       ``(E) Reinsurance and administration.--If a provider 
     combines individual crop insurance coverage and area crop 
     insurance coverage under subparagraph (B), the Corporation 
     shall--
       ``(i) not provide reinsurance, except that the Corporation 
     shall provide reinsurance on--

       ``(I) the area crop insurance coverage at the request of 
     the provider; and
       ``(II) the catastrophic risk protection provided under the 
     individual insurance coverage; and

       ``(ii) reimburse the provider for administrative expenses 
     associated with the area crop insurance coverage, except that 
     the amount of the reimbursement shall be no less than 
     reimbursement provided by the Corporation for comparable area 
     coverage.''.

     SEC. 105. ELIGIBILITY.

       (a) In General.--Section 508 (7 U.S.C. 1508) (as amended by 
     section 104) is further amended by inserting after subsection 
     (d) the following new subsection:
       ``(e) Eligibility.--
       ``(1) In general.--To participate in catastrophic risk 
     protection coverage under this section, a producer shall 
     submit an application at the local office of the Department 
     or to an approved insurance provider.
       ``(2) Sales closing date.--For coverage under this title, 
     each producer shall purchase crop insurance on or before the 
     sales closing date for the crop by providing the required 
     information and executing the required documents. Subject to 
     the goal of ensuring actuarial soundness for the crop 
     insurance program, the sales closing date shall be 
     established by the Corporation to maximize convenience to 
     producers in obtaining benefits under price and production 
     adjustment programs of the Department. Beginning with the 
     1995 crop year, the Corporation shall establish, for an 
     insurance policy for each insurable crop that is planted in 
     the spring, a sales closing date that is 30 days earlier than 
     the corresponding sales closing date that was established for 
     the 1994 crop year.
       ``(3) Records.--For coverage under this title, each 
     producer shall provide records, acceptable to the 
     Corporation, of previous acreage and production or accept a 
     yield determined by the Corporation.
       ``(4) Reporting.--For coverage under this title, each 
     producer shall report acreage planted and prevented from 
     planting by the designated acreage reporting date for the 
     crop and location as established by the Corporation.''.
       (b) Producer Eligibility.--Section 520 (7 U.S.C. 1520) is 
     amended to read as follows:

     ``SEC. 520. PRODUCER ELIGIBILITY.

       ``Except as otherwise provided in this title, a producer 
     shall not be denied insurance under this title if--
       ``(1) for purposes of catastrophic risk protection 
     coverage, the producer is a `person' (as defined by the 
     Secretary); and
       ``(2) for purposes of any other plan of insurance, the 
     producer is 18 years of age and has a bona fide insurable 
     interest in a crop as an owner-operator, landlord, tenant, or 
     sharecropper.''.

     SEC. 106. YIELD DETERMINATIONS.

       Section 508 (7 U.S.C. 1508) (as amended by section 105(a)) 
     is further amended by inserting after subsection (e) the 
     following new subsection:
       ``(f) Yield Determinations.--
       ``(1) In general.--Subject to paragraph (2), the 
     Corporation shall implement crop insurance underwriting rules 
     that ensure that yield coverage is provided to eligible 
     producers participating in the Federal crop insurance 
     program.
       ``(2) Yield coverage plans.--
       ``(A) Actual production history.--Subject to subparagraph 
     (B), the yield for a crop shall be based on the actual 
     production history for the crop, if the crop was produced on 
     the farm without penalty during each of the 4 crop years 
     immediately preceding the crop year for which actual 
     production history is being established, building up to a 
     production data base for each of the 10 consecutive crop 
     years preceding the crop year for which actual production 
     history is being established.
       ``(B) Assigned yield.--If the producer does not provide 
     satisfactory evidence of the yield of a commodity under 
     subparagraph (A), the producer shall be assigned a yield that 
     is not less than 65 percent of the transitional yield of the 
     producer (adjusted to reflect actual production reflected in 
     the records acceptable to the Corporation for continuous 
     years), as specified in regulations issued by the Corporation 
     based on production history requirements.
       ``(C) Area yield.--The Corporation may offer a crop 
     insurance plan based on an area yield that allows an insured 
     producer to qualify for an indemnity if a loss has occurred 
     in an area (as specified by the Corporation) in which the 
     farm of the producer is located. Under an area yield plan, an 
     insured producer shall be allowed to select the level of area 
     production at which an indemnity will be paid consistent with 
     such terms and conditions as are established by the 
     Corporation.
       ``(D) Commodity-by-commodity basis.--A producer may choose 
     between individual yield or area yield coverage or combined 
     coverage (as provided in subsection (d)(4)), if available, on 
     a commodity-by-commodity basis.
       ``(3) Notice.--The Corporation shall ensure that producers 
     are given adequate notice of the applicable yield coverage 
     provisions of this section in advance of the crop insurance 
     application period for the crops to which the provisions 
     first will apply.
       ``(4) Transitional yields for producers of feed or 
     forage.--
       ``(A) In general.--If a producer does not provide 
     satisfactory evidence of the yield under paragraph (2)(A), 
     the producer shall be assigned a yield that is at least 80 
     percent of the transitional yield established by the 
     Corporation (adjusted to reflect the actual production 
     history of the producer) if the Secretary determines that--
       ``(i) the producer grows feed or forage primarily for on-
     farm use in a livestock, dairy, or poultry operation; and
       ``(ii) over 50 percent of the net farm income of the 
     producer is derived from the livestock, dairy, or poultry 
     operation.
       ``(B) Yield calculation.--The Corporation shall--
       ``(i) for the first year of participation of a producer, 
     provide the assigned yield under this paragraph to the 
     producer of feed or forage; and
       ``(ii) for the second year of participation of the 
     producer, apply the actual production history or assigned 
     yield requirement, as provided in this subsection.
       ``(C) Termination of authority.--The authority provided by 
     this paragraph shall terminate on the date that is 2 years 
     after the effective date of this paragraph.''.

     SEC. 107. INSURANCE POLICIES.

       Subsection (g) of section 508 (7 U.S.C. 1508) (as 
     redesignated by section 101(3)) is amended--
       (1) in paragraph (1), by striking ``(a)'' and inserting 
     ``(c)'';
       (2) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) Preparation of policies.--A policy or other material 
     submitted to the Corporation under this subsection may be 
     prepared without regard to the limitations specified in this 
     title, including the requirements concerning the levels of 
     coverage and rates and the requirement that a price level for 
     each commodity insured shall equal the projected market price 
     for the commodity as established by the Corporation. The 
     policy may be subsidized only at an amount equivalent to 
     coverage authorized under this title.'';
       (3) in paragraph (3)--
       (A) in the first sentence, by striking ``taking into 
     consideration the risks covered by the policy or other 
     material''; and
       (B) in the second sentence, by inserting ``with a private 
     insurance provider'' after ``reinsurance agreement''; and
       (4) by striking paragraph (4) and inserting the following 
     new paragraphs:
       ``(4) Required publication.--Any policy, provision of a 
     policy, or rate approved under this subsection shall be 
     published as a notice in the Federal Register and made 
     available to each person who contracts with or is reinsured 
     by the Corporation under the same terms and conditions as are 
     applicable between the Corporation and the submitting person.
       ``(5) Pilot cost of production risk protection plan.--
       ``(A) In general.--The Corporation shall offer, to the 
     extent practicable, a cost of production risk protection plan 
     of insurance that would indemnify producers (including new 
     producers) for insurable losses as provided in this 
     paragraph.
       ``(B) Pilot basis.--The cost of production risk protection 
     plan shall--
       ``(i) be established as a pilot project for each of the 
     1996 and 1997 crop years; and
       ``(ii) be carried out in a number of counties that is 
     determined by the Corporation to be adequate to provide a 
     comprehensive evaluation of the feasibility, effectiveness, 
     and demand among producers for the plan.
       ``(C) Insurable loss.--An insurable loss shall be incurred 
     by a producer if the gross income of the producer (as 
     determined by the Corporation) is less than an amount 
     determined by the Corporation, as a result of a reduction in 
     yield or price resulting from an insured cause.
       ``(D) Definition of new producer.--As used in this 
     paragraph, the term `new producer' means 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.
       ``(6) Additional prevented planting policy coverage.--
       ``(A) In general.--Beginning with the 1995 crop year, the 
     Corporation shall offer to producers additional prevented 
     planting coverage that insures producers against losses in 
     accordance with this paragraph.
       ``(B) Approved insurance providers.--Additional prevented 
     planting coverage shall be offered by the Corporation through 
     approved insurance providers.
       ``(C) Timing of loss.--A crop loss shall be covered by the 
     additional prevented planting coverage if--
       ``(i) crop insurance policies were obtained for--

       ``(I) the crop year the loss was experienced; and
       ``(II) the crop year immediately preceding the year of the 
     prevented planting loss; and

       ``(ii) the cause of the loss occurred--

       ``(I) after the sales closing date for the crop in the crop 
     year immediately preceding the loss; and
       ``(II) before the sales closing date for the crop in the 
     year in which the loss is experienced.

       ``(7) Pilot transitional yield program for new producers.--
       ``(A) Increased transitional yield.--The Corporation shall 
     offer, to the extent practicable, a transitional yield 
     program for new producers to provide 110 percent of the 
     transitional yield established by the Corporation.
       ``(B) Pilot basis.--The transitional yield program shall--
       ``(i) be established as a pilot project for each of the 
     1995 and 1996 crop years; and
       ``(ii) be carried out in 30 counties that are determined by 
     the Corporation to be adequate to provide a comprehensive 
     evaluation of the feasibility, effectiveness, and demand 
     among new producers for the plan.
       ``(C) Definition of new producer.--As used in this 
     paragraph, the term `new producer' means 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.''.

     SEC. 108. CLAIMS FOR LOSSES.

       Subsection (i) of section 508 (7 U.S.C. 1508) (as 
     redesignated by section 101(3)) is amended to read as 
     follows:
       ``(i) Claims for Losses.--
       ``(1) In general.--The Corporation may provide for 
     adjustment and payment of claims for losses as provided under 
     subsection (a) under rules prescribed by the Corporation. The 
     rules prescribed by the Corporation shall establish standards 
     to ensure that all claims for losses are adjusted, to the 
     extent practicable, in a uniform and timely manner.
       ``(2) Denial of claims.--
       ``(A) In general.--Subject to subparagraph (B), if a claim 
     for indemnity is denied by the Corporation or by the private 
     insurance provider, an action on the claim shall only be 
     brought against the Corporation or Secretary or the insurance 
     provider in the United States District Court for the district 
     in which the insured farm is located.
       ``(B) Statute of limitations.--A suit on the claim may be 
     brought not later than 1 year after the date on which written 
     notice of denial of the claim is provided to the claimant.
       ``(3) Indemnification.--The Corporation shall provide 
     insurance companies, agents, and brokers with 
     indemnification, including costs and reasonable attorney 
     fees, from the Corporation for errors or omissions on the 
     part of the Corporation.''.

     SEC. 109. REINSURANCE.

       Section 508 (7 U.S.C. 1508) is amended--
       (1) by striking subsection (j) (as redesignated by section 
     101(3)) and inserting the following new subsection:
       ``(j) Reinsurance.--Notwithstanding any other provision of 
     this title, the Corporation shall, to the maximum extent 
     practicable, provide reinsurance, on such terms and 
     conditions as the Corporation determines to be consistent 
     with subsections (b) and (c) and sound reinsurance 
     principles, to insurers (as defined by the Corporation) that 
     insure producers of any agricultural commodity under 1 or 
     more plans acceptable to the Corporation. 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 availability of private reinsurance.''; and
       (2) in subsection (k) (as so redesignated), by striking 
     ``provide'' and inserting ``offer plans of''.

     SEC. 110. FUNDING.

       Section 516 (7 U.S.C. 1516) is amended to read as follows:

     ``SEC. 516. FUNDING.

       ``(a) Authorization of Appropriations.--
       ``(1) Expenses of corporation.--There are authorized to be 
     appropriated such sums as are necessary to cover the salaries 
     and expenses of the Corporation and the administrative and 
     operating expenses of the Corporation for the sales 
     commissions of agents.
       ``(2) Expenses of providers.--There are authorized to be 
     appropriated such sums as are necessary to cover the 
     administrative and operating expenses of an approved 
     insurance provider for the delivery of policies with coverage 
     that is greater than catastrophic risk protection.
       ``(b) Payment of Expenses.--
       ``(1) Administrative and operating expenses.--Beginning 
     with the 1996 crop year, the Corporation is authorized to 
     pay, from the insurance fund established under subsection 
     (c), the administrative and operating expenses of an approved 
     insurance provider, other than expenses covered under 
     subsection (a)(1).
       ``(2) Other expenses.--The Corporation is authorized to pay 
     from the insurance fund established under subsection (c)--
       ``(A) all other expenses of the Corporation (other than 
     expenses covered in subsection (a)(1)), including all premium 
     subsidies and indemnities;
       ``(B) for the 1995 crop year, all administrative and 
     expense reimbursements due under a reinsurance agreement with 
     an approved insurance provider; and
       ``(C) to the extent necessary, expenses incurred by the 
     Corporation to carry out research and development.
       ``(c) Insurance Fund.--
       ``(1) In general.--There is established an insurance fund 
     for the deposit of premium income, income from reinsurance 
     operations, and amounts made available under subsection (a).
       ``(2) Source of funding.--There are appropriated, without 
     fiscal year limitation, such sums as may be necessary to 
     carry out subsection (b) through the insurance fund.''.

     SEC. 111. ADVISORY COMMITTEE FOR FEDERAL CROP INSURANCE.

       The Act is amended by inserting after section 514 (7 U.S.C. 
     1514) the following new section:

     ``SEC. 515. ADVISORY COMMITTEE FOR FEDERAL CROP INSURANCE.

       ``(a) Establishment.--The Secretary may establish within 
     the Department a committee to be known as the `Advisory 
     Committee for Federal Crop Insurance' (referred to in this 
     section as the `Advisory Committee'), which shall remain in 
     existence until September 30, 1998.
       ``(b) Membership.--The Advisory Committee shall be composed 
     of--
       ``(1) the Manager of the Corporation;
       ``(2) the Secretary or a designee; and
       ``(3) not fewer than 10 representatives of organizations or 
     agencies involved with the Federal crop insurance program, 
     which may include insurance companies, insurance agents, farm 
     producer organizations, experts on agronomic practices, and 
     banking and lending institutions.
       ``(c) Administrative Provisions.--
       ``(1) Terms.--Members of the Advisory Committee shall be 
     appointed by the Secretary for a term of not more than 2 
     years from nominations made by the participating 
     organizations and agencies referred to in subsection (b). The 
     terms of the members shall be staggered.
       ``(2) Chairperson.--The Advisory Committee shall be chaired 
     by the Manager of the Corporation.
       ``(3) Meetings.--The Advisory Committee shall meet at least 
     annually. The meetings of the Advisory Committee shall be 
     publicly announced in advance and shall be open to the 
     public. Appropriate records of the activities of the Advisory 
     Committee shall be kept and made available to the public on 
     request.
       ``(d) Primary Responsibility.--The primary responsibility 
     of the Advisory Committee shall be to advise the Secretary on 
     the implementation of this title and on other issues related 
     to crop insurance (as determined by the Manager of the 
     Corporation).
       ``(e) Reports.--Not later than June 30 of each year, the 
     Advisory Committee shall prepare, and submit to the 
     Secretary, a report specifying the conclusions of the 
     Advisory Committee on--
       ``(1) the progress toward implementation of this title;
       ``(2) the actuarial soundness of the Federal crop insurance 
     program; and
       ``(3) the rate of participation in the catastrophic and the 
     additional coverage programs under this title.''.

     SEC. 112. MANAGEMENT OF CORPORATION.

       (a) In General.--The second sentence of section 505(a) (7 
     U.S.C. 1505(a)) is amended--
       (1) by striking ``program, the Under Secretary'' and 
     inserting ``program, 1 additional Under Secretary''; and
       (2) by striking ``responsible for the farm credit programs 
     of the Department of Agriculture'' and inserting ``, as 
     designated by the Secretary of Agriculture (referred to in 
     this title as the `Secretary')''.
       (b) General Powers.--Section 506 (7 U.S.C. 1506) is 
     amended--
       (1) by redesignating subsections (j) through (n) as 
     subsections (k) through (o), respectively;
       (2) by inserting after subsection (i) the following new 
     subsection:
       ``(j) Settling Claims.--The Corporation shall have the 
     authority to make final and conclusive settlement and 
     adjustment of any claim by or against the Corporation or a 
     fiscal officer of the Corporation.'';
       (3) in subsection (l) (as so redesignated)--
       (A) in the first sentence, by inserting ``, and issue 
     regulations,'' after ``agreements''; and
       (B) in the second sentence, by striking ``contracts or 
     agreements'' each place it appears and inserting ``contracts, 
     agreements, or regulations'';
       (4) in subsection (n)(1) (as so redesignated), by striking 
     subparagraph (B) and inserting the following new 
     subparagraph:
       ``(B) disqualify the person from purchasing catastrophic 
     risk protection or receiving noninsured assistance for a 
     period of not to exceed 2 years, or from receiving any other 
     benefit under this title for a period of not to exceed 10 
     years.'';
       (5) in subsection (o) (as so redesignated)--
       (A) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D) and aligning the margins of 
     each subparagraph with the margins of subparagraph (A) of 
     subsection (n)(1) (as redesignated by paragraph (1));
       (B) by striking ``(o) Actuarial Soundness.--The 
     Corporation'' and inserting the following:
       ``(o) Actuarial Soundness.--
       ``(1) Projected loss ratio as of october 1, 1995.--The 
     Corporation'';
       (C) in subparagraph (A) (as redesignated by subparagraph 
     (A)), by striking ``from obtaining adequate Federal crop 
     insurance, as determined by the Corporation'' and inserting 
     ``(as defined by the Secretary) from obtaining Federal crop 
     insurance'';
       (D) in subparagraph (C) (as so redesignated)--
       (i) by inserting ``, agents, and loss adjusters'' after 
     ``participating producers''; and
       (ii) by inserting ``, agents, and loss adjusters'' after 
     ``identify insured producers''; and
       (E) by adding at the end the following new paragraphs:
       ``(2) Projected loss ratio as of october 1, 1998.--The 
     Corporation shall take such actions, including the 
     establishment of adequate premiums, as are necessary to 
     improve the actuarial soundness of Federal multiperil crop 
     insurance made available under this title to achieve, on and 
     after October 1, 1998, an overall projected loss ratio of not 
     greater than 1.0.
       ``(3) Nonstandard classification system.--To the extent 
     that the Corporation uses the nonstandard classification 
     system, the Corporation shall apply the system to all insured 
     producers in a fair and consistent manner.''; and
       (6) by adding at the end the following new subsections:
       ``(p) Loss Ratio Defined.--As used in this Act, the term 
     `loss ratio' means the ratio of all sums paid by the 
     Corporation as indemnities under any eligible crop insurance 
     policy to that portion of the premium designated for 
     anticipated losses and a reasonable reserve, other than that 
     portion of the premium designated for operating and 
     administrative expenses.
       ``(q) Regulations.--The Secretary and the Corporation are 
     each authorized to issue such regulations as are necessary to 
     carry out this title.''.
       (c) Personnel.--Section 507 (7 U.S.C. 1507) is amended--
       (1) in subsection (a), by striking ``, and county crop 
     insurance committeemen'';
       (2) in subsection (c), by striking ``, in which case the 
     agent or broker'' and all that follows through ``the agent or 
     broker has caused the error or omission''; and
       (3) in subsection (d), by striking ``of this Act,'' and all 
     that follows through ``agency''.
       (d) Information Collection on Crop Insurance.--Subsection 
     (n) of section 508 (7 U.S.C. 1508) (as redesignated by 
     section 101(3)) is amended to read as follows:
       ``(n) Information Collection on Crop Insurance.--The 
     Secretary shall make available to producers through local 
     offices of the Department--
       ``(1) current and complete information on all aspects of 
     Federal crop insurance; and
       ``(2) a listing of insurance agents.''.
       (e) Crop Insurance Yield Coverage.--Section 508A (7 U.S.C. 
     1508a) is repealed.
       (f) Preemption.--Section 511 (7 U.S.C. 1511) is amended by 
     inserting after ``The Corporation, including'' the following: 
     ``the contracts of insurance of the Corporation and premiums 
     on the contracts, whether insured directly or reinsured by 
     the Corporation,''.
       (g) False Statements.--Section 1014 of title 18, United 
     States Code, is amended by inserting ``or a company the 
     Corporation reinsures'' after ``Federal Crop Insurance 
     Corporation''.
                TITLE II--NONINSURED ASSISTANCE PROGRAM

     SEC. 201. NONINSURED ASSISTANCE PROGRAM.

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

     ``SEC. 521. NONINSURED ASSISTANCE PROGRAM.

       ``(a) Eligibility.--
       ``(1) In general.--The Corporation shall establish a 
     noninsured assistance program to provide coverage equivalent 
     to the catastrophic risk protection insurance described in 
     section 508(b) for crops for which catastrophic risk 
     protection insurance is not available. Crops covered shall 
     include all commercial crops and commodities for which 
     catastrophic risk protection coverage is not available and 
     that are produced for food, fiber, or an industrial crop on a 
     commercial basis but shall not include livestock. Noninsured 
     assistance shall not cover losses due to--
       ``(A) the neglect or malfeasance of the producer;
       ``(B) the failure of the producer to reseed to the same 
     crop in such areas and under such circumstances as it is 
     customary to so reseed; or
       ``(C) the failure of the producer to follow good farming 
     practices (as determined by the Secretary).
       ``(2) Applications.--To be eligible for assistance under 
     this section, a producer shall make a timely application, as 
     required by the Corporation, for noninsured assistance at the 
     local office of the Department.
       ``(3) Records.--A producer shall annually provide records, 
     as required by the Corporation, of previous crop acreage and 
     yields, or the producer shall accept a yield under subsection 
     (c)(2)(B) determined by the Corporation.
       ``(4) Acreage reports.--A producer shall provide reports on 
     acreage planted or prevented from being planted, as required 
     by the Corporation, by the designated acreage reporting date 
     for the crop and location as established by the Corporation.
       ``(5) Area yield losses.--
       ``(A) Area average yield.--A producer of a noninsurable 
     crop shall not be eligible for noninsured assistance unless 
     the area (as determined by the Corporation) average yield, or 
     an equivalent measure if yield data are not available, for 
     the crop is less than 65 percent of the expected area yield 
     established by the Corporation.
       ``(B) Prevented planting payments.--Subject to subparagraph 
     (A), the Corporation shall make a prevented planting 
     noninsured assistance payment to a producer if the producer 
     is prevented from planting more than 35 percent of the 
     acreage intended for the crop because of drought, flood, or 
     other natural disaster (as determined by the Secretary).
       ``(C) Reduced yield payments.--Subject to subparagraph (A), 
     if, because of drought, flood, or other natural disaster (as 
     determined by the Secretary), the total quantity of the crop 
     that a producer is able to harvest on any farm is less than 
     50 percent of the expected area yield for the crop (as 
     determined by the Corporation) factored for the interest of 
     the producer for the crop, the Corporation shall make a 
     reduced yield noninsured assistance payment.
       ``(b) Payment.--The Corporation shall make available to a 
     producer eligible for noninsured assistance under this 
     section a payment computed by multiplying--
       ``(1) the quantity that is less than 50 percent of the 
     established yield for the crop; by
       ``(2) 60 percent of the average market price for the crop 
     (or any comparable coverage determined by the Corporation); 
     by
       ``(3) a payment rate for the type of crop (as determined by 
     the Corporation) that--
       ``(A) in the case of a crop that is produced with a 
     significant and variable harvesting expense, a payment rate 
     that reflects the decreasing cost incurred in the production 
     cycle for the crop that is--
       ``(i) harvested;
       ``(ii) planted but not harvested; and
       ``(iii) prevented from being planted because of drought, 
     flood, or other natural disaster (as determined by the 
     Secretary); and
       ``(B) in the case of a crop that is not produced with a 
     significant and variable harvesting expense, a payment rate 
     determined by the Corporation.
       ``(c) Yields.--
       ``(1) In general.--The Corporation shall establish 
     noninsured assistance program farm yields for crops for the 
     purposes of this section.
       ``(2) Actual production history.--
       ``(A) In general.--Subject to subparagraph (B), the yield 
     for a crop shall be based on the actual production history 
     for the crop, if the crop was produced on the farm without 
     penalty during each of the 4 crop years immediately preceding 
     the crop year for which actual production history is being 
     established, building up to a production data base of the 10 
     crop years immediately preceding the crop year for which 
     production history is being established.
       ``(B) Assigned yield.--
       ``(i) In general.--If the producer does not provide 
     sufficient evidence of the yield (as required by the 
     Corporation) of a commodity under subparagraph (A), the 
     producer shall be assigned a yield that is not less than 65 
     percent of the transitional yield of the producer (adjusted 
     to reflect actual production reflected in the records 
     acceptable to the Corporation for continuous years), as 
     specified in regulations issued by the Corporation based on 
     production history requirements.
       ``(ii) Limitation.--A producer who receives an assigned 
     yield for the current year of a natural disaster because 
     required production records were not submitted to the local 
     office of the Department shall not be eligible for an 
     assigned yield for the year of the next natural disaster 
     unless the required production records of the previous 1 or 
     more years (as applicable) are provided to the local office.
       ``(C) Yield variations due to different farming 
     practices.--The Corporation shall make noninsured payments 
     that accurately reflect significant yield variations due to 
     different farming practices, such as between irrigated and 
     nonirrigated acreage.
       ``(d) Increased Crop Plantings.--
       ``(1) In general.--If the acreage of a crop in a county has 
     increased by more than 100 percent since the 1987 crop year, 
     to become eligible for a noninsured assistance payment, a 
     producer must provide detailed documentation of production 
     costs, acres planted, and yield, as required by the 
     Corporation. Except as provided in paragraph (2), a producer 
     who produces a crop on a farm located in a county described 
     in the preceding sentence may not obtain an assigned yield.
       ``(2) Exception.--A crop or a producer shall not be subject 
     to this subsection if--
       ``(A) the planted acreage of the producer for the crop has 
     been inspected by a third party acceptable to the Secretary; 
     or
       ``(B)(i) the County Executive Director, the District 
     Director, and the State Executive Director recommend an 
     exemption from the requirement to the Deputy Administrator 
     for State and County Operations of the Agricultural 
     Stabilization and Conservation Service; and
       ``(ii) the Deputy Administrator approves the 
     recommendation.
       ``(e) Contract Payments.--A producer who has received a 
     guaranteed payment for production, as opposed to delivery, of 
     a crop pursuant to a contract shall have the production of 
     the producer adjusted upward by the amount of the production 
     equal to the amount of the contract payment received.
       ``(f) Payment of Losses.--Payments for noninsured 
     assistance losses under this section shall be made from the 
     insurance fund established under section 516(b). The losses 
     shall not be included in calculating the premiums charged to 
     producers for insurance.''.

     SEC. 202. PAYMENT AND INCOME LIMITATIONS.

       Section 521 (as added by section 201) is further amended by 
     adding at the end the following new subsection:
       ``(g) Payment and Income Limitations.--
       ``(1) Definitions.--As used in this subsection:
       ``(A) Person.--The term `person' has the meaning provided 
     the term in regulations issued by the Secretary. The 
     regulations shall conform, to the extent practicable, to the 
     regulations defining the term `person' issued under section 
     1001 of the Food Security Act of 1985 (7 U.S.C. 1308).
       ``(B) Qualifying gross revenues.--The term `qualifying 
     gross revenues' means--
       ``(i) if a majority of the gross revenue of the person is 
     received from farming, ranching, and forestry operations, the 
     gross revenue from the farming, ranching, and forestry 
     operations of the person; and
       ``(ii) if less than a majority of the gross revenue of the 
     person is received from farming, ranching, and forestry 
     operations, the gross revenue of the person from all sources.
       ``(2) Payment limitation.--The total amount of payments 
     that a person shall be entitled to receive annually under 
     this title may not exceed $100,000.
       ``(3) No double benefits.--No person may receive a 
     noninsured assistance payment under this title and emergency 
     livestock feed assistance under section 606 of the 
     Agricultural Act of 1949 (7 U.S.C. 1471d) for the same 
     livestock feed or forage loss.
       ``(4) Income limitation.--A person who has qualifying gross 
     revenues in excess of the amount specified in section 2266(a) 
     of the Food, Agriculture, Conservation, and Trade Act of 1990 
     (7 U.S.C. 1421 note) (as in effect on November 28, 1990) 
     during the taxable year (as determined by the Secretary) 
     shall not be eligible to receive any noninsured assistance 
     payment under this section.
       ``(5) Regulations.--The Secretary shall issue regulations 
     prescribing such rules as the Secretary determines necessary 
     to ensure a fair and equitable application of section 1001 of 
     the Food Security Act of 1985 (7 U.S.C. 1308), the general 
     payment limitation regulations of the Secretary, and the 
     limitations established under this subsection.''.
                        TITLE III--MISCELLANEOUS

     SEC. 301. INELIGIBILITY FOR CATASTROPHIC RISK AND NONINSURED 
                   ASSISTANCE PAYMENTS.

       The Act (7 U.S.C. 1501 et seq.) (as amended by section 201) 
     is further amended by adding at the end the following new 
     section:

     ``SEC. 522. INELIGIBILITY FOR CATASTROPHIC RISK AND 
                   NONINSURED ASSISTANCE PAYMENTS.

       ``If the Secretary determines that a person has knowingly 
     adopted a material scheme or device to obtain catastrophic 
     risk, additional coverage, or noninsured assistance benefits 
     under this Act to which the person is not entitled, has 
     evaded this Act, or has acted with the purposes of evading 
     this Act, the person shall be ineligible to receive all 
     benefits applicable to the crop year for which the scheme or 
     device was adopted. The authority provided by this section 
     shall be in addition to, and shall not supplant, the 
     authority provided by section 506(m).''.

     SEC. 302. PREVENTED PLANTING.

       (a) In General.--Effective for the 1994 crop year, a 
     producer described in subsection (b) shall receive 
     compensation under the prevented planting coverage policy 
     provision described in subsection (b)(1) by--
       (1) obtaining from the Secretary of Agriculture the 
     applicable amount that is payable under the conservation use 
     program described in subsection (b)(4); and
       (2) obtaining from the Federal Crop Insurance Corporation 
     the amount that is equal to the difference between--
       (A) the amount that is payable under the conservation use 
     program; and
       (B) the amount that is payable under the prevented planting 
     coverage policy.
       (b) Eligible Producers.--Subsection (a) shall apply to a 
     producer who--
       (1) purchased a prevented planting policy for the 1994 crop 
     year from the Federal Crop Insurance Corporation prior to the 
     spring sales closing date for the 1994 crop year;
       (2) is unable to plant a crop due to major, widespread 
     flooding in the Midwest, or excessive ground moisture, that 
     occurred prior to the spring sales closing date for the 1994 
     crop year;
       (3) had a reasonable expectation of planting a crop on the 
     prevented planting acreage for the 1994 crop year; and
       (4) participates in a conservation use program established 
     for the 1994 crop of wheat, feed grains, upland cotton, or 
     rice established under section 107B(c)(1)(E), 105B(c)(1)(E), 
     103B(c)(1)(D), or 101B(c)(1)(D), respectively, of the 
     Agricultural Act of 1949 (7 U.S.C. 1445b-3a(c)(1)(E), 
     1444f(c)(1)(E), 1444-2(c)(1)(D), or 1441-2(c)(1)(D)).
       (c) Oilseed Prevented Planting Payments.--
       (1) In general.--Effective for the 1994 crop year, a 
     producer of a crop of oilseeds (as defined in section 205(a) 
     of the Agricultural Act of 1949 (7 U.S.C. 1446f(a)) shall 
     receive a prevented planting payment for the crop if the 
     requirements of paragraphs (1), (2), and (3) of subsection 
     (b) are satisfied.
       (2) Source of payment.--The total amount of payments 
     required under this subsection shall be made by the Federal 
     Crop Insurance Corporation.
       (d) Payment.--A payment under this section may not be made 
     before October 1, 1994.

     SEC. 303. CONFORMING AMENDMENTS.

       (a) Price Support Programs.--
       (1) In general.--Title IV of the Agricultural Act of 1949 
     (7 U.S.C. 1421 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 427. CROP INSURANCE REQUIREMENT.

       ``As a condition of receiving any benefit (including 
     payments) under title I or II for each of the 1995 and 
     subsequent crops of tobacco, rice, extra long staple cotton, 
     upland cotton, feed grains, wheat, peanuts, oilseeds, and 
     sugar and for each of the 1995 and subsequent calendar years 
     with respect to milk, a producer must obtain at least 
     catastrophic risk protection insurance coverage under section 
     508 of the Federal Crop Insurance Act (7 U.S.C. 1508) for the 
     crop and crop year for which the benefit is sought, if the 
     coverage is offered by the Corporation.''.
       (2) Rice.--Section 101B(c) of such Act (7 U.S.C. 1441-2(c)) 
     is amended--
       (A) in paragraph (1), by striking subparagraph (F); and
       (B) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) Crop insurance requirement.--A producer shall obtain 
     catastrophic risk protection insurance coverage in accordance 
     with section 427.''.
       (3) Upland cotton.--Section 103B(c) of such Act (7 U.S.C. 
     1444-2(c)) is amended--
       (A) in paragraph (1), by striking subparagraph (F); and
       (B) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) Crop insurance requirement.--A producer shall obtain 
     catastrophic risk protection insurance coverage in accordance 
     with section 427.''.
       (4) Feed grains.--Section 105B(c) of such Act (7 U.S.C. 
     1444f(c)) is amended--
       (A) in paragraph (1), by striking subparagraph (G); and
       (B) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) Crop insurance requirement.--A producer shall obtain 
     catastrophic risk protection insurance coverage in accordance 
     with section 427.''.
       (5) Wheat.--Section 107B(c) of such Act (7 U.S.C. 1445b-
     3a(c)) is amended--
       (A) in paragraph (1), by striking subparagraph (G); and
       (B) by striking paragraph (2) and inserting the following 
     new paragraph:
       ``(2) Crop insurance requirement.--A producer shall obtain 
     catastrophic risk protection insurance coverage in accordance 
     with section 427.''.
       (6) Disaster payments.--Section 208 of such Act (7 U.S.C. 
     1446i) is repealed.
       (b) Farmers Home Administration Programs.--The Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 371. CROP INSURANCE REQUIREMENT.

       ``(a) In General.--As a condition of obtaining any benefit 
     (including a direct loan, loan guarantee, or payment) 
     described in subsection (b), a borrower must obtain at least 
     catastrophic risk protection insurance coverage under section 
     508 of the Federal Crop Insurance Act (7 U.S.C. 1508) for the 
     crop and crop year for which the benefit is sought, if the 
     coverage is offered by the Corporation.
       ``(b) Applicable Benefits.--Subsection (a) shall apply to--
       ``(1) a farm ownership loan (FO) under section 303;
       ``(2) an operating loan (OL) under section 312; and
       ``(3) an emergency loan (EM) under section 321.''.
       (c) Disaster Assistance.--Subtitle B of title XXII of the 
     Food, Agriculture, Conservation, and Trade Act of 1990 (7 
     U.S.C. 1421 note) is amended by striking chapter 3.
       (d) Technical Amendments.--
       (1) The first sentence of section 506(d) (7 U.S.C. 1506(d)) 
     is amended by striking ``508(f)'' and inserting ``508(i)''.
       (2) The last sentence of section 507(c) (7 U.S.C. 1507(c)) 
     is amended by striking ``508(b)'' and inserting ``508(g)''.
       (3) Section 518 (7 U.S.C. 1518) is amended by striking 
     ``(k)'' and inserting ``(m)''.

     SEC. 304. EFFECTIVE DATES.

       (a) In General.--Except as otherwise provided in this Act, 
     this Act and the amendments made by this Act shall become 
     effective beginning with--
       (1) if this Act is enacted before August 1, 1994, the 1995 
     crop year for the applicable agricultural commodity; or
       (2) if this Act is enacted on or after August 1, 1994, the 
     1996 crop year for the applicable agricultural commodity.
       (b) Exceptions.--Sections 1, 101(1), 112(e), 112(f), and 
     302, the amendments made by such sections, and this section 
     shall become effective on the date of enactment of this Act.

     SEC. 305. TERMINATION OF AUTHORITY.

       The authority provided by this Act and the amendments made 
     by this Act shall terminate on September 30, 2000.


                           amendment no. 2575

                     (Purpose: To improve the bill)

  Mr. FORD. Mr. President, on behalf of the Senator Leahy and others, I 
send an amendment to the desk and ask unanimous consent for its 
immediate consideration; that the amendment be agreed to, and that the 
motion to reconsider be laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the amendment (No. 2575) was agreed to, as follows:

       Beginning on page 49, strike line 22 and all that follows 
     through page 52, line 22, and insert the following new 
     paragraph:
       ``(4) Individual and area crop insurance coverage.--The 
     Corporation shall allow approved insurance providers to offer 
     a plan of insurance to producers that combines both 
     individual yield coverage and area yield coverage at a 
     premium rate determined by the provider under the following 
     conditions:
       ``(A) The individual yield coverage shall be equal to or 
     greater than catastrophic risk protection as described in 
     subsection (b).
       ``(B) The combined policy shall include area yield coverage 
     that is offered by the Corporation or similar area coverage, 
     as determined by the Corporation.
       ``(C) The Corporation shall provide reinsurance on the area 
     yield portion of the combined policy at the request of the 
     provider, except that the provider shall agree to pay to the 
     producer any portion of the area yield and loss indemnity 
     payment received from the Corporation or a commercial 
     reinsurer that exceeds the individual indemnity payment made 
     by the provider to the producer.
       ``(D) The Corporation shall pay a part of the premium 
     equivalent to--
       ``(i) the amount authorized under paragraph (2) (except 
     provisions regarding operating and administrative expenses); 
     and
       ``(ii) the amount of operating and administrative expenses 
     authorized by the Corporation for the area yield coverage 
     portion of the combined policy.
       ``(E) The provider shall provide all underwriting services 
     for the combined policy, including the determination of 
     individual yield coverage premium rates, the terms and 
     conditions of the policy, and the acceptance and 
     classification of applicants into risk categories, subject to 
     subparagraph (F).
       ``(F) The Corporation shall approve the combined policy 
     unless the Corporation determines that the policy is not 
     actuarially sound or that the interests of producers are not 
     adequately protected.''.
       On page 66, line 14, strike ``(a)'' and insert ``(a)(2)''.
       On page 88, between lines 20 and 21, insert the following 
     new section:
       (d) Emergency Appropriations.--
       (1) In general.--Section 251(b)(2)(D)(i) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
     901(b)(2)(D)(i)) is amended by adding at the end the 
     following new sentence: ``This subparagraph shall not apply 
     to appropriations to cover agricultural crop disaster 
     assistance.''.
       (2) Emergency legislation.--Section 252(e) of such Act (2 
     U.S.C. 902(e)) is amended by adding at the end the following 
     new sentence: ``This subsection shall not apply to direct 
     spending provisions to cover agricultural crop disaster 
     assistance.''.
       On page 88, line 21, strike ``(d)'' and insert ``(e)''.
       On page 89, between lines 5 and 6, insert the following new 
     section:

     SEC. 304. DISASTER ASSISTANCE.

       (a) Crop Loss Assistance.--The Secretary of Agriculture may 
     provide assistance to producers for crop losses in 1994 due 
     to natural disasters under the terms and conditions of--
       (1) chapter 3 of subtitle B of title XXII of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     1421 note); and
       (2) subsections (a)(4), (b)(3), (d), and (e) of section 521 
     of the Federal Crop Insurance Act (as amended by this Act).
       (b) Other Emergency Assistance.--To provide assistance for 
     losses in 1994 due to natural disasters, the Secretary of 
     Agriculture may provide assistance under--
       (1) the emergency conservation program established under 
     title IV of the Agricultural Credit Act of 1978 (16 U.S.C. 
     2201 et seq.);
       (2) the emergency watershed protection program of the Soil 
     Conservation; and
       (3) the emergency community water assistance grant program 
     established under section 306A of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1926a).
       (c) Funding.--
       (1) Crop loss assistance.--Out of available funds of the 
     Commodity Credit Corporation, the Commodity Credit 
     Corporation is authorized to provide to the Secretary of 
     Agriculture, through July 15, 1995, such sums as are 
     necessary to carry out subsection (a).
       (2) Other emergency assistance.--There are authorized to be 
     appropriated such sums as are necessary to carry out 
     subsection (b).
       (3) Emergency requirements.--The amounts made available 
     under paragraphs (1) and (2) are designated by Congress as an 
     emergency requirement pursuant to section 252(e) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 (2 
     U.S.C. 902(e)). The amounts shall be available only to the 
     extent that an official budget request for specific dollar 
     amounts, that includes designation of the entire amount of 
     the request as an emergency requirement pursuant to such Act, 
     is transmitted by the President to Congress.
       (d) Definition of Natural Disasters.--As used in this 
     section, the term ``natural disasters'' includes weather-
     related insect damage to strawberries.
       On page 89, line 6, strike ``304'' and insert ``305''.
       On page 89, line 10, strike ``August'' and insert 
     ``October''.
       On page 89, line 13, strike ``August'' and insert 
     ``October.''
       On page 89, line 16, strike ``(b) Exceptions.--Sections'' 
     and insert the following:
       (b) Exceptions.--
       (1) In general.--Sections''.
       On page 89, line 17, strike ``and 302,'' and insert ``302, 
     and 304,''.
       On page 89, between lines 19 and 20, insert the following 
     new paragraph:
       (2) Emergency appropriations.--The amendments made by 
     section 303(d) shall become effective--
       (A) if this Act is enacted before October 1, 1994, on the 
     date of enactment of this Act; or
       (B) if this Act is enacted on or after October 1, 1994, on 
     June 1, 1995.
       On page 89, line 20, strike ``305'' and insert ``306''.
  Mr. LEAHY. Mr. President, in April of this year, the Senate voted 98 
to 1 to pass a bill to reorganize the U.S. Department of Agriculture. 
That bill was the result of a bipartisan effort in the Committee on 
Agriculture, Nutrition, and Forestry to reform a bureaucracy many 
thought was immune to change.
  Today I am proud to bring to the floor another major reform bill 
developed in a bipartisan manner by our committee. Like the USDA 
reorganization bill, the Federal Crop Insurance Reform Act of 1994 also 
achieves what many thought was impossible. By greatly improving the 
existing crop insurance program and eliminating the authority for ad 
hoc disaster programs, the bill provides major benefits to both farmers 
and taxpayers.
  Farmers will benefit because the reformed crop insurance program will 
provide needed predictability and better risk management options. Ad 
hoc disaster bills are inherently unpredictable, and as a result, 
farmers do not know what type of help they can expect in times of need.
  Rather than relying on the uncertain benefits of annual ad hoc 
disaster bills, farmers will be able to obtain catastrophic crop 
insurance coverage for a nominal processing fee. In addition, the bill 
provides targeted incentives for farmers to purchase higher levels of 
coverage.
  Taxpayers will benefit because the reform bill eliminates the 
senseless duplication of operating separate crop insurance and disaster 
assistance programs that cover the same losses on the same crops. In 
addition, a number of new safeguards will help guard against some of 
the abuses that have plagued the disaster and crop insurance programs 
in the past.
  Recently the Senate Committee on Agriculture, Nutrition, and Forestry 
held an oversight hearing on Oversight of the Disaster Assistance 
Programs. The committee found that millions of dollars have been wasted 
in annual, ad hoc disaster programs as a result of insufficient 
production records, payments which do not accurately reflect market 
prices and the actual cost of production of the crop, and 
mismanagement.
  In sum, past annual, ad hoc disaster programs have been fraught with 
fraudulent claims, mismanagement, and waste of the taxpayers's money. 
This bill addresses these problems by:
  First, requiring increased reporting requirements for all producers 
who have received payments, but who have been allowed in the past to 
provide inadequate documentation to support their claims;

  Second, mandating that payment rates be reduced for producers who do 
not incur production costs because they either did not hire farm labor 
to harvest a crop, did not harvest the crop, or were prevented from 
planting the crop;
  Third, requiring that the payment be adjusted to reflect yield 
variations due to differing farming practices;
  Fourth, requiring that the payment to a producer who receives a 
guaranteed payment for production reflect the amount of the guaranteed 
production; and
  Fifth, providing that if the acreage of a crop in a county has 
increased by more than 100 percent since the 1987 crop year, a producer 
must provide detailed documentation of production costs, acres planted, 
and yield, unless the acreage is inspected or exempted by officials of 
the USDA.
  The Congressional Budget Office estimates that the reform bill will 
reduce Government outlays for crop insurance and disaster assistance. 
Over the next 5 years, CBO estimates that the bill will reduce 
mandatory spending by $187 million, and the need for discretionary 
appropriations by $75 million.
  CBO may underestimate the true savings likely to be achieved by this 
bill. For one thing, CBO's estimates compare the expected costs of the 
reformed program to a baseline where ad hoc disaster programs cost just 
$1 billion per year. In reality, disaster program spending has averaged 
more than $1.5 billion per year over the last 6 years, so the bill's 
savings would be even larger against a more realistic baseline.
  I would like to thank the administration for developing the reform 
proposal that served as our starting point, budget conferees for their 
help in eliminating procedural roadblocks, and Senator Lugar and other 
members of the Agriculture Committee for all their help in putting 
together a solid, bipartisan reform package.
  Reinventing Government means more than just changing outdated 
bureaucratic structures. It also means redesigning Government programs 
to eliminate duplication and provide better Government services at 
lower costs to the taxpayer. Earlier this year, the Senate voted to 
make needed structural changes at USDA. Now it is time to make 
important programmatic changes as well.
  The Federal Crop Insurance Corporation is authorized to offer 
catastrophic risk coverage to producer's for losses exceeding 50 
percent of the producer's yield at a rate of 60 percent of the expected 
market price for the crop. This catastrophic coverage would cost 
producers $50 per crop per county, not to exceed $100 per producer. The 
purchase of catastrophic risk coverage would be a precondition to a 
producer's eligibility to participate in commodity price support and 
certain FmHA loan programs.
  Insurance coverage in addition to catastrophic risk is offered at 
varying rates and increased premium subsidies. Noninsured assistance 
payments are offered for crops not currently covered by Federal crop 
insurance policies.
  The Gramm-Rudman-Hollings budget bill is amended to make it very 
difficult for the President or Congress to declare an agricultural 
disaster appropriation as an emergency. Thus, any future crop disaster 
program would require a budgetary offset.


                           amendment no. 2576

 (Purpose: To authorize the Federal Crop Insurance Corporation to use 
   funds of the Commodity Credit Corporation to cover the operating 
   administrative costs of the Corporation associated with insurance 
                    policies for fall-planted 1995)

  Mr. McCONNELL. Mr. President, I send an amendment to the desk for Mr. 
Dole and ask unanimous consent for its immediate consideration; that 
the amendment be agreed to, and motion to reconsider be laid upon the 
table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So amendment (No 2576) was agreed to, as follows:

     SECTION 1. USE OF COMMODITY CREDIT CORPORATION FUNDS TO COVER 
                   CERTAIN COSTS FOR FALL-PLANTED 1995 CROPS.

       (a) Definition of Fall-Planted 1995 Crop.--As used in this 
     section, the term ``fall-planted 1995 crop'' means a 1995 
     crop that is insurable under the Federal Crop Insurance Act 
     (7 U.S.C. 1501 et seq.) with a sales closing date that is 
     prior to January 1, 1995.
       (b) Use of Funds to Cover Costs.--Subject to the other 
     provisions of this section, the Federal Crop Insurance 
     Corporation may use funds of the Commodity Credit Corporation 
     to cover operating and administrative costs of the 
     Corporation referred to in section 516(a)(1) of the Federal 
     Crop Insurance Act (7 U.S.C. 1516(a)(1)) associated with 
     insurance policies issued for a fall-planted 1995 crop under 
     such Act (7 U.S.C. 1501 et seq.).
       (c) Limitation on Amount of Funds.--The amount of funds of 
     the Commodity Credit Corporation that may be used under 
     subsection (b) may not exceed $40,000,000.
       (d) Combined Limitation on Amount of Funds and Emergency 
     Crop Loss Assistance.--The amount of funds of the Commodity 
     Credit Corporation used under subsection (b) and the amount 
     of funds used for fiscal year 1995 to provide emergency crop 
     loss assistance for 1995 crops shall not exceed $500,000,000.


                     FEDERAL CROP INSURANCE REFORM

  Mr. DOLE. Mr. President, several weeks ago, the Senate Agriculture 
Committee passed the Federal Crop Insurance Reform Act of 1994. If 
enacted, this legislation would provide much needed reform for a crop 
insurance program which provides little incentive to farmers to 
participate.
  Unfortunately, the Senate has struggled to pass this legislation. At 
the same time, the AG subcommittee of the Senate Appropriations 
Committee failed to fund payments to crop insurance companies for their 
reimbursable expenses during their consideration of the AG 
appropriations bill.
  The net result of these activities is that without crop insurance 
reform, farmers who plant their crops in the fall of 1994 will not have 
any crop insurance. No doubt about it, the outcry from rural America 
will be deafening if producers are denied this important management 
tool. The consequences could be significant. For example, many banks 
will not make operating loans to farmers unless the bank has crop 
insurance payments as collateral for a crop loss.
  As a resolution to this problem, I offered as an amendment to the 
child nutrition reauthorization bill legislation which would resolve 
this difficult situation by providing money to cover crop insurance 
companies' reimbursable expenses. My amendment would allow these 
companies to continue to write crop insurance policies until the 
Government can decide how best to proceed with the Crop 
Insurance Reform Act of 1994.

  Mr. President, I would point out that this legislation addresses a 
problem facing not just Kansas wheat farmers, but farmers in many other 
States as well. The legislation would apply to crops which have a sales 
closing date before January 1, 1995. Consequently, almonds, barley, 
citrus, cranberries, grapes, potatoes, and rye are just a few of the 
crops that will be affected.
  Unfortunately, politics have stopped this legislation from passing. 
The administration opposes my legislative fix fearing that, if passed, 
it would take pressure off Congress to pass the administration's reform 
package. Of course, my stop gap bill would not be necessary if the 
Secretary of Agriculture had not refused to work with Senator Helms in 
resolving a personnel problem at USDA. His refusal to resolve this 
matter has escalated into a situation where a simple personnel problem 
at USDA could cause the cancellation of thousands of crop insurance 
policies in the Midwest.
  It is truly unfortunate that America's farmers are being held hostage 
by the Secretary of Agriculture. In the next few weeks, farmers will be 
going to their bankers to obtain operating loans in order to plant 
their wheat crop. And when those bankers refuse the loans until they 
have a commitment of crop insurance payments for collateral I believe 
those farmers will turn their attention to Washington for help. I 
encourage the Secretary to act responsibly in his leadership role and 
do what is necessary to assist America's farmers.
  I encourage my colleagues to join me in addressing this unfortunate 
problem until Congress can act on crop insurance reform.


                           Amendment No. 2577

  Mr. FORD. Mr. President, I send an amendment to the desk on behalf of 
Senator Leahy and ask unanimous consent for its immediate 
consideration; that the amendment be agreed to, and the motion to 
reconsider be laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the amendment (No. 2577) was agreed to.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')


                           amendment no. 2578

  Mr. FORD. Mr. President, I send an amendment to the desk on behalf of 
Senator Boxer and ask unanimous consent for its immediate 
consideration; that the amendment be agreed to, and the motion to 
reconsider be laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the amendment (No. 2578) was agreed to, as follows:

       At the end of the bill, insert the following section: ``It 
     is the sense of the Senate that the U.S. Department of 
     Agriculture should carry out its plans to hold public 
     hearings during the month of September, 1994, for the purpose 
     of receiving public input on issues related to the conditions 
     under which poultry sold in the U.S. may be labeled fresh and 
     to finalize and publish a decision on this issue as 
     expeditiously as possible thereafter. It is the further sense 
     of the Senate that no person serving on the expert advisory 
     committee established to advise the Secretary of Agriculture 
     on this issue should stand to profit, or represent any 
     interest that would stand to profit, from the Department's 
     decision on the issue.''

  Mrs. BOXER. Mr. President, I want to thank the chairman of the 
Agriculture Committee, Senator Leahy, for his counsel and assistance on 
an issue that is very important to consumers in California and across 
the Nation.
  I am grateful to the chairman and the distinguished ranking member of 
the Agriculture Committee, Senator Lugar, for agreeing to accept my 
amendment to S. 2095 to express the sense of the Senate with regard to 
the issue of accuracy in poultry labeling.
  The amendment expresses the sense of the Senate that the Department 
of Agriculture should carry out its plans to hold public hearings 
during the month of September, for the purpose of receiving public 
input on issues related to labeling of poultry sold in the United 
States and to finalize and publish a decision on this issue as 
expeditiously as possible thereafter.
  It also expresses the sense of the Senate that persons serving on the 
expert advisory committee established to advise the Secretary of 
Agriculture on this issue should be impartial and free of conflicts of 
interest.
  This amendment represents a breakthrough on an issue that has been at 
an impasse since 1988. Federal law allows poultry which has been frozen 
rock hard--to as low as one degree fahrenheit--to be thawed and sold 
under labels marked ``fresh.''
  In 1988, after extensive study, USDA experts concluded that chicken 
freezes at 26 degrees, and issued a labeling rule to restrict the use 
of the term ``fresh'' to poultry that had never been frozen. A policy 
memo from the USDA's Food Safety and Inspection Service dated July 11, 
1988, stated:

       The word ``fresh'' may not be used in conjunction with the 
     product name of: * * * Any poultry, poultry part, or an 
     edible portion thereof that has been frozen or previously 
     frozen to 26 degrees Fahrenheit or below.

  Unfortunately, the Bush administration chose to stop promulgation of 
the 1988 rule. The decision to reject the rule was not based on any 
scientific evidence, but--according to a declaration filed in Federal 
Court by Dr. Lester Crawford, the Bush administration's chief of the 
Food Inspection and Safety Service--``as a political compromise.'' Dr. 
Crawford also stated:

       I * * *. continue to believe that it is misleading to label 
     poultry that has been frozen to 26 degrees Fahrenheit or 
     below as fresh because such poultry is clearly frozen.

  Several States have tried to solve the political problem by passing 
their own poultry labeling laws regarding the definition of ``fresh,'' 
including New York, California, Arizona, Oregon, Maine, Alaska, 
Illinois, Washington, and Puerto Rico. But frozen chicken producers 
have successfully challenged the California statute, and the U.S. 
Department of Agriculture has backed their effort, arguing that Federal 
law preempts State law in this situation. Although the other States' 
laws have not been challenged, the precedent has been set, and 
consumers in those States will be at risk until we put Federal law on a 
firm scientific footing.
  Secretary Espy has responded to pressure to adopt the 1988 rule by 
setting up another task force to review the issue. Mr. President, I am 
convinced that we don't need another study. This issue has been studied 
and then studied again and the facts have not changed: fresh is fresh 
and frozen is frozen.
  But if we must have another review, and hold hearings, it is 
important that we do so with as little delay as possible. In a letter I 
received yesterday from Michael Taylor, the new Administrator of the 
Food Safety and Inspection Service, I was assured that the USDA is 
``committed to resolving this issue as expeditiously as possible.'' Mr. 
Taylor also pledged to hold hearings on the issue and to take a 
position by Thanksgiving.
  While I appreciate Mr. Taylor's commitment to resolving this issue, 
previous promises that hearings would be held and the issue decided 
have produced only delay and more delay.
  My amendment puts the Senate on record that the Department of 
Agriculture should end the delays and decide this issue as soon as it 
can.
  A few weeks ago fresh poultry producers held an event outside the 
Rayburn House Office Building featuring frozen chicken bowling. Members 
of the House actually bowled frozen chickens, clearly labeled as fresh. 
Even in the heat of a Washington summer the hard-as-rock chickens 
skated along the floor and knocked down pins as effectively as bowling 
balls.
  Mr. President, this situation is not only absurd, it is grossly 
unfair to consumers and to the producers of genuinely fresh poultry. 
Consumers have no way of knowing whether the chickens and turkeys they 
buy for dinner are really fresh or whether they have been kept frozen 
for months and thawed out for sale.
  And what is the difference? Consumers and some of our best chefs have 
testified that in terms of taste and texture, fresh poultry is superior 
to poultry that has been kept frozen. Because of that, consumers are 
willing to pay a premium price for fresh poultry--as much as 50 cents a 
pound more. Unfortunately, because of misleading labels, consumers are 
not always getting what they're paying for.
  In addition, producers of genuinely fresh poultry in States like 
California are at a significant disadvantage as big out-of-State 
producers of frozen poultry benefit from lower feed costs, lower labor 
costs, and less stringent health, safety, and environmental standards. 
This puts 25,000 jobs at risk in California alone.
  I am pleased that thanks to the help of the chairman and the Senator 
from Indiana, we at long last have a time-table for decisionmaking.
  Over the next three months the Agriculture Department will have 
another chance to hear all the views on this issue. They will hear from 
the big frozen-chicken producers and from the fresh-chicken producers. 
they will hear from scientists and politicians. But in the end, I hope 
they listen to American consumers.
  Consumers prefer genuinely fresh poultry and they are willing to pay 
extra for it. It is up to the Federal Government to make sure that they 
get what they are paying for.
  Mr. President, poultry producers should not be allowed to put a 
``fresh'' label on chicken that's been frozen as hard as a bowling 
ball.
  Federal law should not allow chicken to be labeled fresh, even though 
its been frozen as low as 1 degree Fahrenheit, when we know the chicken 
freezes below 26 degrees.
  Of course not. That is why the Nation's leading consumer 
organizations, the Attorney General of New York, the State of 
California, the Washington Post and the Los Angeles times have all been 
urging the USDA to put an end to this consumer fraud.
  This amendment will help end the delays and clear the way for a 
standard based on sound scientific information, not on politics and 
emotion.
  If the Department of Agriculture sticks to its timetable, Americans 
will be able to buy fresh turkey for Thanksgiving, confident, for the 
first time in years, that it is in fact fresh. That would be reason 
enough to give thanks.


                           amendment no. 2579

  (Purpose: To protect the First Amendment rights of employees of the 
                       Department of Agriculture)

  Mr. McCONNELL. Mr. President, I send an amendment to the desk on 
behalf of Senator Helms and ask unanimous consent for its immediate 
consideration; that the amendment be agreed to, and that the motion to 
reconsider be laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the amendment (No. 2579) was agreed to, as follows:

       ``Sec.   . Notwithstanding any other provision of law, no 
     employee of the United States Department of Agriculture shall 
     be peremptorily removed without public hearings from his or 
     her position because of remarks made during personal time in 
     opposition to Departmental policies, or proposed policies 
     regarding homosexuals; provided that, any such individual so 
     removed prior to date of enactment shall be reinstated to his 
     or her previous position.''


                           amendment no. 2580

  Mr. McCONNELL. Mr. President, I send an amendment to the desk on 
behalf of Senator Stevens and ask unanimous consent for its immediate 
consideration; that the amendment be agreed to, and that the motion to 
reconsider be laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the amendment (No. 2580) was agreed to, as follows:

       At the appropriate place add the following:

     SEC.   . ADJUSTED COST OF THRIFTY FOOD PLAN.

       Section 3(o)(11) of the Food Stamp Act of 1977 (7 U.S.C. 
     2012(o)(11) is amended by inserting before the period at the 
     end the following: ``, except that the Secretary may not 
     reduce the cost of such diet below the allotment in effect 
     for fiscal year 1994''.

  Mr. DASCHLE. Mr. President, I would like to begin by commending 
Senator Leahy and the administration for the effort they have put into 
getting this bill off the ground. Because of that effort, we have the 
chance today to take a big step toward providing America's farmers with 
an effective, reliable, and reasonably-priced risk management tool to 
protect them from natural disasters.
  Many of us on the Agriculture Committee have long advocated moving 
away from dependence on ad hoc disaster programs through a 
comprehensive reform of the Nation's crop insurance program. As we all 
know, disaster programs are an imperfect risk management tool. Each 
year, producers affected by a natural disaster must wait to see if 
Congress will enact a program, and whether that program will provide 
them with adequate coverage. Thus, our current system places producers 
in a perpetual state of financial uncertainty, making it extremely 
difficult to develop sound financial plans and secure adequate credit.
  The proposal we are considering today would change this. By paying 
minimal administrative costs, producers would be able to purchase 
catastrophic insurance that offers them protection similar to that 
provided by recent disaster programs, but on a more stable basis. Most 
importantly, farmers would be able to count on this coverage, even 
taking it to the bank as collateral to secure a loan.
  This proposal truly is an innovative step forward. It would greatly 
reduce the uncertainty currently plaguing much of our farm economy. In 
addition, this new plan would reduce the price of high levels of crop 
insurance coverage, affording more farmers the opportunity to match 
their insurance protection to their true level of risk.
  The bill before us today also includes a number of other commendable 
provisions, three of which I would like to discuss in more detail.
  First, this bill addresses concerns I raised during a hearing earlier 
this spring about the way FCIC has been administering prevented 
planting coverage. Specifically, as a result of FCIC rule changes, 
there was much confusion in North and South Dakota over whether 
producers who had excessively wet land as of the April 15 crop 
insurance signup deadline were eligible for prevented planting 
coverage. The bill before us includes a provision to clarify this 
situation and to provide producers with the prevented planting coverage 
that they were promised.
  Second, I am pleased to note the bill requires the Federal Crop 
Insurance Corporation to market all coverage in a simple dollar amount. 
Virtually every time I discuss crop insurance with producers in South 
Dakota, they point out how the way the coverage is presented 
complicates current coverage levels. They would like to see crop 
insurance coverage offered in dollars per acre terms similar to hail 
insurance policies. This makes great sense because most producers 
measure their input costs in dollars per acre terms, and have a more 
concrete idea of their insurance needs when coverage levels are 
expressed in these terms. This bill will finally allow producers to 
purchase crop insurance in terms they readily understand and are 
comfortable with.

  Third, this bill requires FCIC to institute a pilot program that will 
increase the coverage levels for beginning farmers in several counties. 
It is my hope that by decreasing the risk that beginning farmers pose 
to lenders, this pilot project will provide a model for making credit 
more accessible. Amassing enough credit to start up a farming operation 
is one of the most significant barriers facing beginning farmers today. 
This project is designed to help lower that barrier, and promises to 
offer us a completely new approach to rejuvenating rural communities by 
attracting new farmers.
  Unfortunately, the reforms embodied in this legislation will not take 
effect until next year at the earliest. They are, consequently, of no 
use to the many producers all across the country who already are facing 
devastating natural disasters this crop year. For these reasons, 
Senator Leahy and I drafted an amendment to the crop insurance bill 
that would provide assistance to all producers whose crops are affected 
by natural disasters in 1994.
  Last summer, the entire country watched as devastation caused by 
flooding throughout the Midwest paraded across our television screens. 
Nearly continuous rains reduced much of our Nation's most productive 
farmland to virtual swampland, filled with water and weeds. In that 
atmosphere, there was strong and justified public support for a 
disaster program to help America's hardworking agricultural producers 
survive the extraordinary difficult year.
  Until recently, the agricultural disasters of the current year have 
not drawn the same publicity. However, for the affected farmers, this 
year's disasters are equally devastating.
  In my State of South Dakota, 15 counties have already been declared 
Presidential disaster areas because of flooding, and at least 5 more 
counties have disaster declaration applications pending. There is a 
total crop loss for many producers in these counties, and they are in 
desperate need of some relief. In some areas, this is the second year 
in a row farmers have not be able to produce a crop, pushing them and 
the rural economies that depend on their success to the edge of 
financial failure.
  South Dakota is not an isolated case. Many other States also have 
faced destructive natural disasters. Floods have been devastating in 
Georgia, Florida and Alabama; ice storms hit Mississippi and Arkansas 
this spring; drought conditions affect several western States; and many 
other localized disasters have destroyed crops across the country.
  Starting next year, the crop insurance bill we are considering today 
will respond to all of these disasters. We cannot, however, afford to 
let producers suffer economic hardship this year simply because the 
government has failed to provide them with an adequate risk management 
tool.
  Mr. President, this bill is not perfect, but it is a step in the 
right direction. It saves the Government money; it reduces the cost of 
crop insurance coverage to producers; it simplifies the crop insurance 
program; it moves us away from our dependence on ad hoc disaster 
assistance; and it provides disaster assistance for producers who 
suffer crop losses this year. I urge support for this important 
legislation.
  Mr. DOMENICI. Mr. President, I am supportive of the overall 
objectives of the crop insurance reform bill but skeptical if the 
reform will work.
  I agree that we should reform crop insurance and agree with the 
overall policy objectives.
  We should remove the uncertainty associated with ad hoc disaster 
bills and replace it with a program that will adequately protect 
farmers in a disaster, remove the demand for ad hoc disaster bills, and 
must be financially sound.
  The committee reported bill includes a number of changes to the 
administration's bill to make it more fiscally sound. However, I am 
still concerned about the possible future costs.
  S. 2095 would provide permanent and indefinite spending authority 
from the Crop Insurance Fund for the mandatory costs of the new 
program.
  In addition, the bill would eliminate the Department of Agriculture's 
existing authority to transfer Commodity Credit Corporation funds to 
the Crop Insurance Fund.
  The bill also eliminates the Secretary of Agriculture's discretion to 
provide disaster assistance through the Commodity Credit Corporation.
  The Congressional Budget Office has scored savings of $187 million in 
outlays over 5 years with this bill.
  However, everyone must remember that the conference report on the 
concurrent resolution on the budget for fiscal year 1995 included $5 
billion in new mandatory spending to pay for crop insurance reform.
  This program will work only if Congress constrains itself from 
providing future ad hoc disaster bills.
  This will be hard to do based on past experiences.
  I am cosponsoring an amendment today with the chairman of the Budget 
Committee, Mr. Sasser, which would create a hurdle for Congress to 
provide emergency disaster assistance.
  As I stated this is only a hurdle and does not prevent Congress from 
providing disaster assistance.
  The amendment I am cosponsoring would not allow the emergency 
designation for both discretionary and mandatory agriculture disaster 
spending.
  The President's reform proposal only eliminated the emergency 
designation for agriculture disaster discretionary spending but both 
the mandatory and discretionary designations should be eliminated as 
done in this amendment.
  This means that all future agriculture disaster spending would fall 
under the pay as you go system. If the disaster spending does not 
include an offset it would require 60 votes to waive the budget act.
  Eliminating the emergency designation for both mandatory and 
discretionary spending is necessary if this new crop insurance program 
is suppose to replace ad hoc agriculture disaster bills.
  Also, the CBO says that the adoption of this amendment would increase 
the likelihood that the savings estimated would be realized. This is 
relative to the fiscal year 1995 budget resolution, which assumes 
future spending of $1.0 billion per year associated with future ad hoc 
agriculture disaster assistance payments.
  I will not support the conference report if this amendment is dropped 
in conference.
  Mr. SASSER. Mr. President, today, I am pleased the Agriculture 
Committee agreed to accept my amendment to S. 2095. It is cosponsored 
by Senator Domenici--the Budget Committee's ranking member, as well as 
Senators Leahy and Lugar. We offer this amendment to ensure that the 
crop insurance measure before us incorporates one of the key elements 
of the President's proposed reforms. Specifically, this amendment 
removes ``agriculture crop disaster assistance'' from the list of items 
which are eligible for the emergency designation under the Budget 
Enforcement Act.
  Mr. President, it is no secret that the Federal crop insurance 
program has been the subject of constant criticism as being ineffective 
and costly. Indeed, the program has been the target of reform of 
administrations both Democratic and Republican for most of the last 
decade and a half. Though the program has a variety of problems, one of 
the underlying causes of its failure has been the constant provision of 
emergency disaster relief for farmers with significant crop losses. 
Through the years, many farmers have rightly made the calculation that 
it is wiser to await an ad hoc disaster relief measure rather than 
enroll in the Federal crop insurance program.
  The result of these constant disaster relief bills has been to 
seriously undermine the effectiveness of the crop insurance program. As 
many farmers opt out of the program, the financial viability of the 
insurance is destroyed.
  The administration's reform proposal recognizes the inherent obstacle 
that emergency disaster legislation poses to crop insurance reform 
efforts. For this reason, along with a myriad of other changes designed 
to increase program participation, actuarial soundness and to obviate 
the need for emergency legislation, the administration proposed to 
create a higher legislative hurdle for ad hoc agriculture disaster 
bills. Specifically, the plan would subject these bills to a 60 vote 
point of order if they are not fully offset with other spending cuts.
  The amendment I am offering here will implement this very important 
limitation. By removing agriculture disaster relief from the list of 
items eligible for an emergency designation, the amendment would create 
the 60 vote hurdle proposed by the administration.
  Mr. President, this amendment represents the very best kind of 
budgeting. It strikes a balance between fiscal responsibility and 
responsible policy. On average, the Congress approves an agriculture 
disaster bill costing about $1 billion each year. The Budget Resolution 
recognized this fact by incorporating a baseline adjustment reflecting 
these costs. The sole purpose for this adjustment was to allow the 
Agriculture Committees to rechannel these funds to create an effective 
and workable crop insurance program. Inherent to this adjustment was 
the requirement that the crop insurance reform include the amendment I 
am offering here.
  This amendment enjoys the strong backing of Secretary Espy and the 
ranking minority member of the Budget Committee, Senator Dominici as 
well a the bipartisan support of the chairman and ranking member of the 
Senate Committee on Agriculture. It is with this rare spirit of 
unanimity that I join my colleagues in urging its adoption.
  Mr. EXON. Mr. President, I thank the two managers for their prompt 
action. We do these things very quickly in the Senate. In the case of 
the crop insurance program, I am delighted it is happening in that 
fashion. I wanted to say that the speed with which we have passed this 
bill should be noted, and it was possible only with a great deal of 
hard work way back early when the crop insurance program had to be 
remade. It was remade and redone in the Agriculture Committee, and 
things were going very well. It has been on the schedule here for 
passage for some time.
  Fortunately, earlier today, my colleague, Senator Kerrey from 
Nebraska, called to my attention a fact that I was not fully familiar 
with, although I knew there were some earlier problems. It seems that 
my distinguished colleague from North Carolina, Senator Helms, had a 
hold on the crop insurance bill. The reason he had a hold on the bill 
was that--and in my view, Senator Helms had a good point--he was trying 
to correct what he thought had been some unfortunate decisions by some 
employees of the U.S. Department of Agriculture regarding the transfer 
of one employee of the Department for making what is alleged to be 
inappropriate remarks with regard to the lenient policies existing, or 
alleged to have existed, in the Department with regard to homosexuals. 
Senator Helms had a hold placed on this bill and was trying to get that 
corrected to his satisfaction.
  When I talked about this, I went over to see Senator Helms, whom I 
have worked with on many issues for a long, long time and told him of 
the adverse effect that not passing this crop insurance bill tonight 
would have on farmers. Some of the insurance companies were prepared to 
send out notices to some 12,000 farmers next week--had we not acted on 
this--saying that their crop insurance program might likely not be 
renewed. I also visited with Senator Dole about this. I found that 
Senator Dole had already been talking to Senator Helms about it. I 
called the Secretary of Agriculture and got him involved, and I might 
say that we put in a lot of time and effort on this today in getting it 
resolved--at least up until this point.
  Senator Helms was not totally satisfied, but the Secretary of 
Agriculture has guaranteed an early hearing in September on this matter 
that might lay it to rest.
  In any event, I want to take a moment to thank Senator Helms for his 
consideration and his understanding after I explained to him why it was 
necessary to pass this bill tonight. Senator Dole played a very key 
role, as did the Secretary of Agriculture, and I am pleased that we are 
passing this measure tonight. It does indicate that in some of the 
debates we have on the floor, from time to time, there is a lot more 
understanding between Members of the Senate on all sides of the aisle 
when matters of this nature come up. Once again, I thank all that had a 
part in this, and I am pleased that the bill is passing.
  I am sorry to interrupt the proceedings. I wanted to make those 
remarks.
  I thank my colleagues from Kentucky for allowing me to take this 
time.
  I yield the floor.
  Mr. FORD. Mr. President, have we had third reading.
  The PRESIDING OFFICER. No.
  If there is no further debate, the question is on agreeing to the 
committee substitute, as amended.
  The committee amendment, as amended, was agreed to.
  The bill was deemed read a third time.
  Mr. FORD. Mr. President, I now ask unanimous consent that the Senate 
proceed to the consideration of Calendar 552, H.R. 4217, the House 
companion, that all after the enacting clause be stricken, and the text 
on S. 2095, as amended, be inserted in lieu thereof; the bill be 
advanced to a third reading, passed, and the motion to reconsider be 
laid upon the table; and that upon disposition of H.R. 4217 the Senate 
measure be indefinitely postponed.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the bill (H.R. 4217), as amended, was deemed read a third time and 
passed.
  (The text of the bill will appear in a future edition of the Record.)

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