Calendar No. 464

To amend the Federal Crop Insurance Act to improve crop insurance coverage, to provide agricultural producers with choices to manage risk, and for other purposes.

S 2251 PCS

To amend the Federal Crop Insurance Act to improve crop insurance coverage, to provide agricultural producers with choices to manage risk, and for other purposes.

To amend the Federal Crop Insurance Act to improve crop insurance coverage, to provide agricultural producers with choices to manage risk, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Risk Management for the 21st Century Act'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--CROP INSURANCE COVERAGE

Sec. 101. Quality adjustment.

Sec. 102. Prevented planting.

Sec. 103. Payment of portion of premium by Corporation.

Sec. 104. Assigned yields.

Sec. 105. Multiyear disaster actual production history adjustment.

Sec. 106. Noninsured crop disaster assistance program.

TITLE II--RESEARCH AND PILOT PROGRAMS

Sec. 201. Research and pilot programs.

Sec. 202. Research and development contracting authority.

Sec. 203. Choice of risk management options.

Sec. 204. Conforming amendments.

TITLE III--ADMINISTRATION

Sec. 301. Board of Directors of Corporation.

Sec. 302. Good farming practices.

Sec. 303. Sanctions for program noncompliance and fraud.

Sec. 304. Oversight of agents and loss adjusters.

Sec. 305. Adequate coverage for States.

Sec. 306. Records and reporting.

Sec. 307. Fees for plans of insurance.

Sec. 308. Limitation on double insurance.

Sec. 309. Specialty crops.

Sec. 310. Federal Crop Insurance Improvement Commission.

Sec. 311. Highly erodible land and wetland conservation.

TITLE IV--EFFECTIVE DATES; TERMINATION OF AUTHORITY

Sec. 401. Effective dates.

Sec. 402. Termination of authority.

SEC. 101. QUALITY ADJUSTMENT.

Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) is amended by striking paragraph (6) and inserting the following:

`(6) QUALITY ADJUSTMENT POLICIES-

`(A) IN GENERAL- The Corporation shall offer coverage that permits a reduction in the quantity of production of an agricultural commodity produced during a crop year, or any similar adjustment, that results from the agricultural commodity not meeting the quality standards established in the policy.

`(B) ELECTION NOT TO RECEIVE COVERAGE-

`(i) IN GENERAL- A producer may elect not to receive quality adjustment coverage.

`(ii) PREMIUM REDUCTION- In the case of an election described in clause (i), the Corporation shall provide a reduction in the premium payable by the producer for a plan of insurance in an amount equal to the premium for the quality adjustment coverage, as determined by the Corporation.

`(C) REVIEW OF CRITERIA AND PROCEDURES- The Corporation shall--

`(i) contract with a qualified person to analyze the quality loss adjustment procedures of the Corporation; and

`(ii) based on the analysis, make adjustments in the quality loss adjustment procedures of the Corporation necessary to more accurately reflect local quality discounts that are applied to agricultural commodities insured under this title, taking into consideration the actuarial soundness of the adjustment and the prevention of fraud, waste, and abuse.'.

SEC. 102. PREVENTED PLANTING.

(a) IN GENERAL- Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) (as amended by section 101) is amended by inserting after paragraph (6) the following:

`(7) PREVENTED PLANTING-

`(A) ELECTION NOT TO RECEIVE COVERAGE-

`(i) IN GENERAL- A producer may elect not to receive coverage for prevented planting of an agricultural commodity.

`(ii) PREMIUM REDUCTION- In the case of an election described in clause (i), the Corporation shall provide a reduction in the premium payable by the producer for a plan of insurance in an amount equal to the premium for the prevented planting coverage, as determined by the Corporation.

`(B) EQUAL COVERAGE- For each agricultural commodity for which prevented planting coverage is available, the Corporation shall offer an equal percentage level of prevented planting coverage.

`(C) AREA CONDITIONS REQUIRED FOR PAYMENT- The Corporation shall limit prevented planting payments to producers in the area in which the farm is located that are generally affected by the conditions that prevent an agricultural commodity from being planted.

`(D) SUBSTITUTE COMMODITY-

`(i) AUTHORITY TO PLANT- Subject to clause (v), a producer that has prevented planting coverage and is eligible to receive an indemnity under the coverage may plant an agricultural commodity, other than the commodity covered by the prevented planting coverage, on the acreage originally prevented from being planted.

`(ii) NONAVAILABILITY OF INSURANCE- A substitute agricultural commodity planted under clause (i) for harvest in the same crop year shall not be eligible for coverage under a policy or plan of insurance under this title or for noninsured crop disaster assistance under section 196 of the Agricultural Market Transition Act (7 U.S.C. 7333).

`(iii) RELATIONSHIP TO OTHER REQUIREMENTS- The producer of a substitute agricultural commodity under clause (ii) shall remain eligible for the benefits described in subsection (b)(7).

`(iv) EFFECT ON ACTUAL PRODUCTION HISTORY- If a producer plants a substitute agricultural commodity under clause (i) for a crop year, the Corporation shall assign the producer a yield, for that crop year for the commodity that was prevented from being planted, equal to 60 percent of the producer's actual production history for that commodity for purposes of determining the producer's actual production history for subsequent crop years.

`(v) EFFECT ON PREVENTED PLANTING PAYMENT- If a producer plants a substitute agricultural commodity under clause (i) before the latest planting date established by the Corporation for the agricultural commodity prevented from being planted, the Corporation shall not make a prevented planting payment with regard to the commodity prevented from being planted.

`(E) RELATIONSHIP TO OTHER LAW- This paragraph shall supersede subsection (h)(7) to the extent that this paragraph is inconsistent with subsection (h)(7).

`(F) FISCAL YEARS- This paragraph shall apply to each of fiscal years 2001 through 2004.'.

(b) APPLICATION- The amendment made by subsection (a) shall be reflected in the rates for applicable plans of insurance not later than the 2001 reinsurance year.

SEC. 103. PAYMENT OF PORTION OF PREMIUM BY CORPORATION.

(a) EXPECTED MARKET PRICE- Section 508(c) of the Federal Crop Insurance Act (7 U.S.C. 1508(c)) is amended by striking paragraph (5) and inserting the following:

`(5) EXPECTED MARKET PRICE-

`(A) IN GENERAL- For the purposes of this title, the Corporation shall establish or approve the price level (referred to in this title as the `expected market price') of each agricultural commodity for which insurance is offered.

`(B) AMOUNT- The expected market price of an agricultural commodity--

`(i) except as otherwise provided in this subparagraph, shall be not less than the projected market price of the agricultural commodity, as determined by the Corporation;

`(ii) may be based on the actual market price of the agricultural commodity at the time of harvest, as determined by the Corporation;

`(iii) in the case of revenue and other similar plans of insurance, shall be the actual market price of the agricultural commodity, as determined by the Corporation; or

`(iv) in the case of cost of production or similar plans of insurance, shall be the projected cost of producing the agricultural commodity, as determined by the Corporation.'.

(b) PREMIUM AMOUNTS- Section 508(d)(2) of the Federal Crop Insurance Act (7 U.S.C. 1508(d)(2)) is amended by striking subparagraph (C) and inserting the following:

`(C) In the case of additional coverage at greater than or equal to 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or a comparable coverage for a plan of insurance that is not based on yield, but less than 75 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or a comparable coverage for a plan of insurance that is not based on 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.

`(D) In the case of additional coverage equal to or greater than 75 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or a comparable coverage for a plan of insurance that is not based on 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.'.

(c) PAYMENT OF PORTION OF PREMIUM BY CORPORATION- Section 508(e) of the Federal Crop Insurance Act (7 U.S.C. 1508(e)) is amended--

(1) by striking paragraph (1) and inserting the following:

`(1) IN GENERAL-

`(A) MANDATORY PAYMENTS- For the purpose of encouraging the broadest possible participation of producers in the crop insurance plans of insurance described in subsections (b) and (c), the Corporation shall pay a part of the premium in the amounts determined under this subsection.

`(B) DISCRETIONARY PAYMENTS- For the purpose of encouraging the broadest possible participation of producers, in the case of a plan of insurance approved by the Corporation under subsection (h), the Corporation may pay a part of the premium as determined under this subsection.'; and

(2) in paragraph (2), by striking subparagraphs (B) and (C) and inserting the following:

`(B) In the case of additional coverage less than or equal to 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or a comparable coverage for a plan of insurance that is not based on yield, the amount shall be equal to the sum of--

`(i) 60 percent of the amount of the premium established under subsection (d)(2)(B)(i); and

`(ii) the amount of operating and administrative expenses determined under subsection (d)(2)(B)(ii).

`(C) In the case of additional coverage at 55 percent or 60 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or a comparable coverage for a plan of insurance that is not based on yield, the amount shall be equal to the sum of--

`(i) 45 percent of the amount of the premium established under subsection (d)(2)(B)(i); and

`(ii) the amount of operating and administrative expenses determined under subsection (d)(2)(B)(ii).

`(D) In the case of additional coverage at 65 percent or 70 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or a comparable coverage for a plan of insurance that is not based on yield, the amount shall be equal to the sum of--

`(i) 50 percent of the amount of the premium established under subsection (d)(2)(C)(i); and

`(ii) the amount of operating and administrative expenses determined under subsection (d)(2)(C)(ii).

`(E) In the case of additional coverage equal to or greater than 75 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or a comparable coverage for a plan of insurance that is not based on yield, the amount shall be equal to the sum of--

`(i) 55 percent of the amount of the premium established for coverage at 75 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price under subsection (d)(2)(D)(i); and

`(ii) the amount of operating and administrative expenses determined under subsection (d)(2)(D)(ii).

`(F) Subparagraphs (A) through (E) shall apply to each of fiscal years 2001 through 2004.'.

(d) REVENUE COVERAGE FOR POTATOES- Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) is amended by striking paragraph (3) and inserting the following:

`(3) EXCLUSIONS-

`(A) IN GENERAL- 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 (as determined by the Secretary).

`(B) REVENUE COVERAGE FOR POTATOES- No plan of insurance provided under this title (including a 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 plan of insurance, as determined by the Corporation.'.

(e) CONFORMING AMENDMENTS- Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) is amended--

(1) in subsection (e), by striking paragraph (4); and

(2) in subsection (g)(2)(D), by striking `(as provided in subsection (e)(4))'.

SEC. 104. ASSIGNED YIELDS.

Section 508(g)(2)(B) of the Federal Crop Insurance Act (7 U.S.C. 1508(g)(2)(B)) is amended--

(1) by striking `assigned a yield' and inserting `assigned--

`(i) a yield';

(2) by striking the period at the end and inserting `; or'; and

(3) by adding at the end the following:

`(ii) a yield determined by the Corporation, in the case of--

`(I) a producer that has not had a share of the production of the insured crop for more than 2 crop years, as determined by the Secretary;

`(II) a producer that produces an agricultural commodity on land that has not been farmed by the producer; and

`(III) a producer that rotates a crop produced on a farm to a crop that has not been produced on the farm.'.

SEC. 105. MULTIYEAR DISASTER ACTUAL PRODUCTION HISTORY ADJUSTMENT.

Section 508(g) of the Federal Crop Insurance Act (7 U.S.C. 1508(g)) is amended by adding at the end the following:

`(4) TRANSITIONAL ADJUSTMENT FOR DISASTERS-

`(A) DEFINITION OF A PRODUCER THAT HAS SUFFERED A MULTIYEAR DISASTER- In this paragraph, the term `a producer that has suffered a multiyear disaster' means a producer (or a successor entity through which the actual production history of the producer can be traced) that has suffered a natural disaster during at least 3 of the immediately preceding 5 crop years that resulted in a cumulative reduction of at least 25 percent in the actual production history of the crop of an agricultural commodity.

`(B) ELIMINATION OF CERTAIN YEARS OF PRODUCTION HISTORY- Notwithstanding paragraph (2), effective beginning with the 2001 crop year, for the purpose of calculating the actual production history for a crop of an agricultural commodity, a producer that has suffered a multiyear disaster with respect to the crop may exclude 1 year of production history for each 5 years included in the actual production history calculation of the crop for which the producer purchased crop insurance.

`(C) CORPORATION'S SHARE OF CHANGED COSTS- In the case of an exclusion under subparagraph (B), in addition to any other authority to pay any portion of premium, the Corporation shall pay--

`(i) the portion of the premium that represents the increase in premium associated with the exclusion;

`(ii) all additional indemnities associated with the exclusion; and

`(iii) any amounts that result from the difference in the administrative and operating expenses owed to an approved insurance provider as the result of an exclusion in actual production history under this paragraph.

`(D) INCREASE IN ACTUAL PRODUCTION HISTORY AFTER EXCLUSIONS- In the case of a producer that has received an exclusion under subparagraph (B), the Corporation shall not limit the increase of the actual production history based on the producer's actual production of the crop of an agricultural commodity in succeeding crop years until the actual production history for the producer reaches the level for the crop year immediately preceding the first year of the multiyear disaster.

`(E) TERMINATION OF EXCLUSION AUTHORITY- The authority to apply this paragraph to a producer shall terminate with respect to the first crop year in which crop insurance is available to the producer that adequately insures against natural disasters that occur in multiple crop years, as determined by the Corporation.

`(F) REINSURANCE YEARS- This paragraph shall apply to each of the 2001 through 2004 reinsurance years.'.

SEC. 106. NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

(a) OPERATION AND ADMINISTRATION OF PROGRAM- Section 196(a)(2) of the Agricultural Market Transition Act (7 U.S.C. 7333(a)(2)) is amended by adding at the end the following:

`(C) COMBINATION OF SIMILAR TYPES OR VARIETIES- At the option of the Secretary, all types or varieties of a crop or commodity, described in subparagraphs (A) and (B), may be considered to be a single eligible crop under this section.'.

(b) RECORDS AND APPLICATION DATE- Section 196(b) of the Agricultural Market Transition Act (7 U.S.C. 7333(b)) is amended--

(1) in the second sentence of paragraph (1), by striking `at such time as the Secretary may require.' and inserting `not later than March 15.';

(2) by striking paragraph (2) and inserting the following:

`(2) RECORDS- To be eligible for assistance under this section, a producer shall provide annually to the Secretary records of crop acreage, acreage yields, and production for each crop, as required by the Secretary.'; and

(3) in paragraph (3), by inserting `annual' after `shall provide'.

(c) LOSS REQUIREMENTS- Section 196 of the Agricultural Market Transition Act (7 U.S.C. 7333) is amended by striking subsection (c) and inserting the following:

`(c) LOSS REQUIREMENTS-

`(1) CAUSE- To be eligible for assistance under this section, a producer of an eligible crop shall have suffered a loss of a noninsured commodity as the result of a cause described in subsection (a)(3).

`(2) ASSISTANCE- On making a determination described in subsection (a)(3), the Secretary shall provide assistance under this section to producers of an eligible crop that have suffered a loss as a result of the cause described in subsection (a)(3).

`(3) PREVENTED PLANTING- The Secretary shall make a prevented planting noninsured crop disaster assistance payment to a producer if the producer is prevented from planting more than 15 percent of the acreage intended for the eligible crop because of a cause described in subsection (a)(3), as determined by the Secretary.

`(4) AREA TRIGGER- The Secretary may provide assistance to individual producers without any requirement of an area loss.'.

(d) NEW ELIGIBLE CROPS- Section 196 of the Agricultural Market Transition Act (7 U.S.C. 7333) is amended--

(1) in subsection (d)(1)--

(A) by inserting `(except as provided in subsection (j))' after `percent'; and

(B) by inserting `determined under subsection (e)' after `for the crop';

(2) by redesignating subsection (j) as subsection (l); and

(3) by inserting after subsection (i) the following:

`(j) NEW ELIGIBLE CROPS-

`(1) IN GENERAL- Subject to paragraph (2), if a producer produces an eligible crop that is new to an area (as determined by the Secretary), a payment for the producer shall be computed by substituting the following percentages of yields for the percentages of yields specified in subsection (d)(1):

`(A) In the case of the first crop year of the eligible crop produced by the producer, 35 percent of the established yield for the crop determined under subsection (e).

`(B) In the case of each of the second through fourth years of the eligible crop produced by the producer--

`(i) 45 percent of the established yield for the crop determined under subsection (e); or

`(ii) if the producer received a payment under this section for the first crop year of the eligible crop produced by the producer, 35 percent of the established yield for the crop determined under subsection (e).

`(2) TEMPORARY INELIGIBILITY- If a producer of an eligible crop described in paragraph (1) receives a payment under this section in both the first and second crop years of the eligible crop, the producer shall be ineligible for a payment under this section until the producer has successfully produced the crop for at least 3 consecutive crop years with no loss reported, as determined by the Secretary.'.

(e) SERVICE FEE- Section 196 of the Agricultural Market Transition Act (7 U.S.C. 7333) (as amended by subsection (d)) is amended by inserting after subsection (j) the following:

`(k) SERVICE FEE-

`(1) IN GENERAL- To be eligible to receive assistance for an eligible crop for a crop year under this section, a producer shall pay to the Secretary (at the time at which the producer provides reports under subsection (b)(3)) a service fee for the eligible crop in an amount that is equal to the lesser of--

`(A) the equivalent of the per policy fee for catastrophic risk protection available under section 508(b)(5) of the Federal Crop Insurance Act (7 U.S.C. 1508(b)(5)); or

`(B) $200 per producer per county, but not to exceed a total of $600 per producer.

`(2) WAIVER- The Secretary shall waive the service fee required under paragraph (1) in the case of a limited resource farmer, as defined by the Secretary.

`(3) USE- The Secretary shall deposit service fees collected under this subsection in the Commodity Credit Corporation Fund.'.

(f) CROP YEARS- This section and the amendments made by this section shall apply to each of the 2001 through 2004 crop years.

SEC. 201. RESEARCH AND PILOT PROGRAMS.

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

`SEC. 522. RESEARCH AND PILOT PROGRAMS.

`(a) GENERAL PROVISIONS-

`(1) IN GENERAL- Except as otherwise provided in this subsection, the Corporation may conduct research, surveys, pilot programs, and investigations relating to crop insurance and agriculture-related risks and losses based on proposals developed by the Corporation or by an approved insurance provider to evaluate whether the proposal or new risk management tool is suitable for the marketplace and addresses the needs of producers of agricultural commodities.

`(2) PRIVATE COVERAGE- Under this section, the Corporation shall not conduct any activity that provides insurance protection against a risk if insurance protection against the risk is generally available from private companies.

`(3) COVERED ACTIVITIES- The activities described in paragraph (1) include insurance on 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) loss of timber due to drought, flood, fire, or other natural disaster;

`(F) other agricultural products as determined by the Board; and

`(G) after October 1, 2000, insurance coverage for livestock.

`(4) SCOPE OF PILOT PROGRAMS- The Corporation may--

`(A) offer a pilot program authorized under this title 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 by the Corporation; and

`(D) provide pilot programs that would allow producers--

`(i) to receive premium discounts for using whole farm units or single crop units of insurance; and

`(ii) to cross State and county boundaries to form insurable units.

`(5) EVALUATION- After the completion of any pilot program under this section, the Corporation shall evaluate the pilot program 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 on the operations of the pilot program, including the evaluation by the Corporation of the pilot program and the recommendations of the Corporation with respect to implementing the program on a national basis.

`(6) FUNDING- The amount of funds used to carry out research and pilot programs that are established after the date of enactment of this section (other than subsection (b)(2)) shall not exceed--

`(A) in the case of fiscal year 2001, $20,000,000;

`(B) in the case of fiscal year 2002, $40,000,000;

`(C) in the case of fiscal year 2003, $60,000,000; and

`(D) in the case of fiscal year 2004, $80,000,000.

`(7) FISCAL YEARS- Paragraphs (3)(E), (3)(G), (4), and (6) shall apply to each of fiscal years 2001 through 2004.

`(8) RELATION TO OTHER LAWS-

`(A) IN GENERAL- The terms and conditions of any policy or plan of insurance offered under this section that is reinsured by the Corporation shall not--

`(i) be subject to the jurisdiction of the Commodity Futures Trading Commission or the Securities and Exchange Commission; or

`(ii) 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.).

`(B) EFFECT ON CFTC AND COMMODITY EXCHANGE ACT- Nothing in this paragraph 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 section.'.

SEC. 202. RESEARCH AND DEVELOPMENT CONTRACTING AUTHORITY.

Section 522 of the Federal Crop Insurance Act (as added by section 201) is amended by adding at the end the following:

`(b) RESEARCH AND DEVELOPMENT CONTRACTING AUTHORITY-

`(1) IN GENERAL- Subject to section 523(a), to obtain the best research and analysis concerning any significant issue pertaining to crop insurance, including outreach and education, pilot programs, or the development of a new plan of insurance, the Corporation may use only the authority provided by this section and funds made available under section 516(b)(2)(A) to--

`(A) contract on a competitive basis with qualified persons;

`(B) reimburse research costs associated with product development; and

`(C) reimburse costs associated with the reassessment and modification of plans of insurance.

`(2) ALTERNATIVE RATING METHODOLOGIES-

`(A) IN GENERAL- The Corporation shall enter into contracts with qualified persons to study and develop alternative methodologies for rating plans of insurance for catastrophic risk protection and higher levels of additional coverage under subsections (b) and (c), respectively, of section 508, and rates for the plans of insurance, that take into account--

`(i) producers that elect not to participate in the Federal crop insurance program; and

`(ii) producers that elect to obtain only catastrophic risk protection.

`(B) PRIORITY- The studies conducted under this paragraph shall provide priority to agricultural commodities with--

`(i) the largest average acreage nationwide; and

`(ii) the lowest percentage of producers that purchase additional coverage.

`(C) FUNDING-

`(i) IN GENERAL- The Corporation shall fund the studies conducted under this paragraph from funds in the insurance fund available under section 516(b)(2)(A).

`(ii) AMOUNT- There are authorized for the studies conducted under this paragraph--

`(I) in the case of each of fiscal years 2001 and 2002, $1,000,0000; and

`(II) in the case of each of fiscal years 2003 and 2004, $250,000.

`(D) FISCAL YEARS- This paragraph shall apply to each of fiscal years 2001 through 2004.

`(3) RESEARCH AND DEVELOPMENT PRIORITIES- The Corporation shall establish, as 1 of the highest research and development priorities of the Corporation, the development of a pasture, range, and forage program to promote land stewardship.

`(4) STUDY OF MULTIYEAR COVERAGE-

`(A) IN GENERAL- The Corporation shall contract with a qualified person to conduct a study to determine whether offering plans of insurance that provide coverage for multiple years would reduce fraud and abuse by persons that participate in the Federal crop insurance program.

`(B) REPORT- Not later than 1 year after the date of enactment of this section, 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 the results of the study conducted under subparagraph (A).'.

SEC. 203. CHOICE OF RISK MANAGEMENT OPTIONS.

(a) IN GENERAL- Section 522 of the Federal Crop Insurance Act (as amended by section 202) is amended by adding at the end the following:

`(c) CHOICE OF RISK MANAGEMENT OPTIONS-

`(1) DEFINITIONS- In this subsection:

`(A) AGRICULTURAL COMMODITY- The term `agricultural commodity' means each agricultural commodity specified in section 518--

`(i) for which catastrophic risk protection or additional coverage is available under this title, other than solely this section; and

`(ii) that is selected by the Secretary in a manner that--

`(I) encourages the maximum number of participants in the program under this subsection;

`(II) provides a mixture of program, specialty, and regional crops; and

`(III) gives consideration to agricultural commodities with low crop insurance participation rates.

`(B) APPLICABLE CROP- The term `applicable crop' means each of the 2002 through 2004 crops of an agricultural commodity produced by a producer.

`(C) APPLICABLE YEAR- The term `applicable year' means the year in which--

`(i) the applicable crop is produced on the farm of a producer; and

`(ii) the producer elects to receive a risk management payment or crop insurance premium subsidy under this subsection.

`(D) REGULATED EXCHANGE- The term `regulated exchange' means a board of trade (as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)) that is designated as a contract market under section 2(a)(1)(B) of that Act (7 U.S.C. 2a).

`(2) RISK MANAGEMENT PAYMENTS-

`(A) OFFER- The Corporation shall offer either to make either risk management payments or to provide crop insurance premium subsidies for each of the 2002 through 2004 crops of an agricultural commodity in accordance with subparagraph (B).

`(B) TERMS- Not later than the sales closing date for obtaining coverage for an agricultural commodity for each applicable year, an eligible producer may elect to receive, with respect to the agricultural commodity--

`(i) a risk management payment under this subsection; or

`(ii) a crop insurance premium subsidy, including a catastrophic risk protection subsidy, under this subsection.

`(3) RISK MANAGEMENT PAYMENT-

`(A) IN GENERAL- In the case of a producer that elects to receive a risk management payment for an applicable crop of an agricultural commodity under this subsection, the Corporation shall make a risk management payment to the producer that covers the agricultural commodity produced by the producer for the applicable crop.

`(B) BASIS FOR PAYMENT- The amount of a risk management payment shall be determined in accordance with paragraph (5).

`(4) QUALIFYING RISK MANAGEMENT PRACTICES- To be eligible for a risk management payment under this subsection for an applicable crop of an agricultural commodity, a producer shall obtain or use for the applicable crop a qualifying risk management practice from at least 2 of the following categories:

`(A) CROP INSURANCE CATEGORY- A producer may purchase coverage for an agricultural commodity under a private plan of insurance or a Federal plan of insurance that is not subsidized.

`(B) MARKETING RISK CATEGORY-

`(i) FUTURE OR OPTION- A producer may enter into a future or option for an agricultural commodity produced on the farm of the producer for the applicable crop on a regulated exchange that is (as determined by the Corporation)--

`(I)(aa) in the case of a future, at least 1 regulated futures contract (as defined in section 1256(g) of the Internal Revenue Code of 1986); and

`(bb) in the case of an option, at least 1 listed option (as defined in section 1256(g) of that Code); and

`(II) a hedging transaction (as defined in section 1256(e)(2) of that Code) involving an agricultural commodity that is used to reduce production, price, or revenue risk.

`(ii) AGRICULTURAL TRADE OPTION- A producer may purchase, on other than a regulated exchange, an agricultural trade option for the applicable crop of an agricultural commodity produced on the farm of the producer that (as determined by the Corporation)--

`(I) provides coverage for at least 10 percent of the estimated monetary value of the agricultural commodity;

`(II) is an equity option (as defined in section 1256(g) of the Internal Revenue Code of 1986); and

`(III) is a hedging transaction (as defined in section 1256(e)(2) of that Code) involving an agricultural commodity that is used to reduce production, price, or revenue risk.

`(iii) CASH FORWARD OR OTHER MARKETING CONTRACT- A producer may enter into a cash forward or other type of marketing contract for at least 20 percent of the monetary value of an agricultural commodity produced on the farm of the producer for the applicable crop, as determined by the Secretary.

`(iv) MARKETING THROUGH COOPERATIVES- A producer may market at least 25 percent of an agricultural commodity produced by the producer through a cooperative that is owned by agricultural producers.

`(C) FINANCIAL RISK CATEGORY-

`(i) TRUST- A producer may make a deposit of an amount equal to at least 10 percent of the payments of the producer for the applicable year under the Agricultural Market Transition Act (7 U.S.C. 7201 et seq.) into a trust authorized by statute for eligible farming businesses that may be established to accept tax deductible contributions.

`(ii) AGRICULTURAL MARKETING AND RISK MANAGEMENT EDUCATION- A producer may attend and complete in the applicable year an agricultural marketing or risk management class or seminar approved by the Corporation.

`(iii) FINANCIAL RISK REDUCTION- A producer may reduce farm financial risk by reducing debt in an amount that reduces leverage or by increasing liquidity, as determined by the Secretary.

`(iv) DIVERSIFICATION- A producer may address production or financial risk by--

`(I) diversifying production on the farm of the producer by producing at least 1 additional commodity on the farm;

`(II) significantly increasing farm enterprise diversification in the applicable year, as determined by the Secretary;

`(III) maintaining an integrated farming system with a substantial degree of diversification, as determined by the Secretary; or

`(IV) implementing a transition to organic farming.

`(D) FARM RESOURCES RISK CATEGORY-

`(i) CONSERVATION PRACTICES- A producer may implement new or existing conservation practices consisting of--

`(I) nutrient management;

`(II) integrated pest management;

`(III) conservation tillage;

`(IV) conservation buffers; or

`(V) other conservation practices that are appropriate for the farm, as determined by the Secretary.

`(ii) AGRICULTURAL CONSERVATION MANAGEMENT PLAN- A producer may develop a plan to mitigate financial risk associated with resource conservation through practices consisting of--

`(I) nutrient management;

`(II) integrated pest management;

`(III) soil erosion control;

`(IV) conservation buffers;

`(V) soil residue management;

`(VI) water quantity or quality management; or

`(VII) other conservation practices that are appropriate for the farm, as determined by the Secretary.

`(iii) AGRICULTURAL RESOURCE IMPROVEMENTS- A producer may invest in the improvement or development of 1 or more of the following capital land improvements on the farm of the producer to reduce production risk:

`(I) Irrigation management.

`(II) Watershed management structures.

`(III) Planting trees for windbreaks or water quality.

`(IV) Soil quality management options.

`(V) Animal waste management structures.

`(VI) Other land improvements, as determined by the Secretary.

`(E) OTHER CATEGORY- A producer may engage in any other risk management practice approved by the Secretary.

`(5) DETERMINATION OF RISK MANAGEMENT PAYMENT-

`(A) IN GENERAL- The Secretary shall determine the amount of a risk management payment for an agricultural commodity produced on the farm of a producer for an applicable crop taking into consideration the expenditure by the producer on the risk management practices obtained or used by the producer.

`(B) MAXIMUM PAYMENT- No payment shall be made in excess of an amount equal to the national average of the previous year's liability for all catastrophic risk protection policies.

`(C) FUNDING-

`(i) IN GENERAL- Subject to clause (ii), there are authorized to be expended to carry out this subsection from the insurance fund under section 516(b)(2)(C) not more than $500,000,000 for the period of fiscal years 2002 through 2004.

`(ii) ANNUAL LIMITATION- Not more than $200,000,000 may be expended in any fiscal year to carry out this subsection.

`(6) ADMINISTRATIVE PROVISIONS-

`(A) CERTIFICATION- A producer shall submit to the crop insurance agent or approved insurance provider a risk management practices form that certifies, in accordance with standards prescribed by the Secretary, the qualifying risk management practices and associated costs that were obtained or used by the producer during the applicable year.

`(B) COMPLIANCE- The Corporation may perform random audits of producers that obtain a risk management payment to ensure that the producers obtained or used the qualifying risk management practices described in the form.

`(C) VIOLATION OF TERMS OF RISK MANAGEMENT PAYMENT- If a producer has accepted a risk management payment or crop insurance premium subsidy for an applicable year and the producer fails to comply with subparagraph (A), or to carry out a qualifying risk management option elected by the producer under paragraph (4), with respect to the applicable year, the producer--

`(i) shall refund to the Corporation an amount equal to the risk management payment; and

`(ii) may be subject to debarment from loans and payments for a period of not to exceed 5 years, as provided in section 506(n)(3)(B).

`(D) ASSIGNMENT AND SHARING OF BENEFITS-

`(i) ASSIGNMENT OF BENEFITS- Assignment of a benefit provided under this subsection shall be carried out as provided in section 8(g) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)).

`(ii) NOTICE- The producer making the assignment, or the assignee, shall provide the Corporation with notice, in such manner as the Corporation may require, of any assignment.

`(iii) SHARING OF BENEFITS- The Corporation shall provide for the sharing of benefits under this subsection among all producers that are at risk in the production of an applicable crop on a fair and equitable basis.

`(7) FISCAL YEARS- This subsection shall apply to each of fiscal years 2002 through 2004.'.

(b) AUTHORIZATION OF APPROPRIATIONS- Section 516(a) of the Federal Crop Insurance Act (7 U.S.C. 1516(a)) is amended--

(1) by striking paragraph (1) and inserting the following:

`(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--

`(A) the salaries and expenses of the Corporation; and

`(B) the expenses of approved insurance providers incurred in carrying out section 522(c).'; and

(2) in paragraph (2)--

(A) in subparagraph (A), by striking `and' at the end;

(B) in subparagraph (B), by striking the period at the end and inserting a semicolon; and

(C) by adding at the end the following:

`(C) risk management payments authorized under section 522(c) in an amount not to exceed $500,000,000 for the period of fiscal years 2002 through 2004, of which not more than $200,000,000 may be expended for any 1 fiscal year; and'.

SEC. 204. CONFORMING AMENDMENTS.

(a) Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) is amended--

(1) by striking subsection (m); and

(2) by redesignating subsection (n) as subsection (m).

(b) Section 516(b)(2)(A) of the Federal Crop Insurance Act (7 U.S.C. 1516(b)(2)(A)) is amended by striking `exceed $3,500,000 for each fiscal year.' and inserting `exceed--

`(i) in the case of each of fiscal years 2001 and 2002, $4,500,000;

`(ii) in the case of each of fiscal years 2003 and 2004, $3,750,000; and

`(iii) in the case of each subsequent fiscal year, $3,500,000.'.

(c) Section 518 of the Federal Crop Insurance Act (7 U.S.C. 1518) is amended by striking `subsection (a) or (m) of section 508 of this title' and inserting `section 508(a), 522, or 523'.

SEC. 301. BOARD OF DIRECTORS OF CORPORATION.

(a) IN GENERAL- Section 505 of the Federal Crop Insurance Act (7 U.S.C. 1505) is amended by striking subsection (a) and inserting the following:

`(a) BOARD OF DIRECTORS-

`(1) IN GENERAL- The management of the Corporation shall be vested in a Board of Directors, subject to the general supervision of the Secretary.

`(2) COMPOSITION- The Board shall consist of--

`(A) 4 members who are active agricultural producers with or without crop insurance, with 1 member appointed from each of the 4 regions of the United States (as determined by the Secretary);

`(B) 1 member who is active in the crop insurance business;

`(C) 1 member who is active in the reinsurance business;

`(D) the Under Secretary for Farm and Foreign Agricultural Services;

`(E) the Under Secretary for Rural Development; and

`(F) the Chief Economist of the Department of Agriculture.

`(3) APPOINTMENT AND TERMS OF PRIVATE SECTOR MEMBERS- The members of the Board described in subparagraphs (A), (B), and (C) of paragraph (2)--

`(A) shall be appointed by, and hold office at the pleasure of, the Secretary;

`(B) shall not be otherwise employed by the Federal Government;

`(C) shall be appointed to staggered 4-year terms, as determined by the Secretary; and

`(D) shall serve not more than 2 consecutive terms.

`(4) CHAIRPERSON- The Board shall select a member of the Board described in subparagraph (A), (B), or (C) of paragraph (2) to serve as Chairperson of the Board.

`(5) OFFICE OF RISK MANAGEMENT- The Office of Risk Management shall provide assistance to the Board in developing, reviewing, and recommending--

`(A) new plans of insurance and pilot projects under this title that are proposed by the Office or by a private insurance provider;

`(B) terms of the Standard Reinsurance Agreement;

`(C) rates for plans of insurance under this title; and

`(D) other issues involved in the administration of Federal crop insurance, as requested by the Board.

`(6) EXECUTIVE DIRECTOR; STAFF-

`(A) EXECUTIVE DIRECTOR- An executive director appointed by the Secretary, with the concurrence of the Board, shall--

`(i) assist the Board, as provided in subparagraph (C); and

`(ii) report to the Secretary.

`(B) STAFF-

`(i) IN GENERAL- A staff of 4 individuals appointed by the Executive Director shall report to the Executive Director.

`(ii) QUALIFICATIONS- An individual described in clause (i) (except the Executive Director) shall be knowledgeable and experienced in quantitative mathematics and actuarial rating.

`(C) FUNCTIONS- The Executive Director and staff appointed under this paragraph shall--

`(i) assist the Board in reviewing and approving policies and materials with respect to plans of insurance or other materials authorized or submitted under section 508, 522, or 523;

`(ii) provide at least monthly reports to the Board on crop insurance issues, which shall be based on comments received from producers, approved insurance providers, and other sources that the Executive Director and staff consider appropriate;

`(iii) review policies and materials with respect to--

`(I) subsidized plans of insurance authorized under section 508; and

`(II) unsubsidized plans of insurance submitted to the Board under section 508(h);

`(iv) make recommendations to the Board with respect to approval of the policies and materials, including recommendations with respect to the disapproval of any policies and materials that contain terms or conditions that promote fraud;

`(v) make recommendations to the Board to encourage cooperation between United States attorneys, the Corporation, and approved insurance providers to minimize fraud in connection with an insurance plan or policy under this title;

`(vi) review and make recommendations to the Board with respect to methodologies for rating plans of insurance under this title; and

`(vii) perform such other functions as the Board considers appropriate.

`(D) FUNDING-

`(i) INSURANCE FUND- From amounts in the insurance fund under section 516(c)(1), effective for fiscal year 2001, $500,000 shall be available to pay the salaries and expenses of the Executive Director and staff appointed under this paragraph.

`(ii) SALARIES AND EXPENSES- Subject to the availability of appropriations, the Risk Management Agency shall transfer $500,000 for fiscal year 2001, and $1,000,000 for each subsequent fiscal year, at the beginning of the fiscal year to the Executive Director for the salaries and expenses of the Executive Director and staff appointed under this paragraph.'.

(b) SUBMISSION OF POLICIES AND MATERIALS TO BOARD- Section 508(h) of the Federal Crop Insurance Act (7 U.S.C. 1508(h)) is amended--

(1) by striking paragraphs (1) through (4) and inserting the following:

`(1) 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 may propose to the Board--

`(A) loss of yield or revenue insurance coverage on an individual, area, or a combination of individual and area basis, for 1 or more agricultural commodities;

`(B) rates of premium for a proposed or existing policy; and

`(C) underwriting systems for a proposed or existing policy.

`(2) SUBMISSION OF PROPOSALS-

`(A) IN GENERAL- Subject to subparagraph (B) and paragraph (3), a proposal submitted to the Board under this subsection may be prepared without regard to the limitations of this title, including limitations--

`(i) concerning actuarial soundness;

`(ii) concerning levels of coverage;

`(iii) concerning rates of premium;

`(iv) that the price level for coverage for each insured commodity must equal the expected market price for the commodity as established by the Board; and

`(v) that an approved insurance provider shall provide coverage under a policy throughout a State for all commodities if the approved insurance provider elects to provide any coverage in the State.

`(B) MAXIMUM ALLOWABLE SUBSIDY- The payment by the Corporation of a portion of the premium of the policy approved by the Board under this subsection may not exceed the amount that would otherwise be authorized under subsection (e).

`(3) STANDARDS-

`(A) IN GENERAL- The Board shall approve a proposal under this subsection for subsidy and reinsurance if the Board finds that the proposal adequately ensures that--

`(i) the interests of producers of commodities are adequately protected;

`(ii) premiums charged to producers are actuarially appropriate;

`(iii) the underwriting system included in the proposal is appropriate and adequate; and

`(iv) the proposal is reinsured under this title, is reinsured through private reinsurance, or is self-insured;

`(B) RATES OF PREMIUM- A proposed rate of premium (including the part of premium paid by the Corporation) shall be considered to be actuarially appropriate if the rate is sufficient to cover projected losses and expenses, a reasonable reserve, and the amount of operating and administrative expenses of the approved insurance provider determined under subsection (d)(2).

`(C) PROPOSED UNDERWRITING PLANS- A proposed underwriting plan--

`(i) may be on an area or individual farm basis; and

`(ii) shall, at a minimum, specify factors such as yield history for the farm or region, soils and resource quality for the farm, and farm production practices.

`(D) REINSURANCE-

`(i) FEDERAL REINSURANCE- The Corporation shall, to the maximum extent practicable, make reinsurance available to an approved insurance provider under this subsection.

`(ii) PRIVATE OR FEDERAL REINSURANCE- An approved insurance provider may--

`(I) obtain private reinsurance for the proposal;

`(II) obtain reinsurance for the proposal under this title; or

`(III) self-insure the proposal.

`(E) ACTUARIALLY APPROPRIATE- The Board shall prescribe standards for determining whether premium rates are actuarially appropriate considering the risk inherent in the proposed product.

`(4) REVIEW AND APPROVAL BY BOARD- With respect to any policy or other material submitted to the Board after October 1, 2000, under this subsection, the following guidelines shall apply:

`(A) IN GENERAL- The policy or other material shall be reviewed by the Board in accordance with subparagraphs (C) and (D).

`(B) MULTIPLE INSURANCE AGREEMENTS- The Corporation may enter into more than 1 reinsurance agreement simultaneously with the approved insurance provider to facilitate the offering of the new policy.

`(C) PROCEDURES FOR SUBMISSION AND REVIEW- The Corporation shall promulgate regulations that establish procedures for the submission and review by the Board of proposals submitted to the Board under this subsection, including--

`(i) the standards applicable to a proposal under paragraph (3) (including documentation required to establish that a proposal satisfies the standards);

`(ii) procedures concerning the time limitations provided under this paragraph; and

`(iii) procedures that provide an applicant the opportunity to present the proposal to the Board in person.

`(D) REVIEW BY THE BOARD-

`(i) PERIOD FOR APPROVAL- Notwithstanding any other provision of law, a proposal submitted to the Board shall be considered to be approved unless the Board disapproves the proposal by the date that is 60 business days after the later of--

`(I) the date of submission of the completed proposal to the Board; or

`(II) the date on which the applicant provides to the Board notice of intent to modify the proposal under clause (ii)(IV).

`(ii) NOTICE OF DISAPPROVAL-

`(I) IN GENERAL- Not later than 15 days before the date on which the Board intends to announce disapproval of a proposal, the Board shall provide the applicant, by registered mail, with notice of intent to disapprove the proposal.

`(II) RIGHT TO MODIFY- An applicant that is notified under subclause (I) may modify the proposal.

`(III) ORIGINAL APPLICATION- For the purposes of this clause, any modified proposal shall be considered to be an original proposal.

`(IV) NOTICE OF INTENT TO MODIFY- Not later than 5 business days after receipt of a notice under subclause (I), an applicant that intends to modify the proposal shall so notify the Board.

`(E) TIMING- In establishing procedures under this subsection, the Board shall prescribe a reasonable deadline for the submission of proposals that approved insurance providers expect to market during the reinsurance year.

`(F) 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 or financial information for the purposes of section 552(b)(4) of title 5, United States Code.

`(ii) STANDARD OF CONFIDENTIALITY- Except as provided in clauses (iii) and (iv), 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) EXCEPTION FOR PURCHASERS OF PLANS OF INSURANCE- Clause (ii) shall not apply in the case of an approved insurance provider that elects to pay a fee to sell a plan of insurance developed by another provider under paragraph (5).

`(iv) APPROVED PROPOSALS- In lieu of publication in the Federal Register, a general summary of the content of the proposal shall be made available to other approved insurance providers at the time at which the proposal is approved by the Board, consisting of a description of--

`(I) the identity of the approved insurance provider;

`(II) the coverage provided; and

`(III) the area to be covered by the approved proposal.';

(2) by striking paragraphs (6), (8), and (10); and

(3) by redesignating paragraphs (7) and (9) as paragraphs (6) and (7), respectively.

(c) CONFORMING AMENDMENTS- Section 516(b)(1) of the Federal Crop Insurance Act (7 U.S.C. 1516(b)(1)) is amended--

(1) in subparagraph (B), by striking `; and' and inserting a semicolon;

(2) in subparagraph (C), by striking the period at the end and inserting a semicolon; and

(3) by adding at the end the following:

`(D) the salaries and expenses of the Executive Director and staff appointed under section 505(a)(6) for fiscal year 2001, but not to exceed $500,000 for the fiscal year; and'.

SEC. 302. GOOD FARMING PRACTICES.

Section 508(a)(3) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)(3)) (as amended by section 103(d)) is amended in subparagraph (A)(iii) by inserting after `good farming practices' the following: `, including scientifically sound sustainable and organic farming practices'.

SEC. 303. SANCTIONS FOR PROGRAM NONCOMPLIANCE AND FRAUD.

(a) IN GENERAL- Section 506 of the Federal Crop Insurance Act (7 U.S.C. 1506) is amended by striking subsection (n) and inserting the following:

`(n) 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 title may, after notice and an opportunity for a hearing on the record, be subject to 1 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 1 or more of the sanctions described in paragraph (3) if the person is--

`(A) a producer, agent, loss adjuster, approved insurance provider, or other person that willfully and intentionally fails to comply with a requirement of the Corporation; or

`(B) an agent, loss adjuster, approved insurance provider, or other person (other than a producer) that willfully and intentionally fails to comply with a requirement of the Standard Reinsurance Agreement.

`(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 title; or

`(ii) $10,000.

`(B) DEBARMENT-

`(i) PRODUCERS- 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--

`(I) this title;

`(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);

`(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.); and

`(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.

`(ii) 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 title.

`(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 amount of the sanction to be imposed.

`(5) DISCLOSURE OF SANCTIONS- Each policy or plan of insurance under this title shall provide notice about 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 or the Standard Reinsurance Agreement.

`(6) INSURANCE FUND- Any funds collected under this subsection shall be deposited into the insurance fund under section 516(c)(1).'.

(b) CONFORMING AMENDMENTS- Section 516(c) of the Federal Crop Insurance Act (7 U.S.C. 1516(c)) is amended by striking paragraph (1) and inserting the following:

`(1) IN GENERAL- There is established the insurance fund, which shall include (to remain available without fiscal year limitation)--

`(A) premium income;

`(B) amounts made available under subsection (a)(2); and

`(C) civil fines collected under section 506(n)(3)(A).'.

SEC. 304. OVERSIGHT OF AGENTS AND LOSS ADJUSTERS.

Section 506(q) of the Federal Crop Insurance Act (7 U.S.C. 1506(q)) is amended by adding at the end the following:

`(3) OVERSIGHT OF AGENTS AND LOSS ADJUSTERS- The Corporation shall--

`(A) develop procedures for an annual review by an approved insurance provider of the performance of each agent and loss adjuster used by the approved insurance provider;

`(B) oversee the annual review conducted by each approved insurance provider; and

`(C) consult with each approved insurance provider regarding any remedial action that is determined necessary as a result of the annual review of an agent or loss adjuster.

`(4) COMPLIANCE REPORTS- Not later than the end of each fiscal year, the Corporation shall submit, to the Committee on Agriculture of the House of Representatives, the Committee on Agriculture, Nutrition, and Forestry of the Senate, and the Board, a report concerning compliance by approved insurance providers, agents, and loss adjusters with this title, including any recommendations for legislative or administrative changes that could further improve compliance.'.

SEC. 305. ADEQUATE COVERAGE FOR STATES.

Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) (as amended by section 102(a)) is amended by adding at the end the following:

`(8) ADEQUATE COVERAGE FOR STATES-

`(A) DEFINITION OF ADEQUATELY SERVED- In this paragraph, the term `adequately served' means having a participation rate that is at least 50 percent of the national average participation rate.

`(B) REVIEW- The Board shall review the plans of insurance that are offered by approved insurance providers under this title to determine if each State is adequately served by the plans of insurance.

`(C) REPORT-

`(i) IN GENERAL- Not later than 30 days after completion of the review under subparagraph (B), the Board shall submit to Congress a report on the results of the review.

`(ii) RECOMMENDATIONS- The report shall include recommendations to increase participation in States that are not adequately served by the plans of insurance.'.

SEC. 306. RECORDS AND REPORTING.

(a) CONDITION OF OBTAINING COVERAGE- Section 508(f)(3)(A) of the Federal Crop Insurance Act (7 U.S.C. 1508(f)(3)(A)) is amended by striking `provide,' and all that follows through `sought' and inserting `provide annually records acceptable to the Secretary regarding crop acreage, acreage yields, and production for each agricultural commodity insured under this title'.

(b) COORDINATION AND USE OF RECORDS AND REPORTS- Section 506(h) of the Federal Crop Insurance Act (7 U.S.C. 1506(h)) is amended--

(1) by striking `The Corporation' and inserting the following:

`(1) IN GENERAL- The Corporation'; and

(2) by adding at the end the following:

`(2) COORDINATION AND USE OF RECORDS AND REPORTS-

`(A) COORDINATION- The Secretary shall ensure that recordkeeping and reporting requirements under this title and section 196 of the Agricultural Market Transition Act (7 U.S.C. 7333) are coordinated by the Corporation and the Farm Service Agency--

`(i) to avoid duplication of records and reports;

`(ii) to streamline procedures involved with the submission of records and reports; and

`(iii) to enhance the accuracy of records and reports.

`(B) USE- Records submitted under this title 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, and approved insurance providers for use in carrying out this title, that section, and other agricultural programs and related responsibilities.'.

SEC. 307. FEES FOR PLANS OF INSURANCE.

(a) IN GENERAL- Section 508(h) of the Federal Crop Insurance Act (7 U.S.C. 1508(h)) is amended by striking paragraph (5) and inserting the following:

`(5) FEES FOR PLANS OF INSURANCE-

`(A) FEES FOR EXISTING PLANS OF INSURANCE-

`(i) IN GENERAL- Effective beginning with the 2001 reinsurance year, if an approved insurance provider elects to sell a plan of insurance that was developed by another approved insurance provider and the plan of insurance was approved by the Board before January 1, 2000, the approved insurance provider that developed the plan of insurance shall have the right to receive a fee from the approved insurance provider that elects to sell the plan of insurance.

`(ii) AMOUNT- The amount of the fee that is payable by an approved insurance provider for a plan of insurance under clause (i) shall be--

`(I) for each of the first 5 crop years that the plan is sold, $2.00 for each policy under the plan that is sold by the approved insurance provider;

`(II) for each of the next 3 crop years that the plan is sold, $1.00 for each policy under the plan that is sold by the approved insurance provider; and

`(III) for each crop year thereafter that the plan is sold, 50 cents for each policy under the plan that is sold by the approved insurance provider.

`(B) FEES FOR NEW PLANS OF INSURANCE-

`(i) IN GENERAL- Effective beginning with the 2001 reinsurance year, if an approved insurance provider elects to sell a plan of insurance that was developed by another approved insurance provider, the plan of insurance was approved by the Board under this subsection on or after January 1, 2000, and the plan of insurance was not available at the time at which the plan of insurance was approved by the Board, the approved insurance provider that developed the plan of insurance shall have the right to receive a fee from the approved insurance provider that elects to sell the plan of insurance.

`(ii) AMOUNT-

`(I) IN GENERAL- Subject to subclause (II), the amount of the fee that is payable by an approved insurance provider for a plan of insurance under clause (i) shall be an amount that is--

`(bb) approved by the Board.

`(II) APPROVAL- The Board shall not approve the amount of a fee under clause (i) if the amount of the fee unnecessarily inhibits the use of the plan of insurance, as determined by the Board.

`(C) PAYMENTS- The Corporation shall annually--

`(i) collect from an approved insurance provider the amount of any fees that are payable by the approved insurance provider under subparagraphs (A) and (B); and

`(ii) credit any fees that are payable to an approved insurance provider under subparagraphs (A) and (B).

`(D) EXCEPTIONS- In the case of a policy developed by an approved insurance provider that does not conduct business in a State--

`(i) the approved policy may be marketed in the State by another approved insurance provider if the approved insurance provider marketing the policy pays any fee for marketing the policy imposed by the developing provider; and

`(ii) the developing provider shall not deny payment of a fee by another provider to maintain full marketing rights of the approved policy.'.

(b) FUNDING- Section 516 of the Federal Crop Insurance Act (7 U.S.C. 1516) (as amended by sections 301(c) and 303(b)) is amended--

(1) in subsection (b)(1), by adding at the end the following:

`(E) payment of fees in accordance with section 508(h)(5)(C).'; and

(2) in subsection (c)(1)(A), by inserting `and fees' after `premium income'.

SEC. 308. LIMITATION ON DOUBLE INSURANCE.

Subsection (m) of section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) (as redesignated by section 204(a)(2)) is amended by adding at the end the following:

`(3) LIMITATION ON DOUBLE INSURANCE- The Corporation may offer plans of insurance or reinsurance for only 1 agricultural commodity produced on specific acreage during a crop year, unless--

`(A) there is an established practice of double-cropping in an area, as determined by the Corporation;

`(B) the additional plan of insurance is offered with respect to an agricultural commodity that is customarily double-cropped in the area; and

`(C) the producer has a history of double cropping or the specific acreage has historically been double-cropped.'.

SEC. 309. SPECIALTY CROPS.

(a) IN GENERAL- The Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) (as amended by sections 201 through 203) is amended by adding at the end the following:

`SEC. 523. SPECIALTY CROPS.

`(a) RESEARCH REGARDING THE DEVELOPMENT OF NEW OR REVISED CROP INSURANCE POLICIES- To encourage the development of new or revised crop insurance policies and other materials for specialty crops by qualified private entities, and the submission of those insurance policies and other materials to the Corporation under section 508(h), the Specialty Crops Coordinator may--

`(1) make grants on a competitive basis for the research and development of plans of insurance for underserved specialty crops;

`(2) reimburse research costs associated with product development; and

`(3) enter into contracts on a competitive basis for the research and development of plans of insurance for underserved specialty crops.

`(b) PARTNERSHIPS FOR DEVELOPMENT OF RISK MANAGEMENT TOOLS FOR SPECIALTY CROPS-

`(1) PURPOSE- The purpose of this subsection is to authorize the Specialty Crops Coordinator, on behalf of the Corporation, to enter into partnerships with qualified public and private entities for the purpose of increasing the availability of risk management tools for producers of specialty crops.

`(2) AUTHORITY-

`(A) IN GENERAL- For each of fiscal years 2001 through 2004, the Corporation may use not more than $20,000,000 from funds in the insurance fund under section 516(c)(1) to enter into partnerships with the Cooperative State Research, Education, and Extension Service, the Agricultural Research Service, the National Oceanic and Atmospheric Administration, and other appropriate public and private entities with demonstrated capabilities in developing and implementing risk management and marketing options for specialty crops.

`(B) EXCLUSION- Amounts necessary to carry out subparagraph (A) shall not be counted toward the limitation on research and development expenses established in section 516(b)(2)(A).

`(3) OBJECTIVES- The Corporation may enter into a partnership under this subsection to--

`(A) enhance the notice, and timeliness of notice of weather conditions, that could negatively affect specialty crop yields, quality, and final product use in order to allow producers to take preventive actions to increase end-product profitability and marketability and to reduce the possibility of crop insurance claims;

`(B) develop a multifaceted approach to pest management to decrease inputs, decrease the development of pest resistance, and increase the effectiveness of pest prevention applications;

`(C) develop a multifaceted approach to fertilization to decrease inputs, decrease excessive nutrient loading to the environment, and increase application efficiency;

`(D) develop or improve techniques for planning, breeding, growing, maintaining, harvesting, storage, and shipping that will address quality and quantity challenges for specialty crops and livestock associated with year-to-year and regional variations;

`(E) provide assistance to State foresters or equivalent officials for the prescribed use of burning on private forest land for the prevention, control, and suppression of fire; and

`(F) develop other risk management tools that specialty crop producers can use to further increase their economic and production stability.

`(c) TIME PERIODS FOR PURCHASE OF COVERAGE FOR SPECIALTY CROPS-

`(1) SALES CLOSING DATE- The sales closing date for obtaining coverage for a specialty crop under this title may not expire before the end of the 120-day period beginning on the date of the final release of materials for policies from the Risk Management Agency and the Specialty Crops Coordinator.

`(2) PURCHASE DURING INSURANCE PERIOD- A producer of a specialty crop may purchase new coverage for the specialty crop, or increase coverage levels, at any time during the insurance period, subject to a 30-day waiting period for the coverage to take effect to permit an inspection to verify acceptability by the insurance provider.

`(d) STUDIES OF NEW SPECIALTY CROP INSURANCE POLICIES-

`(1) IN GENERAL- The Corporation and the Specialty Crops Coordinator authorized under section 507(g) shall jointly conduct studies of the feasibility of developing new insurance policies for specialty crops, including policies based on the cost of production or adjusted gross income, quality-based policies, or an intermediate program with a higher coverage and cost than the catastrophic risk protection offered on the date of enactment of this section.

`(2) SUBMISSION OF RESULTS- Not later than 1 year after the date of enactment of this section, and annually thereafter, the Corporation and the Specialty Crops Coordinator shall submit to Congress a report containing the results of the studies required under this subsection.

`(e) FISCAL YEARS- Subsections (b) and (c) shall apply to each of fiscal years 2001 through 2004.'.

(b) REPORT ON COVERAGE OF NEW AND SPECIALTY CROPS AND METHOD FOR PROVISION OF CATASTROPHIC RISK PROTECTION- Not later than 180 days after the date of enactment of this Act, the Secretary of Agriculture shall submit to the President, the Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report assessing--

(1)(A) the progress made by the Department of Agriculture in expanding crop insurance coverage for new and specialty crops; and

(B) the plans of the Department to continue to expand coverage for additional crops; and

(2)(A) whether provision of catastrophic risk protection by private sector insurance providers--

(i) has resulted in a uniform quality of risk protection services in all regions of the United States; and

(ii) has fulfilled the goal of increased participation in the Federal crop insurance program, particularly in States with traditionally low crop insurance participation rates and States with a high proportion of specialty crops; and

(B) whether, particularly in States described in subparagraph (A)(ii), the Secretary should resume direct provision of catastrophic risk protection and performance of loss adjustment functions through local offices of the Department.

SEC. 310. FEDERAL CROP INSURANCE IMPROVEMENT COMMISSION.

(a) IN GENERAL- Section 515 of the Federal Crop Insurance Act (7 U.S.C. 1515) is amended to read as follows:

`SEC. 515. FEDERAL CROP INSURANCE IMPROVEMENT COMMISSION.

`(a) DEFINITIONS- In this section:

`(1) COMMISSION- The term `Commission' means the Federal Crop Insurance Improvement Commission established by subsection (b).

`(2) SPECIALTY CROP- The term `specialty crop' means an agricultural commodity other than a contract commodity (as defined in section 102 of the Agricultural Marketing Transition Act (7 U.S.C. 7202)).

`(b) ESTABLISHMENT OF COMMISSION- There is established a Commission to be known as the `Federal Crop Insurance Improvement Commission'.

`(c) MEMBERSHIP-

`(1) IN GENERAL- The Commission shall be composed of the following 9 members:

`(A) The Under Secretary for Farm and Foreign Agricultural Services of the Department.

`(B) The manager of the Corporation.

`(C) The Chief Economist of the Department or a person appointed by the Chief Economist.

`(D) An employee of the Office of Management and Budget, appointed by the Director of the Office of Management and Budget.

`(E) A representative of the National Association of Insurance Commissioners, experienced in insurance regulation, appointed by the National Association of Insurance Commissioners.

`(F) Representatives of 3 approved insurance providers (the 3 approved insurance providers being elected by majority vote of all approved insurance providers), appointed by the 3 approved insurance providers.

`(G) A representative of a private nonprofit organization designated by the manager of the Corporation--

`(i) that is organized and has operated for at least 5 consecutive years as an insurance advisory and statistical agent organization for crop insurance written in the United States;

`(ii) that is licensed and approved as a statistical agent by substantially all States in which federally reinsured crop insurance is sold; and

`(iii) the activities of which have included--

`(I) the accumulation and analysis of loss expenses and other crop insurance statistics;

`(II) the development of forms for crop insurance policies; and

`(III) the development of procedures for loss adjustment;

appointed by the organization.

`(2) TIME OF APPOINTMENT- The members of the Commission shall be appointed not later than 60 days after the date of enactment of the Risk Management for the 21st Century Act.

`(3) TERM- A member of the Commission shall serve for the life of the Commission.

`(d) DUTIES- The Commission shall study the following subjects:

`(1) The extent to which approved insurance providers should bear the risk of loss for federally subsidized crop insurance.

`(2) Whether the Corporation should--

`(A) continue to provide financial assistance for the benefit of agricultural producers by reinsuring coverage written by approved insurance providers; or

`(B) provide assistance in another form, such as by acting as an excess insurer.

`(3) The extent to which development of new insurance products should be undertaken by the private sector, including development of insurance products for specialty crops.

`(4) The use by the Corporation of private sector resources under section 507(c).

`(5) The progress of the Corporation in reducing administrative and operating costs of approved insurance providers under section 508(k)(5).

`(6) The identification of methods, and of organizational, statutory, and structural changes, to enhance and improve--

`(A) delivery of reasonably priced crop insurance products to agricultural producers;

`(B) loss adjustment procedures;

`(C) good farming practices;

`(D) the establishment of premiums; and

`(E) compliance with this title (including regulations issued under this title, the terms and conditions of insurance coverage, and adjustments of losses).

`(e) COMMISSION OPERATIONS-

`(1) CHAIRPERSON; VOTING- The Under Secretary for Farm and Foreign Agricultural Services of the Department of Agriculture shall--

`(A) serve as Chairperson of the Commission; and

`(B) vote in the case of a tie.

`(2) MEETINGS-

`(A) IN GENERAL- The Commission shall meet regularly, but not less than 6 times per year.

`(B) TIME- A meeting may be called--

`(i) at any time, by the Chairperson; or

`(ii) notwithstanding section 10(f) of the Federal Advisory Committee Act (5 U.S.C. App.), by any 3 members of the Commission, if those members give notice to the Commission not later than 10 days before the date of the meeting.

`(3) DISCLOSURE-

`(A) IN GENERAL- To the extent that the records, papers, or other documents received, prepared, or maintained by the Commission are subject to public disclosure, the documents shall be available for public inspection and copying at the Office of Risk Management.

`(B) EXCEPTIONS- Section 10(a) of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to--

`(i) a meeting of the Commission; or

`(ii) any disclosure of records, reports, transcripts, minutes, appendixes, working papers, drafts, studies, agenda, or other similar documents containing such information as is not required under section 10(b) of that Act.

`(C) APPLICABILITY- The exceptions described in subparagraph (B) shall not exempt the Commission from any requirement of--

`(i) section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C. App.) (to the extent of giving public notice of its meetings);

`(ii) section 10(a)(3) of that Act (to the extent of allowing interested persons to appear and to present or file statements); or

`(iii) section 10(c) of that Act.

`(4) COMPENSATION-

`(A) IN GENERAL- Except as provided in subparagraph (B), a member of the Commission who is employed by the Department or by another agency, department, or office of the Federal Government shall receive no additional compensation for the services of the employee as a member of the Commission.

`(B) EXPENSES- A member of the Commission may be allowed necessary traveling and subsistence expenses when engaged in business of the Commission.

`(C) NON-FEDERAL MEMBERS- A member of the Commission who is not employed by the Federal Government, when on the business of the Commission away from the home or regular place of business of the member, shall be paid--

`(i) compensation for the services of the member at the daily equivalent of the annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code; and

`(ii) necessary traveling and subsistence expenses (or a per diem allowance in lieu of subsistence expenses) as authorized by section 5703 of title 5, United States Code, for persons employed intermittently in the Federal Government service.

`(5) MISCELLANEOUS ACCOMMODATIONS-

`(A) OFFICE SPACE- The Under Secretary for Farm and Foreign Agricultural Services (or, on delegation by the Under Secretary for Farm and Foreign Agricultural Services, the manager of the Corporation) shall arrange for the Commission to occupy offices and meeting rooms at the offices of the Department in the District of Columbia, in accordance with section 5(b)(5) of the Federal Advisory Committee Act (5 U.S.C. App.).

`(B) SUPPORT SERVICES- The Department shall provide support services for the Commission in accordance with section 12 of the Federal Advisory Committee Act (5 U.S.C. App.).

`(6) STAFF-

`(A) IN GENERAL- The Commission may employ staff and retain the services of professionals such as accountants, actuaries, attorneys, economists, and management consultants to assist the Commission in carrying out its duties under this section.

`(B) COMPENSATION- In accordance with subparagraph (C), the Commission--

`(i) may compensate staff hired and professionals retained under subparagraph (A) on such terms and in such amounts as are customary and reasonable within the private sector; and

`(ii) shall not be limited in any respect to terms, amounts, and limitations related to compensation that would apply if the Commission were retaining contractors to or for a governmental entity.

`(C) LIMITATION ON COMPENSATION- The aggregate of all staff and professional compensation shall not exceed $4,000,000 per year.

`(D) REIMBURSEMENT- A member of the Commission may be reimbursed for the costs of professional services obtained by the member to assist in the work of the member for the Commission, except that--

`(i) no reimbursement (other than travel and subsistence expenses) shall be allowed with respect to any services rendered by any person otherwise employed by the Federal Government;

`(ii) a majority of the Commission shall approve in advance the retention by a member of professional services, including the terms of compensation of the professional;

`(iii) the services to be reimbursed shall relate exclusively to the work of the Commission;

`(iv) the work product of any professional hired under this paragraph shall be available to the Commission and all professionals engaged by the Commission;

`(v) no reimbursement may be made without approval by a majority of the Commission; and

`(vi) the aggregate amount of all such services for all members of the Commission under this subparagraph shall not exceed $1,000,000 for each fiscal year.

`(7) SOURCE OF FUNDS- All expenses of the Commission, including payments made under paragraphs (4) and (6), shall be paid from the insurance fund established under section 516.

`(f) FINAL REPORT-

`(1) IN GENERAL- Not later than 2 years after the date of enactment of the Risk Management for the 21st Century Act, the Commission shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a final report on the study under subsection (d).

`(2) COPIES- The Commission shall provide copies of the final report to--

`(A) the Secretary;

`(B) the Board; and

`(C) the Comptroller General of the United States.

`(3) INTERIM REPORTS- To expedite completion of the work of the Commission, the Commission may submit 1 or more interim reports or reports on 1 or more of the subjects to be studied.

`(g) TERMINATION- The Commission shall terminate on the earlier of--

`(1) 60 days after the date on which the Commission submits the final report under subsection (f); or

`(2) September 30, 2004.'.

(b) CONFORMING AMENDMENTS- Section 516 of the Federal Crop Insurance Act (as amended by section 203(b)(2)) is amended--

(1) in subsection (a)(2), by adding at the end the following:

`(D) all necessary amounts to fund the operations of the Commission authorized under section 515.'; and

(2) in subsection (b), by adding at the end the following:

`(3) FUNDS FOR COMMISSION- For each of fiscal years 2001 through 2004, the Corporation shall pay from the insurance fund established under subsection (c) such sums as are necessary to fund the operation of the Commission authorized under section 515.'.

SEC. 311. HIGHLY ERODIBLE LAND AND WETLAND CONSERVATION.

(a) HIGHLY ERODIBLE LAND- Section 1211(3) of the Food Security Act of 1985 (16 U.S.C. 3811(3)) is amended--

(1) in subparagraph (C), by striking `or' at the end;

(2) in subparagraph (D), by striking the period at the end and inserting `; or'; and

(3) by adding at the following:

`(E) crop or revenue insurance, or a risk management payment, under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq).'.

(b) WETLAND CONSERVATION- Section 1221(b)(3) of the Food Security Act of 1985 (16 U.S.C. 3821(b)(3)) is amended by adding at the end the following:

`(E) Crop or revenue insurance, or a risk management payment, under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq).'.

SEC. 401. EFFECTIVE DATES.

(a) IN GENERAL- Except as provided in subsections (b) and (c)(2) and section 402(a), this Act and the amendments made by this Act take effect on the date of enactment of this Act.

(b) DELAYED OBLIGATION- The Federal Crop Insurance Corporation shall not obligate funds to carry out the amendments made by sections 102, 103, 105, 106, 201 through 204, 309, and 310 until October 1, 2000.

(c) REGULATIONS-

(1) IN GENERAL- Not later than 60 days after the date of enactment of this Act, the Secretary of Agriculture shall promulgate regulations to carry out this Act and the amendments made by this Act.

(2) VOIDING OF BULLETIN-

(A) IN GENERAL- Bulletin MGR-99-004, issued by the Administrator of the Risk Management Agency of the Department of Agriculture, is void.

(B) TRANSITIONAL PROVISION- The original terms of the crop revenue coverage plan of insurance, as published on July 14, 1998 (63 Fed. Reg. 37829), shall remain in effect for the 1999 crop year.

(C) EFFECTIVE DATE- This paragraph takes effect on October 1, 2000.

SEC. 402. TERMINATION OF AUTHORITY.

(a) EFFECTIVE DATE- This section and the amendments made by this section take effect on September 30, 2004.

(b) REPEAL-

(1) IN GENERAL- The amendments made by sections 102, 103, 105, 106, 203(b), and 310 are repealed.

(2) APPLICABILITY- The Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) and section 196 of the Agricultural Market Transition Act (7 U.S.C. 7333) shall be applied and administered as if the provisions described in paragraph (1) had not been enacted.

(3) CONFORMING AMENDMENT- Section 508(a) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)) is amended by redesignating paragraph (8) (as added by section 305) as paragraph (7).

(c) PILOT PROGRAMS- Section 522 of the Federal Crop Insurance Act (as added by sections 201 through 203) is amended--

(1) in subsection (a)--

(A) in paragraph (3)--

(i) in subparagraph (D), by adding `and' at the end;

(ii) by striking subparagraphs (E) and (G);

(iii) in subparagraph (F), by striking `; and' and inserting a period; and

(iv) by redesignating subparagraph (F) as subparagraph (E);

(B) by striking paragraphs (4), (6), and (7); and

(C) by redesignating paragraphs (5) and (8) as paragraphs (4) and (5), respectively;

(2) in subsection (b)--

(A) by striking paragraph (2); and

(B) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and

(3) by striking subsection (c).

(d) BOARD OF DIRECTORS OF CORPORATION- Section 516(b)(1) of the Federal Crop Insurance Act (7 U.S.C. 1516(b)(1)) (as amended by sections 301(c) and 307(b)(1)) is amended--

(1) in subparagraph (C), by inserting `and' after the semicolon;

(2) by striking subparagraph (D); and

(3) by redesignating subparagraph (E) as subparagraph (D).

(e) SPECIALTY CROPS-

(1) IN GENERAL- Section 523 of the Federal Crop Insurance Act (as added by section 309(a)) is amended--

(A) in subsection (b)--

(i) by striking paragraph (2); and

(ii) by redesignating paragraph (3) as paragraph (2);

(B) by striking subsections (c) and (e); and

(C) by redesignating subsection (d) as subsection (c).

(2) REPORT- Section 309 of this Act is amended by striking subsection (b).

(f) FUNDING- Neither the Secretary of Agriculture nor the Federal Crop Insurance Corporation may use the funds of the insurance fund under section 516(c)(1) of the Federal Crop Insurance Act (7 U.S.C. 1516(c)(1)), the funds of the Commodity Credit Corporation, or funds under any provision of law to carry out a provision repealed or struck by this section.