FCIC Act

Q:\COMP\AGMISC\75-30 - Agricultural Adjustment Act Of 1938 & Federal
Crop Insurance Act.xml
1–3

75-30 - Agricultural Adjustment Act of 1938 & Fed...

Sec. 2

TITLE V—CROP INSURANCE
Subtitle A—Federal Crop Insurance Act
Sec. 501. Short title and application of other provisions.
Sec. 502. Purpose and definitions.
Sec. 503. Creation of Federal Crop Insurance Corporation.
Sec. 504. Capital stock.
Sec. 505. Management of Corporation.
Sec. 506. General powers.
Sec. 507. Personnel.
Sec. 508. Crop insurance.
Sec. 508A. Double insurance and prevented planting.
Sec. 509. Indemnities exempt from levy.
Sec. 510. Deposit of funds.
Sec. 511. Tax exemption.
Sec. 512. Fiscal agency of government.
Sec. 513. Accounting by Corporation.
Sec. 514. Crimes and offenses.
Sec. 515. Program compliance and integrity.
Sec. 516. Funding.
Sec. 517. Separability.
Sec. 518. Agricultural commodity.
Sec. 520. Producer eligibility.
Sec. 521. Ineligibility for catastrophic risk and noninsured assistance payments.
Sec. 522. Research and development.
Sec. 523. Pilot programs.
Sec. 524. Education and risk management assistance.
Subtitle B—Supplemental Agricultural Disaster Assistance
Sec. 531. Supplemental agricultural assistance.disaster

an adequate and balanced flow of agricultural commodities in interstate and foreign commerce
and for other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, ø7 U.S.C. 1281¿ That this Act
may be cited as the ‘‘Agricultural Adjustment Act of 1938’’.
TITLE V—CROP INSURANCE

Subtitle A—Federal Crop Insurance Act
SEC. 501. 7 U.S.C. 1501 - SHORT TITLE AND APPLICATION OF OTHER PROVISIONS.

This subtitle may be cited as the ‘‘Federal Crop Insurance Act’’. Except as
otherwise expressly provided the provisions in titles I to IV, inclusive, shall not

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apply with respect to this subtitle, and the term ‘‘Act’’ wherever it appears in
such titles shall not be construed to include this subtitle.
SEC. 502. 7 U.S.C. 1502 - PURPOSE AND DEFINITIONS.

(a)
PURPOSE.—It is the purpose of this subtitle to promote the
national welfare by improving the economic stability of agriculturethrough

a sound system of crop insurance and providing the means for the
research and experience helpful in devising and establishing such
insurance.

(b) DEFINITIONS.—As used in this subtitle:
(1) ADDITIONAL COVERAGE.—The term ‘‘additional coverage’’
means a plan of crop insurance coverage providing a level of coverage
greater than the level available under catastrophic risk protection.
(2) APPROVED INSURANCE PROVIDER.—The term ‘‘approved insurance
provider’’ means a private insurance provider that has been approved by
the Corporation to provide insurance coverage to producers participating
in the Federal crop insurance program established under this subtitle.
(3) BEGINNING FARMER OR RANCHER.—The term ‘‘beginning farmer
or rancher’’ means a farmer or rancher who has not actively operated and
managed a farm or ranch with a bona fide insurable interest in a crop or
livestock as an owner-operator, landlord, tenant, or sharecropper for more
than 5 crop years, as determined by the Secretary.
(4) BOARD.—The term ‘‘Board’’ means the Board of Directors of
the Corporation established under section 505(a).
(5) CORPORATION.—The term ‘‘Corporation’’ means the Federal
Crop Insurance Corporation established under section 503.
(6) COVER CROP TERMINATION.—The term ‘cover crop termination’
means a practice that historically and under reasonable circumstances
results in the termination of the growth of a cover crop.
(7) DEPARTMENT.—The term ‘‘Department’’ means the United
States Department of Agriculture.
(8) FARM FINANCIAL BENCHMARKING.—The term ‘‘farm financial
benchmarking’’ means—
(A) the process of comparing the performance of an
agricultural enterprise against the performance of other similar
enterprises, through the use of comparable and reliable data, in order
to identify business management strengths, weaknesses, and steps
necessary to improve management performance and business
profitability; and
(B) benchmarking of the type conducted by farm management
and producer associations consistent with the activities described in
or funded pursuant to section 1672D of the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C. 5925f).
(9) HEMP.—The term ‘hemp’ has the meaning given the term in
section 297A of the Agricultural Marketing Act of 1946.
(10) LOSS RATIO.—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.
(11) ORGANIC CROP.—The term ‘‘organic crop’’ means an agricultural
commodity that is organically produced consistent with section 2103 of

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the Organic Foods Production Act of 1990 (7 U.S.C. 6502).
(12) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of
Agriculture.
(13) TRANSITIONAL YIELD.—The term ‘‘transitional yield’’ means the
maximum average production per acre or equivalent measure that is
assigned to acreage for a crop year by the Corporation in accordance

with the regulations of the Corporation whenever the producer
fails—

(A) to certify that acceptable documentation of production and
acreage for the crop year is in the possession of the producer; or
(B) to present the acceptable documentation on the demand of
the Corporation or an insurance company reinsured by the
Corporation.
(c) PROTECTION OF CONFIDENTIAL INFORMATION.—
(1) GENERAL PROHIBITION AGAINST DISCLOSURE.—Except as provided
in paragraph (2), the Secretary, any other officer or employee of the
Department or an agency thereof, an approved insurance provider and its
employees and contractors, and any other person may not disclose to the
public information furnished by a producer under this subtitle.
(2) AUTHORIZED DISCLOSURE.—
(A) DISCLOSURE IN STATISTICAL OR AGGREGATE FORM.—
Information described in paragraph (1) may be disclosed to the public
if the information has been transformed into a statistical or aggregate
form that does not allow the identification of the person who supplied
particular information.
(B) CONSENT OF PRODUCER.—A producer may consent to the
disclosure of information described in paragraph (1). The
participation of the producer in, and the receipt of any benefit by the
producer under, this subtitle or any other program administered by the
Secretary may not be conditioned on the producer providing consent
under this paragraph.
(3) VIOLATIONS; PENALTIES.—Section 1770(c) of the Food Security
Act of 1985 (7 U.S.C. 2276(c)) shall apply with respect to the release of
information collected in any manner or for any purpose prohibited by this
subsection.
(4) INFORMATION.—
(A) REQUEST.—Subject to subparagraph (B), the Farm Service
Agency shall, in a timely manner, provide to an agent or an approved
insurance provider authorized by the producer any information
(including Farm Service Agency Form 578s (or any successor form))
or maps (or any corrections to those forms or maps) that may assist
the agent or approved insurance provider in insuring the producer
under a policy or plan of insurance under this subtitle.
(B) PRIVACY.—Except as provided in subparagraph (C), an
agent or approved insurance provider that receives the information of

a producer pursuant to subparagraph (A) shall treat the
information in accordance with paragraph (1).

(C) SHARING.—Nothing in this section prohibits the sharing of
the information of a producer pursuant to subparagraph (A) between
the agent and the approved insurance provider of the producer.
(d) RELATION TO OTHER LAWS.—

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(1)
TERMS AND CONDITIONS OF POLICIES AND PLANS.—The terms
and conditions of any policy or plan of insurance offered under this

subtitle that is reinsured by the Corporation shall not—

(A) be subject to the jurisdiction of the Commodity Futures
Trading Commission or the Securities and Exchange Commission; or
(B) be considered to be accounts, agreements (including any
transaction that is of the character of, or is commonly known to the
trade as, an ‘‘option’’, ‘‘privilege’’, ‘‘indemnity’’, ‘‘bid’’, ‘‘offer’’,
‘‘put’’, ‘‘call’’, ‘‘advance guaranty’’, or ‘‘decline guaranty’’), or
transactions involving contracts of sale of a commodity for future
delivery, traded or executed on a contract market for the purposes of
the Commodity Exchange Act (7 U.S.C. 1 et seq.).
(2)
EFFECT ON CFTC AND COMMODITY EXCHANGE ACT.—
Nothing in this subtitle affects the jurisdiction of the Commodity Futures
Trading Commission or the applicability of the Commodity Exchange Act
(7 U.S.C. 1 et seq.) to any transaction conducted on a contract market under
that Act by an approved insurance provider to offset the approved insurance
provider’s risk under a plan or policy of insurance under this subtitle.
CREATION OF FEDERAL CROP INSURANCE CORPORATION

SEC. 503. 7 U.S.C. 1503 - To carry out the purposes of this subtitle, there
is hereby created as an agency of and within the Department a body corporate
with the name ‘‘Federal Crop Insurance Corporation’’. The principal office of
the Corporation shall be located in the District of Columbia, but there may be
established agencies or branch offices elsewhere in the United States under rules
and regulations prescribed by the Board.
CAPITAL STOCK

SEC. 504. 7 U.S.C. 1504 - (a) The Corporation shall have a capital stock of
$500,000,000 subscribed by the United States of America, payment for which
shall, with the approval of the Secretary, be subject to call in whole or in part by
the Board.
(b) There is hereby authorized to be appropriated such sums as are
necessary for the purpose of subscribing to the capital stock of theCorporation.
(c) Receipts for payments by the United States of America for or on
account of such stock shall be issued by the Corporation to the Secretary of the
Treasury and shall be evidence of the stock ownership by the United States of
America.
(d) Within thirty days after the date of enactment of the Federal Crop
Insurance Act of 1980, the Secretary of the Treasury shall cancel, without
consideration, receipts for payments for or on account of the stock of the

Corporation outstanding on such date of enactment and such receipts
shall cease to be liabilities of the Corporation.
SEC. 505. 7 U.S.C. 1505 MANAGEMENT OF CORPORATION.

(a) BOARD OF DIRECTORS.—
(1)
ESTABLISHMENT.—The management of the Corporation shall be
vested in a Board of Directors subject to the general supervision of the
Secretary.
(2)
COMPOSITION.—The Board shall consist of only the following
members:
(A) The manager of the Corporation, who shall serve as a

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nonvoting ex officio member.
(B) The Under Secretary of Agriculture responsible for the
Federal crop insurance program.
(C) One additional Under Secretary of Agriculture (as designated
by the Secretary).
(D) The Chief Economist of the Department of Agriculture.
(E) One person experienced in the crop insurance business.
(F) One person experienced in reinsurance or the regulation of
insurance.
(G) Four active producers who are policy holders, are from
different geographic areas of the United States, and represent a crosssection of agricultural commodities grown in the United States, including
at least one specialty crop producer.
(3) APPOINTMENT OF PRIVATE SECTOR MEMBERS.—The members of the
Board described in subparagraphs (E), (F), and
(G) of paragraph (2)—
(A) shall be appointed by, and hold office at the pleasure of,
the Secretary;
(B) shall not be otherwise employed by the Federal
Government;
(C) shall be appointed to staggered 4-year terms, as
determined by the Secretary; and
(D) shall serve not more than two consecutive terms.
(4) CHAIRPERSON.—The Board shall select a member of the Board to serve
as Chairperson.
(b) Vacancies in the Board so long as there shall be four members in office
shall not impair the powers of the Board to execute the functions of the
Corporation, and four of the members in office shall constitute a quorum for the
transaction of the business of the Board.
(c) The Directors of the Corporation who are employed in the Department
shall receive no additional compensation for their services as such Directors, but
may be allowed necessary traveling and subsistence expenses when engaged in
business of the Corporation, outside of the District of Columbia. The Directors of
the Corporation who are not employed by the Federal Government shall be paid
such compensation for their services as Directors as the Secretary shall determine,
but such compensation shall not exceed the daily equivalent of the rate prescribed
for grade GS–18 under section 5332 of title 5 of the United States Code when
actually employed, and actual necessary traveling and subsistence expenses, or a
per diem allowance in lieu of subsistence expenses, as authorized by section

5703 of title 5 of the United States Code for persons in Government
service employed intermittently, when on the business of the Corporation
away from their homes or regular places of business.

(d) The manager of the Corporation shall be its chief executive officer,
with such power and authority as may be conferred by the Board. The manager
shall be appointed by, and hold office at the pleasure of, the Secretary.
(e) EXPERT REVIEW OF POLICIES, PLANS OF INSURANCE, AND RELATED
MATERIAL.—
(1) REVIEW BY EXPERTS.—The Board shall establish procedures
under which any policy or plan of insurance, as well as any related material
or modification of such a policy or plan of insurance, to be offered under
this subtitle shall be subject to independent reviews by persons experienced

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as actuaries and in underwriting, as determined by the Board.
(2) REVIEW OF CORPORATION POLICIES AND PLANS.—Except as
provided in paragraph (3), the Board shall contract with at least five persons
to each conduct a review of the policy or plan of insurance, of whom—
(A) not more than one person may be employed by the
Federal Government; and
(B) at least one person must be designated by approved
insurance providers pursuant to procedures determined by the Board.
(3) REVIEW OF PRIVATE SUBMISSIONS.—If the reviews under
paragraph (1) cover a policy or plan of insurance, or any related material or
modification of a policy or plan of insurance, submitted under section
508(h)—
(A) the Board shall contract with at least five persons to each
conduct a review of the policy or plan of insurance, of whom—
(i) not more than one person may be employed by the
Federal Government; and
(ii) none may be employed by an approved insurance
provider; and
(B) each review must be completed and submitted to the
Board not later than 30 days prior to the end of the 120-day period
described in section 508(h)(4)(D).
(4) CONSIDERATION OF REVIEWS.—The Board shall include reviews
conducted under this subsection as part of the consideration of any policy
or plan or insurance, or any related material or modification of a policy or
plan of insurance, proposed to be offered under this subtitle.
(5) FUNDING OF REVIEWS.—Each contract to conduct a review under
this subsection shall be funded from amounts made available under
section 516(b)(2)(A)(ii).
(6) RELATION TO OTHER AUTHORITY.—The contract authority
provided in this subsection is in addition to any other contracting authority
that may be exercised by the Board under section 506(l).
SEC. 506. 7 U.S.C. 1506 - GENERAL POWERS.

(a) SUCCESSION.—The Corporation shall have succession in its corporate name.
(b) CORPORATE SEAL.—The Corporation may adopt, alter, and use a
corporate seal, which shall be judicially noticed.
(c) PROPERTY.—The Corporation may purchase or lease and hold such real
and personal property as it deems necessary or convenient in the transaction of its
business and may dispose of such property held by it upon such terms as it deems
appropriate.

(d) SUIT.—Subject to section 508(j)(2)(A), the Corporation, subject to the
provisions of section 508(j), may sue and be sued in its corporate name, but no
attachment, injunction, garnishment, or other similar process, mesne or final,
shall be issued against the Corporation or its property. The district courts of the
United States, including the district courts of the District of Columbia and of any
territory or possession, shall have exclusive original jurisdiction, without regard
to the amount in controversy, of all suits brought by or against the Corporation.
The Corporation may intervene in any court in any suit, action, or proceeding in
which it has an interest. Any suit against the Corporation shall be brought in the
District of Columbia, or in the district wherein the plaintiff resides or is engaged
in business.
(e) BYLAWS AND REGULATIONS.—The Corporation may adopt, amend, and

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repeal bylaws, rules, and regulations governing the manner in which its business
may be conducted and the powers granted to it by law may be exercised and
enjoyed.
(f) MAILS.—The Corporation shall be entitled to the use of the United
States mails in the same manner as the other executive agencies of Government.
(g) ASSISTANCE.—The Corporation, with the consent of any board,
commission, independent establishment, or executive department of the
Government, including any field service thereof, may avail itself of the use of
information, services, facilities, officials, and employees thereof in carrying out
the provisions of this subtitle.
(h) COLLECTION AND SHARING OF INFORMATION.—
(1) SURVEYS AND INVESTIGATIONS.—The Corporation may conduct
surveys and investigations relating to crop insurance, agriculture- related
risks and losses, and other issues related to carrying out this subtitle.
(2) DATA COLLECTION.—
(A) IN GENERAL.—The Corporation shall assemble data for the
purpose of establishing sound actuarial bases for insurance on
agricultural commodities.
(B) NATIONAL AGRICULTURAL STATISTICS SERVICE.—Data
collected by the National Agricultural Statistics Service, whether
published or unpublished, shall be—
(i) provided in an aggregate form to the Corporation for
the purpose of providing insurance under this subtitle; and
(ii) kept confidential by the Corporation in the same
manner and to the same extent as is required under—
(I) section 1770 of the Food Security Act of 1985 (7
U.S.C. 2276); and
(II) the Confidential Information Protection and
Statistical Efficiency Act of 2002 (44 U.S.C. 3501 note;
Public Law 107–347).
(C) NONINSURED CROP DISASTER ASSISTANCE PROGRAM.— In
collecting data under this subsection, the Secretary shall ensure
that—
(i) appropriate data are collected through the noninsured
crop disaster assistance program established by section 196 of
the Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7333); and
(ii) not less frequently than annually, the Farm Service
Agency shares, and the Corporation considers, the data
described in clause (i).
(3) SHARING OF RECORDS.—Notwithstanding section 502(c), records
submitted in accordance with this subtitle and section 196 of the
Agricultural Market Transition Act (7 U.S.C. 7333) shall be available to
agencies and local offices of the Department, appropriate State and Federal
agencies and divisions, applicants who have received payment under
section 522(b)(2)(E) and approved insurance providers for use in carrying
out this subtitle, such section 196, and other agricultural programs.
(i) EXPENDITURES.—The Corporation shall determine the character and
necessity for its expenditures under this subtitle and the manner in which they
shall be incurred, allowed, and paid, without regard to the provisions of any other
laws governing the expenditure of public funds and such determinations shall be
final and conclusive upon all other officers of the Government.

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(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.
(k) OTHER POWERS.—The Corporation shall have such powers as may be
necessary or appropriate for the exercise of the powers herein specifically
conferred upon the Corporation and all such incidental powers as are customary
in corporations generally.
(l) CONTRACTS.—The Corporation may enter into and carry out contracts
or agreements, and issue regulations, necessary in the conduct of its business, as
determined by the Board. State and local laws or rules shall not apply to
contracts, agreements, or regulations of the Corporation or the parties thereto to
the extent that such contracts, agreements, or regulations provide that such laws
or rules shall not apply, or to the extent that such laws or rules are inconsistent
with such contracts, agreements, or regulations.
(m) SUBMISSION OF CERTAIN INFORMATION.—
(1)
SOCIAL SECURITY ACCOUNT AND EMPLOYER IDENTIFICATION
NUMBERS.—The Corporation shall require, as a condition of eligibility for
participation in the multiple peril crop insurance program, submission of
social security account numbers, subject to the requirements of section
205(c)(2)(C)(iii)1 of the Social Security Act, and employer identification
numbers, subject to the requirements of section 6109(f) of the Internal
Revenue Code of 1986.
(2)
NOTIFICATION BY POLICYHOLDERS.—Each policyholder shall
notify each individual or other entity that acquires or holds a substantial
beneficial interest in such policyholder of the requirements and limitations
under this subtitle.
(3)
IDENTIFICATION OF HOLDERS OF SUBSTANTIAL INTERESTS.—The
Manager of the Corporation may require each policyholder to provide to
the Manager, at such times and in such manner as prescribed by the
Manager, the name of each individual that holds or acquires a substantial
beneficial interest in the policyholder.
(4)
DEFINITION.—For purposes of this subsection, the term
‘‘substantial beneficial interest’’ means not less than 5 percent of all
beneficial interests in the policyholder.
(n) ACTUARIAL SOUNDNESS.—
(1)
PROJECTED LOSS RATIO AS OF OCTOBER 1, 1995.—The
Corporation shall take such actions as are necessary to improve the
actuarial soundness of Federal multiperil crop insurance coverage made
available under this subtitle to achieve, on and after October 1, 1995, an
overall projected loss ratio of not greater than 1.1, including—
(A) instituting appropriate requirements for documentation of the
actual production history of insured producers to establish recorded or
appraised yields for Federal crop insurance coverage that more
accurately reflect the associated actuarial risk, except that the
Corporation may not carry out this paragraph in a manner that would
prevent beginning farmers (as defined by the Secretary) from

obtaining Federal crop insurance;

(B) establishing in counties, to the extent practicable, a crop
insurance option based on area yields in a manner that allows an
insured producer to qualify for an indemnity if a loss has occurred in
a specified area in which the farm of the insured producer is located;

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(C) establishing a database that contains the social security
account and employee identification numbers of participating producers,
agents, and loss adjusters and using the numbers to identify insured
producers, agents, and loss adjusters who are high risk for actuarial

purposes and insured producers who have not documented at least
4 years of production history, to assess the performance of
insurance providers, and for other purposes permitted by law; and

(D) taking any other measures authorized by law to improve
the actuarial soundness of the Federal crop insurance program while
maintaining fairness and effective coverage for agricultural
producers.
(2) PROJECTED LOSS RATIO.—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 subtitle to achieve 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.
(o) REGULATIONS.—The Secretary and the Corporation are each authorized
to issue such regulations as are necessary to carry out this subtitle.
(p) PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS.—
(1)
SENSE OF CONGRESS.—It is the sense of Congress that, to the
greatest extent practicable, all equipment and products purchased by the
Corporation using funds made available to the Corporation should be
American-made.
(2)
NOTICE REQUIREMENT.—In providing financial assistance to,
or entering into any contract with, any entity for the purchase of equipment
and products to carry out this subtitle, the Corporation, to the greatest extent
practicable, shall provide to the entity a notice describing the statement
made in paragraph (1).
(r) PROCEDURES FOR RESPONDING TO CERTAIN INQUIRIES.—
(1)
PROCEDURES REQUIRED.—The Corporation shall establish
procedures under which the Corporation will provide a final agency
determination in response to an inquiry regarding the interpretation by the
Corporation of this subtitle or any regulation issued under this subtitle.
(2)
IMPLEMENTATION.—Not later than 180 days after the date of
enactment of this subsection, the Corporation shall issue regulations to

implement this subsection. At a minimum, the regulations shall
establish—

(A) the manner in which inquiries described in paragraph
(1) are required to be submitted to the Corporation; and
(B) a reasonable maximum number of days within which the
Corporation will respond to all inquiries.
(3) EFFECT OF FAILURE TO TIMELY RESPOND.—If the Corporation

fails to respond to an inquiry in accordance with the procedures
established pursuant to this subsection, the person requesting the
interpretation of this subtitle or regulation may assume the
interpretation is correct for the applicable reinsurance year.
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PERSONNEL

SEC. 507. 7 U.S.C. 1507
(a) The Secretary shall appoint such officers and employees as may be
necessary for the transaction of the business of the Corporation pursuant to
civil-service laws and regulations, fix their compensation in accordance with
the provisions of the Classification Act of 19232, as amended, define their
authority and duties, and delegate to them such of the powers vested in the
Corporation as the Secretary may determine appropriate. However, personnel
paid by the hour, day, or month when actually employed may be appointed and
their compensation fixed without regard to civil-service laws and regulations or
the Classification Act of 1923, as amended.
(b) Insofar as applicable, the benefits of the Act entitled ‘‘An Act to
provide compensation for employees of the United States suffering injuries
while in the performance of their duties, and for other purposes,’’ approved
September 7, 1916, as amended (5 U.S.C. Chapter 8, subchapter I), shall extend
to persons given employment under the provisions of this subtitle, including the
employees of the committees and associations referred to in subsection (c) of
this section and the members of such committees.
(c) In the administration of this subtitle, the Board shall, to the maximum
extent possible, (1) establish or use committees or associations of producers and
make payments to them to cover the administrative and program expenses, as
determined by the Board, incurred by them in cooperating in carrying out this
subtitle, (2) contract with private insurance companies, private rating bureaus,
and other organizations as appropriate for actuarial services, services relating to
loss adjustment and rating plans of insurance, and other services to avoid
duplication by the Federal Government of services that are or may readily be
available in the private sector and to enable the Corporation to concentrate on
regulating the provision of insurance under this subtitle and evaluating new
products and materials submitted under section 508(h) or 523, and reimburse

such companies for the administrative and program expenses, as
determined by the Board, incurred by them, under terms and provisions
and rates of compensation consistent with those generally prevailing in
the insurance industry, and (3) encourage the sale of Federal crop
insurance through licensed private insurance agents and brokers and give
the insured the right to renew such insurance for successive terms
through such agents and brokers, in which case the agent or broker shall
be reasonably compensated from premiums paid by the insured for such
sales and renewals recognizing the function of the agent or broker to
provide continuing services while the insurance is in effect: Provided,
That such compensation shall not be included in computations
establishing premium rates. The Board shall provide such agents and
brokers with indemnification, including costs and reasonable attorney
fees, from the Corporation for errors or omissions on the part of the
Corporation or its contractors for which the agent or broker is sued or
held liable, except to the extent the agent or broker has caused the error
or omission. Nothing in this subsection shall permit the Corporation to
contract with other persons to carry out the responsibility of the
Corporation to review and approve policies, rates, and other materials
submitted under section 508(h).
(d) The Secretary may allot to bureaus and offices of the Department or

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transfer to such other agencies of the State and Federal Governments as he may
request to assist in carrying out this subtitle any funds made available pursuant
to the provisions of section 516.
(e) In carrying out the provisions of this subtitle the Board may, in its

discretion, utilize producer-owned and producer-controlled cooperative
associations.
(f)
USE OF RESOURCES, DATA, BOARDS, AND COMMITTEES OF FEDERAL
AGENCIES.—If the Board determines it is necessary, the Board shall use, to the

maximum extent practicable, the resources, data, boards, and the committees
of—
(1) the Natural Resources Conservation Service, in assisting the
Board in—
(A) the classification of land as to risk and production capability;
and
(B) the consideration of acceptable conservation practices,
including good farming practices with respect to conservation (such
as cover crop termination);
(2) the Forest Service, in assisting the Board in the development of a
timber insurance plan;
(3) the Farm Service Agency, in assisting the Board in—
(A) the determination of individual producer yields;
(B) sharing information on beginning farmers and ranchers and
veteran farmers and ranchers;
(C) investigating potential waste, fraud, or abuse;
(D) sharing information to support the transition of crops and
counties from the noninsured crop disaster assistance program
established by section 196 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7333) to insurance under this
subtitle; and
(E) serving as a local point of contact for the dissemination of
information on risk management options available to farmers and
ranchers; and
(4) other Federal agencies, in assisting the Board in any way the
Board determines is necessary in carrying out this subtitle.
(g) SPECIALTY CROPS COORDINATOR.—
(1) IN GENERAL.—The Corporation shall establish a management-level
position to be known as the Specialty Crops Coordinator.
(2) The Specialty Crops Coordinator shall have primary
responsibility for addressing the needs of specialty crop producers, and for
providing information and advice, in connection with the activities of the
Corporation to improve and expand the insurance program for specialty
crops. In carrying out this paragraph, the Specialty Crops Coordinator shall
act as the liaison of the Corporation with representatives of specialty crop
producers and assist the Corporation with the knowledge, expertise, and
familiarity of the producers with risk management and production issues
pertaining to specialty crops.
(3) The Specialty Crops Coordinator shall use information collected
from Corporation field office directors in States in which specialty crops
have a significant economic effect and from other sources, including the
extension service and colleges and universities.
(4) SPECIALTY CROP LIAISONS.—The Specialty Crops Coordinator
shall—

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(A) designate a Specialty Crops Liaison in each regional field
office; and
(B) share the contact information of the Specialty Crops Liaisons
with specialty crop producers.
(5) WEBSITE.—The Specialty Crops Coordinator shall establish a
website focused on the efforts of the Corporation to provide and expand
crop insurance for specialty crop producers.
SEC. 508. 7 U.S.C. 1508 - CROP INSURANCE.

(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 must be due to drought, flood, or other natural disaster (as
determined by the Secretary).
(2)
PERIOD.—Except in the cases of tobacco, potatoes, sweet
potatoes, and hemp, 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 an aquacultural species, the term ‘‘field’’ means
the environment in which the commodity is produced.
(3) EXCLUSION OF LOSSES DUE TO CERTAIN ACTIONS OF PRODUCER.—
(A) EXCLUSIONS.—Insurance provided under this subsection
shall not cover losses due to—
(i)
the neglect or malfeasance of the producer;
(ii)
the failure of the producer to reseed to the same crop
in such areas and under such circumstances as it is customary to
reseed; or
(iii)
the failure of the producer to follow good farming
practices, including scientifically sound sustainable and organic
farming practices.
(B) GOOD FARMING PRACTICES DETERMINATION REVIEW.—
(i) INFORMAL ADMINISTRATIVE PROCESS.—A producer shall
have the right to a review of a determination regarding good
farming practices made under subparagraph (A)(iii) in
accordance with an informal administrative process to be
established by the Corporation.
(ii) ADMINISTRATIVE REVIEW.—
(I) NO ADVERSE DECISION.—The determination shall
not be considered an adverse decision for purposes of
subtitle H of the Department of Agriculture Reorganization
Act of 1994 (7 U.S.C. 6991 et seq.).
(II) REVERSAL OR MODIFICATION.—Except
as
provided in clause (i), the determination may not be
reversed or modified as the result of a subsequent
administrative review.
(iii) JUDICIAL REVIEW.—
(I) RIGHT TO REVIEW.—A producer shall have the
right to judicial review of the determination without
exhausting any right to a review under clause (i).
(II) REVERSAL
OR
MODIFICATION.—The

12

determination may not be reversed or modified as the result
of judicial review unless the determination is found to be
arbitrary or capricious.
(C) LIMITATION ON REVENUE COVERAGE FOR

POTATOES.—No

policy or plan of insurance provided
under this subtitle (including a policy or plan of
insurance approved by the Board under subsection (h))
shall cover losses due to a reduction in revenue for
potatoes except as covered under a whole farm policy
or plan of insurance, as determined by the
Corporation.

(4) EXPANSION TO OTHER AREAS OR SINGLE PRODUCERS.—
(A) AREA EXPANSION.—The Corporation may offer plans of
insurance or reinsurance for production of agricultural commodities in
the Commonwealth of Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Commonwealth of the Northern Mariana
Islands, the Republic of the Marshall Islands, the Federated States of
Micronesia, and the Republic of Palau in the same manner as provided
in this section for production of agricultural commodities in the United
States.
(B) PRODUCER EXPANSION.—In an area in the United States or
specified in subparagraph (A) where crop insurance is not available
for a particular agricultural commodity, the Corporation may offer to
enter into a written agreement with an individual producer operating
in the area for insurance coverage under this subtitle if the producer
has actuarially sound data relating to the production by the producer
of the commodity or similar commodities and the data is acceptable
to the Corporation.
(5) DISSEMINATION OF CROP INSURANCE INFORMATION.—
(A) AVAILABLE INFORMATION.—The Corporation shall make
available to producers through local offices of the Department—
(i)
current and complete information on all aspects of
Federal crop insurance; and
(ii)
a listing of insurance agents and companies offering
to sell crop insurance in the area of the producers.
(B) USE OF ELECTRONIC METHODS.—
(i)
DISSEMINATION BY CORPORATION.—The Corporation
shall make the information described in subparagraph (A)
available electronically to producers and approved insurance
providers.
(ii)
SUBMISSION TO CORPORATION.—To the maximum
extent practicable, the Corporation shall allow producers and
approved insurance providers to use electronic methods to
submit information required by the Corporation.
(6) ADDITION OF NEW AND SPECIALTY CROPS (INCLUDING VALUE-ADDED
CROPS).—
(A) ANNUAL REVIEW.—Not later than 1 year after the date of
enactment of the Agriculture Improvement Act of 2018, and annually
thereafter, the manager of the Corporation shall prepare, to the
maximum extent practicable, based on data shared from the
noninsured crop disaster assistance program established by section
196 of the Federal Agriculture Improvement and Reform Act of 1996

13

(7 U.S.C. 7333), written agreements, or other data, and present to the
Board not less than 1 of each of the following:
(i) Research and development for a policy or plan of
insurance for a commodity for which there is no existing
policy or plan of insurance.
(ii) Expansion of an existing policy or plan of insurance to
additional counties or States, including malting barley
endorsements or contract options.
(iii) Research and development for a new policy or plan
of insurance, or endorsement, for commodities with existing
policies or plans of insurance, such as dollar plans.
(B) REPORT.—Not later than 1 year after the date of enactment of
this paragraph, and annually thereafter, the Corporation shall report
to Congress on the progress and expected timetable for expanding
crop insurance coverage under this subtitle to new and specialty
crops.
(7) ADEQUATE COVERAGE FOR STATES AND UNDERSERVED PRODUCERS.—
(A) DEFINITIONS.—In this paragraph:
(i) ADEQUATELY SERVED.—The term ‘‘adequately served’’
means having a participation rate by crop that is at least 50
percent of the national average participation rate.
(ii) UNDERSERVED PRODUCER.—The term ‘underserved
producer’ means an individual (including a member of an
Indian Tribe) that is—
(I) a beginning farmer or rancher;
(II) a veteran farmer or rancher; or
(III) a socially disadvantaged farmer or rancher.
(B) REVIEW.— Using resources and information available to the
Board or the Secretary, the Board shall review the policies and plans
of insurance that are offered by approved insurance providers under
this subtitle, including policies and plans of insurance for
underserved producers, to determine if each State is adequately
served by the policies and plans of insurance.
(C) REPORT.—
(i) IN GENERAL.—Not later than 30 days after completion
of the review under subparagraph (B), and not less frequently
than once every 3 years thereafter, the Board shall make
publicly available and submit to the Committee on Agriculture
of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate a report
describing the results of the review.
(ii) RECOMMENDATIONS.—The report under clause (i) shall
include recommendations to increase participation in States
and among underserved producers that are not adequately
served by the policies and plans of insurance, including any
plans for administrative action or recommendations for
Congressional action.
(8) SPECIAL PROVISIONS FOR COTTON AND RICE.—Notwithstanding any
other provision of this subtitle, beginning with the 2001 crops of
upland cotton, extra long staple cotton, and rice, the Corporation
shall offer plans of insurance, including prevented planting

14

coverage and replanting coverage, under this subtitle that cover
losses of upland cotton, extra long staple cotton, and rice
resulting from failure of irrigation water supplies due to drought
and saltwater intrusion.
(9) PREMIUM ADJUSTMENTS.—
(A) PROHIBITION.—Except as provided in subparagraph (B),
no person shall pay, allow, or give, or offer to pay, allow, or give,
directly or indirectly, either as an inducement to procure insurance
or after insurance has been procured, any rebate, discount,
abatement, credit, or reduction of the premium named in an
insurance policy or any other valuable consideration or inducement
not specified in the policy.
(B) EXCEPTIONS.—Subparagraph (A) does not apply with
respect to—
(i) A payment authorized under subsection
(b)(5)(B);
(ii)
a performance-based discount authorized under
subsection (d)(3); or
(iii) a patronage dividend, or similar payment, that is
paid—
(I) by an entity that was approved by the
Corporation to make such payments for the 2005, 2006, or
2007 reinsurance year, in accordance with subsection
(b)(5)(B) as in effect on the day before the date of enactment
of this paragraph; and
(II) in a manner consistent with the payment plan
approved in accordance with that subsection for the entity
by the Corporation for the applicable reinsurance year.
(C) PUBLICATION OF VIOLATIONS.—
(i)
PUBLICATION REQUIRED.—Subject to clause (ii), the
Corporation shall publish in a timely manner on the website of
the Risk Management Agency information regarding each
violation of this paragraph, including any sanctions imposed in
response to the violation, in sufficient detail so that the
information may serve as effective guidance to approved
insurance providers, agents, and producers.
(ii)
PROTECTION OF PRIVACY.—In providing information
under clause (i) regarding violations of this paragraph, the
Corporation shall redact the identity of the persons and entities
committing the violations in order to protect the privacy of those
persons and entities.
(10) COMMISSIONS.—
(A) DEFINITION OF IMMEDIATE FAMILY.—In this paragraph, the
term ‘‘immediate family’’ means an individual’s father, mother,
stepfather, stepmother, brother, sister, stepbrother, stepsister, son,
daughter,
stepson,
stepdaughter,
grandparent,
grandson,
granddaughter, father- in-law, mother-in-law, brother-in- law, sisterin-law, son-in- law, daughter-in-law, the spouse of the foregoing, and
the individual’s spouse.
(B) PROHIBITION.—No individual (including a subagent) may
receive directly, or indirectly through an entity, any compensation
(including any commission, profit sharing, bonus, or any other direct
or indirect benefit) for the sale or service of a policy or plan

15

of insurance offered under this subtitle if—
(i) the individual has a substantial beneficial interest, or a
member of the individual’s immediate family has a substantial
beneficial interest, in the policy or plan of insurance; and
(ii) the total compensation to be paid to the individual
with respect to the sale or service of the policies or plans of
insurance that meet the condition described in clause (i)
exceeds 30 percent or the percentage specified in State law,
whichever is less, of the total of all compensation received
directly or indirectly by the individual for the sale or service of
all policies and plans of insurance offered under this subtitle
for the reinsurance year.
(C) REPORTING.—Not later than 90 days after the annual
settlement date of the reinsurance year, any individual that received
directly or indirectly any compensation for the service or sale of any
policy or plan of insurance offered under this subtitle in the prior
reinsurance year shall certify to applicable approved insurance
providers that the compensation that the individual received was in
compliance with this paragraph.
(D) SANCTIONS.—The procedural requirements and sanctions
prescribed in section 515(h) shall apply to the prosecution of a
violation of this paragraph.
(E) APPLICABILITY.—
(i)
IN GENERAL.—Sanctions for violations under this
paragraph shall only apply to the individuals or entities directly
responsible for the certification required under subparagraph (C)
or the failure to comply with the requirements of thisparagraph.
(ii)
PROHIBITION.—No sanctions shall apply with respect
to the policy or plans of insurance upon which compensation is
received, including the reinsurance for those policies or plans.
(11) COVER CROPS.—
(A) IN GENERAL.—The voluntary practice of cover cropping shall
be considered a good farming practice under paragraph (3)(A)(iii) if
the cover crop is terminated in accordance with subparagraph (B).
(B) TERMINATION.—
(i) IN GENERAL.—The termination of a cover crop
shall be carried out according to—
(I) guidelines established by the Secretary; or
(II) an exception to the guidelines approved under
clause (ii).
‘‘(ii) EXCEPTION TO GUIDELINES.—The Corporation shall
approve an exception to the guidelines under clause (i)(I) if
that exception is recommended by—
(I) the Natural Resources Conservation Service; or
(II) an agricultural expert, as determined by the
Corporation, unless the exception is determined to be
unreasonable by the Corporation.
(C) INSURABILITY OF SUBSEQUENT CROP.—Cover crop termination
shall not affect the insurability of a subsequently planted Insurable
crop if the cover crop is terminated in accordance with subparagraph
(B).

16

(D) SUMMER FALLOW.—In a county in which summer fallow is an
insurable practice, a cover crop in that county that is terminated in
accordance with subparagraph (B) shall be considered as summer
fallow for the purpose of insurability.
(b) CATASTROPHIC RISK PROTECTION.—
(1) COVERAGE AVAILABILITY.— The Corporation shall offer a
catastrophic risk protection plan to indemnify producers for crop loss due
to loss of yield or prevented planting, if provided by the Corporation,
when the producer is unable, because of drought, flood, or other natural
disaster (as determined by the Secretary), to plant other crops for harvest
on the acreage for the crop year.
(2) AMOUNT OF COVERAGE.—
(A) IN GENERAL.—Subject to subparagraph (B)—
(i)
in the case of each of the 1995 through 1998 crop
years, catastrophic risk protection shall offer a producer coverage
for a 50 percent loss in yield, on an individual yield or area yield
basis, indemnified at 60 percent of the expected market price, or
a comparable coverage (as determined by the Corporation); and
(ii)
in the case of each of the 1999 and subsequent crop
years, catastrophic risk protection shall offer a producer coverage
for a 50 percent loss in yield, on an individual yield or area yield
basis, indemnified at 55 percent of the expected market price, or
a comparable coverage (as determined by the Corporation).
(B) REDUCTION IN ACTUAL PAYMENT.—The amount paid to a

producer on a claim under catastrophic risk protection may
reflect a reduction that is proportional to the out-of-pocket
expenses that are not incurred by the producer as a result of not
planting, growing, or harvesting the crop for which the claim is
made, as determined by the Corporation.

(3) ALTERNATIVE CATASTROPHIC COVERAGE.—Beginning with the 2001
crop year, the Corporation shall offer producers of an agricultural
commodity the option of selecting either of the following:
(A) The catastrophic risk protection coverage available under
paragraph (2)(A).
(B) An alternative catastrophic risk protection coverage that—
(i) indemnifies the producer on an area yield and loss basis
if such a policy or plan of insurance is offered for the
agricultural commodity in the county in which the farm is
located;
(ii) provides, on a uniform national basis, a higher
combination of yield and price protection than the coverage
available under paragraph (2)(A); and
(iii) the Corporation determines is comparable to the
coverage available under paragraph (2)(A) for purposes of
subsection (e)(2)(A).
(4) SALE OF CATASTROPHIC RISK COVERAGE.—
(A) IN GENERAL.—Catastrophic risk coverage may be offered
by—
(i) approved 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 Department.

(B)

NEED.—For

purposes

17

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.
(C) DELIVERY OF COVERAGE.—
(i) IN GENERAL.—In full consultation with approved
insurance providers, the Secretary may continue to offer
catastrophic risk protection in a State (or a portion of a State)
through local offices of the Department if the Secretary
determines that there is an insufficient number of approved
insurance providers operating in the State or portion of the State
to adequately provide catastrophic risk protection coverage to
producers.
(ii)
COVERAGE BY APPROVED INSURANCE PRO- VIDERS.—
To the extent that catastrophic risk protection coverage by
approved insurance providers is sufficiently available in a State
(or a portion of a State) as determined by the Secretary, only
approved insurance providers may provide the coverage in the
State or portion of the State.
(iii) TIMING OF DETERMINATIONS.—Not later than 90 days
after the date of enactment of this subparagraph, the Secretary
shall announce the results of the determinations under clause (i)
for policies for the 1997 crop year. For subsequent crop years,
the Secretary shall make the announcement not later than April
30 of the year preceding the year in which the crop will be
produced, or at such other times during the year as the Secretary
finds practicable in consultation with affected crop insurance
providers for those States (or portions of States) in which
catastrophic coverage remains available through local offices of
the Department.
(iv)
CURRENT POLICIES.—This clause shall take effect
beginning with the 1997 crop year. Subject to clause (ii) all
catastrophic risk protection policies written by local offices of
the Department shall be transferred to the approved insurance
provider for performance of all sales, service, and loss
adjustment functions. Any fees in connection with such policies
that are not yet collected at the time of the transfer shall be
payable to the approved insurance providers assuming the
policies. The transfer process for policies for the 1997 crop year
with sales closing dates before January 1, 1997, shall begin at the
time of the Secretary’s announcement under clause (iii) and be
completed by the sales closing date for the crop and county. The
transfer process for all subsequent policies (including policies for
the 1998 and subsequent crop years) shall begin at a date that
permits the process to be completed not later than 45 days before
the sales closing date.
(5) ADMINISTRATIVE FEE.—
(A) BASIC FEE.—Each producer shall pay an administrative fee
for catastrophic risk protection in the amount of $655 per crop per
county.
(B) PAYMENT OF CATASTROPHIC RISK PROTECTION FEE ON BEHALF
OF PRODUCERS.—
(i)
PAYMENT AUTHORIZED.—If State law permits a
licensing fee to be paid by an insurance provider to a cooperative

18

association or trade association and rebated to a producer through
the payment of catastrophic risk protection administrative fees, a
cooperative association or trade association located in that State
may pay, on behalf of a member of the association in that State
or a contiguous State who consents to be insured under such an
arrangement, all or a portion of the administrative fee required
by this paragraph for catastrophic risk protection.
(ii)
SELECTION OF PROVIDER.—Nothing in this
subparagraph limits the option of a producer to select the licensed
insurance agent or other approved insurance provider from
whom the producer will purchase a policy or plan of insurance
or to refuse coverage for which a payment is offered to be made
under clause (i).
(iii) DELIVERY OF INSURANCE.—Catastrophic risk
protection coverage for which a payment is made under clause
(i) shall be delivered by a licensed insurance agent or other
approved insurance provider.
(iv) ADDITIONAL
COVERAGE
ENCOURAGED.—A
cooperative association or trade association, and any approved
insurance provider with whom a licensing fee is made, shall
encourage producer members to purchase appropriate levels of
coverage in order to meet the risk management needs of the
member producers. (C) TIME FOR PAYMENT.—The administrative
fee required by this paragraph shall be paid by the producer on
the same date on which the premium for a policy of additional
coverage would be paid by the producer.
(D) USE OF FEES.—
(i)
IN GENERAL.—The amounts paid under this
paragraph shall be deposited in the crop insurance fund
established under section 516(c), to be available for the programs
and activities of the Corporation.
(ii)
LIMITATION.—No funds deposited in the crop
insurance fund under this subparagraph may be used to
compensate an approved insurance provider or agent for the
delivery of services under this subsection.
(E) WAIVER OF FEE.—The Corporation shall waive the amounts
required under this paragraph for limited resource farmers and
beginning farmers or ranchers, as defined by the Corporation.
(6)
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 the coverage for the crop on all insurable land
of the producer in the county.
(7)
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.
(8)
TRANSITIONAL COVERAGE FOR 1995 CROPS.—Effective only for
a 1995 crop planted or for which insurance attached prior to January 1,
1995, the Corporation shall allow producers of the crops until not later than
the end of the 180-day period beginning on the date of enactment of the
Federal Crop Insurance Reform Act of 1994 to obtain catastrophic risk
protection for the crop. On enactment of such Act, a producer who made
timely purchases of a crop insurance policy before the date of enactment of
such Act, under the provisions of this subtitle then in effect, shall be eligible
for the same benefits to which a producer would be entitled under

19

comparable additional coverage under subsection (c).
(9) SIMPLIFICATION.—
(A) CATASTROPHIC RISK PROTECTION PLANS.—In developing
and carrying out the policies and procedures for a catastrophic risk
protection plan under this subtitle, 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 subtitle 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.
(10) LOSS ADJUSTMENT.—The rate for reimbursing an approved
insurance provider or agent for expenses incurred by the approved
insurance provider or agent for loss adjustment in connection with a policy
of catastrophic risk protection shall not exceed 6 percent of the premium
for catastrophic risk protection that is used to define loss ratio.
(c) GENERAL COVERAGE LEVELS.—
(1) ADDITIONALCOVERAGE GENERALLY.—
(A) IN GENERAL.—The Corporation shall offer to producers of
agricultural commodities grown in the United States plans of crop
insurance that provide additional coverage.
(B) PURCHASE.—To be eligible for additional coverage, a
producer must apply to an approved insurance provider for purchase
of additional coverage if the coverage is available from an approved
insurance provider. If additional coverage is unavailable privately, the
Corporation may offer additional coverage plans of insurance directly
to producers.
(2) TRANSFER OF RELEVANT INFORMATION.—If a producer has
already applied for catastrophic risk protection at the local office of the
Department and elects to purchase additional coverage, the relevant
information 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 OPTIONS.—A producer shall have the
option of purchasing additional coverage based on—
(A)
(i) an individual yield and loss basis;
(ii) an area yield and loss basis;
(B) an individual yield and loss basis, supplemented with
coverage based on an area yield and loss basis to cover a part of the
deductible under the individual yield and loss policy, as described in
paragraph (4)(C); or
(C) a margin basis alone or in combination with the coverages
available under subparagraph (A) or (B).
(4) LEVEL OF COVERAGE.—
(A) DOLLAR DENOMINATION AND PERCENTAGE OF YIELD.—Except as
provided in subparagraph (C), the level of coverage—
(i) shall be dollar denominated; and
(ii) may be purchased at any level not to exceed 85
percent of the individual yield or 95 percent of the area yield

20

(as determined by the Corporation).
(B) INFORMATION.—The Corporation shall provide producers
with information on catastrophic risk and additional coverage in terms
of dollar coverage (within the allowable limits of coverage provided
in this paragraph).
(C) SUPPLEMENTAL COVERAGE OPTION.—
(i) IN GENERAL.—Notwithstanding subparagraph (A), in
the case of the supplemental coverage option described in
paragraph (3)(B), the Corporation shall offer producers the
opportunity to purchase coverage in combination with a policy
or plan of insurance offered under this subtitle that would allow
indemnities to be paid to a producer equal to a part of the
deductible under the policy or plan of insurance—
(I) at a county-wide level to the fullest extent
practicable; or
(II) in counties that lack sufficient data, on the basis of
such larger geographical area as the Corporation
determines to provide sufficient data for purposes of
providing the coverage.
(ii)
TRIGGER.—Coverage offered under paragraph (3)(B)
and clause (i) shall be triggered only if the losses in the area
exceed 14 percent of normal levels (as determined by the
Corporation).
(iii) COVERAGE.—Subject to the trigger described in
clause (ii), coverage offered under paragraph (3)(B) and clause
(i) shall not exceed the difference between—
(I) 86 percent; and
(II) the coverage level selected by the producer for the
underlying policy or plan of insurance.
(iv)
INELIGIBLE CROPS AND ACRES.—Crops for which the
producer has elected under section 1116 of the Agricultural Act
of 2014 to receive agriculture risk coverage and acres that are
enrolled in the stacked income protection plan under section
508B shall not be eligible for supplemental coverage under this
subparagraph.
(v)
CALCULATION
OF
PREMIUM.—Notwithstanding
subsection (d), the premium for coverage offered under
paragraph (3)(B) and clause (i) shall—
(I)
be sufficient to cover anticipated losses and
a reasonable reserve; and
(II)
include an amount for operating and
administrative expenses established in accordance with
subsection (k)(4)(F).
(5) EXPECTED MARKET PRICE.—
(A) ESTABLISHMENT OR APPROVAL.—For the purposes of this
subtitle, the Corporation shall establish or approve the price level
(referred to in this subtitle as the ‘‘expected market price’’) of each
agricultural commodity for which insurance is offered.
(B) GENERAL RULE.—Except as otherwise provided in
subparagraph (C), the expected market price of an agricultural
commodity shall be not less than the projected market price of the
agricultural commodity, as determined by the Corporation.
(C) OTHER AUTHORIZED APPROACHES.—The expected market
price of an agricultural commodity—

21

(i)
may be based on the actual market price of the
agricultural commodity at the time of harvest, as determined by
the Corporation;
(ii)
in the case of revenue and other similar plans of
insurance, may be the actual market price of the agricultural
commodity, as determined by the Corporation;
(iii) in the case of cost of production or similar plans of
insurance, shall be the projected cost of producing the
agricultural commodity, as determined by the Corporation; or
(iv)
in the case of other plans of insurance, may be an
appropriate amount, as determined by the Corporation.
(D) GRAIN SORGHUM PRICE ELECTION.—
(i) IN GENERAL.—The Corporation, in conjunction with the
Secretary (referred to in this subparagraph as the
‘‘Corporation’’), shall—
(I) not later than 60 days after the date of enactment
of this subparagraph, make available all methods and data,
including data from the Economic Research Service, used
by the Corporation to develop the expected market prices
for grain sorghum under the production and revenue-based
plans of insurance of the Corporation; and
(II) request applicable data from the grain sorghum
industry.
(ii) EXPERT REVIEWERS.—
(I) IN GENERAL.—Not later than 120 days after the
date of enactment of this subparagraph, the Corporation
shall contract individually with 5 expert reviewers
described in subclause (II) to develop and recommend a
methodology for determining an expected market price for
sorghum for both the production and revenue-based plans
of insurance to more accurately reflect the actual price at
harvest.
(II) REQUIREMENTS.—The expert reviewers under
subclause (I) shall be comprised of agricultural economists
with experience in grain sorghum and corn markets, of
whom—
(aa) 2 shall be agricultural economists of
institutions of higher education;
(bb) 2 shall be economists from within the
Department; and
(cc) 1 shall be an economist nominated by the
grain sorghum industry.
(iii) RECOMMENDATIONS.—
(I) IN GENERAL.—Not later than 90 days after the
date of contracting with the expert reviewers under clause
(ii), the expert reviewers shall submit, and the Corporation
shall make available to the public, the recommendations of
the expert reviewers.
(II) CONSIDERATION.—The Corporation shall
consider the recommendations under subclause (I) when
determining the appropriate pricing methodology to
determine the expected market price for grain sorghum

under both the production and revenue-based plans of
insurance.
22

(III) PUBLICATION.—Not later than 60 days after the
date on which the Corporation receives the
recommendations of the expert reviewers, the Corporation
shall publish the proposed pricing methodology for both the
production and revenue- based plans of insurance for notice
and comment and, during the comment period, conduct at
least 1 public meeting to discuss the proposed pricing
methodologies.
(iv) APPROPRIATE PRICING METHODOLOGY.—
(I) IN GENERAL.—Not later than 180 days after the
close of the comment period in clause (iii)(III), but
effective not later than the 2010 crop year, the Corporation
shall implement a pricing methodology for grain sorghum
under the production and revenue-based plans of insurance
that is transparent and replicable.
(II) INTERIM METHODOLOGY.—Until the date on
which the new pricing methodology is implemented, the
Corporation may continue to use the pricing methodology
that the Corporation determines best establishes the
expected market price.
(III) AVAILABILITY.—On an annual basis, the
Corporation shall make available the pricing methodology
and data used to determine the expected market prices for
grain sorghum under the production and revenue-based
plans of insurance, including any changes to the
methodology used to determine the expected market prices
for grain sorghum from the previous year.
(6) PRICE ELECTIONS.—
(A) IN GENERAL.—Subject to subparagraph (B), insurance
coverage shall be made available to a 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 CLASSES AND MALTING BARLEY.—The Cor- poration
shall, as the Corporation determines practicable, offer producers
different price elections for classes of wheat and malting barley
(including contract prices in the case of malting barley), in addition
to the standard price election, that reflect different market prices, as
determined by the Corporation. The Corporation shall, as the
Corporation determines practicable, offer additional coverage for
each class determined under this subparagraph and charge a premium
for each class that is actuarially sound.
(D) ORGANIC CROPS.—
(i)
IN GENERAL.—As soon as possible, but not later than
the 2015 reinsurance year, the Corporation shall offer producers
of organic crops price elections for all organic crops produced in
compliance with standards issued by the Department of
Agriculture under the national organic program established
under the Organic Foods Production Act of 1990 (7 U.S.C. 6501
et seq.) that reflect the actual retail or wholesale prices, as
appropriate, received by producers for organic crops, as

23

determined by the Secretary using all relevant sources of
information.
(ii)
ANNUAL REPORT.—The Corporation shall submit to
the Committee on Agriculture of the House of Representatives
and the Committee on Agriculture, Nutrition, and Forestry of the
Senate an annual report on progress made in developing and
improving Federal crop insurance for organic crops, including—
(I) the numbers and varieties of organic crops
insured;
(II) the progress of implementing the price elections
required under this subparagraph, including the rate at
which additional price elections are adopted for organic
crops;
(III) the development of new insurance approaches
relevant to organic producers; and
(IV) any recommendations the Corporation
considers appropriate to improve Federal crop insurance
coverage for organic crops.
(7) FIRE AND HAIL COVERAGE.—For levels of additional coverage
equal to 65 percent or more of the recorded or appraised average yield
indemnified at 100 percent of the expected market price, or an equivalent
coverage, a producer may elect to delete from the additional coverage any
coverage against damage caused by fire and hail if the producer obtains an
equivalent or greater dollar amount of coverage for damage caused by fire
and hail from an approved insurance provider. On written notice of the
election to the company issuing the policy providing additional coverage
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. In no event shall the producer be given credit for an amount
of premium determined to be greater than the actuarial value of the
protection against losses caused by fire and hail that is included in the
additional coverage for the crop.
(8) STATE PREMIUM SUBSIDIES.—The Corporation may enter into an
agreement 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 producers in
the State.
(9) LIMITATIONS ON ADDITIONAL COVERAGE.—The Board may limit
the availability of additional coverage under this subsection in any county
or area, or on any farm, on the basis of the insurance risk involved. The
Board shall not offer additional coverage equal to less than 50 percent of
the recorded or appraised average yield indemnified at 100 percent of the
expected market price, or an equivalent coverage.
(10) ADMINISTRATIVE FEE.—
(A) FEE REQUIRED.—If a producer elects to purchase coverage
for a crop at a level in excess of catastrophic risk protection, the
producer shall pay an administrative fee for the additional coverage
of $30 per crop per county.
(B) USE OF FEES; WAIVER.—Subparagraphs (D) and (E) of
subsection (b)(5) shall apply with respect to the collection and use of
administrative fees under this paragraph.
(C) TIME FOR PAYMENT.—Subsection (b)(5)(C) shall apply

24

with respect to the collection date for the administrative fee.
(d) PREMIUMS.—
(1) PREMIUMS REQUIRED.—The Corporation shall fix adequate
premiums for all the plans of insurance of the Corporation at such rates as
the Board determines are actuarially sufficient to attain an expected loss
ratio of not greater than—
(A)
1.1 through September 30, 1998;
(B)
1.075 for the period beginning October 1, 1998, and
ending on the day before the date of enactment of the
Food, Conservation, and Energy Act of 2008; and (C) 1.0 on and after
the date of enactment of that Act.
(2) PREMIUM AMOUNTS.—The premium amounts for catastrophic risk
protection under subsection (b) and additional coverage under subsection
(c) shall be fixed as follows:
(A) In the case of catastrophic risk protection, the amount of
the premium established by the Corporation for each crop for which
catastrophic risk protection is available shall be reduced by the
percentage equal to the difference between the average loss ratio for
the crop and 100 percent, plus a reasonable reserve, as determined by
the Corporation.
(B) In the case of additional coverage equal to or greater than
50 percent of the recorded or appraised average yield indemnified at
not greater than 100 percent of the expected market price, or a
comparable coverage for a policy or plan of insurance that is not based
on individual yield, the amount of the premium shall—
(i)
be sufficient to cover anticipated losses and a
reasonable reserve; and
(ii) include an amount for operating and administrative
expenses, as determined by the Corporation, on an industry-wide
basis as a percentage of the amount of the premium used to
define loss ratio.
(3) PERFORMANCE-BASED DISCOUNT.—The Corporation may provide a
performance-based premium discount for a producer of an agricultural
commodity who has good insurance or production experience relative to
other producers of that agricultural commodity in the same area, as
determined by the Corporation.
(4) BILLING DATE FOR PREMIUMS.—Effective beginning with the 2012
reinsurance year, the Corporation shall establish August 15 as the billing
date for premiums.
(e) PAYMENT OF PORTION OF PREMIUM BY CORPORATION.—
(1) IN GENERAL.—For the purpose of encouraging the broadest
possible participation of producers in the catastrophic risk protection
provided under subsection (b) and the additional coverage provided under
subsection (c), the Corporation shall pay a part of the premium in the
amounts provided in accordance with this subsection.
(2) AMOUNT OF PAYMENT.—Subject to paragraphs (3), (6), and (7),
the amount of the premium to be paid by the Corporation shall be as
follows:
(A) In the case of catastrophic risk protection, the amount
shall be equivalent to the premium established for catastrophic risk
protection under subsection (d)(2)(A).
(B) In the case of additional coverage equal to or greater than
50 percent, but less than 55 percent, of the recorded or appraised
average yield indemnified at not greater than 100 percent of the

25

expected market price, or a comparable coverage for a policy or
plan of insurance that is not based on individual yield, the amount
shall be equal to the sum of—
(i) 67 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(C) In the case of additional coverage equal to or greater than
55 percent, but less than 65 percent, of the recorded or appraised
average yield indemnified at not greater than 100 percent of the
expected market price, or a comparable coverage for a policy or
plan of insurance that is not based on individual yield, the amount
shall be equal to the sum of—
(i) 64 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(D) In the case of additional coverage equal to or greater than
65 percent, but less than 75 percent, of the recorded or appraised
average yield indemnified at not greater than 100 percent of the
expected market price, or a comparable coverage for a policy or
plan of insurance that is not based on individual yield, the amount
shall be equal to the sum of—
(i) 59 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(E) In the case of additional coverage equal to or greater than 75
percent, but less than 80 percent, of the recorded or appraised average
yield indemnified at not greater than 100 percent of the expected
market price, or a comparable coverage for a policy or plan of
insurance that is not based on individual yield, the amount shall be
equal to the sum of—
(i) 55 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(F) In the case of additional coverage equal to or greater than 80
percent, but less than 85 percent, of the recorded or appraised average
yield indemnified at not greater than 100 percent of the expected
market price, or a comparable coverage for a policy or plan of
insurance that is not based on individual yield, the amount shall be
equal to the sum of—
(i) 48 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(G) Subject to subsection (c)(4), in the case of additional
coverage equal to or greater than 85 percent of the recorded or

26

appraised average yield indemnified at not greater than 100 percent of
the expected market price, or a comparable coverage for a policy or
plan of insurance that is not based on individual yield, the amount shall
be equal to the sum of—
(i) 38 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(H) In the case of the supplemental coverage option
authorized in subsection (c)(4)(C), the amount shall be equal to the
sum of—
(i) 65 percent of the additional premium associated with
the coverage; and
(ii) the
amount
determined
under
subsection
(c)(4)(C)(v)(II), subject to subsection (k)(4)(F), for the coverage
to cover operating and administrative expenses.
(3) PROHIBITION ON CONTINUOUS COVERAGE.—Notwithstanding
paragraph (2), during each of the 2001 and subsequent reinsurance years,
additional coverage under subsection (c) shall be available only in 5 percent
increments beginning at 50 percent of the recorded or appraised average
yield.
(4) PREMIUM PAYMENT DISCLOSURE.—Each policy or plan of
insurance under this subtitle shall prominently indicate the dollar amount
of the portion of the premium paid by the Corporation.
(5) ENTERPRISE AND WHOLE FARM UNITS.—
(A) IN GENERAL.—The Corporation may pay a portion of the
premiums for plans or policies of insurance for which the insurable
unit is defined on a whole farm or enterprise unit basis that is
higher than would otherwise be paid in accordance with paragraph
(2).
(B) AMOUNT.—The percentage of the premium paid by the
Corporation to a policyholder for a policy with an enterprise or
whole farm unit under this paragraph shall, to the maximum extent
practicable, provide the same dollar amount of premium subsidy
per acre that would otherwise have been paid by the Corporation
under paragraph (2) if the policyholder had purchased a basic or
optional unit for the crop for the crop year.
(C) LIMITATION.—The amount of the premium paid by the
Corporation under this paragraph may not exceed 80 percent of the
total premium for the enterprise or whole farm unit policy.
(D) NONIRRIGATED CROPS.—Beginning with the 2015 crop
year, the Corporation shall make available separate enterprise units
for irrigated and nonirrigated acreage of crops in counties.
(E) ENTERPRISE UNITS ACROSS COUNTY LINES.—The Corporation
may allow a producer to establish a single enterprise unit by
combining an enterprise unit with—
(i) 1 or more other enterprise units in 1 or more other
counties; or
(ii) all basic units and all optional units in 1 or more
other counties.
(6) PREMIUM SUBSIDY FOR AREA REVENUE PLANS.—Subject to
paragraph (4), in the case of a policy or plan of insurance that covers losses
due to a reduction in revenue in an area, the amount of the premium paid

27

by the Corporation shall be as follows:
(A) In the case of additional area coverage equal to or greater
than 70 percent, but less than 75 percent, of the recorded county
yield indemnified at not greater than 100 percent of the expected
market price, the amount shall be equal to the sum of—
(i) 59 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected;
and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(B) In the case of additional area coverage equal to or greater
than 75 percent, but less than 85 percent, of the recorded county
yield indemnified at not greater than 100 percent of the expected
market price, the amount shall be equal to the sum of—
(i) 55 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected;
and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(C) In the case of additional area coverage equal to or greater
than 85 percent, but less than 90 percent, of the recorded county
yield indemnified at not greater than 100 percent of the expected
market price, the amount shall be equal to the sum of—
(i) 49 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected;
and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(D) In the case of additional area coverage equal to or greater
than 90 percent of the recorded county yield indemnified at not greater
than 100 percent of the expected market price, the amount shall be
equal to the sum of—
(i) 44 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected;
and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(7) PREMIUM SUBSIDY FOR AREA YIELD PLANS.—Subject to paragraph
(4), in the case of a policy or plan of insurance that covers losses due to a
loss of yield or prevented planting in an area, the amount of the premium
paid by the Corporation shall be as follows:
(A) In the case of additional area coverage equal to or greater
than 70 percent, but less than 80 percent, of the recorded county
yield indemnified at not greater than 100 percent of the expected
market price, the amount shall be equal to the sum of—
(i) 59 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected;
and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and

28

administrative expenses.
(B) In the case of additional area coverage equal to or greater
than 80 percent, but less than 90 percent, of the recorded county
yield indemnified at not greater than 100 percent of the expected
market price, the amount shall be equal to the sum of—
(i) 55 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected;
and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(C) In the case of additional area coverage equal to or greater
than 90 percent, of the recorded county yield indemnified at not
greater than 100 percent of the expected market price, the amount
shall be equal to the sum of—
(i) 51 percent of the amount of the premium established
under subsection (d)(2)(B)(i) for the coverage level selected;
and
(ii) the amount determined under subsection (d)(2)(B)(ii)
for the coverage level selected to cover operating and
administrative expenses.
(8) PREMIUM
FOR
BEGINNING
FARMERS
OR
RANCHERS.—
Notwithstanding any other provision of this subsection regarding payment
of a portion of premiums, a beginning farmer or rancher shall receive
premium assistance that is 10 percentage points greater than premium
assistance that would otherwise be available under paragraphs (2) (except
for subparagraph (A) of that paragraph), (5), (6), and (7) for the applicable
policy, plan of insurance, and coverage level selected by the beginning
farmer or rancher.
(f) 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.—
(A) IN GENERAL.—For coverage under this subtitle, 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.
(B) ESTABLISHED DATES.—Except as provided in subparagraph
(C), 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.
(C) EXCEPTION.—If compliance with subparagraph (B) results
in a sales closing date for an agricultural commodity that is earlier
than January 31, the sales closing date for that commodity shall be
January 31 beginning with the 2000 crop year.
(3) RECORDS AND REPORTING.—To obtain catastrophic risk protection
under subsection (b) or additional coverage under subsection (c), a
producer shall—

29

(A) provide annually records acceptable to the Secretary
regarding crop acreage, acreage yields, and production for each
agricultural commodity insured under this subtitle or accept a yield
determined by the Corporation; and
(B) report acreage planted and prevented from planting by the
designated acreage reporting date for the crop and location as
established by the Corporation.
(g) YIELD DETERMINATIONS.—
(1) IN GENERAL.—Subject to paragraph (2), the Corporation shall
establish crop insurance underwriting rules that ensure that yield coverage,
as specified in this subsection, is provided to eligible producers obtaining
catastrophic risk protection under subsection (b) or additional coverage
under subsection (c).
(2) YIELD COVERAGE PLANS.—
(A) ACTUAL PRODUCTION HISTORY.—Subject to subparagraph
(B) and paragraph (4)(C), 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—
(i) 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) a yield determined by the Corporation, in the case
of—
(I) a producer that has not had a share of the
production of the insured crop for more than two crop years,
as determined by the Secretary;
(II) a producer that produces an agricultural
commodity on land that has not been farmed by the
producer; or
(III) a producer that rotates a crop produced on a farm
to a crop that has not been produced on the farm; or
(iii) if the producer is a beginning farmer or rancher who
was previously involved in a farming or ranching operation,
including involvement in the decisionmaking or physical
involvement in the production of the crop or livestock on the
farm, for any acreage obtained by the beginning farmer or
rancher, a yield that is the higher of—
(I) the actual production history of the previous
producer of the crop or livestock on the acreage determined
under subparagraph (A); or
(II) a yield of the producer, as determined in clause
(i).
(C) AREA YIELD.—The Corporation may offer a crop
insurance plan based on an area yield that allows an insured producer

30

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, if available, on a commodity-by-commodity basis.
(E) SOURCES OF YIELD DATA.—To determine yields under this
paragraph, the Corporation—
(i) shall use county data collected by the Risk
Management Agency, the National Agricultural Statistics
Service, or both; or
(ii) if sufficient county data is not available, may use
other data considered appropriate by the Secretary.
(3) TRANSITIONAL YIELDS FOR PRODUCERS OF FEED OR FORAGE.—
(A) IN GENERAL.—If a producer does not provide satisfactory
evidence of a 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 determinesthat—
(i) the producer grows feed or forage primarily for onfarm 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 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 3 years after the
effective date of this paragraph.
(4) ADJUSTMENT IN ACTUAL PRODUCTION HISTORY TO ESTABLISH
INSURABLE YIELDS.—
(A) APPLICATION.—This paragraph shall apply whenever the
Corporation uses the actual production records of the producer to
establish the producer’s actual production history for an agricultural
commodity for any of the 2001 and subsequent crop years.
(B) ELECTION TO USE PERCENTAGE OF TRANSITIONAL
YIELD.—If, for one or more of the crop years used to establish the
producer’s actual production history of an agricultural commodity, the
producer’s recorded or appraised yield of the commodity was less than
60 percent of the applicable transitional yield, as determined by the
Corporation, the Corporation shall, at the election of the producer—
(i) exclude any of such recorded or appraised yield; and—
(ii)(I) replace each excluded yield with a yield equal to 60
percent of the applicable transitional yield; or
(II) in the case of beginning farmers or ranchers, replace
each excluded yield with a yield equal to 80 percent of the
applicable transitional yield.

31

(C) ELECTION TO EXCLUDE CERTAIN HISTORY.—
(i) IN GENERAL.—Notwithstanding paragraph (2), with
respect to 1 or more of the crop years used to establish the actual
production history of an agricultural commodity of the producer,
the producer may elect to exclude any recorded or appraised
yield for any crop year in which the per planted acre yield of the
agricultural commodity in the county of the producer was at least
50 percent below the simple average of the per planted acre yield
of the agricultural commodity in the county during the previous
10 consecutive crop years.
(ii)
CONTIGUOUS COUNTIES.—In any crop year that a
producer in a county is eligible to make an election to exclude a
yield under clause (i), a producer in a contiguous county is
eligible to make such an election.
(iii) IRRIGATION PRACTICE.—For purposes of determining
whether the per planted acre yield of the agricultural commodity
in the county of the producer was at least 50 percent below the
simple average of the per planted acre yield of the agricultural
commodity in the county during the previous 10 consecutive crop
years, the Corporation shall make a separate determination for
irrigated and nonirrigated acreage.
(D) PREMIUM ADJUSTMENT.—In the case of a producer that
makes an election under subparagraph (B) or (C), the Corporation shall
adjust the premium to reflect the risk associated with the adjustment
made in the actual production history of the producer.
(5) ADJUSTMENT TO REFLECT INCREASED YIELDS FROM SUCCESSFUL PEST
CONTROL EFFORTS.—
(A) SITUATIONS
JUSTIFYING
ADJUSTMENT.—The
Corporation shall develop a methodology for adjusting the actual
production history of a producer when each of the following apply:
(i) The producer’s farm is located in an area where
systematic, area-wide efforts have been undertaken using certain
operations or measures, or the producer’s farm is a location at
which certain operations or measures have been undertaken, to
detect, eradicate, suppress, or control, or at least to prevent or
retard the spread of, a plant disease or plant pest, including a plant
pest (as defined in section 102 of the Department of Agriculture
Organic Act of 1944 (7 U.S.C. 147a)).
(ii)
The presence of the plant disease or plant pest has
been found to adversely affect the yield of the agricultural
commodity for which the producer is applying for insurance.
(iii) The efforts described in clause (i) have been
effective.
(B) ADJUSTMENT AMOUNT.—The amount by which the
Corporation adjusts the actual production history of a producer of an
agricultural commodity shall reflect the degree to which the success
of the systematic, area-wide efforts described in subparagraph (A), on
average, increases the yield of the commodity on the producer’s farm,
as determined by the Corporation.
(6) CONTINUED AUTHORITY.—
(A) IN GENERAL.—The Corporation shall establish—
(i) underwriting rules that limit the decrease in the actual
production history of a producer, at the election of the
producer, to not more than 10 percent of the actual production

32

history of the previous crop year provided that the production
decline was the result of drought, flood, natural disaster, or
other insurable loss (as determined by the Corporation); and
(ii) actuarially sound premiums to cover additional risk.
(B) OTHER AUTHORITY.—The authority provided under
subparagraph (A) is in addition to any other authority that adjusts the
actual production history of the producer under this Act.
(C) EFFECT.—Nothing in this paragraph shall be construed to
require a change in the administration of any provision of this Act as
the Act was administered for the 2018 reinsurance year.’’.
(h) SUBMISSION OF POLICIES AND MATERIALS TO BOARD.—
(1) AUTHORITY TO SUBMIT.—
(A) IN GENERAL.—In addition to any standard forms or policies
that the Board may require be made available to producers under
subsection (c), a person (including an approved insurance provider, a
college or university, a cooperative or trade association, or any other
person) may prepare for submission or propose to the Board—
(i)
other crop insurance policies and provisions of
policies; and
(ii)
rates of premiums for multiple peril crop insurance
pertaining to wheat, soybeans, field corn, and any other crops
determined by the Secretary.
(B) REVIEW AND SUBMISSION BY CORPORATION.— ‘
(i) IN GENERAL.—The Corporation shall review any policy
developed under section 522(c) or any pilot program
developed under section 523 and submit the policy or program
to the Board under this subsection if the Corporation, at the
sole discretion of the Corporation, finds that the policy or
program—
(I) subject to clause (ii), will likely result in a
viable and marketable policy consistent with this
subsection;
(II) would provide crop insurance coverage in a
significantly improved form; and
(III) adequately protects the interests of producers.
(ii) WAIVER FOR HEMP.—The Corporation may waive the
viability and marketability requirement under clause (i)(I) in
the case of a policy or pilot program relating to the production
of hemp.
(2) SUBMISSION OF POLICIES.—A policy or other material submitted to
the Board under this subsection may be prepared without regard to the
limitations contained in this subtitle, including the requirements concerning
the levels of coverage and rates and the requirement that a price level for
each commodity insured must equal the expected market price for the
commodity as established by the Board.
(3) REVIEW AND APPROVAL BY THE BOARD.—
(A) IN GENERAL.—A policy, plan of insurance, or other
material submitted to the Board under this subsection shall be
reviewed by the Board and shall be approved by the Board for
reinsurance and for sale by approved insurance providers to producers
at actuarially appropriate rates and under appropriate terms and
conditions if the
Board determines that—

33

(i) the interests of producers are adequately protected;
(ii) the proposed policy or plan of insurance will—
(I) provide a new kind of coverage that is likely to be
viable and marketable;
(II) provide crop insurance coverage in a manner that
addresses a clear and identifiable flaw or problem in an
existing policy; or
(III) provide a new kind of coverage for a commodity
that previously had no available crop insurance, or has
demonstrated a low level of participation or coverage level
under existing coverage; and
(iii) the proposed policy or plan of insurance will not
have a significant adverse impact on the crop insurance delivery
system.
(B) CONSIDERATION.—In approving policies or plans of
insurance, the Board shall in a timely manner—
(i) first, consider policies or plans of insurance that
address underserved commodities, including commodities for
which there is no insurance;
(ii)
second, consider existing policies or plans of
insurance for which there is inadequate coverage or there exists
low levels of participation; and
(iii) last, consider all policies or plans of insurance
submitted to the Board that do not meet the criteria described in
clause (i) or (ii).
(C) SPECIFIED REVIEW AND APPROVAL PRIORITIES.—In
reviewing policies and other materials submitted to the
Board under this subsection for approval, the Board—
(i) shall make the development and approval of a
revenue policy for peanut producers a priority so that a revenue
policy is available to peanut producers in time for the 2015 crop
year;
(ii)
shall make the development and approval of a
margin coverage policy for rice producers a priority so that a
margin coverage policy is available to rice producers in time for
the 2015 crop year;
(iii) may approve a submission that is made pursuant to
this subsection that would, beginning with the 2015 crop year,
allow producers that purchase policies in accordance with
subsection (e)(5)(A) to separate enterprise units by risk rating for
acreage of crops in counties; and
(iv) in the case of reviewing policies and other materials
relating to the production of hemp, may waive the viability
and marketability requirement under subparagraph
(A)(ii)(I).’’.
(4) GUIDELINES FOR SUBMISSION AND REVIEW.—The Corporation shall
issue regulations to establish guidelines for the submission, and Board
review, of policies or other material submitted to the Board under this
subsection. At a minimum, the guidelines shall ensure the following:
(A) CONFIDENTIALITY.—
(i)
IN GENERAL.—A proposal submitted to the Board
under this subsection (including any information generated from
the proposal) shall be considered to be confidential commercial

34

or financial information for the purposes of section 552(b)(4) of
title 5, United States Code.
(ii)
STANDARD OF CONFIDENTIALITY.—If information
concerning a proposal could be withheld by the Secretary under
the standard for privileged or confidential information pertaining
to trade secrets and commercial or financial information under
section 552(b)(4) of title 5, United States Code, the information
shall not be released to the public.
(iii) APPLICATION.—This subparagraph shall apply with
respect to a proposal only during the period preceding any
approval of the proposal by the Board.
(B) PERSONAL PRESENTATION.—The Board shall provide an
applicant with the opportunity to present the proposal to the Board in
person if the applicant so desires.
(C) NOTIFICATION OF INTENT TO DISAPPROVE.—
(i)
TIME PERIOD.—The Board shall provide an applicant
with notification of intent to disapprove a proposal not later
than 30 days prior to making the disapproval.
(ii)
MODIFICATION OF APPLICATION.—
(I) AUTHORITY.—An applicant that receives the
notification may modify the application, and such
application, as modified, shall be considered by the Board
in the manner provided in subparagraph (D) within the 30day period beginning on the date the modified application
is submitted.
(II) TIME PERIOD.—Clause (i) shall not apply to the
Board’s consideration of the modified application.
(iii) EXPLANATION.—Any notification of intent to
disapprove a policy or other material submitted under this
subsection shall be accompanied by a complete explanation as
to the reasons for the Board’s intention to deny approval.
(D) DETERMINATION TO APPROVE OR DISAPPROVE POLICIES OR
MATERIALS.—
(i)
TIME PERIOD.—Not later than 120 days after a policy
or other material is submitted under this subsection, the Board
shall make a determination to approve or disapprove the policy
or material.
(ii)
EXPLANATION.—Any determination by the
Board to disapprove any policy or other material shall
be accompanied by a complete explanation of the reasons for the
Board’s decision to deny approval.
(iii) FAILURE TO MEET DEADLINE.—Notwithstanding any
other provision of this subtitle, if the Board fails to make a
determination within the prescribed time period, the submitted
policy or other material shall be deemed approved by the Board
for the initial reinsurance year designated for the policy or
material, unless the Board and the applicant agree to an
extension.
(E)
CONSULTATION.—
(i)
REQUIREMENT.—As part of the feasibility and
research associated with the development of a policy or other
material for fruits and vegetables, tree nuts, dried fruits, and
horticulture and nursery crops (including floriculture), the
submitter prior to making a submission under this subsection

35

shall consult with groups representing producers of those
agricultural commodities in all major producing areas for the
commodities to be served or potentially impacted, either directly
or indirectly.
(ii)
SUBMISSION TO THE BOARD.—Any submission made
to the Board under this subsection shall contain a summary and
analysis of the feasibility and research findings from the
impacted groups described in clause (i), including a summary
assessment of the support for or against development of the
policy and an assessment on the impact of the proposed policy to
the general marketing and production of the crop from both a
regional and national perspective.
(iii) EVALUATION BY THE BOARD.—In evaluating whether
the interests of producers are adequately protected pursuant to
paragraph (3) with respect to a submission made under this
subsection, the Board shall review the information provided
pursuant to clause (ii) to determine if the submission will create
adverse market distortions with respect to the production of
commodities that are the subject of the submission.
(5)
PREMIUM SCHEDULE.—
(A) PAYMENT BY CORPORATION.—In the case of a policy or
plan of insurance developed and approved under this subsection or
section 522, or conducted under section 523 (other than a policy or
plan of insurance applicable to livestock), the Corporation shall pay a
portion of the premium of the policy or plan of insurance that is equal
to—
(i)
the percentage, specified in subsection (e) for a
similar level of coverage, of the total amount of the premium
used to define loss ratio; and
(ii)
an amount for administrative and operating expenses
determined in accordance with subsection
(k)(4).
(B) TRANSITIONAL SCHEDULE.—Effective only during the 2001
reinsurance year, in the case of a policy or plan of insurance
developed and approved under this subsection or section 522, or
conducted under section 523 (other than a policy or plan of insurance
applicable to livestock), and first approved by the Board after the date
of the enactment of this subparagraph, the payment by the Corporation
of a portion of the premium of the policy may not exceed the dollar
amount that would otherwise be authorized under subsection (e)
(consistent with subsection (c)(5), as in effect on the day before the
date of the enactment of this subparagraph).
(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

36

(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.
(a) ADOPTION OF RATES AND COVERAGES.—
(1)
IN GENERAL.—The Corporation shall adopt, as soon as
practicable, rates and coverages that will improve the actuarial soundness
of the insurance operations of the Corporation for those crops that are
determined to be insured at rates that are not actuarially sound, except that
no rate may be increased by an amount of more than 20 percent over the
comparable rate of the preceding crop year.
(2)
REVIEW OF RATING METHODOLOGIES.—To maximize
participation in the Federal crop insurance program and to ensure equity
for producers, the Corporation shall periodically review the methodologies
employed for rating plans of insurance under this subtitle consistent with
section 507(c)(2).
(3)
ANALYSIS OF RATING AND LOSS HISTORY.—The Corporation
shall analyze the rating and loss history of approved policies and plans of
insurance for agricultural commodities by area.
(4)
PREMIUM ADJUSTMENT.—If the Corporation makes a
determination that premium rates are excessive for an agricultural
commodity in an area relative to the requirements of subsection (d)(2) for
that area, then, for the 2002 crop year (and as necessary thereafter), the
Corporation shall make appropriate adjustments in the premium rates for
that area for that agricultural commodity.
(j) CLAIMS FOR LOSSES.—
(1) IN GENERAL.—Under rules prescribed by the Corporation, the
Corporation may provide for adjustment and payment of claims for losses.
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 an approved provider on
behalf of the Corporation, an action on the claim may be brought
against the Corporation or Secretary only 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 final notice of
denial of the claim is provided to the claimant.
(3)
INDEMNIFICATION.—The Corporation shall provide approved
insurance providers with indemnification, including costs and reasonable
attorney fees incurred by the approved insurance provider, due to errors or
omissions on the part of the Corporation.
(4)
MARKETING WINDOWS.—The Corporation shall consider
marketing windows in determining whether it is feasible to require planting
during a crop year.
(5) SETTLEMENT OF CLAIMS ON FARM-STORED PRODUCTION.—A

producer with farm-stored production may, at the option of the
producer, delay settlement of a crop insurance claim relating to the
farm-stored production for up to 4 months after the last date on
37

which claims may be submitted under the policy of insurance.

(k) REINSURANCE.—
(1)
IN GENERAL.—Notwithstanding any other provision of this
subtitle, the Corporation shall, to the maximum extent practicable, provide
reinsurance to insurers approved by the Corporation that insure producers
of any agricultural commodity under 1 or more plans acceptable to the
Corporation.
(2)
TERMS AND CONDITIONS.—The reinsurance shall be provided
on such terms and conditions as the Board may determine to be consistent
with subsections (b) and (c) and sound reinsurance principles.
(3)
SHARE OF RISK.—The reinsurance agreements of the
Corporation with the reinsured companies shall require the reinsured
companies to bear a sufficient share of any potential loss under the
agreement so as to ensure that the reinsured company will sell and service
policies of insurance in a sound and prudent manner, taking into
consideration the financial condition of the reinsured companies and the
availability of private reinsurance.
(4)
RATE.—
(A) IN GENERAL.—Except as otherwise provided in this
paragraph, the rate established by the Board to reimburse approved
insurance providers and agents for the administrative and operating
costs of the providers and agents shall not exceed—
(i)
for the 1998 reinsurance year, 27 percent of the
premium used to define loss ratio; and
(ii)
for each of the 1999 and subsequent reinsurance
years, 24.5 percent of the premium used to define loss ratio.
(B) PROPORTIONAL REDUCTIONS.—A policy of additional
coverage that received a rate of reimbursement for administrative and
operating costs for the 1998 reinsurance year that is lower than the rate
specified in subparagraph (A)(i) shall receive a reduction in the rate of
reimbursement that is proportional to the reduction in the rate of
reimbursement between clauses (i) and (ii) of subparagraph (A).
(C) OTHER REDUCTIONS.—Beginning with the 2002
reinsurance year, in the case of a policy or plan of insurance approved
by the Board that was not reinsured during the 1998 reinsurance year
but, had it been reinsured, would have received a reduced rate of
reimbursement during the 1998 reinsurance year, the rate of
reimbursement for administrative and operating costs established for
the policy or plan of insurance shall take into account the factors used
to determine the rate of reimbursement for administrative and
operating costs during the 1998 reinsurance year, including the
expected difference in premium and actual administrative and
operating costs of the policy or plan of insurance relative to an
individual yield policy or plan of insurance and other appropriate
factors, as determined by the Corporation.
(D) TIME FOR REIMBURSEMENT.—Effective beginning with the
2012 reinsurance year, the Corporation shall reimburse approved
insurance providers and agents for the allowable administrative and
operating costs of the providers and agents as soon as practicable after
October 1 (but not later than October 31) after the reinsurance year
for which reimbursements are earned.
(E) REIMBURSEMENT RATE REDUCTION.—In the case of a policy
of additional coverage that received a rate of reimbursement for
administrative and operating costs for the 2008 reinsurance year, for

38

each of the 2009 and subsequent reinsurance years, the reimbursement
rate for administrative and operating costs shall be 2.3 percentage
points below the rates in effect as of the date of enactment of the Food,
Conservation, and Energy Act of 2008 for all crop insurance policies
used to define loss ratio, except that only 1⁄2 of the reduction shall apply
in a reinsurance year to the total premium written in a State in which
the State loss ratio is greater than 1.2.
(F) REIMBURSEMENT RATE FOR AREA POLICIES AND PLANS OF
INSURANCE.—Notwithstanding subparagraphs (A) through (E), for
each of the 2009 and subsequent reinsurance years, the reimbursement
rate for area policies and plans of insurance widely available as of the
date of enactment of this subparagraph or authorized under subsection
(c)(4)(C) or section 508B shall be 12 percent of the premium used to
define loss ratio for that reinsurance year.
(5)
COST AND REGULATORY REDUCTION.—Consistent with section
118 of the Federal Crop Insurance Reform Act of 1994, and consistent with
maintenance of program integrity, prevention of fraud and abuse, the need
for program expansion, and improvement of quality of service to
customers, the Board shall alter program procedures and administrative
requirements in order to reduce the administrative and operating costs of
approved insurance providers and agents in an amount that corresponds to
any reduction in the reimbursement rate required under paragraph (4)
during the 5-year period beginning on the date of enactment of this
paragraph.
(6)
AGENCY DISCRETION.—The determination of whether the
Corporation is achieving, or has achieved, corresponding administrative
cost savings shall not be subject to administrative review, and is wholly
committed to agency discretion within the meaning of section 701(a)(2) of
title 5, United States Code.
(7)
PLAN.—The Corporation shall submit to Congress a plan
outlining the measures that will be used to achieve the reduction required
under paragraph (5). If the Corporation can identify additional cost
reduction measures, the Corporation shall describe the measures in the
plan.
(8) RENEGOTIATION OF STANDARD REINSURANCE AGREEMENT.—
(A) IN GENERAL.—Except as provided in subparagraph (B),
notwithstanding section 536 of the Agricultural Research, Extension,
and Education Reform Act of 1998 (7 U.S.C. 1506 note; Public Law
105–185) and section 148 of the Agricultural Risk Protection Act of
2000 (7 U.S.C. 1506 note; Public Law 106–224), the Corporation may
renegotiate the financial terms and conditions of each Standard
Reinsurance Agreement—
(i)
to be effective for the 2011 reinsurance year
beginning July 1, 2010; and
(ii)
once during each period of 5 reinsurance years
thereafter.
(B) EXCEPTIONS.—
(i)
ADVERSE CIRCUMSTANCES.—Subject to clause (ii),
subparagraph (A) shall not apply in any case in which the
approved insurance providers, as a whole, experience
unexpected adverse circumstances, as determined by the
Secretary.
(ii)
EFFECT OF FEDERAL LAW CHANGES.—If Federal law is
enacted after the date of enactment of this paragraph that requires

39

revisions in the financial terms of the Standard Reinsurance
Agreement, and changes in the Agreement are made on a
mandatory basis by the Corporation, the changes shall not be
considered to be a renegotiation of the Agreement for purposes
of subparagraph (A).
(C) NOTIFICATION REQUIREMENT.—If
the
Corporation
renegotiates a Standard Reinsurance Agreement under subparagraph
(A)(ii), the Corporation shall notify the Committee on Agriculture of
the House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate of the renegotiation.
(D) CONSULTATION.—The approved insurance providers may
confer with each other and collectively with the Corporation during
any renegotiation under subparagraph
(A).
(E) 2011 REINSURANCE YEAR.—
(i)
IN GENERAL.—As part of the Standard Reinsurance
Agreement renegotiation authorized under subparagraph (A)(i),
the Corporation shall consider alternative methods to determine
reimbursement rates for administrative and operating costs.
(ii)
ALTERNATIVE METHODS.—Alternatives considered
under clause (i) shall include—
(I) methods that—
(aa) are graduated and base reimbursement rates
in a State on changes in premiums in that State;
(bb) are graduated and base reimbursement rates
in a State on the loss ratio for crop insurance for that
State; and
(cc) are graduated and base reimbursement rates
on individual policies on the level of total premium for
each policy; and
(II) any other method that takes into account current
financial conditions of the program and ensures continued
availability of the program to producers on a nationwide
basis.
(F) BUDGET.—
(i) IN GENERAL.—The Board shall ensure that any Standard
Reinsurance Agreement negotiated under subparagraph (A)(ii)
shall—
(I) to the maximum extent practicable, be estimated
as budget neutral with respect to the total amount of
payments described in paragraph (9) as compared to the
total amount of such payments estimated to be made under
the immediately preceding Standard Reinsurance
Agreement if that Agreement were extended over the same
period of time;
(II) comply with the applicable provisions of this Act
establishing the rates of reimbursement for administrative
and operating costs for approved insurance providers and
agents, except that, to the maximum extent practicable, the
estimated total amount of reimbursement for those costs
shall not be less than the total amount of the payments to
be made under the immediately preceding Standard
Reinsurance Agreement if that Agreement were extended
over the same period of time, as estimated on the date of

40

enactment of the Agricultural Act of 2014; and
(III) in no event significantly depart from budget
neutrality unless otherwise required by this Act.
(ii) USE OF SAVINGS.—To the extent that any budget savings
are realized in the renegotiation of a Standard Reinsurance
Agreement under subparagraph (A)(ii), and the savings are
determined not to be a significant departure from budget
neutrality under clause (i), the savings shall be used to increase
reimbursements or payments described under paragraphs (4) and
(9).
(9) DUE DATE FOR PAYMENT OF UNDERWRITING GAINS.—Effective
beginning with the 2011 reinsurance year, the Corporation shall make
payments for underwriting gains under this subtitle on—
(A) for the 2011 reinsurance year, October 1, 2012; and
(B) for each reinsurance year thereafter, October 1 of the
following calendar year.
(l) OPTIONAL COVERAGES.—The Corporation may offer specific risk
protection programs, including protection against prevented planting, wildlife
depredation, tree damage and disease, and insect infestation, under such terms
and conditions as the Board may determine, except that no program may be
undertaken if insurance for the specific risk involved is generally available from
private companies.
(m) QUALITY LOSS ADJUSTMENT COVERAGE.—
(1) EFFECT OF COVERAGE.—If a policy or plan of insurance offered
under this subtitle includes quality loss adjustment coverage, the coverage
shall provide for a reduction in the quantity of production of the agricultural
commodity considered produced during a crop year, or a similar
adjustment, as a result of the agricultural commodity not meeting the
quality standards established in the policy or plan of insurance.
(2) ADDITIONAL QUALITY LOSS ADJUSTMENT.—
(A) PRODUCER OPTION.—Notwithstanding any other provision
of law, in addition to the quality loss adjustment coverage available
under paragraph (1), the Corporation shall offer producers the

option of purchasing quality loss adjustment coverage on a
basis that is smaller than a unit with respect to an agricultural
commodity that satisfies each of the following:

(i)
The agricultural commodity is sold on an identitypreserved basis.
(ii)
All quality determinations are made solely by the
Federal agency designated to grade or classify the agricultural
commodity.
(iii) All quality determinations are made in accordance
with standards published by the Federal agency in the Federal
Register.
(iv)
The discount schedules that reflect the reduction in
quality of the agricultural commodity are established by the
Secretary.
(B) BASIS FOR ADJUSTMENT.—Under this paragraph, the
Corporation shall set the quality standards below which quality losses
will be paid based on the variability of the grade of the agricultural
commodity from the base quality for the agricultural commodity.
(3) REVIEW OF CRITERIA AND PROCEDURES.—
(A) REVIEW.—The Corporation shall contract with a qualified
person to review the quality loss adjustment procedures of the

41

Corporation so that the procedures more accurately reflect local
quality discounts that are applied to agricultural commodities insured
under this subtitle.
(B) PROCEDURES.—Effective beginning not later than the 2004
reinsurance year, based on the review, the Corporation shall make
adjustments in the procedures, taking into consideration the actuarial
soundness of the adjustment and the prevention of fraud, waste, and
abuse.
(4) QUALITY OF AGRICULTURAL COMMODITIES DELIVERED TO WAREHOUSE
OPERATORS.—In administering this subtitle, the Secretary shall accept, in
the same manner and under the same terms and conditions, evidence of the
quality of agricultural commodities delivered to—
(A) warehouse operators that are licensed under the
United States Warehouse Act (7 U.S.C. 241 et seq.);
(B) warehouse operators that—
(i) are licensed under State law; and
(ii) have entered into a storage agreement with the
Commodity Credit Corporation; and
(C) warehouse operators that—
(i)
are not licensed under State law but are in
compliance with State law regarding warehouses; and
(ii)
have entered into a commodity storage agreement
with the Commodity Credit Corporation.
(5) SPECIAL PROVISIONS FOR MALTING BARLEY.—The Corporation shall
promulgate special provisions under this subsection specific to malting
barley, taking into consideration any changes in quality factors, as required
by applicable market conditions.
(6) TEST WEIGHT FOR CORN.—
(A) IN GENERAL.—The Corporation shall establish procedures
to allow insured producers not more than 120 days to settle claims, in
accordance with procedures established by the Secretary, involving
corn that is determined to have low test weight.
(B) IMPLEMENTATION.—As soon as practicable after the date
of enactment of this paragraph, the Corporation shall implement
subparagraph (A) on a regional basis based on market conditions and
the interests of producers.
(C) TERMINATION OF EFFECTIVENESS.—The authority provided
by this paragraph terminates effective on the date that is 5 years after
the date on which subparagraph (A) is implemented.
(n)
LIMITATION ON MULTIPLE BENEFITS FOR SAME LOSS.—
(1)
IN GENERAL.—Except as provided in paragraph (2), if a
producer who is eligible to receive benefits under catastrophic risk
protection under subsection (b) is also eligible to receive assistance for the
same loss under any other program administered by the Secretary, the
producer shall be required to elect whether to receive benefits under this
subtitle or under the other program, but not both. A producer who
purchases additional coverage under subsection (c) may also receive
assistance for the same loss under other programs administered by the
Secretary, except that the amount received for the loss under the additional
coverage together with the amount received under the other programs may
not exceed the amount of the actual loss of the producer.
(2)
EXCEPTION.—Paragraph (1) shall not apply to emergency
loans under subtitle C of the Consolidated Farm and Rural Development

42

Act (7 U.S.C. 1961 et seq.).
CROP PRODUCTION ON NATIVE SOD.—
(1) DEFINITION OF NATIVE SOD.—In this subsection, the term ‘‘native
sod’’ means land—
(A) on which the plant cover is composed principally of
native grasses, grasslike plants, forbs, or shrubs suitable for grazing
and browsing; and
(B) that has never been tilled, or the producer cannot
substantiate that the ground has ever been tilled, for the production of
an annual crop as of the date of enactment of this subsection.
(2) REDUCTION IN BENEFITS.—
(A) IN GENERAL.—
(i) FIRST 4 CROP YEARS.—During the first 4 crop years of
planting, as determined by the Secretary, native sod acreage
that has been tilled for the production of an annual crop
beginning on February 8, 2014, and ending on the date of
enactment of the Agriculture Improvement Act of 2018 shall
be subject to a reduction in benefits under this subtitle as
described in this paragraph.
(ii) SUBSEQUENT CROP YEARS.—Native sod acreage hat has
been tilled for the production of an insurable crop after the
date of enactment of the Agriculture Improvement Act of 2018
shall be subject to a reduction in benefits under this subtitle as
described in this paragraph for not more than 4 cumulative
years—
(I) during the first 10 years after initial tillage;
and
(II) during each of which a crop on that acreage
is insured under subsection (c).
(B) DE MINIMIS ACREAGE EXEMPTION.—The Secretary shall
exempt areas of 5 acres or less from subparagraph (A).
(C) ADMINISTRATION.—
(i) REDUCTION.—For purposes of the reduction in
benefits for the acreage described in subparagraph
(A) —
(I) the crop insurance guarantee shall be
determined by using a yield equal to 65 percent of the
transitional yield of the producer; and
(II) the crop insurance premium subsidy provided
for the producer under this subtitle, except for coverage
authorized pursuant to subsection (b)(1), shall be 50
percentage points less than the premium subsidy that
would otherwise apply.
(3) YIELD SUBSTITUTION.—During the period native sod acreage is
covered by this subsection, a producer may not substitute yields for the
native sod.
(4) APPLICATION.—This subsection shall only apply to native sod
acreage in the States of Minnesota, Iowa, North Dakota, South Dakota,
Montana, and Nebraska.
(p) COVERAGE LEVELS BY PRACTICE.—Beginning with the 2015 crop year,
a producer that produces an agricultural commodity on both dry land and
irrigated land may elect a different coverage level for each productionpractice.
(o)

43

SEC. 508A. 7 U.S.C. 1508a DOUBLE INSURANCE AND PREVENTED PLANTING.

(a) DEFINITIONS.—In this section:
(1)
FIRST CROP.—The term ‘‘first crop’’ means the first crop of
the first agricultural commodity planted for harvest, or prevented from
being planted, on specific acreage during a crop year and insured under this
subtitle.
(2)
SECOND CROP.—The term ‘‘second crop’’ means a second
crop of the same agricultural commodity as the first crop, or a crop of a
different agricultural commodity following the first crop, planted on the
same acreage as the first crop for harvest in the same crop year, except the
term does not include a replanted crop.
(3)
REPLANTED CROP.—The term ‘‘replanted crop’’ means any
agricultural commodity replanted on the same acreage as the first crop for
harvest in the same crop year if the replanting is required by the terms of
the policy of insurance covering the first crop.
(b) DOUBLE INSURANCE.—
(1) OPTIONS ON LOSS TO FIRST CROP.—Except as provided in

subsections (d) and (e), if a first crop insured under this subtitle in a
crop year has a total or partial insurable loss, the producer of the
first crop may elect one of the following options:
(A) NO SECOND CROP PLANTED.—The producer may—
(i)
elect to not plant a second crop on the same acreage
for harvest in the same crop year; and (ii) collect an indemnity
payment that is equal to 100 percent of the insurable loss for the
first crop.
(B) SECOND CROP PLANTED.—The producer may—
(i)
plant a second crop on the same acreage for harvest
in the same crop year; and
(ii)
collect an indemnity payment established by the
Corporation for the first crop, but not to exceed 35 percent of the
insurable loss for the first crop.
(2) EFFECT OF NO LOSS TO SECOND CROP.—If a producer makes an
election under paragraph (1)(B) and the producer does not suffer an
insurable loss to the second crop, the producer may collect an indemnity
payment for the first crop that is equal to—
(A) 100 percent of the insurable loss for the first crop;
less
(B) the amount previously collected under paragraph (1)(B)(ii).
(3) PREMIUM FOR FIRST CROP IF SECOND CROP PLANTED.—
(A) INITIAL PREMIUM.—If a producer makes an election under
paragraph (1)(B), the producer shall be responsible for a premium

for the first crop that is commensurate with the indemnity paid
under paragraph (1)(B)(ii). The Corporation shall adjust the
total premium for the first crop to reflect the reduced
indemnity.

(B)
EFFECT OF NO LOSS TO SECOND CROP.—If the producer
makes an election under paragraph (1)(B) and the producer does not
suffer an insurable loss to the second crop, the producer shall be
responsible for a premium for the first crop that is equal to—
(i) the full premium owed by the producer for the first

44

crop; less
(ii)
the amount of premium previously paid under
subparagraph (A).
(c) PREVENTED PLANTING COVERAGE.—
(1) OPTIONS ON LOSS TO FIRST CROP.—Except as provided in

subsections (d) and (e), if a first crop insured under this subtitle in a
crop year is prevented from being planted, the producer of the first
crop may elect one of the following options:
(A) NO SECOND CROP PLANTED.—The producer may—

(i)
elect to not plant a second crop on the same acreage
for harvest in the same crop year; and
(ii)
subject to paragraph (4), collect an indemnity
payment that is equal to 100 percent of the prevented planting
guarantee for the acreage for the first crop.
(B) SECOND CROP PLANTED.—The producer may—
(i)
plant a second crop on the same acreage for harvest
in the same crop year; and
(ii)
subject to paragraphs (4) and (5), collect an
indemnity payment established by the Corporation for the first
crop, but not to exceed 35 percent of the prevented planting
guarantee for the acreage for the first crop.
(2) PREMIUM FOR FIRST CROP IF SECOND PLANTED.—If the producer
makes an election under paragraph (1)(B), the producer shall pay a
premium for the first crop that is commensurate with the indemnity paid
under paragraph (1)(B)(ii). The Corporation shall adjust the total premium
for the first crop to reflect the reduced indemnity.
(3) EFFECT ON ACTUAL PRODUCTION HISTORY.—Except in the case of
double cropping described in subsection (d), if a producer make an
election under paragraph (1)(B) for a crop year, the Corporation shall
assign the producer a recorded yield for that crop year for the first crop
equal to 60 percent of the producer’s actual production history for the
agricultural commodity involved, for purposes of determining the
producer’s actual production history for subsequent crop years.
(4) AREA CONDITIONS REQUIRED FOR PAYMENT.—The Corporation shall
limit prevented planting payments for producers to those situations in
which other producers, in the area where a first crop is
prevented from being planted is located, are also generally affected by the
conditions that prevented the first crop from being planted.
(5) PLANTING DATE.—If a producer plants the second crop beforethe
latest planting date established by the Corporation for the first crop, the
Corporation shall not make a prevented planting payment with regard to the
first crop.
(d)
EXCEPTION FOR ESTABLISHED DOUBLE CROPPING PRACTICES.—A

producer may receive full indemnity payments on two or more crops
planted for harvest in the same crop year and insured under this subtitle
if each of the following conditions are met:
(1)
There is an established practice of planting two or more crops
for harvest in the same crop year in the area, as determined by the
Corporation.
(2)
An additional coverage policy or plan of insurance is offered
with respect to the agricultural commodities planted on the same acreage
for harvest in the same crop year in the area.
(3)
The producer has a history of planting two or more crops for

45

harvest in the same crop year or the applicable acreage has historically had
two or more crops planted for harvest in the same crop year.
(4)
The second or more crops are customarily planted after the
first crop for harvest on the same acreage in the same year in the area.
(e) SUBSEQUENT CROPS.—Except in the case of double cropping described
in subsection (d), if a producer elects to plant a crop (other than a replanted crop)
subsequent to a second crop on the same acreage as the first crop and second
crop for harvest in the same crop year, the producer shall not be eligible for
insurance under this subtitle, or noninsured crop assistance under section 196 of
the Agricultural Market Transition Act (7 U.S.C. 7333), for the subsequent crop.
SEC. 508B. 7 U.S.C. 1508b STACKED INCOME PROTECTION PLAN FOR
PRODUCERS OF UPLAND COTTON.

(a) AVAILABILITY.—Beginning not later than the 2015 crop of upland
cotton, the Corporation shall make available to producers of upland cotton an
additional policy (to be known as the ‘‘Stacked Income Protection Plan’’),
which shall provide coverage consistent with the Group Risk Income Protection
Plan (and the associated Harvest Revenue Option Endorsement) offered by the
Corporation for the 2011 crop year.
(b) REQUIRED TERMS.—The Corporation may modify the Stacked Income
Protection Plan on a program-wide basis, except that the Stacked Income
Protection Plan shall comply with the following requirements:
(1)
Provide coverage for revenue loss of not less than 10 percent
and not more than 30 percent of expected county revenue, specified in
increments of 5 percent. The deductible shall be the minimum percent of
revenue loss at which indemnities are triggered under the plan, not to be
less than 10 percent of the expected county revenue.
(2)
Be offered to producers of upland cotton in all counties with
upland cotton production—
(A)
at a county-wide level to the fullest extent practicable; or
(B)
in counties that lack sufficient data, on the basis of such
larger geographical area as the Corporation determines to provide
sufficient data for purposes of providing the coverage.
(3) Be purchased in addition to any other individual or area

coverage in effect on the producer’s acreage or as a stand- alone
policy, except that if a producer has an individual or area coverage
for the same acreage, the maximum coverage available under the
Stacked Income Protection Plan shall not exceed the deductible for
the individual or area coverage.
(4)

Establish coverage based on—
(A) the expected price established under existing Group Risk
Income Protection or area wide policy offered by the Corporation for
the applicable county (or area) and crop year; and
(B) an expected county yield that is the higher of—
(i)
the expected county yield established for the existing
area-wide plans offered by the Corporation for the applicable
county (or area) and crop year (or, in geographic areas where
area-wide plans are not offered, an expected yield determined in
a manner consistent with those of area-wide plans); or
(ii)
the average of the applicable yield data for the
county (or area) for the most recent 5 years, excluding the highest
and lowest observations, from the Risk Management Agency or
the National Agricultural Statistics Service (or both) or, if
sufficient county data is not available, such other data considered

46

appropriate by the Secretary.
(5)
Use a multiplier factor to establish maximum protection per
acre (referred to as a ‘‘protection factor’’) of not less than the higher of the
level established on a program wide basis or 120 percent.
(6)
Pay an indemnity based on the amount that the expected
county revenue exceeds the actual county revenue, as applied to the
individual coverage of the producer. Indemnities under the Stacked Income
Protection Plan shall not include or overlap the amount of the deductible
selected under paragraph (1).
(7)
In all counties for which data are available, establish separate
coverage levels for irrigated and nonirrigated practices.
(c) PREMIUM.—Notwithstanding section 508(d), the premium for the
Stacked Income Protection Plan shall—
(1)
be sufficient to cover anticipated losses and a reasonable
reserve; and
(2)
include an amount for operating and administrative expenses
established in accordance with section 508(k)(4)(F).
(d) PAYMENT OF PORTION OF PREMIUM BY CORPORATION.—Subject to
section 508(e)(4), the amount of premium paid by the Corporation for all
qualifying coverage levels of the Stacked Income Protection Plan shallbe—
(1)
80 percent of the amount of the premium established under
subsection (c) for the coverage level selected; and
(2)
the amount determined under subsection (c)(2), subject to
section 508(k)(4)(F), for the coverage to cover administrative and
operating expenses.
(e) RELATION TO OTHER COVERAGES.—The Stacked Income Protection Plan
is in addition to all other coverages available to producers of upland cotton.
SEC. 508C. 7 U.S.C. 1508c PEANUT REVENUE CROP INSURANCE.

(a) IN GENERAL.—Effective beginning with the 2015 crop year, the Risk
Management Agency and the Corporation shall make available to producers of
peanuts a revenue crop insurance program for peanuts.
(b) EFFECTIVE PRICE.—Subject to subsection (c), for purposes of the
revenue crop insurance program and the multiperil crop insurance program
under this Act, the effective price for peanuts shall be equal to the Rotterdam
price index for peanuts or other appropriate price as determined by the Secretary,
as adjusted to reflect the farmer stock price of peanuts in the United States.
(c) ADJUSTMENTS.—
(1)
IN GENERAL.—The effective price for peanuts established
under subsection (b) may be adjusted by the Risk Management Agency and
the Corporation to correct distortions.
(2)
ADMINISTRATION.—If an adjustment is made under paragraph
(1), the Risk Management Agency and the Corporation shall—
(A) make the adjustment in an open and transparent manner;
and
(B) submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that describes the reasons for the
adjustment.
SEC. 508D. COVERAGE FOR FORAGE AND GRAZING.

Notwithstanding section 508A, and in addition to any other available
coverage, for crops that can be both grazed and mechanically harvested on the

47

same acres during the same growing season, producers shall be allowed to
purchase separate policies for each intended use, as determined by the
Corporation, and any indemnity paid under those policies for each intended
use shall not be considered to be for the same loss for the purposes of section
508(n).
INDEMNITIES EXEMPT FROM LEVY

SEC. 509. 7 U.S.C. 1509

Claims for indemnities under this subtitle shall not be liable to attachment,
levy, garnishment, or any other legal process before payment to the insured or
to deduction on account of the indebtedness of the insured or the estate of the
insured to the United States except claims of the United States or the
Corporation arising under this subtitle.
DEPOSIT OF FUNDS

SEC. 510. 7 U.S.C. 1510

All money of the Corporation not otherwise employed may be deposited
with the Treasurer of the United States or in any bank approved by the
Secretary of the Treasury, subject to withdrawal by the Corporation at any
time, or with the approval of the Secretary of the Treasury may be invested in
obligations of the United States or in obligations guaranteed as to principal and
interest by the United States. Subject to the approval of the Secretary of the
Treasury, the Federal Reserve banks are hereby authorized and directed to act
as depositories, custodians, and fiscal agents for the Corporation in the
performance of its powers conferred by this subtitle.
TAX EXEMPTION

SEC. 511. 7 U.S.C. 1511 The Corporation, including its franchise, its capital,
reserves, and surplus, and its income and property, shall be exempt from all
taxation now or hereafter imposed by the United States or by any Territory,
dependency, or possession thereof, or by any State, county, municipality or local
taxing authority. A contract of insurance of the Corporation, and a contract of
insurance reinsured by the Corporation, shall be exempt from taxation imposed by
any State, municipality, or local taxing authority.
FISCAL AGENCY OF GOVERNMENT

SEC. 512. 7 U.S.C. 1512 When designated for that purpose by the Secretary of
the Treasury, the Corporation shall be a depository of public money, except
receipts from customs, under such regulations as may be prescribed by said
Secretary; and it may also be employed as a financial agent of the
Government; and it shall perform all such reasonable duties, as a depository of
public money and financial agent of the Government, as may be required of it.
ACCOUNTING BY CORPORATION

SEC. 513. 7 U.S.C. 1513 The Corporation shall at all times maintain complete
and accurate books of account and shall file annually with the Secretary a
complete report as to the business of the Corporation.
CRIMES AND OFFENSES

SEC. 514. 7 U.S.C. 1514 Subsections (a) through (e) repealed by 62 Stat.
859. See criminal provisions at the end of this Act. The provisions of section
22 of title 41 shall not apply to any crop insurance agreements made under
this subtitle.

48

SEC. 515. 7 U.S.C. 1515 PROGRAM COMPLIANCE AND INTEGRITY.

(a) PURPOSE.—
(1)
IN GENERAL.—The purpose of this section is to improve
compliance with, and the integrity of, the Federal crop insurance program.
(2)
ROLE OF INSURANCE PROVIDERS.—The Corporation shall work
actively with approved insurance providers to address program compliance
and integrity issues as such issues develop.
(b) NOTIFICATION OF COMPLIANCE PROBLEMS.—
(1)
NOTIFICATION OF ERRORS, OMISSIONS, AND FAILURES.— The
Corporation shall notify in writing an approved insurance provider of any
error, omission, or failure to follow Corporation regulations or procedures
for which the approved insurance provider may be responsible and which
may result in a debt owed the Corporation.
(2)
TIME FOR NOTIFICATION.—Notice under paragraph (1) shall be
given within 3 years after the end of the insurance period during which the
error, omission, or failure is alleged to have occurred, except that this time
limitation shall not apply with respect to an error, omission, or procedural
violation that is willful or intentional.
(3)
EFFECT OF FAILURE TO TIMELY NOTIFY.—Except as provided in paragraph (2), the failure to timely provide the notice required
under this subsection shall relieve the approved insurance provider from
the debt owed the Corporation.
(c) RECONCILING PRODUCER INFORMATION.—
(1)
IN GENERAL.—The Secretary shall develop and implement a
coordinated plan for the Corporation and the Farm Service Agency to
reconcile all relevant information received by the Corporation or the Farm
Service Agency from a producer who obtains crop insurance coverage
under this subtitle.
(2)
FREQUENCY.—Beginning with the 2001 crop year, the
Secretary shall require that the Corporation and the Farm Service Agency
reconcile such producer-derived information on at least an annual basis in
order to identify and address any discrepancies.
(3) CORRECTIONS.—
(A) IN GENERAL.—In addition to the corrections permitted by
the Corporation as of the day before the date of enactment of the
Agricultural Act of 2014, the Corporation shall establish procedures
that allow an agent or an approved insurance provider, subject to
subparagraph (B)—
(i)
within a reasonable amount of time following the
applicable sales closing date, to correct errors in information that
is provided by a producer for the purpose of obtaining coverage
under any policy or plan of insurance made available under this
subtitle to ensure that the eligibility information is correct and
consistent with information reported by the producer for other
programs administered by the Secretary;
(ii)
within a reasonable amount of time following—
(I) the acreage reporting date, to reconcile errors in
the information reported by the producer with correct
information determined from any other program
administered by the Secretary; or
(II)
the date of any subsequent correction of data
by the Farm Service Agency made as a result of the
verification of information, to make conforming

49

corrections; and
(iii) at any time, to correct electronic transmission errors
that were made by an agent or approved insurance provider, or
such errors made by the Farm Service Agency or any other
agency of the Department of Agriculture in transmitting the
information provided by the producer for purposes of other
programs of the Department to the extent an agent or approved
insurance provider relied upon the erroneous information for
crop insurance purposes.
(B) LIMITATION.—In accordance with the procedures of the
Corporation, correction to the information described in clauses (i)
and (ii) of subparagraph (A) may only be made if the corrections do
not allow the producer—
(i)
to avoid ineligibility requirements for insurance or
obtain a disproportionate benefit under the crop insurance
program or any related program administered by the Secretary;
(ii)
to obtain, enhance, or increase an insurance
guarantee or indemnity if a cause of loss exists or has occurred
before any correction has been made, or avoid premium owed if
no loss is likely to occur; or
(iii) to avoid an obligation or requirement under any
Federal or State law.
(C) EXCEPTION TO LATE FILING SANCTIONS.—Any corrections
made within a reasonable amount of time, in accordance with
established procedures, pursuant to this paragraph shall not be
subject to any late filing sanctions authorized in the reinsurance
agreement with the Corporation.
(D) LATE PAYMENT OF DEBT.—In the case of a producer that
has inadvertently failed to pay a debt due as specified by regulations
of the Corporation and has been determined to be ineligible for crop
insurance pursuant to the terms of the policy as a result of that
failure, the Corporation may determine to allow the producer to pay
the debt and purchase the crop insurance after the sales closing date, in
accordance with procedures and limitations established by the
Corporation.
(d)
IDENTIFICATION AND ELIMINATION OF FRAUD, WASTE, AND
ABUSE.—
(1)
FSA MONITORING PROGRAM.—The Secretary shall develop and
implement a coordinated plan for the Farm Service Agency to assist the
Corporation in the ongoing monitoring of programs carried out under this
subtitle, including—
(A) at the request of the Corporation or, subject to paragraph
(2), on its own initiative if the Farm Service Agency has reason to
suspect the existence of program fraud, waste, or abuse, conducting
fact finding relative to allegations of program fraud, waste, or abuse;
(B) reporting to the Corporation, in writing in a timely
manner, the results of any fact finding conducted pursuant to
subparagraph (A), any allegation of fraud, waste, or abuse, and any
identified program vulnerabilities;
(C) assisting the Corporation and approved insurance
providers in auditing a statistically appropriate number of claims made
under any policy or plan of insurance under this subtitle; and
(D) using published aggregate data from the National
Agricultural Statistics Service or any other data source to—

50

(i) detect yield disparities or other data anomalies that
indicate potential fraud; and
(ii) target the relevant counties, crops, regions, companies,
or agents associated with that potential fraud for audits and other
enforcement actions.
(2) FSA INQUIRY.—If, within five calendar days after receiving a
report submitted under paragraph (1)(B), the Corporation does not provide
a written response that describes the intended actions of the Corporation,
the Farm Service Agency may conduct its own inquiry into the alleged
program fraud, waste, or abuse on approval from the State director of the
Farm Service Agency of the State in which the alleged fraud, waste, or
abuse occurred. If as a result of the inquiry, the Farm Service Agency
concludes further investigation is warranted, but the Corporation declines
to proceed with the investigation, the Farm Service Agency may refer the
matter to the Inspector General of the Department of Agriculture.
(3)
USE OF FIELD INFRASTRUCTURE.—The plan required by
paragraph (1) shall provide for the use of the field infrastructure of the Farm
Service Agency. The Secretary shall ensure that relevant Farm Service
Agency personnel are appropriately trained for any responsibilities
assigned to the personnel under the plan. At a minimum, the personnel shall
receive the same level of training and pass the same basic competency tests
as required of loss adjusters of approved insurance providers.
(4) MAINTENANCE OF PROVIDER EFFORT.—
(A) IN GENERAL.—The activities of the Farm Service Agency
under this subsection do not affect the responsibility of approved
insurance providers to conduct any audits of claims or other program
reviews required by the Corporation.
(B) NOTIFICATION OF PROVIDERS.—The Corporation shall
notify the appropriate approved insurance provider of a report from
the Farm Service Agency regarding alleged program fraud, waste, or
abuse, unless the provider is suspected to be included in, or a party to,
the alleged fraud, waste, or abuse.
(C) RESPONSE.—An approved insurance provider that receives
a notice under subparagraph (B) shall submit a report to the
Corporation, within an appropriate time period determined by the
Secretary, describing the actions taken by the provider to investigate
the allegations of program fraud, waste, or abuse contained in the
notice.
(5) CORPORATION RESPONSE TO PROVIDER REPORTS.—
(A) PROMPT RESPONSE.—If an approved insurance provider
reports to the Corporation that the approved insurance provider
suspects intentional misrepresentation, fraud, waste, or abuse, the
Corporation shall make a determination and provide, within 90
calendar days after receiving the report, a written response that
describes the intended actions of the Corporation.
(B) COOPERATIVE EFFORT.—The approved insurance provider
and the Corporation shall take coordinated action in any case where
misrepresentation, fraud, waste, or abuse is alleged.
(C) FAILURE TO TIMELY RESPOND.—If the Corporation fails to
respond as required by subparagraph (A), an approved insurance
provider may request the Farm Service Agency to assist the provider
in an inquiry into the alleged program fraud, waste, or abuse.
(e) CONSULTATION WITH STATE FSA COMMITTEES.—The Secretary shall

51

establish procedures under which the Corporation shall consult with the State
committee of the Farm Service Agency for a State with respect to policies, plans
of insurance, and material related to such policies or plans of insurance
(including applicable sales closing dates, assigned yields, and transitional
yields) offered in that State under this subtitle.
(f) DETECTION OF DISPARATE PERFORMANCE.—
(1) COVERED ACTIVITIES.—The Secretary shall establish procedures
under which the Corporation will be able to identify the following:
(A) Any agent engaged in the sale of coverage offered under
this subtitle where the loss claims associated with such sales by the
agent are equal to or greater than 150 percent (or an appropriate
percentage specified by the Corporation) of the mean for all loss
claims associated with such sales by all other agents operating in the
same area, as determined by the Corporation.
(B) Any person performing loss adjustment services relative
to coverage offered under this subtitle where such loss adjustments
performed by the person result in accepted or denied claims equal to
or greater than 150 percent (or an appropriate percentage specified
by the Corporation) of the mean for accepted or denied claims (as
applicable) for all other persons performing loss adjustment services
in the same area, as determined by the Corporation.
(2)
REVIEW.—
(A) REVIEW REQUIRED.—The Corporation shall conduct a
review of any agent identified under paragraph (1)(A), and any

person identified pursuant to paragraph (1)(B), to determine
whether the higher loss claims associated with the agent or the
higher number of accepted or denied claims (as applicable)
associated with the person are the result of fraud, waste, or
abuse.

(B) REMEDIAL ACTION.—The Corporation shall take
appropriate remedial action with respect to any occurrence of fraud,
waste, or abuse identified in a review conducted under this paragraph.
(3) OVERSIGHT OF AGENTS AND LOSS ADJUSTERS.—The Corporation

shall develop procedures to require an annual review by an
approved insurance provider of the performance of each agent and
loss adjuster used by the approved insurance provider. The
Corporation shall oversee the conduct of annual reviews and may
consult with an approved insurance provider regarding any
remedial action that is determined to be necessary as a result of the
annual review of an agent or loss adjuster.

(g) SUBMISSION OF INFORMATION TO CORPORATION TO SUPPORT COMPLIANCE
EFFORTS.—
(1)
TYPES OF INFORMATION REQUIRED.—The Secretary shall
establish procedures under which approved insurance providers shall
submit to the Corporation the following information with respect to each
policy or plan of insurance offered under this subtitle:
(A) The name and identification number of the insured.
(B) The agricultural commodity to be insured.
(C) The elected coverage level, including the price election, of
the insured.
(D) The actual production history to be used to establish
insurable yields.

52

(2)

TIME FOR SUBMISSION.—
(A) IN GENERAL.—The information required to be submitted
under subparagraphs (A) through (C) of paragraph (1) with respect to
a policy or plan of insurance shall be submitted so as to ensure
receipt by the Corporation not later than the Saturday of the week
containing the calendar day that is 30 days after the applicable sales
closing date for the crop to be insured.
(B) ACTUAL PRODUCTION HISTORY.—
(i) IN GENERAL.—The information required to be submitted
under paragraph (1)(D) with respect to an applicable policy or
plan of insurance for a covered commodity (as defined in section
1111 of the Agricultural Act of 2014 (7 U.S.C. 9011)) shall be
submitted so as to ensure receipt by the Corporation not later
than the Saturday of the week containing the calendar day that is
30 days after the applicable production reporting date for the
crop to be insured.
(ii) CORRECTION OF ERRORS.—Nothing in clause (i) limits the
ability of an approved insurance provider to correct any error in
the information submitted under paragraph (1)(D) after receipt
of the information by the Corporation in accordance with clause
(i).
(h) SANCTIONS FOR PROGRAM NONCOMPLIANCE AND FRAUD.—
(1)
FALSE INFORMATION.—A producer, agent, loss adjuster,
approved insurance provider, or other person that willfully and
intentionally provides any false or inaccurate information to the
Corporation or to an approved insurance provider with respect to a policy
or plan of insurance under this subtitle may, after notice and an opportunity
for a hearing on the record, be subject to one or more of the sanctions
described in paragraph
(3).
(2)
COMPLIANCE.—A person may, after notice and an opportunity
for a hearing on the record, be subject to one or more of the sanctions
described in paragraph (3) if the person is a producer, agent, loss adjuster,
approved insurance provider, or other person that willfully and
intentionally fails to comply with a requirement of the Corporation.
(3)
AUTHORIZED SANCTIONS.—If the Secretary determines that a
person covered by this subsection has committed a material violation under
paragraph (1) or (2), the following sanctions may be imposed:
(A) CIVIL FINES.—A civil fine may be imposed for each
violation in an amount not to exceed the greater of—
(i)
the amount of the pecuniary gain obtained as a result
of the false or inaccurate information provided
or the noncompliance with a requirement of this subtitle; or
(ii)
$10,000.
(B) PRODUCER DISQUALIFICATION.—In the case of a violation
committed by a producer, the producer may be disqualified for a
period of up to 5 years from receiving any monetary or nonmonetary
benefit provided under each of the following:
(i)
This subtitle.
(ii)
The Agricultural Market Transition Act (7 U.S.C.
7201 et seq.), including the noninsured crop disaster assistance
program under section 196 of that Act (7 U.S.C. 7333).

53

(iii) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
(iv) The Commodity Credit Corporation Charter Act (15
U.S.C. 714 et seq.).
(v)
The Agricultural Adjustment Act of 1938 (7 U.S.C.
1281 et seq.).
(vi) Title XII of the Food Security Act of 1985 (16 U.S.C.
3801 et seq.).
(vii) The Consolidated Farm and Rural Development Act
(7 U.S.C. 1921 et seq.).
(viii) Any law that provides assistance to a producer of an
agricultural commodity affected by a crop loss or a decline in the
prices of agricultural commodities.
(C) DISQUALIFICATION OF OTHER PERSONS.—In the case of a
violation committed by an agent, loss adjuster, approved insurance
provider, or other person (other than a producer), the violator may be
disqualified for a period of up to 5 years from participating in any
program, or receiving any benefit, under this subtitle.
(4)
ASSESSMENT OF SANCTION.—The Secretary shall consider the
gravity of the violation of the person covered by this subsection in
determining—
(A)

whether to impose a sanction under this subsection; and

(B)

the type and amount of the sanction to be imposed.

(5) DISCLOSURE OF SANCTIONS.—Each policy or plan of insurance
under this subtitle shall provide notice describing the sanctions prescribed
under paragraph (3) for willfully and intentionally—
(A) providing false or inaccurate information to the
Corporation or to an approved insurance provider; or
(B) failing to comply with a requirement of the Corporation.
(6) INSURANCE FUND.—Any funds collected under this subsection shall
be deposited into the insurance fund established under section 516(c).
(i) ANNUAL REPORT ON PROGRAM COMPLIANCE AND INTEGRITY EFFORTS.—
(1) REPORT REQUIRED.—The Secretary shall submit to the Committee
on Agriculture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate an annual report
describing the operation of this section during the preceding year and
efforts undertaken by the Secretary and the Corporation to carry out this
section.
(2) INFORMATION REGARDING FRAUD, WASTE, AND ABUSE.—
The report shall identify specific occurrences of waste, fraud, or abuse and
contain an outline of actions that have been or are being taken to eliminate
the identified waste, fraud, or abuse.
(j) INFORMATION MANAGEMENT.—
(1) SYSTEMS MAINTENANCE AND UPGRADES.—
(A) IN GENERAL.—The Secretary shall maintain and upgrade the
information management systems of the Corporation used in the
administration and enforcement of this subtitle.
(B) REQUIREMENT.—
(i)
IN GENERAL.—In maintaining and upgrading the
systems, the Secretary shall ensure that new hardware and
software are compatible with the hardware and software used by

54

other agencies of the Department to maximize data sharing and
promote the purposes of this section.
(ii)
ACREAGE
REPORT
STREAMLINING
INITIATIVE
PROJECT.—As soon as practicable, the Secretary shall develop
and implement an acreage report streamlining initiative project
to allow producers to report acreage and other information
directly to the Department.
(2) USE OF AVAILABLE INFORMATION TECHNOLOGIES.—The
Secretary shall use the information technologies known as data mining and
data warehousing and other available information technologies to
administer and enforce this subtitle.
(3) USE OF PRIVATE SECTOR.—The Secretary may enter into contracts
to use private sector expertise and technological resources in implementing
this subsection, which shall be subject to competition on a periodic basis,
as determined by the Secretary.
(k)

CONTINUING EDUCATION FOR LOSS ADJUSTERS AND AGENTS.—

(1) IN GENERAL.—The Corporation shall establish requirements for
continuing education for loss adjusters and agents of approved insurance
providers.
(2) REQUIREMENTS.—The requirements for continuing education
described in paragraph (1) shall ensure that loss adjusters and agents of
approved insurance providers are familiar with—
(A) the policies and plans of insurance available under this Act,
including the regulations promulgated to carry out this Act;
(B) efforts to promote program integrity through the elimination
of waste, fraud, and abuse; and
(C) other aspects of adjusting, delivering, and servicing policies
and plans of insurance by adjustors and agents, as determined by the
Secretary, including conservation activities and agronomic practices
(including organic and sustainable practices) that are common and
appropriate to the area in which the insured crop being inspected is
produced.
(l)
FUNDING.—
(1)
INFORMATION TECHNOLOGY.—
(A) IN GENERAL.—For purposes of subsection (j)(1), the
Corporation may use, from amounts made available from the
insurance fund established under section 516(c), not more than—
(i)(I) for fiscal year 2014, $14,000,000; and
(II) for each of fiscal years 2015 through 2018, $9,000,000;
or
(ii) if the Acreage Crop Reporting Streamlining Initiative
(ACRSI) project is substantially completed by September 30,
2015, not more than $14,000,000 for each of the fiscal years 2015
through 2018.
(B) NOTIFICATION.—The Secretary shall notify the Committee
on Agriculture of the House of Representatives and the Committee
on Agriculture, Nutrition, and Forestry of the Senate of the substantial
completion of the Acreage Crop Reporting Streamlining Initiative
(ACRSI) project not later than July 1, 2015.
(2) DATA MINING.—To carry out subsection (j)(2), the Corporation
may use, from amounts made available from the insurance fund established
under section 516(c), not more than $4,000,000 for fiscal year 2009 and

55

each subsequent fiscal year.
SEC. 516. 7 U.S.C. 1516 FUNDING.

(a) AUTHORIZATION OF APPROPRIATIONS.—
(1)
DISCRETIONARY EXPENSES.—There are authorized to be
appropriated for fiscal year 1999 and each subsequent fiscal year such sums
as are necessary to cover the salaries and expenses of the Corporation.
(2)
MANDATORY EXPENSES.—There are authorized to be
appropriated such sums as are necessary to cover for each of the 1999 and
subsequent reinsurance years the following:
(A) The administrative and operating expenses of the
Corporation for the sales commissions of agents.
(B) Premium subsidies, including the administrative and
operating expenses of an approved insurance provider for the delivery
of policies with additional coverage.
(C) Costs associated with the conduct of livestock and wild
salmon pilot programs carried out under section 523, subject to the
limitations in subsections (a)(3)(E)(ii) and (b)(10) of section 523.
(D) Costs associated with the reimbursement, contracting, and
partnerships for research and development under section 522.
(b) PAYMENT OF CORPORATION EXPENSES FROM INSURANCE
FUND.—
(1) EXPENSES GENERALLY.—For each of the 1999 and subsequent
reinsurance years, the Corporation may pay from the insurance fund

established under subsection (c) all expenses of the Corporation
(other than expenses covered by subsection (a)(1) and expenses
covered by paragraph (2)(A)), including the following:
(A) Premium subsidies and indemnities.
(B) Administrative and operating expenses of the Corporation
necessary to pay the sales commissions of agents.
(C) All administrative and operating expense reimbursements
due under a reinsurance agreement with an approved insurance
provider.
(D) Costs associated with the conduct of livestock and wild
salmon pilot programs carried out under section 523, subject to the
limitations in subsections (a)(3)(E)(ii) and (b)(10) ofsection 523.
(E)
Costs associated with the reimbursement, contracting, and
partnerships for research and development under section 522.
(2) POLICY CONSIDERATION AND IMPLEMENTATION.—
(A) IN GENERAL.—For each of the 1999 and subsequent
reinsurance years, the Corporation may use the insurance fund
established under subsection (c), but not to exceed $3,500,000 for each
fiscal year, to pay the following:
(i)
Costs associated with the consideration and
implementation of policies, plans of insurance, and related
materials submitted under section 508(h) or developed under
section 522 or 523.
(ii)
Costs to contract for the review of policies, plans of
insurance, and related materials under section 505(e) and to
contract for other assistance in considering policies, plans of
insurance, and related materials.
(B) DAIRY OPTIONS PILOT PROGRAM.—Amounts necessary to

56

carry out the dairy options pilot program shall not be counted toward the
limitation on expenses specified in subparagraph (A).
(C) REVIEWS, COMPLIANCE, AND INTEGRITY.—
(i)
IN GENERAL.—For each of the 2014 and subsequent
reinsurance years, the Corporation may use the insurance fund
established under subsection (c), but not to exceed $7,000,000
for each fiscal year, to pay costs—
(I) to reimburse expenses incurred for the operations
and review of policies, plans of insurance, and related
materials (including actuarial and related information); and
(II) to assist the Corporation in maintaining program
actuarial soundness and financial integrity.
(ii)
SECRETARIAL ACTION.—For the purposes described
in clause (i), the Secretary may, without furtherappropriation—
(I) merge some or all of the funds made available
under this subparagraph into the accounts of the Risk
Management Agency; and
(II) obligate those funds.
(iii) MAINTENANCE OF FUNDING.—Funds made available
under this subparagraph shall be in addition to other funds made
available for costs incurred by the Corporation or the Risk
Management Agency.
(c) INSURANCE FUND.—
(1)
IN GENERAL.—There is established an insurance fund, for the
deposit of premium income, amounts made available under subsection
(a)(2), and civil fines collected under section 515(h), to be available
without fiscal year limitation.
(2)
COMMODITY CREDIT CORPORATION FUNDS.—If at any time the
amounts in the insurance fund are insufficient to enable the Corporation to
carry out subsection (b), to the extent the funds of the Commodity Credit
Corporation are available—
(A) the Corporation may request the Secretary to use the funds
of the Commodity Credit Corporation to carry out subsection (b);
and
(B) the Secretary may use the funds of the Commodity Credit
Corporation to carry out subsection (b).
SEPARABILITY

SEC. 517. 7 U.S.C. 1517 The sections of this subtitle and subdivisions of
sections are hereby declared to be separable, and in the event any one or more
sections or parts of the same of this subtitle be held to be unconstitutional, the
same shall not affect the validity of other sections or parts of sections of this
subtitle.
AGRICULTURAL COMMODITY

SEC. 518. 7 U.S.C. 1518 ‘‘Agricultural commodity’’, as used in this
subtitle, means wheat, cotton, flax, corn, dry beans, oats, barley, rye, tobacco,
rice, peanuts, soybeans, sugar beets, sugar cane, tomatoes, grain sorghum,
sunflowers, raisins, oranges, sweet corn, dry peas, freezing and canning peas,
forage, apples, grapes, potatoes, timber and forests, nursery crops, citrus, and
other fruits and vegetables, nuts, tame hay, native grass, hemp, aquacultural
species (including, but not limited to, any species of finfish, mollusk,
crustacean, or other aquatic invertebrate, amphibian, reptile, or aquatic plant
propagated or reared in a controlled or selected environment), or any other

57

agricultural commodity, excluding stored grain, determined by the Board, or
any one or more of such commodities, as the context may indicate.
SEC. 519. NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

950.

Repealed by P.L. 104–127, §196(j), Apr. 4, 1996, 110 Stat.

SEC. 520. 7 U.S.C. 1520 PRODUCER ELIGIBILITY.

Except as otherwise provided in this subtitle, a producer shall not be denied
insurance under this subtitle 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. 521. 7 U.S.C. 1521 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 subtitle to which the person is not entitled, has
evaded this subtitle, or has acted with the purposes of evading this subtitle, the
person shall be ineligible to receive all benefits applicable to the crop year for
which the scheme or device was adopted.

SEC. 522. 7 U.S.C. 1522 RESEARCH AND DEVELOPMENT.

(a) DEFINITION OF POLICY.—In this section, the term ‘‘policy’’ means a
policy, plan of insurance, provision of a policy or plan of insurance, and related
materials.
(b)
REIMBURSEMENT OF RESEARCH, DEVELOPMENT, AND MAINTENANCE
COSTS.—
(1) RESEARCH AND DEVELOPMENT PAYMENT.—
(A) IN GENERAL.—The Corporation shall provide a payment to
an applicant for research and development costs in accordance with
this subsection.
(B) REIMBURSEMENT.—
(i) IN GENERAL.—An applicant who submits a policy under
section 508(h) shall be eligible for the reimbursement of
reasonable research and development costs if the policy is
approved by the Board for sale to producers.
(ii) REASONABLE COSTS.—For the purpose of reimbursing
research and development and maintenance costs under this
section, costs of the applicant shall be considered reasonable
costs if the costs are based on—
(I) for any employees or contracted personnel, wage
rates equal to not more than 2 times the hourly wage rate
plus benefits, as provided by the Bureau of Labor Statistics
for the year in which such costs are incurred, calculated
using the formula applied to an applicant by the Corporation
in reviewing proposed project budgets under this section on
October 1, 2016; and
(II) other actual documented costs incurred by the
applicant.
(2) ADVANCE PAYMENTS.—

58

(A) IN GENERAL.—Subject to the other provisions of this
paragraph, the Board may approve the request of an applicant for
advance payment of a portion of reasonable research and development
costs prior to submission and approval of the policy by the Board
under section 508(h).
(B) PROCEDURES.—The Board shall establish procedures for
approving advance payment of reasonable research and development
costs to applicants.
(C) CONCEPT PROPOSAL.—As a condition of eligibility for
advance payments, an applicant shall submit a concept proposal for
the policy that the applicant plans to submit to the Board under
section 508(h), consistent with procedures established by the Board
for submissions under subparagraph (B), including—
(i)
a summary of the qualifications of the applicant,
including any prior concept proposals and submissions to the
Board under section 508(h) and, if applicable, any work
conducted under this section;
(ii)
a projection of total research and development costs
that the applicant expects to incur;
(iii) a description of the need for the policy, the
marketability of and expected demand for the policy among
affected producers, and the potential impact of the policy on
producers and the crop insurance delivery system;
(iv) a summary of data sources available to demonstrate that
the policy can reasonably be developed and actuarially
appropriate rates established; and
(v) an identification of the risks the proposed policy will
cover and an explanation of how the identified risks are insurable
under this subtitle.
(D) REVIEW.—
(i)
EXPERTS.—If the requirements of subparagraph (B)
and (C) are met, the Board may submit a concept proposal
described in subparagraph (C) to not less than 2 independent
expert reviewers, whose services are appropriate for the type of
concept proposal submitted, to assess the likelihood that the
proposed policy being developed will result in a viable and
marketable policy, as determined by the Board.
(ii)
TIMING.—The
time
frames
described
in
subparagraphs (C) and (D) of section 508(h)(4) shall apply to the
review of concept proposals under this subparagraph.
(E)
APPROVAL.—
(i)
IN GENERAL.—The Board may approve up to 50
percent of the projected total research and development costs to
be paid in advance to an applicant, in accordance with the
procedures developed by the Board for the making of the
payments, if, after consideration of the reviewer reports
described in subparagraph (D) and such other information as the
Board determines appropriate, the Board determines that—
(I) the concept, in good faith, will likely result in a
viable and marketable policy consistent with section
508(h);
(II) at the sole discretion of the Board, the concept, if
developed into a policy and approved by the Board, would
provide crop insurance coverage—

59

(aa) in a significantly improved form;
(bb) to a crop or region not traditionally served
by the Federal crop insurance program; or
(cc) in a form that addresses a recognized flaw
or problem in the program;
(III) the applicant agrees to provide such reports as
the Corporation determines are necessary to monitor the
development effort;
(IV) the proposed budget and timetable are
reasonable, as determined by the Board; and
(V)
the concept proposal meets any other
requirements that the Board determines appropriate.
(ii)
WAIVER.—The Board may waive the 50-percent
limitation and, upon request of the submitter after the submitter
has begun research and development activities, the Board may
approve an additional 25 percent advance payment to the
submitter for research and development costs, if, at the sole
discretion of the Board, the Board determines that—
(I) the intended policy or plan of insurance
developed by the submitter will provide coverage for a
region or crop that is underserved by the Federal crop
insurance program, including specialty crops; and
(II) the submitter is making satisfactory progress
towards developing a viable and marketable policy or plan
of insurance consistent with section 508(h).
(F)
SUBMISSION OF POLICY.—If the Board approves an
advanced payment under subparagraph (E), the Board shall establish
a date by which the applicant shall present a submission in compliance
with section 508(h) (including the procedures implemented under
that section) to the Board for approval.
(G) FINAL PAYMENT.—
(i)
APPROVED POLICIES.—If a policy is submitted under
subparagraph (F) and approved by the Board under section
508(h) and the procedures established by the Board (including
procedures established under subparagraph (B)), the applicant
shall be eligible for a payment of reasonable research and
development costs in the same manner as policies reimbursed
under paragraph (1)(B), less any payments made pursuant to
subparagraph (E).
(ii)
POLICIES NOT APPROVED.—If a policy is submitted
under subparagraph (F) and is not approved by the Board under
section 508(h), the Corporation shall—
(I) not seek a refund of any payments made in
accordance with this paragraph; and
(II) not make any further research and development
cost payments associated with the submission of the policy
under this paragraph.
(H) POLICY NOT SUBMITTED.—If an applicant receives an
advance payment and fails to fulfill the obligation of the applicant to
the Board by not submitting a completed submission without just
cause and in accordance with the procedures established under
subparagraph (B)), including notice and reasonable opportunity to
respond, as determined by the Board, the applicant shall return to the
Board the amount of the advance plus interest.

60

(I) REPEATED SUBMISSIONS.—The Board may prohibit advance
payments to applicants who have submitted—
(i)
a concept proposal or submission that did not result
in a marketable product; or
(ii)
a concept proposal or submission of poor quality.
(J) CONTINUED ELIGIBILITY.—A determination that an applicant is
not eligible for advance payments under this paragraph shall not
prevent an applicant from reimbursement under paragraph (1)(B).
(K) WAIVER FOR HEMP.—The Board may waive the viability and
marketability requirements under this paragraph in the case of
research and development relating to a policy to insure the
production of hemp.
(3) MARKETABILITY.—
(A) IN GENERAL.—Subject to subparagraph (B), the Corporation
shall approve a reimbursement under paragraph (1) only after
determining that the policy is marketable based on a reasonable
marketing plan, as determined by the Board.
(B) WAIVER FOR HEMP.—The Corporation may waive the
marketability requirement under subparagraph (A) in the case of
research and development relating to a policy to insure the
production of hemp.
(4) MAINTENANCE PAYMENTS.—
(A)
REQUIREMENT.—The Corporation shall reimburse
maintenance costs associated with the annual cost of underwriting for
a policy described in paragraph (1).
(B) DURATION.—Payments with respect to maintenance costs
may be provided for a period of not more than four reinsurance years
subsequent to Board approval for payment under this subsection.
(C) OPTIONS FOR MAINTENANCE.—On the expiration of the 4-year
period described in subparagraph (B), the applicant responsible for
maintenance of the policy may—
(i)
maintain the policy and charge a fee to approved
insurance providers that elect to sell the policy under this
subsection; or
(ii)
transfer responsibility for maintenance of the policy
to the Corporation.
(D) FEE.—
(i) AMOUNT.—Subject to approval by the Board, the
amount of the fee that is payable by an approved insurance
provider that elects to sell the policy shall be an amount that is
determined by the applicant maintaining the policy.
(ii) APPROVAL.—The Board shall approve the amount of
a fee determined under clause (i) for maintenance of the policy
unless the Board determines that the amount of the fee—
(I)
is unreasonable
in relation to the
maintenance costs associated with the policy; or
(II)
unnecessarily inhibits the use of the policy.
(iii) REVIEW.—After the Board approves the amount of a
fee under clause (ii), the fee shall remain in effect and not be
reviewed by the Board unless—
(I) the applicant petitions the Board for
reconsideration of the fee;

61

(II) a substantial change is made to the policy, as
determined by the Board; or
(III) there is substantial evidence that the fee is
inhibiting sales or use of the policy, as determined by the
Board.
(5) TREATMENT OF PAYMENT.—Payments made under this subsection
for a policy shall be considered as payment in full by the Corporation for
the research and development conducted with regard to the policy and any
property rights to the policy.
(6) REIMBURSEMENT AMOUNT.—The Corporation shall determine the
amount of the payment under this subsection for an approved policy
based on the complexity of the policy and the size of the area in which the
policy or material is expected to be sold.
(c) RESEARCH AND DEVELOPMENT AUTHORITY.—
(1) AUTHORITY.—The Corporation may conduct activities or enter into
contracts to carry out research and development to maintain or improve
existing policies or develop new policies to—
(A) increase participation in States in which the Corporation
determines that—
(i)
there is traditionally, and continues to be, a low level
of Federal crop insurance participation and availability; and
(ii)
the State is underserved by the Federal crop
insurance program;
(B) increase participation in areas that are underserved by the
Federal crop insurance program; and
(C) increase participation by producers of underserved
agricultural commodities, including specialty crops.
(2) UNDERSERVED AGRICULTURAL COMMODITIES AND AREAS.—
(A) AUTHORITY.—The Corporation may conduct research and
development or enter into contracts under procedures prescribed by
the Corporation with qualified persons to carry out research and
development for policies that promote the purposes of paragraph (1).
(B) CONSULTATION.—Before conducting research and
development or entering into a contract under subparagraph (A), the
Corporation shall consult with groups representing producers of
agricultural commodities that would be served by the policies that are
the subject of the research and development.
(3) QUALIFIED PERSONS.—A person with experience in crop
insurance or farm or ranch risk management (including a college or
university, an approved insurance provider, and a trade or research
organization), as determined by the Corporation, shall be eligible to enter
into a contract with the Corporation under this subsection.
(4) TYPES OF CONTRACTS.—A contract under this subsection may
provide for research and development regarding new or expanded policies,
including policies based on adjusted gross income, cost-of-production,
quality losses, and an intermediate base program with a higher coverage
and cost than catastrophic risk protection.
(5) USE OF RESULTING POLICIES.—The Corporation may offer any
policy developed under this subsection that is approved by the Board after
expert review in accordance with section 505(e).
(6) RESEARCH AND DEVELOPMENT PRIORITIES.—The Corporation shall
establish as one of the highest research and development priorities of the
Corporation the development of policies that increase participation by

62

producers of underserved agricultural commodities, including sweet
sorghum, biomass sorghum, rice, peanuts, sugarcane, alfalfa, pennycress,
dedicated energy crops, and specialty crops.
(7) WHOLE FARM DIVERSIFIED RISK MANAGEMENT INSURANCE PLAN.—
(A) IN GENERAL.—Unless the Corporation approves a whole
farm insurance plan, similar to the plan described in this paragraph,
to be available to producers for the 2016 reinsurance year, the
Corporation shall conduct activities or enter into contracts to carry out
research and development to develop a whole farm risk
management insurance plan, with a liability limitation of $1,500,000,
that allows a diversified crop or livestock producer the option to
qualify for an indemnity if actual gross farm revenue is below 85
percent of the average gross farm revenue or the expected gross farm
revenue that can reasonably be expected of the producer, as
determined by the Corporation.
(B) ELIGIBLE PRODUCERS.—The Corporation shall permit
producers (including direct-to-consumer marketers and producers
servicing local and regional and farm identity- preserved markets)
who produce multiple agricultural commodities, including specialty
crops, industrial crops, livestock, and aquaculture products, to
participate in the plan developed under subparagraph (A) in lieu of any
other plan under this subtitle.
(C) DIVERSIFICATION.—The Corporation may provide
diversification-based additional coverage payment rates, premium
discounts, or other enhanced benefits in recognition of the risk
management benefits of crop and livestock diversification strategies
for producers that—
(i) grow multiple crops; or
(ii) may have income from the production of livestock that
uses a crop grown on the farm.
(D) MARKET READINESS.—The Corporation may include
coverage for the value of any packing, packaging, or any other
similar on-farm activity the Corporation determines to be the
minimum required in order to remove the commodity from the field.
(E) REVIEW OF MODIFICATIONS TO IMPROVE EFFECTIVENESS.—
(i) IN GENERAL.—Not later than 18 months after the date of
enactment of the Agriculture Improvement Act of 2018—
(I) the Corporation shall hold stakeholder meetings to
solicit producer and agent feedback; and
(II) the Board shall—
(aa)
review
procedures
and
paperwork
requirements on agents and producers; and
(bb) modify procedures and requirements, as
appropriate, to decrease burdens and increase flexibility
and effectiveness.
(ii) FACTORS.—In carrying out items (aa) and (bb) of
subclause (i)(II), the Board shall consider—
(I) removing caps on nursery and livestock production;
(II) allowing a waiver to expand operations, especially
for small and beginning farmers;
(III) minimizing paperwork for producers and agents;

63

(IV) implementing an option for producers with less
than $1,000,000 in gross revenue that requires significantly
less paperwork and recordkeeping;
(V) developing and using alternative records such as
time-stamped photographs or technology applications to
document planting and production history;
(VI) treating the different growth stages of aquaculture
species as separate crops to recognize the difference in
perils at different phases of growth;
(VII) moderating the impacts of disaster years on
historic revenue, such as—
(aa) using an average of the historic and projected
revenue;
(bb) counting indemnities as historic revenue for
loss years;
(cc) counting payments under section 196 of the
Federal Agriculture Improvement and Reform Act of
1996 (7 U.S.C. 7333) as historic revenue for loss years;
or
(dd) using an assigned yield floor similar to the
limitation described in section 508(g)(6)(A)(i), as
determined by the Secretary;
(VIII) improving agent training and outreach to
underserved regions and sectors such as small dairy farms;
and
(IX) providing coverage and indemnification of
insurable losses—
(aa) after the losses exceed the deductible; and
(bb) up to the maximum amount of total coverage.
(F) BEGINNING FARMER OR RANCHER DEFINED.—Notwithstanding
section 502(b)(3), with respect to plans described under this paragraph,
the term ‘beginning farmer or rancher’ means a farmer or rancher who
has not actively operated and managed a farm or ranch with a bona fide
insurable interest in a crop or livestock as an owner-operator, landlord,
tenant, or sharecropper for more than 10 crop years.’
(8) RELATION TO LIMITATIONS.—A policy developed under this
subsection may be prepared without regard to the limitations of this
subtitle, including—
(A) the requirement concerning the levels of coverage and
rates; and
(B) the requirement that the price level for each insured
agricultural commodity must equal the expected market price for the
agricultural commodity, as established by the Board.
(9) TROPICAL STORM OR HURRICANE INSURANCE.—
(A) IN GENERAL.—The Corporation shall carry out research and
development, or offer to enter into 1 or more contracts with 1 or
more qualified persons to carry out research and development,
regarding a policy to insure crops (including tomatoes, peppers, and
citrus) against losses due to a tropical storm or hurricane.
(B) RESEARCH AND DEVELOPMENT.—Research and development
under subparagraph (A) shall—

64

(i) evaluate the effectiveness of risk management tools for a
low frequency and catastrophic loss weather event; and
(ii) result in a policy that provides protection for at least 1 of
the following:
(I) Production loss.
(II) Revenue loss.
(C) REPORT.—Not later than 1 year after the date of enactment of the
Agriculture Improvement Act of 2018, the Corporation shall submit
to the Committee on Agriculture of the House of Representatives and
the Committee on Agriculture, Nutrition, and Forestry of the Senate a
report that describes—
(i) the results of the research and development carried out
under this paragraph; and
(ii) any recommendations with respect to those results.
(10) QUALITY LOSS.—
(A) IN GENERAL.—The Corporation shall carry out research and
development, or offer to enter into 1 or more contracts with 1 or
more qualified persons to carry out research and development,
regarding the establishment of each of the following alternative
methods of adjusting for quality losses:
(i) A method that does not impact the actual production
history of a producer.
(ii) A method that provides that, in circumstances in which a
producer has suffered a quality loss to the insured crop of the
producer that is insufficient to trigger an indemnity payment, the
producer may elect to exclude that quality loss from the actual
production history of the producer.
(iii) 1 or more methods that combine the methods described
in clauses (i) and (ii).
(B) REQUIREMENTS.—Notwithstanding subsections (g) and (m)
of section 508, any method developed under subparagraph (A) that is
used by the Corporation shall be—
(i) optional for a producer to use; and
(ii) offered at an actuarially sound premium rate.
(C) REPORT.—Not later than 1 year after the date of enactment of
the Agriculture Improvement Act of 2018, the Corporation shall
submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that describes—
(i) the results of the research and development carried out
under subparagraph (A); and
(ii) any recommendations with respect to those results.
(11) CITRUS.—
(A) IN GENERAL.—The Corporation shall carry out research and
development, or offer to enter into 1 or more contracts with 1 or
more qualified persons to carry out research and development,
regarding the insurance of citrus fruit commodities and commodity
types, including research and development of—
(i) improvements to 1 or more existing policies, including
the whole-farm revenue protection pilot policy;

65

(ii) alternative methods of insuring revenue for citrus fruit
commodities and commodity types; and
(iii) the development of new, or expansion of existing,
revenue policies for citrus fruit commodities and commodity
types.
(B) REPORT.—Not later than 1 year after the date of enactment of
the Agriculture Improvement Act of 2018, the Corporation shall
submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that describes—
(i) the results of the research and development carried out
under subparagraph (A); and
(ii) any recommendations with respect to those results.
(12) HOPS.—
(A) IN GENERAL.—The Corporation shall carry out research and
development, or offer to enter into 1 or more contracts with 1 or
more qualified persons to carry out research and development,
regarding a policy to insure the production of hops or revenue
derived from the production of hops.
(B) REPORT.—Not later than 1 year after the date of enactment of
the Agriculture Improvement Act of 2018, the Corporation shall
submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that describes—
(i) the results of the research and development carried out
under subparagraph (A); and
(ii) any recommendations with respect to those results.
(13) SUBSURFACE IRRIGATION PRACTICES.—
(A) IN GENERAL.—The Corporation shall carry out research and
development, or offer to enter into 1 or more contracts with 1 or
more qualified persons to carry out research and development,
regarding the creation of a separate practice for subsurface irrigation,
including the establishment of a separate transitional yield within a
county that is reflective of the average gain in productivity and yield
associated with the installation of a subsurface irrigation system.
(B) REPORT.—Not later than 18 months after the date of
enactment of the Agriculture Improvement Act of 2018, the
Corporation shall submit to the Committee on Agriculture of the
House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out
under subparagraph (A); and
(ii) any recommendations with respect to those results.
(14) GRAIN SORGHUM.—
(A) IN GENERAL.—The Corporation shall carry out research and
development, or offer to enter into 1 or more contracts with 1 or
more qualified persons to carry out research and development—
(i) regarding improvements to 1 or more policies to insure
irrigated grain sorghum;

66

(ii) regarding alternative methods for producers with not
more than 4 years of production history to insure irrigated grain
sorghum; and
(iii) to assess, by county, the difference in the rate, average
yield, and coverage level of grain sorghum policies compared to
policies for other feed grains in that county.
(B) REPORT.—Not later than 18 months after the date of
enactment of the Agriculture Improvement Act of 2018, the
Corporation shall submit to the Committee on Agriculture of the
House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out
under subparagraph (A); and
(ii) any recommendations with respect to those results.
(15) LIMITED IRRIGATION PRACTICES.—
(A) AUTHORITY.—The Corporation shall—
(i) consider expanding the availability of the limited
irrigation insurance program to neighboring and similarly
situated States (such as the States of Colorado and Nebraska),
as determined by the Secretary;
(ii) carry out research, or offer to enter into 1 or more
contracts with 1 or more qualified persons to carry out research,
on the marketability of the existing limited irrigation insurance
program; and
(iii) make recommendations on how to improve
participation in that program.
(B) RESEARCH.—In carrying out research under subparagraph
(A), a qualified person shall—
(i) collaborate with researchers on the subjects of—
(I) reduced irrigation practices or limited irrigation
practices; and
(II) expected yield reductions following the application
of reduced irrigation;
(ii) collaborate with State and Federal officials responsible
for the collection of water and the regulation of water use for the
purpose of irrigation;
(iii) provide recommendations to encourage producers to
carry out limited irrigation practices or reduced irrigation and
water conservation practices; and
(iv) develop web-based applications that will streamline
access to coverage for producers electing to conserve water use
on irrigated crops.
(C) REPORT.—Not later than 18 months after the date of
enactment of the Agriculture Improvement Act of 2018, the
Corporation shall submit to the Committee on Agriculture of the
House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research carried out under
subparagraphs (A) and (B);

67

(ii) any recommendations to encourage producers to carry
out limited irrigation practices or reduced irrigation and water
conservation practices; and
(iii) the actions taken by the Corporation to carry out the
recommendations described in clause (ii).
(16) INSURABLE IRRIGATION PRACTICES FOR RICE.—
(A) IN GENERAL.—The Corporation shall carry out research and
development, or offer to enter into 1 or more contracts with 1 or
more qualified persons to carry out research and development, to
include new and innovative irrigation practices under the current rice
policy or the development of a distinct policy endorsement rated for
rice produced using—
(i) alternate wetting and drying practices (also referred to as
‘intermittent flooding’); and
(ii) furrow irrigation practices.
(B) REPORT.—Not later than 18 months after the date of
enactment of the Agriculture Improvement Act of 2018, the
Corporation shall submit to the Committee on Agriculture of the
House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a report that describes—
(i) the results of the research and development carried out
under paragraph (1); and
(ii) any recommendations with respect to those results.
(17) GREENHOUSE POLICY.—
(A) IN GENERAL.—
(i) RESEARCH AND DEVELOPMENT.—The Corporation shall
carry out research and development, or offer to enter into 1 or
more contracts with 1 or more qualified persons to carry out
research and development, regarding a policy to insure in a
controlled environment such as a greenhouse—
(I) the production of floriculture, nursery, and bedding
plants;
(II) the establishment of cuttings or tissue culture in a
growing medium; or
(III) other similar production, as determined by the
Secretary.
(ii) AVAILABILITY OF POLICY.—Notwithstanding the last
sentence of section 508(a)(1), and section 508(a)(2), the
Corporation shall make a policy described in clause (i) available
if the requirements of section 508(h) are met.
(B) RESEARCH AND DEVELOPMENT DESCRIBED.—Research and
development described in subparagraph (A)(i) shall evaluate the
effectiveness of policies for the production of plants in a
controlled environment, including policies that—
(i) are based on the risk of—
(I) plant diseases introduced from the environment;
(II) contaminated cuttings, seedlings, or tissue culture;
or

68

(III) Federal or State quarantine or destruction orders
associated with the contaminated items described in
subclause (II);
(ii) consider other causes of loss applicable to a controlled
environment, such as a loss of electricity due to weather;
(iii) consider appropriate best practices to minimize the risk
of loss;
(iv) consider whether to provide coverage for various types
of plants under 1 policy or to provide coverage for 1 species or
type of plant per policy;
(v) have streamlined reporting and paperwork requirements
that take into account short propagation schedules, variable crop
years, and the variety of plants that may be produced in a single
facility; and
(vi) provide protection for revenue losses.
(C) REPORT.—Not later than 2 years after the date of enactment
of the Agriculture Improvement Act of 2018, the Corporation shall
submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that describes—
(i) the results of the research and development carried out
under subparagraphs (A)(i) and (B); and
(ii) any recommendations with respect to those results.
(18) LOCAL FOODS.—
(A) IN GENERAL.—
(i) FEASIBILITY STUDY.—The Corporation shall carry out a
study to determine the feasibility of, or offer to enter into 1 or
more contracts with 1 or more qualified persons to carry out a
study to determine the feasibility of, a policy to insure
production—
(I) of floriculture, fruits, vegetables, poultry, livestock,
or the products of floriculture, fruits, vegetables, poultry, or
livestock; and
(II) that is targeted toward local consumers and
markets.
(ii) AVAILABILITY OF POLICY.—Notwithstanding the last
sentence of section 508(a)(1), and section 508(a)(2), the
Corporation shall make available a policy described in clause (i)
if—
(I) the results of the feasibility study under clause (i) are
viable; and
(II) the requirements of section 508(h) are met.
(B) FEASIBILITY STUDY DESCRIBED.—The feasibility study
described in subparagraph (A)(i) shall evaluate the effectiveness of
policies for production targeted toward local consumers and markets,
including policies that—
(i) consider small-scale production in various areas,
including urban, suburban, and rural areas;
(ii) consider a variety of marketing strategies;

69

(iii) allow for production in soil and in alternative systems
such as vertical systems, greenhouses, rooftops, or hydroponic
systems;
(iv) consider the price premium when accounting for
production or revenue losses;
(v) consider whether to provide coverage—
(I) for various types of production under 1 policy; and
(II) for 1 species or type of plant per policy; and
(vi) have streamlined reporting and paperwork
requirements.
(C) REPORT.—Not later than 2 years after the date of enactment
of the Agriculture Improvement Act of 2018, the Corporation shall
submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that—
(i) examines whether a version of existing policies such as
the whole-farm revenue protection insurance plan may be
tailored to provide improved coverage for producers of local
foods;
(ii) describes the results of the feasibility study carried out
under subparagraph (A)(i); and
(iii) includes any recommendations with respect to those
results.
(19) HIGH-RISK, HIGHLY PRODUCTIVE BATTURE LAND POLICY.—
(A) IN GENERAL.—
(i) RESEARCH AND DEVELOPMENT.—The Corporation shall
carry out research and development, or offer to enter into 1 or
more contracts with 1 or more qualified persons to carry out
research and development, regarding a policy to insure
producers of corn, cotton, and soybeans—
(I) with operations on highly productive batture land
within the Lower Mississippi River Valley;
(II) that have a history of production of not less than 5
years; and
(III) that have been impacted by more frequent flooding
over the past 10 years due to sedimentation or federally
constructed engineering improvements.
(ii) AVAILABILITY OF POLICY.—Notwithstanding the last
sentence of section 508(a)(1), and section 508(a)(2), the
Corporation shall make a policy described in clause (i) available
if the requirements of section 508(h) are met.
(B) RESEARCH AND DEVELOPMENT DESCRIBED.—Research and
development described in subparagraph (A)(i) shall evaluate the
feasibility of less cost-prohibitive policies for batture-land producers
in high risk areas, including policies that—
(i) consider premium rate adjustments;
(ii) consider automatic yield exclusion for consecutive-year
losses; and
(iii) allow for flexibility of final plant dates and prevent
plant regulations.

70

(C) REPORT.—Not later than 2 years after the date of enactment
of the Agriculture Improvement Act of 2018, the Corporation shall
submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report that—
(i) examines whether a version of existing policies may be
tailored to provide improved coverage for batture-land
producers;
(ii) describes the results of the research and development
carried out under subparagraphs (A) and (B); and
(iii) includes any recommendations with respect to those
results.
(d) PARTNERSHIPS FOR RISK MANAGEMENT DEVELOPMENT AND
IMPLEMENTATION.—
(1)
PURPOSE.—The purpose of this subsection is to authorize the
Corporation to enter into partnerships with public and private entities for
the purpose of either—
(A)
increasing the availability of loss mitigation,
financial, and other risk management tools for producers, with a
priority given to risk management tools for producers of agricultural
commodities covered by section 196 of the Agricultural Market
Transition Act (7 U.S.C. 7333), specialty crops, and underserved
agricultural commodities; or
(B)
improving analysis tools and technology regarding
compliance or identifying and using innovative compliance strategies.
(2)
AUTHORITY.—The Corporation may enter into partnerships
with the National Institute of Food and Agriculture, the Agricultural
Research Service, the National Oceanic Atmospheric Administration, and
other appropriate public and private entities with demonstrated capabilities
in developing and implementing risk management and marketing options
for producers of specialty crops and underserved agricultural commodities.
(3)
OBJECTIVES.—The Corporation may enter into a partnership
under paragraph (2)—
(A) to enhance the notice and timeliness of notice of weather
conditions that could negatively affect crop yields, quality, and final
product use in order to allow producers to take preventive actions to
increase end product profitability and marketability and to reduce the
possibility of crop insurance claims;
(B) to develop a multifaceted approach to pest management
and fertilization to decrease inputs, decrease environmental exposure,
and increase application efficiency;
(C) to develop or improve techniques for planning, breeding,
planting, growing, maintaining, harvesting, storing, shipping, and
marketing that will address quality and quantity challenges
associated with year-to-year and regional variations;
(D) to clarify labor requirements and assist producers in
complying with requirements to better meet the physically intense and
time-compressed planting, tending, and harvesting requirements
associated with the production of specialty crops and underserved
agricultural commodities;
(E) to provide assistance to State foresters or equivalent
officials for the prescribed use of burning on private forest land for
the prevention, control, and suppression of fire;

71

(F) to provide producers with training and informational
opportunities so that the producers will be better able to use financial
management, farm financial benchmarking, crop insurance, marketing
contracts, and other existing and emerging risk management tools;
(G) to improve analysis tools and technology regarding
compliance or identifying and using innovative compliance strategies;
and
(H) to develop other risk management tools to further increase
economic and production stability.
(e) FUNDING.—
(1) REIMBURSEMENTS.—Of the amounts made available from the
insurance fund established under section 516(c), the Corporation may use
to provide reimbursements under subsection (b) not more than $7,500,000
for fiscal year 2008 and each subsequent fiscal year.
(2) CONTRACTING.—
(A) CONDUCTING AND CONTRACTING FOR RESEARCH AND
DEVELOPMENT.—Of the amounts made available from the insurance
fund established under section 516(c), the Corporation may use to
conduct research and development and carry out contracting and
partnerships under subsections (c) and (d) not more than—
(i) $12,500,000 for each of fiscal years 2008 through 2018;
and
(ii) $8,000,000 for fiscal year 2019 and each fiscal year
thereafter.
(B) UNDERSERVED STATES.—Of the amount made available
under subparagraph (A) for a fiscal year, the Corporation shall use
not more than $5,000,000 for the fiscal year to conduct research and
development and carry out contracting for research and development
to carry out the purpose described in subsection (c)(1)(A).
(3) UNUSED FUNDING.—If the Corporation determines that the amount
available under this section for a fiscal year is not needed for such purposes,
the Corporation may use—
(A) not more than $5,000,000 for each fiscal year to improve
program integrity, including by—
(i)
increasing compliance-related training;
(ii)
improving analysis tools and technology regarding
compliance;
(iii) use of information technology, as determined by the
Corporation; and
(iv) identifying and using innovative compliance
strategies; and
(B) any excess amounts to carry out other activities authorized
under this section.
SEC. 523. 7 U.S.C. 1523 PILOT PROGRAMS.

(a) GENERAL PROVISIONS.—
(1) AUTHORITY.—Except as otherwise provided in this section, the
Corporation may, at the sole discretion of the Corporation, conduct a pilot
program submitted to and approved by the Board under section 508(h), or
that is developed under subsection (b) or section 522, to evaluate whether a
proposal or new risk management tool tested by the pilot program is
suitable for the marketplace and addresses the needs of producers of
agricultural commodities.
(2) PRIVATE COVERAGE.—Under this section, the Corporation shall

72

not conduct any pilot program that provides insurance protection against a
risk if insurance protection against the risk is generally available from
private companies.
(3) COVERED ACTIVITIES.—The pilot programs described in
paragraph (1) may include pilot programs providing insurance protection
against losses involving—
(A) reduced forage on rangeland caused by drought or insect
infestation;
(B) livestock poisoning and disease;
(C) destruction of bees due to the use of pesticides;
(D) unique special risks related to fruits, nuts, vegetables, and
specialty crops in general, aquacultural species, and forest industry
needs (including appreciation);
(E) after October 1, 2001, wild salmon, except that—
(i)
any pilot program with regard to wild salmon may be
carried out without regard to the limitations of this subtitle; and
(ii) the Corporation shall conduct all wild salmon
programs under this subtitle so that, to the maximum extent
practicable, all costs associated with conducting the programs
are not expected to exceed $1,000,000 for fiscal year 2002 and
each subsequent fiscal year.
(4) SCOPE OF PILOT PROGRAMS.—The Corporation may—
(A) approve a pilot program under this section to be
conducted on a regional, State, or national basis after considering the
interests of affected producers and the interests of, and risks to, the
Corporation;
(B) operate the pilot program, including any modifications of
the pilot program, for a period of up to 4 years;
(C) extend the time period for the pilot program for additional
periods, as determined appropriate bythe Corporation; and
(D)
providepilot
programs
that
would
allow producers—
(i)
to receive a reduced premium for using whole farm
units or single crop units of insurance; and
(ii)
to cross State and county boundaries to form
insurable units.
(b) LIVESTOCK PILOT PROGRAMS.—
(1) DEFINITION OF LIVESTOCK.—In this subsection, the term
‘‘livestock’’ includes, but is not limited to, cattle, sheep, swine, goats, and
poultry.
(2) PROGRAMS REQUIRED.—Subject to paragraph (7), the
Corporation shall conduct two or more pilot programs to evaluate the
effectiveness of risk management tools for livestock producers, including
the use of futures and options contracts and policies and plans of insurance
that protect the interests of livestock producers and that provide—
(A) livestock producers with reasonable protection from the
financial risks of price or income fluctuations inherent in the
production and marketing of livestock; or
(B) protection for production losses.
(3) PURPOSE OF PROGRAMS.—To the maximum extent practicable, the
Corporation shall evaluate the greatest number and variety of pilot
programs described in paragraph (2) to determine which of the offered risk
management tools are best suited to protect livestock producers from the
financial risks associated with the production and marketing of livestock.

73

(4) TIMING.—The Corporation shall begin conducting livestock
pilot programs under this subsection during fiscal year 2001.
(5) RELATION TO OTHER LIMITATIONS.—Any policy or plan of
insurance offered under this subsection may be prepared without regard to
the limitations of this subtitle.
(6) ASSISTANCE.—As part of a pilot program under this subsection,
the Corporation may provide reinsurance for policies or plans of
insurance and subsidize the purchase of futures and options contracts or
policies and plans of insurance offered under the pilot program.
(7) PRIVATE INSURANCE.—No action may be undertaken with
respect to a risk under this subsection if the Corporation determines that
insurance protection for livestock producers against the risk is generally
available from private companies.
(8) LOCATION.—The Corporation shall conduct the livestock pilot
programs under this subsection 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 risk
management tools evaluated in the pilot programs.
(9) ELIGIBLE PRODUCERS.—Any producer of a type of livestock
covered by a pilot program under this subsection that owns or operates a
farm or ranch in a county selected as a location for that pilot program shall
be eligible to participate in that pilot program.
(10)
LIMITATION ON EXPENDITURES.—The Corporation shall
conduct all livestock programs under this subtitle so that, to the maximum
extent practicable, all costs associated with conducting the livestock
programs (other than research and development costs covered by section
522) are not expected to exceed the following:
(A) $10,000,000 for each of fiscal years 2001 and 2002.
(B) $15,000,000 for fiscal year 2003.
(C) $20,000,000 for fiscal year 2004 and each
subsequent fiscal year.
(c) REVENUE INSURANCE PILOT PROGRAM.—
(1) IN GENERAL.—Subject to section 522(e)(4), the Secretary shall
carry out a pilot program in a limited number of counties, as determined by
the Secretary, for crop years 1997 through 2001, under which a producer
of wheat, feed grains, soybeans, or such other commodity as the Secretary
considers appropriate may elect to receive insurance against loss of
revenue, as determined by the Secretary.
(2) ADMINISTRATION.—Revenue insurance under this subsection
shall—
(A) be offered through reinsurance arrangements with private
insurance companies;
(B) offer at least a minimum level of coverage that is an
alternative to catastrophic crop insurance;
(C) be actuarially sound; and
(D) require the payment of premiums and administrative fees
by an insured producer.
(d) PREMIUM RATE REDUCTION PILOT PROGRAM.—
(1) PURPOSE.—The purpose of the pilot program established under this
subsection is to determine whether approved insurance providers will
compete to market policies or plans of insurance with reduced rates of
premium, in a manner that maintains the financial soundness of approved
insurance providers and is consistent with the integrity of the Federal crop
insurance program.

74

(2) ESTABLISHMENT.—
(A) IN GENERAL.—Beginning with the 2002 crop year, the
Corporation shall establish a pilot program under which approved
insurance providers may propose for approval by the Board policies
or plans of insurance with reduced rates of premium—
(i) for one or more agricultural commodities; and
(ii)
within a limited geographic area, as proposed by the
approved insurance provider and approved by the Board.
(B) DETERMINATION BY BOARD.—The Board shall approve a
policy or plan of insurance proposed under this subsection that
involves a premium reduction if the Board determines that—
(i)
the interests of producers are adequately protected
within the pilot area;
(ii)
rates of premium are actuarially appropriate, as
determined by the Board;
(iii) the size of the proposed pilot area is adequate;
(iv) the proposed policy or plan of insurance would not
unfairly discriminate among producers within the proposed pilot
area;
(v) if the proposed policy or plan of insurance were
available in a geographic area larger than the proposed pilot area,
the proposed policy or plan of insurance would—
(I) not have a significant adverse impact on the crop
insurance delivery system;
(II) not result in a reduction of program integrity;
(III) be actuarially appropriate; and
(IV) not place an additional financial burden on the
Federal Government; and
(vi)
the proposed policy or plan of insurance meets other
requirements of this subtitle determined appropriate by the
Board.
(C) TIME LIMITATIONS AND PROCEDURES.—The time limitations
and procedures of the Board established under section 508(h) shall
apply to a proposal submitted under this subsection.
(e) ADJUSTED GROSS REVENUE INSURANCE PILOT PROGRAM.—
(1) IN GENERAL.—The Corporation shall carry out, through at least the
2004 reinsurance year, the adjusted gross revenue insurance pilot program
in effect for the 2002 reinsurance year.
(2) ADDITIONAL COUNTIES.—
(A) IN GENERAL.—In addition to counties otherwise included
in the pilot program, the Corporation shall include in the pilot program
for the 2003 reinsurance year at least 8 counties in the State of
California and at least 8 counties in the State of Pennsylvania.
(B) SELECTION CRITERIA.—In carrying out subparagraph (A),
the Corporation shall work with the respective State Departments of
Agriculture to establish criteria to determine which counties to
include in the pilot program.
(f) CAMELINA PILOT PROGRAM.—
(1) IN GENERAL.—The Corporation shall establish a pilot program
under which producers or processors of camelina may propose for approval
by the Board policies or plans of insurance for camelina, in accordance
with section 508(h).
(2) DETERMINATION BY BOARD.—The Board shall approve a policy

75

or plan of insurance proposed under paragraph (1) if, as determined by the
Board, the policy or plan of insurance—
(A) protects the interests of producers;
(B) is actuarially sound; and
(C) meets the requirements of this subtitle.
(3) TIMEFRAME.—The Corporation shall commence the camelina
insurance pilot program as soon as practicable after the date of enactment
of this subsection.
(g) SESAME INSURANCE PILOT PROGRAM.—
(1) IN GENERAL.—In addition to any other authority of the
Corporation, the Corporation shall establish and carry out a pilot program
under which a producer of nondehiscent sesame under contract may elect
to obtain multiperil crop insurance, as determined by the Corporation.
(2)
TERMS AND CONDITIONS.—The multiperil crop insurance
offered under the sesame insurance pilot program shall— (A) be offered
through reinsurance arrangements with private insurance companies;
(B)
be actuarially sound; and
(C)
require the payment of premiums and administrative
fees by a producer obtaining the insurance.
(3)
LOCATION.—The sesame insurance pilot program shall be
carried out only in the State of Texas.
(4) DURATION.—The Corporation shall commence the sesame
insurance pilot program as soon as practicable after the date of the
enactment of this subsection.
(h) GRASS SEED INSURANCE PILOT PROGRAM.—
(1) IN GENERAL.—In addition to any other authority of the
Corporation, the Corporation shall establish and carry out a grass seed pilot
program under which a producer of Kentucky bluegrass or perennial rye
grass under contract may elect to obtain multiperil crop insurance, as
determined by the Corporation.
(2) TERMS AND CONDITIONS.—The multiperil crop insurance offered
under the grass seed insurance pilot program shall—
(A) be offered through reinsurance arrangements with private
insurance companies;
(B) be actuarially sound; and
(C) require the payment of premiums and administrative fees
by a producer obtaining the insurance.
(3) LOCATION.—The grass seed insurance pilot program shall be
carried out only in each of the States of Minnesota and North Dakota.
(4) DURATION.—The Corporation shall commence the grass seed
insurance pilot program as soon as practicable after the date of the
enactment of this subsection.
(i) UNDERSERVED CROPS AND REGIONS PILOT PROGRAMS.—
(1) DEFINITION OF LIVESTOCK COMMODITY.—In this subsection, the
term ‘‘livestock commodity’’ includes cattle, sheep, swine, goats, and
poultry, including pasture, rangeland, and forage as a source of feed for
that livestock.
(2) AUTHORIZATION.—Notwithstanding subsection (a)(2), the
Corporation may conduct 2 or more pilot programs to provide producers of
underserved specialty crops and livestock commodities with index-based
weather insurance, subject to the requirements of this section.
(3) REVIEW AND APPROVAL OF SUBMISSIONS.—
(A) IN GENERAL.—The Board shall approve 2 or more

76

proposed policies or plans of insurance from approved insurance
providers if the Board determines that the policies or plans provide
coverage as specified in paragraph (2), and meet the conditions
described in this paragraph
(B) REQUIREMENTS.—To be eligible for approval under this
subsection, the approved insurance provider shall have—
(i)
adequate experience underwriting and administering
policies or plans of insurance that are comparable to the proposed
policy or plan of insurance;
(ii)
sufficient assets or reinsurance to satisfy the
underwriting obligations of the approved insurance provider, and
possess a sufficient insurance credit rating from an appropriate
credit rating bureau, in accordance with Board procedures; and
(iii) applicable authority and approval from each State in
which the approved insurance provider intends to sell the
insurance product.
(C) REVIEW REQUIREMENTS.—In reviewing applications under
this subsection, the Board shall conduct the review in a manner
consistent with the standards, rules, and procedures for policies or
plans of insurance submitted under section 508(h) and the actuarial
soundness requirements applied to other policies and plans of
insurance made available under this subtitle.
(D) PRIORITIZATION.—The Board shall prioritize applications
that provide a new kind of coverage for specialty crops and livestock
commodities that previously had no available crop insurance, or has
demonstrated a low level of participation under existing coverage.
(4) PAYMENT OF PREMIUM SUPPORT.—
(A) IN GENERAL.—The Corporation shall pay a portion of the
premium for producers that purchase a policy or plan of insurance
approved pursuant to this subsection.
(B) AMOUNT.—The premium subsidy shall provide a similar
dollar amount of premium subsidy per acre that the Corporation pays
for comparable policies or plans of insurance reinsured under this
subtitle, except that in no case shall the premium subsidy exceed 60
percent of total premium, as determined by the Corporation.
(C) CALCULATION.—The premium subsidy, as determined by
the Corporation, shall be calculated as—
(i) a percentage of premium;
(ii) a percentage of expected loss determined pursuant to a
reasonable actuarial methodology; or (iii) a fixed dollar amount
per acre.
(D) PAYMENT.—Subject to subparagraphs (B) and (C), the
premium subsidy under this subsection shall be paid by the
Corporation in the same manner and under the same terms and
conditions as premium subsidy for other policies and plans of
insurance.
(E) OPERATING AND ADMINISTRATIVE EXPENSE PAYMENTS.—
(i) IN GENERAL.—Subject to clause (ii), operating and
administrative expense payments may be made for policies and
plans of insurance approved under this subsection in an amount
that is commensurate with similar policies and plans of insurance
reinsured under this subtitle, on the condition that the operating
and administrative expenses are not included in premiums.
(ii) LIMITATION.—Subject to subparagraph (F)(i), Federal

77

reinsurance, research and development costs, other
reimbursements, or maintenance fees shall not be provided or
collected for policies and plans of insurance approved under this
subsection.
(F) APPROVED INSURANCE PROVIDERS.—Any policy or plan of
insurance approved under this subsection may be sold only by the
approved insurance provider that submits the application and by any
additional approved insurance provider that—
(i) agrees to pay maintenance fees or other payments to the
approved insurance provider that submitted the application in an
amount agreed to by the applicant and the additional approved
insurance provider, on the condition that the fees or payments
shall be reasonable and appropriate to ensure that the policies or
plans of insurance may be made available by additional approved
insurance providers; and
(ii) meets the eligibility criteria of paragraph (3)(B), as

determined by the Board.

(G) RELATIONSHIP TO OTHER PROVISIONS.—The requirements of
this paragraph shall apply notwithstanding paragraph (6).
(5) OVERSIGHT.—The Corporation shall develop and publish
procedures to administer policies or plans of insurance approved under this
subsection that—
(A) require each approved insurance provider to report sales,
acreage and claim data, and any other data that the Corporation
determines to be appropriate, to allow the Corporation to evaluate
sales and performance of the product; and
(B) contain such other requirements as the Corporation
determines necessary to ensure that the products—
(i)
do not have a significant adverse impact on the crop
insurance delivery system;
(ii)
are in the best interests of producers; and
(iii) do not result in a reduction of program integrity.
(6) CONFIDENTIALITY.—
(A) IN GENERAL.—All reports required under paragraph
(5) and all other proprietary information and data generated or derived
from applicants under this subsection shall be considered to be
confidential commercial or financial information for the purposes of
section 552(b)(4) of title 5, United States Code.
(B) STANDARD.—If information concerning a proposal could
be withheld by the Secretary under the standard for privileged or
confidential information pertaining to trade secrets and commercial or
financial information under section 552(b)(4) of title 5, United States
Code, the information shall not be released to the public.
(7)
INELIGIBLE PURPOSES.—In no case shall a policy or plan of
insurance made available under this subsection provide coverage
substantially similar to privately available hail insurance.
(8)
FUNDING.—
(A) LIMITATION ON EXPENDITURES.—Notwithstanding any other
provision in this subsection, of the funds of the Corporation, the
Corporation shall use to carry out this section not more than $12,500,000

for each of fiscal years 2015 through 2018, to remain available until
expended.
(B) RELATION TO OTHER PROGRAMS.—The amount of funds
made available under this section shall be in addition to amounts made

78

available under other provisions of this subtitle, including amounts
made available under subsection (b).
SEC. 524. 7 U.S.C. 1524 EDUCATION AND RISK MANAGEMENT ASSISTANCE.

(a) EDUCATION ASSISTANCE.—
(1) IN GENERAL.—Subject to the amounts made available under
paragraph (5), the Secretary, acting through the National Institute of Food
and Agriculture, shall carry out the program established under paragraph
(2).
(2) PARTNERSHIPS FOR RISK MANAGEMENT EDUCATION.—
(A) AUTHORITY.—The Secretary, acting through the National
Institute of Food and Agriculture, shall establish a program under
which competitive grants are made to qualified public and private
entities (including land grant colleges, cooperative extension
services, and colleges or universities), as determined by the Secretary,
for the purpose of educating agricultural producers and providing
technical assistance to agricultural producers on a full range of
farm viability and risk management activities, including futures,
options, agricultural trade options, crop insurance, business planning,
enterprise analysis, transfer and succession planning, management
coaching, market assessment, cash flow analysis, cash forward
contracting, debt reduction, production diversification, farm
resources risk reduction, farm financial benchmarking, conservation
activities, and other risk management strategies.
(B) BASIS FOR GRANTS.—A grant under this paragraph shall be
awarded on the basis of merit and shall be subject to peer or merit
review.
(C) OBLIGATION PERIOD.—Funds for a grant under this
paragraph shall be available to the Secretary for obligation for a 2-year
period.
(D) ADMINISTRATIVE COSTS.—The Secretary may use not more
than 4 percent of the funds made available for grants under this
paragraph for administrative costs incurred by the Secretary in
carrying out this paragraph.

(3) REQUIREMENTS.—In carrying out the programs established under
paragraphs (2), the Secretary shall place special emphasis on farm viability
and risk management strategies (including farm financial benchmarking
business planning and technical assistance, market assessment, transfer and
succession planning, and crop insurance participation), education, and

outreach specifically targeted at—

(A) beginning farmers or ranchers;
(B) legal immigrant farmers or ranchers that are attempting to
become established producers in the United States; and
(C) socially disadvantaged farmers or ranchers;
(D) farmers or ranchers that—
(i) are preparing to retire;
(ii) are using transition strategies to help new farmers or
ranchers get started;
(iii) are converting production and marketing systems to
pursue new markets; and

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(E) producers that are underserved by the Federal crop insurance
program established under this subtitle, as determined by the
Corporation.
(4) FUNDING.—From the insurance fund established under section
516(c), there is transferred for the partnerships for risk management
education program established under paragraph (2), $10,000,000 for
fiscal year 2019 and each subsequent fiscal year.
(b) AGRICULTURAL MANAGEMENT ASSISTANCE.—
(1)
AUTHORITY.—The Secretary shall provide financial assistance
to producers in the States of Connecticut, Delaware, Hawaii, Maryland,
Massachusetts, Maine, Nevada, New Hampshire, New Jersey, New York,
Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming.
(2)
USES.—A producer may use financial assistance provided
under this subsection to—
(A) construct or improve—
(i) watershed management structures; or
(ii) irrigation structures;
(B) plant trees to form windbreaks or to improve water
quality;
(C) mitigate financial risk through production or marketing
diversification or resource conservation practices, including—
(i) soil erosion control;
(ii)
integrated pest management;
(iii) organic farming; or
(iv) to develop and implement a plan to create marketing
opportunities for the producer, including through value-added
processing;
(D) enter into futures, hedging, or options contracts in a
manner designed to help reduce production, price, or revenue risk;
(E) enter into agricultural trade options as a hedging transaction
to reduce production, price, or revenue risk; or
(F) conduct any other activity relating to an activity described in
subparagraphs (A) through (E), as determined by the Secretary.
(3)
PAYMENT LIMITATION.—The total amount of payments made
to a person (as defined in section 1001(5) of the Food Security Act (7
U.S.C. 1308(5))) (before the amendment made by section 1703(a) of the
Food, Conservation, and Energy Act of 2008) under this subsection for any
year may not exceed $50,000.
(4) COMMODITY CREDITCORPORATION.—
(A) IN GENERAL.—The Secretary shall carry out this
subsection through the Commodity Credit Corporation.
(B) FUNDING.—
(i) IN GENERAL.—Except as provided in clause (ii), the
Commodity Credit Corporation shall make available to carry out
this subsection not less than $10,000,000 for each fiscal year.
(ii) EXCEPTION FOR CERTAIN FISCAL YEARS.—For each of
fiscal years 2008 through 2014, the Commodity Credit
Corporation shall make available to carry out this subsection
$15,000,000.
(C) CERTAIN USES.—Of the amounts made available to carry
out this subsection for a fiscal year, the Commodity Credit
Corporation shall use not less than—
(i)
50 percent to carry out subparagraphs (A), (B), and

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(C) of paragraph (2) through the Natural Resources Conservation
Service;
(ii)
10 percent to provide organic certification cost share
assistance through the Agricultural Marketing Service; and
(iii) 40 percent to conduct activities to carry out
subparagraph (F) of paragraph (2) through the Risk Management
Agency.

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