S 629 IS

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

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

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

SECTION. 1. SHORT TITLE.

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

SEC. 2. COST OF PRODUCTION INSURANCE COVERAGE.

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

(1) in subsection (c), by striking paragraph (5) and inserting the following:

`(5) EXPECTED MARKET PRICE-

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

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

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

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

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

(2) in subsection (h), by striking paragraph (6) and inserting the following:

`(6) COST OF PRODUCTION INSURANCE COVERAGE-

`(A) IN GENERAL- The Corporation shall offer a cost of production plan of insurance that--

`(i) allows producers to select a dollar amount of coverage per acre of an agricultural commodity for each production area described in subparagraph (B) designated by the Corporation; and

`(ii) is based on the actual or expected cost of producing the agricultural commodity.

`(B) SIZE OF PRODUCTION AREA- For the purposes of this paragraph, a production area shall be determined based on the similar characteristics of the acreage and the use of similar farming practices to produce the agricultural commodity and shall not be limited by the boundaries of a county.

`(C) CONSULTATION WITH STATE COMMITTEES- Prior to designating a production area described in subparagraph (B), the Corporation shall consult with the appropriate State committee.

`(D) AMOUNT OF COVERAGE- Notwithstanding subsection (c)(4), the dollar amount of coverage per acre of an agricultural commodity shall not exceed 90 percent of the cost of production of the agricultural commodity, as determined by the Corporation, in the production area described in subparagraph (B).'.

SEC. 3. YIELD DETERMINATIONS.

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

(1) in subparagraph (A)--

(A) by striking `Subject to subparagraph (B),' and inserting the following:

`(i) IN GENERAL- Subject to clause (ii) and subparagraph (B),';

(B) by adding at the end the following:

`(ii) ROTATION PRACTICES-

`(I) DEFINITION OF A PRODUCER THAT HAS SUFFERED A LOSS DUE TO A NATURAL DISASTER- In this clause, the term `a producer that has suffered a loss due to a natural disaster' means a producer that has suffered a loss due to a natural disaster with respect to a crop that has resulted in a substantial reduction in the producer's actual production history with respect to the crop, as determined by the Corporation.

`(II) YIELD BASED ON ACTUAL PRODUCTION HISTORY- Subject to subparagraph (B), in the case of a producer that has adopted an acceptable rotation practice, involving 3 or more agricultural commodities, the yield for a crop shall be based on the actual production history for the crop for the 3 preceding crop years during which the crop was produced on the farm building up to a production data base of 10 crop years for which the actual production history is established.

`(III) NATURAL DISASTERS- For the purposes of calculating the actual production history of an agricultural commodity under this clause, a producer that has suffered a loss due to a natural disaster with respect to the crop may exclude 1 year of production history for each 4 years of production history for the crop for which the producer has purchased crop insurance.'; and

(2) in subparagraph (B)--

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

`(i) a yield';

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

(C) by adding at the end the following:

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

`(I) a person that has not been actively engaged in farming for a share of the production of the insured crop for more than 2 crop years, as determined by the Secretary;

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

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

SEC. 4. NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

(a) OPERATION AND ADMINISTRATION OF PROGRAM- Section 196(a) of the Agricultural Market Transition Act (7 U.S.C. 7333(a)) is amended--

(1) in the first sentence of paragraph (1), by striking `to provide coverage' and all that follows through `Federal Crop Insurance Act (7 U.S.C. 1508(b))'; and

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

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

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

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

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

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

(c) LOSS REQUIREMENTS- Section 196(c) of the Agricultural Market Transition Act (7 U.S.C. 7333(c)) is amended--

(1) by striking paragraph (1);

(2) in paragraph (2)--

(A) by striking `Subject to paragraph (1), the' and inserting `The'; and

(B) by striking `because of drought, flood, or other natural disaster, as determined by the Secretary';

(3) in paragraph (3)--

(A) by striking `Subject to paragraph (1), the' and inserting `The'; and

(B) by striking `, because of drought, flood, or other natural disaster as determined by the Secretary,';

(4) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively; and

(5) by adding at the end the following:

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

(d) PAYMENTS- Section 196(d)(2)(B) of the Agricultural Market Transition Act (7 U.S.C. 7333(d)(2)(B)) is amended by striking `55 percent of the average market price for the crop' and inserting `100 percent of the average market price for the crop'.

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

`(e) YIELD DETERMINATIONS-

`(1) ESTABLISHMENT- The Secretary shall establish farm yields for the purposes of providing noninsured crop disaster assistance under this section.

`(2) ACTUAL YIELDS- Subject to paragraph (3), the Secretary shall determine yields for an eligible crop on the basis of the quantity of production per acre for the crop for the farm for each of the 5 crop years for which the crop was planted immediately preceding the crop year, excluding--

`(A) the crop year with the highest yield per acre on the farm; and

`(B) the crop year with the lowest yield per acre on the farm.

`(3) STATE OR COUNTY YIELDS- If insufficient records exist, as determined by the Secretary, to determine the actual yield pursuant to paragraph (2), the Secretary may establish a per acre yield based on State or county yields for an eligible crop on the basis of--

`(A) historical yields, as adjusted by the Secretary to correct for abnormal factors affecting the yields in the historical period; or

`(B) the Secretary's estimate of actual yields for the crop year involved if historical yield data are not available.'.

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

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

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

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

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

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

`(j) NEW ELIGIBLE CROPS-

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

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

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

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

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

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

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

`(k) SERVICE FEE- To be eligible to receive assistance for an eligible crop for a crop year under this section, a producer shall pay to the Secretary a service fee of $50 for each eligible crop.'.