FEDERAL CROP INSURANCE ACT AS AMENDED

7 U.S.C. 1501 et seq., Chapter 36


Amendments of Public Law 105-185, June 23, 1998 (112 Stat. 523), the "Agricultural Research, Extension,
and Education Reform Act of 1998" (are underlined).

Amendments of Public Law 105-277, Oct. 21, 1998 (112 Stat. 2681), the "Omnibus Consolidated
and Emergency Supplemental Appropriations Act, 1999 - Division A: Omnibus Consolidated
Appropriations - Agriculture, Rural Development, Food and Drug Administration, and Related
Agencies Appropriations Act, 1999" (are bold).

Sec. 1501. Short title; application of other laws

    This chapter may be cited as the "Federal Crop Insurance Act''.  Except as otherwise expressly
provided the provisions in titles I to IV, inclusive, shall not apply with respect to this chapter, and
the term "Act'' wherever it appears in such titles shall not be construed to include this chapter.

(Feb. 16, 1938, ch. 30, title V, Sec. 501, 52 Stat. 72.)

Sec. 1502. Purpose and definitions

(a)  Purpose

It is the purpose of this chapter to promote the national welfare by improving the economic
stability of agriculture through a sound system of crop insurance and providing the means for the
research and experience helpful in devising and establishing such insurance.

(b)  Definitions

    As used in this chapter:

        (1)  Additional coverage

               The term "additional coverage'' means a plan of crop insurance coverage providing a
          level of coverage greater than the level available under catastrophic risk protection.

        (2) Approved insurance provider

               The term "approved insurance provider'' means a private insurance provider that has
        been approved by the Corporation to provide insurance coverage to producers participating
        in the Federal crop insurance program established under this chapter.

        (3)  Board

                The term "Board'' means the Board of Directors of the Corporation established under
        section 1505(a) of this title.

        (4)    Corporation

                The term "Corporation'' means the Federal Crop Insurance Corporation established
        under section 1503 of this title.

        (5)   Department

                The term "Department'' means the United States Department of Agriculture.

        (6)    Loss ratio

                The term "loss ratio'' means the ratio of all sums paid by the Corporation as indemnities
        under any eligible crop insurance policy to that portion of the premium designated for
        anticipated losses and a reasonable reserve, other than that portion of the premium
        designated for operating and administrative expenses.

        (7)    Secretary

                The term "Secretary'' means the Secretary of Agriculture.

       (8)     Transitional yield

                The term "transitional yield'' means the maximum average production per acre or
        equivalent measure that is assigned to acreage for a crop year by the Corporation in
        accordance with the regulations of the Corporation whenever the producer fails--
                (A) to certify that acceptable documentation of production and acreage for the crop year
                is in the possession of the producer; or
                (B) to present the acceptable documentation on the demand of the Corporation or an
                insurance company reinsured by the Corporation.

(Feb. 16, 1938, ch. 30, title V, Sec. 502, 52 Stat. 72; June 21, 1941, ch. 214, Sec. 1, 55 Stat. 255;
Aug. 1, 1947, ch. 440, Sec. 4, 61 Stat. 719; Oct. 13, 1994, Pub. L. 103-354, title I, Sec. 102(a),
108 Stat. 3180.)

Sec. 1503. Federal Crop Insurance Corporation; creation; offices

    To carry out the purposes of this chapter, there is hereby created as an agency of and within
the Department a body corporate with the name "Federal Crop Insurance Corporation''. The
principal office of the Corporation shall be located in the District of Columbia, but there may be
established agencies or branch offices elsewhere in the United States under rules and regulations
prescribed by the Board.

(Feb. 16, 1938, ch. 30, title V, Sec. 503, 52 Stat. 72; Oct. 13, 1994, Pub. L. 103-354, title I, Sec.
102(b)(1), (4)(A), (B), 108 Stat. 3180, 3181.)

Sec. 1504. Capital stock of Corporation

(a) Subscription by United States

    The Corporation shall have a capital stock of $500,000,000 subscribed by the United States
of America, payment for which shall, with the approval of the Secretary, be subject to call in
whole or in part by the Board.

(b) Appropriations

    There is authorized to be appropriated such sums as are necessary for the purpose of
subscribing to the capital stock of the Corporation.

(c) Issuance of stock to Secretary of the Treasury

    Receipts for payments by the United States of America for or on account of such stock shall
be issued by the Corporation to the Secretary of the Treasury and shall be evidence of the stock
ownership by the United States of America.

(d) Cancellation of receipts; nonliability of Corporation

    Within thirty days after September 26, 1980, the Secretary of the Treasury shall cancel,
without consideration, receipts for payments for or on account of the stock of the Corporation
outstanding on September 26, 1980, and such receipts shall cease to be liabilities of the
Corporation.

(Feb. 16, 1938, ch. 30, title V, Sec. 504, 52 Stat. 72; Aug. 25, 1949, ch. 512, Secs. 4, 6, 63 Stat.
665; June 16, 1977, Pub. L. 95-47, 91 Stat. 228; Nov. 15, 1977, Pub. L. 95-181, Sec. 1, 91 Stat.
1373; Sept. 26, 1980, Pub. L. 96-365, title I, Sec. 101, 94 Stat. 1312; Oct. 13, 1994, Pub. L.
103-354, title I, Sec. 102(b)(2), (4)(C), 108 Stat. 3180, 3181.)

Sec. 1504a. Capitalization of Corporation

    The payment for capital stock in the Federal Crop Insurance Corporation shall be effected by
transfer of funds on the books of the Treasury Department to the credit of the Corporation.

Sec. 1505. Management of Corporation

(a) Establishment, composition, and appointment of Board

    The management of the Corporation shall be vested in a Board subject to the general
supervision of the Secretary. The Board shall consist of the manager of the Corporation, the
Under Secretary of Agriculture responsible for the Federal crop insurance program, one
additional Under Secretary of Agriculture (as designated by the Secretary of Agriculture), one
person experienced in the crop insurance business who is not otherwise employed by the Federal
Government, and three active farmers who are not otherwise employed by the Federal
Government. The Board shall be appointed by, and hold office at the pleasure of, the Secretary.
The Secretary shall not be a member of the Board. The Secretary, in appointing the three active
farmers who are not otherwise employed by the Federal Government, shall ensure that such
members are policyholders and are from different geographic areas of the United States, in order
that diverse agricultural interests in the United States are at all times represented on the Board.

(b) Vacancies

    Vacancies in the Board so long as there shall be four members in office shall not impair the
powers of the Board to execute the functions of the Corporation, and four of the members in
office shall constitute a quorum for the transaction of the business of the Board.

(c) Compensation

    The Directors of the Corporation who are employed in the Department shall receive no
additional compensation for their services as such Directors but may be allowed necessary
traveling and subsistence expenses when engaged in business of the Corporation, outside of the
District of Columbia. The Directors of the Corporation who are not employed by the Federal
Government shall be paid such compensation for their services as Directors as the Secretary shall
determine, but such compensation shall not exceed the daily equivalent of the rate prescribed for
grade GS-18 under section 5332 of title 5 when actually employed, and actual necessary traveling
and subsistence expenses, or a per diem allowance in lieu of subsistence expenses, as authorized
by section 5703 of title 5 for persons in Government service employed intermittently, when on
the business of the Corporation away from their homes or regular places of business.

(d) Manager of Corporation

    The manager of the Corporation shall be its chief executive officer, with such power and
authority as may be conferred by the Board. The manager shall be appointed by, and hold office
at the pleasure of, the Secretary.

(Feb. 16, 1938, ch. 30, title V, Sec. 505, 52 Stat. 72; Aug. 1, 1947, ch. 440, Sec. 8, 61 Stat. 719;
Aug. 25, 1949, ch. 512, Sec. 7, 63 Stat. 665; Sept. 26, 1980, Pub. L. 96-365, title I, Sec. 102, 94
Stat. 1312; Oct. 13, 1994, Pub. L. 103-354, title I, Secs. 102(b)(3), (4), 103, 115(a), 108 Stat.
3181, 3204.)

Sec. 1506. General powers

(a)  Succession

    The Corporation shall have succession in its corporate name.

(b) Corporate seal

    The Corporation may adopt, alter, and use a corporate seal, which shall be judicially noticed.

(c) Property

    The Corporation may purchase or lease and hold such real and personal property as it deems
necessary or convenient in the transaction of its business, and may dispose of such property held
by it upon such terms as it deems appropriate.

(d) Suit

    The Corporation, subject to the provisions of section 1508(j) of this title, may sue and be
sued in its corporate name, but no attachment, injunction, garnishment, or other similar process,
mesne or final, shall be issued against the Corporation or its property. The district courts of the
United States, including the district courts of the District of Columbia and of any territory or
possession, shall have exclusive original jurisdiction, without regard to the amount in
controversy, of all suits brought by or against the Corporation. The Corporation may intervene in
any court in any suit, action, or proceeding in which it has an interest. Any suit against the
Corporation shall be brought in the District of Columbia, or in the district wherein the plaintiff
resides or is engaged in business.

(e) Bylaws and regulations

    The Corporation may adopt, amend, and repeal bylaws, rules, and regulations governing the
manner in which its business may be conducted and the powers granted to it by law may be
exercised and enjoyed.

(f) Mails

    The Corporation shall be entitled to the use of the United States mails in the same manner as
the other executive agencies of the Government.

(g) Assistance

    The Corporation, with the consent of any board, commission, independent establishment, or
executive department of the Government, including any field service thereof, may avail itself of
the use of information, services, facilities, officials, and employees thereof in carrying out the
provisions of this chapter.

(h) Data collection

    The Corporation shall assemble data for the purpose of establishing sound actuarial bases for
insurance on agricultural commodities.

(i) Expenditures

    The Corporation shall determine the character and necessity for its expenditures under this
chapter and the manner in which they shall be incurred, allowed, and paid, without regard to the
provisions of any other laws governing the expenditure of public funds and such determinations
shall be final and conclusive upon all other officers of the Government.

(j) Settling claims

    The Corporation shall have the authority to make final and conclusive settlement and
adjustment of any claim by or against the Corporation or a fiscal officer of the Corporation.

(k) Other powers

    The Corporation shall have such powers as may be necessary or appropriate for the exercise of
the powers herein specifically conferred upon the Corporation and all such incidental powers as are
customary in corporations generally.

(l) Contracts

    The Corporation may enter into and carry out contracts or agreements, and issue regulations,
necessary in the conduct of its business, as determined by the Board. State and local laws or rules
shall not apply to contracts, agreements, or regulations of the Corporation or the parties thereto to
the extent that such contracts, agreements, or regulations provide that such laws or rules shall not
apply, or to the extent that such laws or rules are inconsistent with such contracts, agreements, or
regulations.

(m) Submission of certain information

    (1) Social security account and employer identification numbers

         The Corporation shall require, as a condition of eligibility for participation in the multiple
    peril crop insurance program, submission of social security account numbers, subject to the
    requirements of section 405(c)(2)(C)(iii) of title 42, and employer identification numbers,
    subject to the requirements of section 6109(f) of title 26.

    (2) Notification by policyholders

         Each policyholder shall notify each individual or other entity that acquires or holds a
     substantial beneficial interest in such policyholder of the requirements and limitations under
     this chapter.

    (3) Identification of holders of substantial interests

         The Manager of the Corporation may require each policyholder to provide to the
     Manager, at such times and in such manner as prescribed by the Manager, the name of each
     individual that holds or acquires a substantial beneficial interest in the policyholder.

   (4) "Substantial beneficial interest" defined

         For purposes of this subsection, the term "substantial beneficial interest" means not less
     than 5 percent of all beneficial interests in the policyholder.

(n) Penalties

     (1)  False information

          If a person willfully and intentionally provides any false or inaccurate information to the
     Corporation or to any insurer with respect to an insurance plan or policy under this chapter, the
     Corporation may, after notice and an opportunity for a hearing on the record--
              (A) impose a civil fine of not to exceed $10,000 on the person; and
              (B) disqualify the person from purchasing catastrophic risk protection or receiving
          noninsured assistance for a period of not to exceed 2 years, or from receiving any other
          benefit under this chapter for a period of not to exceed 10 years.

    (2) Assessment of penalty

         In assessing penalties under this subsection, the Corporation shall consider the gravity of
     the violation.

(o) Actuarial soundness

     (1) Projected loss ratio as of October 1, 1995

            The Corporation shall take such actions as are necessary to improve the actuarial
     soundness of Federal multiperil crop insurance coverage made available under this chapter to
     achieve, on and after October 1, 1995, an overall projected loss ratio of not greater than 1.1,
     including–
                (A) instituting appropriate requirements for documentation of the actual production
            history of insured producers to establish recorded or appraised yields for Federal crop
            insurance coverage that more accurately reflect the associated actuarial risk, except that
            the Corporation may not carry out this paragraph in a manner that would prevent
            beginning farmers (as defined by the Secretary) from obtaining Federal crop insurance;
                (B) establishing in counties, to the extent practicable, a crop insurance option based on
             area yields in a manner that allows an insured producer to qualify for an indemnity if a
             loss has occurred in a specified area in which the farm of the insured producer is located;
                (C) establishing a database that contains the social security account and employee
             identification numbers of participating producers, agents, and loss adjusters and using the
             numbers to identify insured producers, agents, and loss adjusters who are high risk for
             actuarial purposes and insured producers who have not documented at least 4 years of
             production history, to assess the performance of insurance providers, and for other
             purposes permitted by law; and
                (D) taking any other measures authorized by law to improve the actuarial soundness of
             the Federal crop insurance program while maintaining fairness and effective coverage for

     (2)  Projected loss ratio as of October 1, 1998

            The Corporation shall take such actions, including the establishment of adequate
      premiums, as are necessary to improve the actuarial soundness of Federal multiperil crop
      insurance made available under this chapter to achieve, on and after October 1, 1998, an
      overall projected loss ratio of not greater than 1.075. agricultural producers.

      (3) Nonstandard classification system

                   To the extent that the Corporation uses the nonstandard classification system, the
            Corporation shall apply the system to all insured producers in a fair and consistent manner.

(p) Regulations

    The Secretary and the Corporation are each authorized to issue such regulations as are
necessary to carry out this chapter.

(q) Program compliance

    (1)  Timeliness

          The Corporation shall work actively with approved insurance providers to address
program compliance and integrity issues as the issues develop.

    (2) Notification of compliance problems

          The Corporation shall notify in writing any approved insurance provider with whom the
     Corporation has an agreement under this chapter of any error, omission, or failure to follow
     Corporation regulations or procedures for which the approved insurance provider may be
     responsible and which may result in a debt owed the Corporation. The notice shall be given
     within 3 years of the end of the insurance period during which the error, omission, or failure is
     alleged to have occurred, except that this time limit shall not apply with respect to errors,
     omissions, or procedural violations that are willful or intentional. The failure to timely provide
     the notice required under this subsection shall relieve the approved insurance provider from
     the debt owed the Corporation.

(r) Purchase of American-made equipment and products

     (1)  Sense of Congress

          It is the sense of Congress that, to the greatest extent practicable, all equipment and
     products purchased by the Corporation using funds made available to the Corporation should
     be American-made.

    (2) Notice requirement

          In providing financial assistance to, or entering into any contract with, any entity for the
     purchase of equipment and products to carry out this chapter, the Corporation, to the greatest
     extent practicable, shall provide to the entity a notice describing the statement made in
     paragraph (1).

(s) Procedures for Responding to Certain Inquiries
          (1) Procedures required.--The Corporation shall establish procedures under which the
     Corporation will provide a final agency determination in response to an inquiry regarding the
     interpretation by the Corporation of this title or any regulation issued under this title.
          (2) Implementation.--Not later than 180 days after the date of enactment of this subsection,
     the Corporation shall issue regulations to implement this subsection.  At a minimum, the
     regulations shall establish--
                   (A) the manner in which inquiries described in paragraph (1) are required to be submitted
          to the Corporation; and
                   (B) a reasonable maximum number of days within which the Corporation will respond to
          all inquiries.
          (3) Effect of failure to timely respond.--If the Corporation fails to respond to an inquiry in
     accordance with the procedures established pursuant to the subsection, the person requesting
     the interpretation of this title or regulation may assume the interpretation is correct for the
     applicable reinsurance year.

SEC. 1506 note.  SEC. 536. REQUIRED TERMS AND CONDITIONS OF STANDARD
REINSURANCE AGREEMENTS.

(a) Definitions.--In this section, the terms "approved insurance provider" and "Corporation" have
the meanings given the terms in section 502(b) of the Federal Crop Insurance Act (7 U.S.C.
1502(b)).
(b) Terms and Conditions.--
          (1) Incorporation of amendments.--For each of the 1999 and subsequent reinsurance years,
     the Corporation shall ensure that each Standard Reinsurance Agreement between an approved
     insurance provider and the Corporation reflects the amendments to the Federal Crop Insurance
     Act (7 U.S.C. 1501 et seq.) that are made by this subtitle to the extent the amendments are
     applicable to approved insurance providers.
          (2) Retention of existing provisions.--Except to the extent necessary to implement the
     amendments made by this subtitle, each Standard Reinsurance Agreement described in
     paragraph (1) shall contain the following provisions of the Standard Reinsurance Agreement
     for the 1998 reinsurance year:
                   (A) Section II, concerning the terms of reinsurance and underwriting gain and loss for an
          approved insurance provider.
                   (B) Section III, concerning the terms for subsidies and administrative fees for an
          approved insurance provider.
                   (C) Section IV, concerning the terms for loss adjustment for an approved insurance
          provider under catastrophic risk protection.
                   (D) Section V.C., concerning interest payments between the Corporation and an approved
          insurance provider.
                   (E) Section V.I.5, concerning liquidated damages.
(c) Implementation.--To implement this subtitle and the amendments made by this subtitle, the
Corporation is not required to amend provisions of the Standard Reinsurance Agreement not
specifically affected by this subtitle or an amendment made by this subtitle.
 

SEC. 1506 note.  SEC. 537 EFFECTIVE DATE.
Except as provided in Section 535, this subtitle and the amendments made by this subtitle take
effect on July 1, 1998.

(Feb. 16, 1938, ch. 30, title V, Sec. 506, 52 Stat. 73; June 21, 1941, ch. 214, Sec. 2, 55 Stat. 255;
Aug. 1, 1947, ch. 440, Sec. 7, 61 Stat. 719; Aug. 25, 1949, ch. 512, Sec. 8, 63 Stat. 665; Sept. 26,
1980, Pub. L. 96-365, title I, Secs. 103, 107(a), 94 Stat. 1313, 1317; Nov. 28, 1990, Pub. L.
101-624, title XXII, Secs. 2201(a), 2202, 104 Stat. 3951, 3954; Dec. 13, 1991, Pub. L. 102-237,
title VI, Sec. 601(1), (2), 105 Stat. 1878; Aug. 10, 1993, Pub. L. 103-66, title XIV, Sec. 1403(a),
107 Stat. 333; Oct. 13, 1994, Pub. L. 103-354, title I, Secs. 104, 119(f)(1), 108 Stat. 3181, 3208;
Pub. L. 105-185, title V, Sec. 533, June 23, 1998, 112 Stat. 583.)

Secs. 1506a, 1506b. Omitted

Codification

Section 1506a, act July 30, 1947, ch. 356, title II, Sec. 202, 61 Stat. 550, which related to
authority of Federal Crop Insurance Corporation to make expenditures, was from the Department
of Agriculture Appropriation Act, 1948, and was not repeated in subsequent appropriation acts.
 Section 1506b, acts June 29, 1954, ch. 409, title II, Sec. 201, 68 Stat. 317; May 23, 1955, ch.
43, title II, Sec. 201, 69 Stat. 60; June 4, 1956, ch. 355, title II, Sec. 201, 70 Stat. 238, which
provided that crop inspection costs and loss adjustments could be considered as nonadministrative
or nonoperating expenses, was from the Department of Agriculture and Farm Credit
Administration Appropriation Acts for fiscal years 1955-57, and was not repeated in subsequent
appropriation acts.

Sec. 1507. Personnel of Corporation

     (a)  Appointment; civil service exemption; compensation

The Secretary shall appoint such officers and employees as may be necessary for the
transaction of the business of the Corporation pursuant to civil-service laws and regulations, fix
their compensation in accordance with the provisions of chapter 51 and subchapter III of chapter
53 of title 5, define their authority and duties, and delegate to them such of the powers vested in the
Corporation as the Secretary may determine appropriate. However, personnel paid by the hour,
day, or month when actually employed may be appointed without regard to civil-
service laws and regulations.

(b) Application of employees' compensation law

Insofar as applicable, the benefits of subchapter I of chapter 81 of title 5, shall extend to
persons given employment under the provisions of this chapter, including the employees of the
committees and associations referred to in subsection (c) of this section and the members of such
committees.

(c) Use of associations of producers and private insurance companies; payment of  administrative
and program expenses; sale of crop insurance through private agents and brokers: renewals,
exclusion of compensation from premium rates, indemnification for errors or omissions of
Commission or its contractors

In the administration of this chapter, the Board shall, to the maximum extent possible, (1)
establish or use committees or associations of producers and make payments to them to cover the
administrative and program expenses, as determined by the Board, incurred by them in cooperating
in carrying out this chapter, (2) contract with private insurance companies, private rating bureaus,
and other organizations as appropriate for actuarial, loss adjustment, and other services to avoid
duplication by the Federal Government of services that are or may readily be available in the
private sector, and reimburse such companies for the administrative and program expenses, as
determined by the Board, incurred by them, under terms and provisions and rates of compensation
consistent with those generally prevailing in the insurance industry, and (3) encourage the sale of
Federal crop insurance through licensed private insurance agents and brokers and give the insured
the right to renew such insurance for successive terms through such agents and brokers, in which
case the agent or broker shall be reasonably compensated from premiums paid by the insured for
such sales and renewals recognizing the function of the agent or broker to provide continuing
services while the insurance is in effect: Provided, That such compensation shall not be included in
computations establishing premium rates. The Board shall provide such agents and brokers with
indemnification, including costs and reasonable attorney fees, from the Corporation for errors or
omissions on the part of the Corporation or its contractors for which the agent or broker is sued or
held liable, except to the extent the agent or broker has caused the error or omission. Nothing in
this subsection shall permit the Corporation to contract with other persons to carry out the
responsibility of the Corporation to review and approve policies, rates, and other materials
submitted under section 1508(h) of this title.

(d) Allotment of funds to Federal and State agencies

The Secretary may allot to bureaus and offices of the Department or transfer to such other
agencies of the State and Federal Governments that the Secretary requests to assist in carrying out
this chapter any funds made available pursuant to the provisions of section 1516 of this
title.

(e) Utilization of producer cooperative associations

In carrying out the provisions of this chapter the Board may, in its discretion, utilize
producer-owned and producer-controlled cooperative associations.

(f) Use of resources, data, boards, and committees of Federal agencies

The Board should use, to the maximum extent possible, the resources, data, boards, and the
committees of (1) the Soil Conservation Service, in assisting the Board in the classification of land
as to risk and production capability and in the development of acceptable conservation
practices; (2) the Forest Service, in assisting the Board in the development of a timber insurance
plan; (3) the Agricultural Stabilization and Conservation Service, in assisting the Board in the
determination of individual producer yields and in serving as a local contact point for farmers
where the Board deems necessary; and (4) other Federal agencies in any way the Board deems
necessary in carrying out this chapter.

     (g)  Specialty Crops Coordinator

          (1) The Corporation shall establish a management-level position to be known as the Specialty
     Crops Coordinator.
          (2) The Specialty Crops Coordinator shall have primary responsibility for addressing the
     needs of specialty crop producers, and for providing information and advice, in connection
     with the activities of the Corporation to improve and expand the insurance program for
     specialty crops. In carrying out this paragraph, the Specialty Crops Coordinator shall act as the
     liaison of the Corporation with representatives of specialty crop producers and assist the
     Corporation with the knowledge, expertise, and familiarity of the producers with risk
     management and production issues pertaining to specialty crops.
          (3) The Specialty Crops Coordinator shall use information collected from Corporation field
     office directors in States in which specialty crops have a significant economic effect and from
     other sources, including the extension service and colleges and universities.

(Feb. 16, 1938, ch. 30, title V, Sec. 507, 52 Stat. 73; Aug. 1, 1947, ch. 440, Sec. 6, 61 Stat. 719;
Aug. 25, 1949, ch. 512, Sec. 10, 63 Stat. 665; Oct. 28, 1949, ch. 782, title XI, Sec. 1106(a), 63 Stat.
972; June 6, 1972, Pub. L. 92-310, title II, Sec. 221(b), 86 Stat. 205; Sept. 26, 1980, Pub. L.
96-365, title I, Sec. 104, 94 Stat. 1313; Nov. 28, 1990, Pub. L. 101-624, title XXII, Sec. 2206, 104
Stat. 3958; Dec. 13, 1991, Pub. L. 102-237, title VI, Sec. 601(3), 105 Stat. 1878; Oct. 13, 1994,
Pub. L. 103-354, title I, Secs. 102(b)(4)(B), (C), 105, 115(b), 119(f)(2), 108 Stat. 3181, 3182,
3204, 3208.)

Sec. 1508. Crop insurance

     (a)  Authority to offer insurance
      (1) In general
           If sufficient actuarial data are available (as determined by the Corporation), the
     Corporation may insure, or provide reinsurance for insurers of, producers of agricultural
     commodities grown in the United States under 1 or more plans of insurance determined by the
     Corporation to be adapted to the agricultural commodity concerned. To qualify for coverage
     under a plan of insurance, the losses of the insured commodity must be due to drought, flood,
     or other natural disaster (as determined by the Secretary).
      (2) Period
           Except in the cases of tobacco and potatoes, insurance shall not extend beyond the period
     during which the insured commodity is in the field. As used in the preceding sentence, in the
     case of an aquacultural species, the term ''field'' means the environment in which the
     commodity is produced.
      (3) Exclusions
           Insurance provided under this subsection shall not cover losses due to -
                         (A)  the neglect or malfeasance of the producer;
                    (B) the failure of the producer to reseed to the same crop in such areas and under such
          circumstances as it is customary to reseed; or
                    (C) the failure of the producer to follow good farming practices (as determined by the
          Secretary).
               (4)  Expansion to other areas or single producers
                         (A)  Area expansion
                     The Corporation may offer plans of insurance or reinsurance for production of
          agricultural commodities in the Commonwealth of Puerto Rico, the Virgin Islands, Guam,
          American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of
          the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau in the
          same manner as provided in this section for production of agricultural commodities in the
          United States.
                         (B)  Producer expansion
                     In an area in the United States or specified in subparagraph (A) where crop insurance
          is not available for a particular agricultural commodity, the Corporation may offer to enter
          into a written agreement with an individual producer operating in the area for insurance
          coverage under this chapter if the producer has actuarially sound data relating to the
          production by the producer of the commodity and the data is acceptable to the
          Corporation.
               (5)  Dissemination of crop insurance information
                     The Corporation shall make available to producers through local offices of the
          Department -
                    (A) current and complete information on all aspects of Federal crop insurance; and
                    (B) a listing of insurance agents and companies offering to sell crop insurance in the area
          of the producers.
               (6)  Addition of new and specialty crops
                         (A)  Data collection
                     Not later than 180 days after October 13, 1994, the Secretary shall issue guidelines
          for publication in the Federal Register for data collection to assist the Corporation in
          formulating crop insurance policies for new and specialty crops.
                         (B)  Addition of new crops
                     Not later than 1 year after October 13, 1994, and annually thereafter, the Corporation
          shall report to Congress on the progress and expected timetable for expanding crop
          insurance coverage under this chapter to new and specialty crops.
                         (C)  Addition of direct sale perishable crops
                     Not later than 1 year after October 13, 1994, the Corporation shall report to Congress
          on the feasibility of offering a crop insurance program designed to meet the needs of
          specialized producers of vegetables and other perishable crops who market through direct
          marketing channels.
                         (D)  Addition of nursery crops
                     Not later than 2 years after April 4, 1996, the Corporation shall conduct a study and
          limited pilot program on the feasibility of insuring nursery crops.

     (b)  Catastrophic risk protection
               (1)  In general
           The Corporation shall offer a catastrophic risk protection plan to indemnify producers for
     crop loss due to loss of yield or prevented planting, if provided by the Corporation, when the
     producer is unable, because of drought, flood, or other natural disaster (as determined by the
     Secretary), to plant other crops for harvest on the acreage for the crop year.
               (2)  Amount of coverage
                         (A)  In general
                     Subject to subparagraph (B) -
                              (i) in the case of each of the 1995 through 1998 crop years, catastrophic risk
               protection shall offer a producer coverage for a 50 percent loss in yield, on an
               individual yield or area yield basis, indemnified at 60 percent of the expected market
               price, or a comparable coverage (as determined by the Corporation); and
                              (ii) in the case of each of the 1999 and subsequent crop years, catastrophic risk
               protection shall offer a producer coverage for a 50 percent loss in yield, on an
               individual yield or area yield basis, indemnified at 55 percent of the expected market
               price, or a comparable coverage (as determined by the Corporation).
                         (B)  Reduction in actual payment
                     The amount paid to a producer on a claim under catastrophic risk protection may
          reflect a reduction that is proportional to the out-of-pocket expenses that are not incurred
          by the producer as a result of not planting, growing, or harvesting the crop for which the
          claim is made, as determined by the Corporation.
               (3)  Yield and loss basis
           A producer shall have the option of basing the catastrophic coverage of the producer on an
     individual yield and loss basis or on an area yield and loss basis, if both options are offered by
     the Corporation.
               (4)  Sale of catastrophic risk coverage
                         (A)  In general
                     Catastrophic risk coverage may be offered by -
                              (i) approved insurance providers, if available in an area; and
                              (ii) at the option of the Secretary that is based on considerations of need, local
               offices of the Department.
                         (B)  Need
                     For purposes of considering need under subparagraph (A)(ii), the Secretary may take
          into account the most efficient and cost-effective use of resources, the availability of
          personnel, fairness to local producers, the needs and convenience of local producers, and
          the availability of private insurance carriers.
                         (C)  Delivery of coverage
                                   (i)  In general
                               In full consultation with approved insurance providers, the Secretary may
               continue to offer catastrophic risk protection in a State (or a portion of a State)
               through local offices of the Department if the Secretary determines that there is an
               insufficient number of approved insurance providers operating in the State or portion
               of the State to adequately provide catastrophic risk protection coverage to producers.
                                   (ii) Coverage by approved insurance providers
                               To the extent that catastrophic risk protection coverage by approved insurance
               providers is sufficiently available in a State (or a portion of a State) as determined by
               the Secretary, only approved insurance providers may provide the coverage in the
               State or portion of the State.
                                        (iii)     Timing of determinations
                               Not later than 90 days after April 4, 1996, the Secretary shall announce the
               results of the determinations under clause (i) for policies for the 1997 crop year. For
               subsequent crop years, the Secretary shall make the announcement not later than
               April 30 of the year preceding the year in which the crop will be produced, or at such
               other times during the year as the Secretary finds practicable in consultation with
               affected crop insurance providers for those States (or portions of States) in which
               catastrophic coverage remains available through local offices of the Department.
                                   (iv) Current policies
                               This clause shall take effect beginning with the 1997 crop year. Subject to clause
               (ii) all catastrophic risk protection policies written by local offices of the Department
               shall be transferred to the approved insurance provider for performance of all sales,
               service, and loss adjustment functions. Any fees in connection with such policies that
               are not yet collected at the time of the transfer shall be payable to the approved
               insurance providers assuming the policies. The transfer process for policies for the
               1997 crop year with sales closing dates before January 1, 1997, shall begin at the time
               of the Secretary's announcement under clause (iii) and be completed by the sales
               closing date for the crop and county. The transfer process for all subsequent policies
               (including policies for the 1998 and subsequent crop years) shall begin at a date that
               permits the process to be completed not later than 45 days before the sales closing
               date.
 (5) Administrative fee.--
                   (A) Basic fee.--Each producer shall pay an administrative fee for catastrophic risk
          protection in an amount equal to 10 percent of the premium for the catastrophic risk
          protection or $50 per crop per county, whichever is greater, as determined by the
          Corporation.

          Notwithstanding the provisions of section 508(b)(5)(A) of the Federal Crop Insurance
     Act (7 U.S.C. 508(b)(5)(A)), for the 1999 reinsurance and subsequent insurance years, no
     producer shall pay more than $50 per crop per county as an administrative fee for
     catastrophic risk protection under section 508(b)(5)(A) of the Act.

                    (B) Additional fee.--In addition to the amount required under subparagraph (A), the
          producer shall pay a $10 fee for each amount determined under paragraph (A).
                   (C) Time for payment.--The amounts required under subparagraphs (A) and (B) shall be
          paid by the producer on the date that premium for a policy of additional coverage would
          be paid by the producer.
                    (D) Use of fees.--
                              (i) In general.--The amounts paid under this paragraph shall be deposited in the crop
               insurance fund established under section 516(c), to be available for the programs and
               activities of the Corporation.
                              (ii) Limitation.--No funds deposited in the crop insurance fund under this
               subparagraph may used to compensate an approved insurance provider or agent for
               the delivery of services under this subsection.
                    (E) Waiver of fee.--The Corporation shall waive the amounts required under this
          paragraph for limited resource farmers, as defined by the Corporation.

               (6)  Participation requirement
           A producer may obtain catastrophic risk coverage for a crop of the producer on land in the
     county only if the producer obtains the coverage for the crop on all insurable land of the
     producer in the county.
               (7)  Eligibility for Department programs
                         (A)  In general
                     Effective for the spring-planted 1996 and subsequent crops (and fall-planted 1996
          crops at the option of the Secretary), to be eligible for any payment or loan under the
          Agricultural Market Transition Act (7 U.S.C. 7201 et seq.), for the conservation reserve
          program, or for any benefit described in section 2008f of this title, a person shall -
                              (i) obtain at least the catastrophic level of insurance for each crop of economic
               significance in which the person has an interest; or
                              (ii) provide a written waiver to the Secretary that waives any eligibility for
               emergency crop loss assistance in connection with the crop.
                         (B)  ''Crop of economic significance'' defined
                     As used in this paragraph, the term ''crop of economic significance'' means a crop that
          has contributed, or is expected to contribute, 10 percent or more of the total expected
          value of all crops grown by the producer.
               (8)  Limitation due to risk
           The Corporation may limit catastrophic risk coverage in any county or area, or on any
     farm, on the basis of the insurance risk concerned.
               (9)  Transitional coverage for 1995 crops
           Effective only for a 1995 crop planted or for which insurance attached prior to January 1,
     1995, the Corporation shall allow producers of the crops until not later than the end of the
     180-day period beginning on the date of enactment of the Federal Crop Insurance Reform Act
     of 1994 (Oct. 13, 1994) to obtain catastrophic risk protection for the crop. On enactment of
     such Act, a producer who made timely purchases of a crop insurance policy before the date of
     enactment of such Act, under the provisions of this chapter then in effect, shall be eligible for
     the same benefits to which a producer would be entitled under comparable additional coverage
     under subsection (c) of this section.
          (10) Simplification
                         (A)  Catastrophic risk protection plans
                     In developing and carrying out the policies and procedures for a catastrophic risk
          protection plan under this chapter, the Corporation shall, to the maximum extent
          practicable, minimize the paperwork required and the complexity and costs of procedures
          governing applications for, processing, and servicing of the plan for all parties involved.
                         (B)  Other plans
                     To the extent that the policies and procedures developed under subparagraph (A) may
          be applied to other plans of insurance offered under this chapter without jeopardizing the
          actuarial soundness or integrity of the crop insurance program, the Corporation shall apply
          the policies and procedures to the other plans of insurance within a reasonable period of
          time (as determined by the Corporation) after the effective date of this paragraph.
          (11) Loss adjustment.--The rate for reimbursing an approved insurance provider or agent for
     expenses incurred by the approved insurance provider or agent for loss adjustment in
     connection with a policy of catastrophic risk protection shall not exceed 11 percent of the
     premium for catastrophic risk protection that is used to define loss ratio.

(c) General coverage levels
               (1)  Additional coverage generally
                         (A)  In general
                     The Corporation shall offer to producers of agricultural commodities grown in the
          United States plans of crop insurance that provide additional coverage.
                         (B)  Purchase
                     To be eligible for additional coverage, a producer must apply to an approved
          insurance provider for purchase of additional coverage if the coverage is available from an
          approved insurance provider. If additional coverage is unavailable privately, the
          Corporation may offer additional coverage plans of insurance directly to producers.
               (2)  Transfer of relevant information
           If a producer has already applied for catastrophic risk protection at the local office of the
     Department and elects to purchase additional coverage, the relevant information for the crop of
     the producer shall be transferred to the approved insurance provider servicing the additional
     coverage crop policy.
               (3)  Yield and loss basis
           A producer shall have the option of purchasing additional coverage based on an individual
     yield and loss basis or on an area yield and loss basis, if both options are offered by the
     Corporation.
               (4)  Level of coverage
           The level of coverage shall be dollar denominated and may be purchased at any level not
     to exceed 85 percent of the individual yield or 95 percent of the area yield (as determined by
     the Corporation). Not later than the beginning of the 1996 crop year, the Corporation shall
     provide producers with information on catastrophic risk and additional coverage in terms of
     dollar coverage (within the allowable limits of coverage provided in this paragraph).
               (5)  Price level
           The Corporation shall establish a price level for each commodity on which insurance is
     offered that -
                         (A)  shall not be less than the projected market price for the commodity (as determined by
               the Corporation); or
                         (B)  at the discretion of the Corporation, may be based on the actual market price at the
               time of harvest (as determined by the Corporation).
               (6)  Price elections
                         (A)  In general
                     Subject to subparagraph (B), insurance coverage shall be made available to a
          producer on the basis of any price election that equals or is less than the price election
          established by the Corporation. The coverage shall be quoted in terms of dollars per acre.
                         (B)  Minimum price elections
                     The Corporation may establish minimum price elections below which levels of
          insurance shall not be offered.
                         (C)  Wheat classes and malting barley
                     The Corporation shall, as the Corporation determines practicable, offer producers
          different price elections for classes of wheat and malting barley (including contract prices
          in the case of malting barley), in addition to the standard price election, that reflect
          different market prices, as determined by the Corporation. The Corporation shall, as the
          Corporation determines practicable, offer additional coverage for each class determined
          under this subparagraph and charge a premium for each class that is actuarially sound.
               (7)  Fire and hail coverage
           For levels of additional coverage equal to 65 percent or more of the recorded or appraised
     average yield indemnified at 100 percent of the expected market price, or an equivalent
     coverage, a producer may elect to delete from the additional coverage any coverage against
     damage caused by fire and hail if the producer obtains an equivalent or greater dollar amount
     of coverage for damage caused by fire and hail from an approved insurance provider. On
     written notice of the election to the company issuing the policy providing additional coverage
     and submission of evidence of substitute coverage on the commodity insured, the premium of
     the producer shall be reduced by an amount determined by the Corporation to be actuarially
     appropriate, taking into account the actuarial value of the remaining coverage provided by the
     Corporation. In no event shall the producer be given credit for an amount of premium
     determined to be greater than the actuarial value of the protection against losses caused by fire
     and hail that is included in the additional coverage for the crop.
               (8)  State premium subsidies
           The Corporation may enter into an agreement with any State or agency of a State under
     which the State or agency may pay to the approved insurance provider an additional premium
     subsidy to further reduce the portion of the premium paid by producers in the State.
               (9)  Limitations on additional coverage
           The Board may limit the availability of additional coverage under this subsection in any
     county or area, or on any farm, on the basis of the insurance risk involved. The Board shall not
     offer additional coverage equal to less than 50 percent of the recorded or appraised average
     yield indemnified at 100 percent of the expected market price, or an equivalent coverage.
          (10) Administrative fee
                    (A) Fee required.--Except as otherwise provided in this paragraph, if a producer elects to
          purchase additional coverage for a crop at a level this is less than 65 percent of the
          recorded or appraised average yield indemnified at 100 percent of the expected market
          price, or an equivalent coverage, the producer shall pay an administrative fee for the
          additional coverage.  The administrative fee shall be $50 per crop per county, up to a
          maximum of $600 per producer for all counties in which a producer has insured crops.
          Subparagraphs (D) and (E) of subsection (b)(5) shall apply with respect to the use of
          administrative fees under this subparagraph.
                         (B)  Exception
                     If a producer elects to purchase additional coverage for a crop equal to 65 percent or
          more of the recorded or appraised average yield indemnified at 100 percent of the
          expected market price, or an equivalent coverage, the producer shall not be subject to the
          administrative fee required by this paragraph or subsection (b)(5) of this section. If the
          producer has already paid the administrative fee for a lower level of coverage for the crop,
          the administrative fee shall be refunded to the producer unless the refund would reduce to
          less than $200 the total amount of the administrative fees paid by the producer for 2 or
          more crops in the same county for which a lower level of coverage is obtained.
                         (C)  Additional fee
                     If a producer elects to purchase additional coverage for a crop equal to or exceeding
          65 percent of the recorded or appraised average yield and 100 percent of the expected
          market price or an equivalent coverage, the producer shall pay an administrative fee of
          $20 for the coverage. If a producer has already paid an administrative fee for lesser
          coverage for the crop, the fee for lesser coverage shall be refunded to the producer unless
          the producer has paid the maximum fee for lesser coverage and refund of the fee will not
          reduce the amount to be paid below the maximum amount.
                         (D)  Deposit of fees
                     Notwithstanding the authority granted to the Secretary under the Federal Crop
          Insurance Corporation account provisions of the Agricultural, Rural Development, Food
          and Drug Administration, and Related Agencies Appropriations Act, 1995, administrative
          fees collected under subparagraph (B) in excess of $100 per producer per county and
          under subparagraph (C) shall be deposited in the insurance fund established under section
          1516(c) of this title to be available for the programs and activities of the Corporation.

     (d)  Premiums
               (1)  Premiums required
           The Corporation shall fix adequate premiums for all the plans of insurance of the
     Corporation at such rates as the Board determines are actuarially sufficient to attain an
     expected loss ratio of not greater than 1.1 through September 30, 1998, and not greater than
     1.075 after October 1, 1998.
               (2)  Premium amounts
           The premium amounts for catastrophic risk protection under subsection (b) of this section
     and additional coverage under subsection (c) of this section shall be fixed as follows:
                         (A)  In the case of catastrophic risk protection, the amount of the premium shall be
               sufficient to cover anticipated losses and a reasonable reserve.
                         (B)  In the case of additional coverage below 65 percent of the recorded or appraised
               average yield ndemnified at 100 percent of the expected market price, or an
               equivalent coverage, but greater than 50 percent of the recorded or appraised average
               yield indemnified at 100 percent of the expected market price, or an equivalent
               coverage, 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.
                         (C)  In the case of additional coverage equal to or greater than 65 percent of the recorded
               or appraised average yield indemnified at 100 percent of the expected market price,
               or an equivalent coverage, 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.

     (e)  Payment of portion of premium by Corporation
               (1)  In general
           For the purpose of encouraging the broadest possible participation of producers in the
     catastrophic risk protection provided under subsection (b) of this section and the additional
     coverage provided under subsection (c) of this section, the Corporation shall pay a part of the
     premium in the amounts provided in accordance with this subsection.
               (2)  Amount of payment
           The amount of the premium to be paid by the Corporation shall be as follows:
                         (A)  In the case of catastrophic risk protection, the amount shall be equivalent to the
               premium established for catastrophic risk protection under subsection (d)(2)(A)
                    of this section.
                         (B)  In the case of coverage below 65 percent of the recorded or appraised average yield
               indemnified at 100 percent of the expected market price, or an equivalent coverage,
               but greater than 50 percent of the recorded or appraised average yield indemnified at
               100 percent of the expected market price, or an equivalent coverage, the amount shall
               be equivalent to the amount of premium established for catastrophic risk protection
               coverage and the amount of operating and administrative expenses established under
               subsection (d)(2)(B) of this section.
                         (C)  In the case of coverage equal to or greater than 65 percent of the recorded or
               appraised average yield indemnified at 100 percent of the expected market price, or
               an equivalent coverage, on an individual or area basis, the amount shall be equivalent
               to an amount equal to the premium established for 50 percent loss in yield
               indemnified at 75 percent of the expected market price and the amount of operating
               and administrative expenses established under subsection (d)(2)(C) of this section.
               (3)  Premium reduction
           If an approved insurance provider determines that the provider may provide insurance
     more efficiently than the expense reimbursement amount established by the Corporation, the
     approved insurance provider may reduce, subject to the approval of the Corporation, the
     premium charged the insured by an amount corresponding to the efficiency. The approved
     insurance provider shall apply to the Corporation for authority to reduce the premium before
     making such a reduction, and the reduction shall be subject to the rules, limitations, and
     procedures established by the Corporation.
               (4)  Individual and area crop insurance coverage
           The Corporation shall allow approved insurance providers to offer a plan of insurance to
     producers that combines both individual yield coverage and area yield coverage at a premium
     rate determined by the provider under the following conditions:
                         (A)  The individual yield coverage shall be equal to or greater than catastrophic risk
               protection as described in subsection (b) of this section.
                         (B)  The combined policy shall include area yield coverage that is offered by the
               Corporation or similar area coverage, as determined by the Corporation.
                         (C)  The Corporation shall provide reinsurance on the area yield portion of the combined
               policy at the request of the provider, except that the provider shall agree to pay to the
               producer any portion of the area yield and loss indemnity payment received from the
               Corporation or a commercial reinsurer that exceeds the individual indemnity payment
               made by the provider to the producer.
                         (D)  The Corporation shall pay a part of the premium equivalent to -
                                   (i)  the amount authorized under paragraph (2) (except provisions regarding
                    operating and administrative expenses); and
                                   (ii) the amount of operating and administrative expenses authorized by the
                    Corporation for the area yield coverage portion of the combined policy.
                         (E)  The provider shall provide all underwriting services for the combined policy,
               including the determination of individual yield coverage premium rates, the terms
                    and conditions of the policy, and the acceptance and classification of applicants
                    into risk categories, subject to subparagraph (F).
                         (F)  The Corporation shall approve the combined policy unless the Corporation
               determines that the policy is not actuarially sound or that the interests of producers
               are not adequately protected.

   (f)  Eligibility
      (1) In general
           To participate in catastrophic risk protection coverage under this section, a producer shall
     submit an application at the local office of the Department or to an approved insurance
     provider.
               (2)  Sales closing date
           For coverage under this chapter, each producer shall purchase crop insurance on or before
     the sales closing date for the crop by providing the required information and executing the
     required documents. Subject to the goal of ensuring actuarial soundness for the crop insurance
     program, the sales closing date shall be established by the Corporation to maximize
     convenience to producers in obtaining benefits under price and production adjustment
     programs of the Department.  Beginning with the 1995 crop year, the Corporation shall
     establish, for an insurance policy for each insurable crop that is planted in the spring, a sales
     closing date that is 30 days earlier than the corresponding sales closing date that was
     established for the 1994 crop year.
               (3)  Records and reporting
           To obtain catastrophic risk protection under subsection (b) of this section or additional
     coverage under subsection (c) of this section, a producer shall -
                         (A)  provide, to the extent required by the Corporation, records acceptable to the
               Corporation of historical acreage and production of the crops for which the insurance
               is sought or accept a yield determined by the Corporation; and
                         (B)  report acreage planted and prevented from planting by the designated acreage
               reporting date for the crop and location as established by the Corporation.

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

     (h)  Submission of policies and materials to Board
               (1)  In general
           In addition to any standard forms or policies that the Board may require be made available
     to producers under subsection (c) of this section, a person may prepare for submission or
     propose to the Board -
                         (A)  other crop insurance policies and provisions of policies; and
                         (B)  rates of premiums for multiple peril crop insurance pertaining to wheat, soybeans,
               field corn, and any other crops determined by the Secretary.
               (2)  Submission of policies
           A policy or other material submitted to the Board under this subsection may be prepared
     without regard to the limitations contained in this chapter, including the requirements
     concerning the levels of coverage and rates and the requirement that a price level for each
     commodity insured must equal the expected market price for the commodity as established by
     the Board. In the case of such a policy, the payment by the Corporation of a portion of the
     premium of the policy may not exceed the amount that would otherwise be authorized under
     subsection (e) of this section.
               (3)  Review and approval by the Board
           A policy or other material submitted to the Board under this subsection shall be reviewed
     by the Board and, if the Board finds that the interests of producers are adequately protected
     and that any premiums charged to the producers are actuarially appropriate, shall be approved
     by the Board for reinsurance and for sale to producers as an additional choice at actuarially
     appropriate rates and under appropriate terms and conditions. The Corporation may enter into
     more than 1 reinsurance agreement with the approved insurance provider simultaneously to
     facilitate the offering of the new policies.
               (4)  Guidelines for submission and review
           The Corporation shall issue regulations to establish guidelines for the submission, and
     Board review, of policies or other material submitted to the Board under this subsection. At a
     minimum, the guidelines shall ensure the following:
                         (A)  A proposal submitted to the Board under this subsection shall be considered as
               confidential commercial or financial information for purposes of section 552(b)(4) of
               title 5 until approved by the Board. A proposal disapproved by the Board shall remain
               confidential commercial or financial information.
                    (B) The Board shall provide an applicant with the opportunity to present the proposal to
          the Board in person if the applicant so desires.
                         (C)  The Board shall provide an applicant with notification of intent to disapprove a
               proposal not later than 30 days prior to making the disapproval. An applicant that
               receives the notification may modify the application of the applicant. Any
               modification shall be considered an original application for purposes of this
               paragraph.
                         (D)  Specific guidelines shall prescribe the timing of submission of proposals under this
               subsection and timely consideration by the Board so that any approved proposal may
               be made available to all persons reinsured by the Corporation in a manner permitting
               the persons to participate, if the persons so desire, in offering such a proposal in the
               first crop year in which the proposal is approved by the Board for reinsurance,
               premium subsidy, or other support offered by this chapter.
               (5)  Required publication
           Any policy, provision of a policy, or rate approved under this subsection shall be
     published as a notice in the Federal Register and made available to all persons contracting with
     or reinsured by the Corporation under the terms and conditions of the contract between the
     Corporation and the person originally submitting the policy or other material.
               (6)  Pilot cost of production risk protection plan
                         (A)  In general
                     The Corporation shall offer, to the extent practicable, a cost of production risk
          protection plan of insurance that indemnifies producers (including new producers) for
          insurable losses as provided in this paragraph.
                         (B)  Pilot basis
                     The cost of production risk protection plan shall -
                              (i) be established as a pilot project for each of the 1996 and 1997 crop years; and
                              (ii) be carried out in a number of counties that is determined by the Corporation to
               be adequate to provide a comprehensive evaluation of the feasibility, effectiveness,
               and demand among producers for the plan.
                         (C)  Insurable loss
                     An insurable loss shall be incurred by a producer if the gross income of the producer
          (as determined by the Corporation) is less than an amount determined by the Corporation,
          as a result of a reduction in yield or price resulting from an insured cause.
                         (D)  ''New producer'' defined
                     As used in this paragraph, the term ''new producer'' means a person that has not been
          actively engaged in farming for a share of the production of the insured crop for more than
          2 crop years, as determined by the Secretary.
               (7)  Additional prevented planting policy coverage
                         (A)  In general
                     Beginning with the 1995 crop year, the Corporation shall offer to producers
          additional prevented planting coverage that insures producers against losses in
              accordance with this paragraph.
                         (B)  Approved insurance providers
                     Additional prevented planting coverage shall be offered by the Corporation through
          approved insurance providers.
                         (C)  Timing of loss
                     A crop loss shall be covered by the additional prevented planting coverage if -
                                   (i)  crop insurance policies were obtained for -
                                             (I)  the crop year the loss was experienced; and
                                        (II) the crop year immediately preceding the year of the prevented planting loss;
                    and
                                   (ii) the cause of the loss occurred -
                                        (I) after the sales closing date for the crop in the crop year immediately
                    preceding the loss; and
                                        (II) before the sales closing date for the crop in the year in which the loss is
                    experienced.
               (8)  Pilot program of assigned yields for new producers
                         (A)  Program required
                     For each of the 1995 and 1996 crop years, the Corporation shall carry out a pilot
          program to assign to eligible new producers higher assigned yields than would otherwise
          be assigned to the producers under subsection (g) of this section. The Corporation shall
          include in the pilot program 30 counties that are determined by the Corporation to be
          adequate to provide a comprehensive evaluation of the feasibility, effectiveness, and
          demand among new producers for increased assigned yields.
                         (B)  Increased assigned yields
                     In the case of an eligible new producer participating in the pilot program, the
          Corporation shall assign to the new producer a yield that is equal to not less than 110
              percent of the transitional yield otherwise established by the Corporation.
                         (C)  Eligible new producer
                     The Secretary shall establish a definition of new producer for purposes of
          determining eligibility to participate in the pilot program.
               (9)  Revenue insurance pilot program
              (A) In general
                     Not later than December 31, 1996, the Secretary shall carry out a pilot program in a
          limited number of counties, as determined by the Secretary, for crop years 1997, 1998,
          1999, and 2000, under which a producer of wheat, feed grains, soybeans, or such other
          commodity as the Secretary considers appropriate may elect to receive insurance against
          loss of revenue, as determined by the Secretary.
                         (B)  Administration
                     Revenue insurance under this paragraph shall -
                              (i) be offered through reinsurance arrangements with private insurance companies;
                              (ii) offer at least a minimum level of coverage that is an alternative to catastrophic
               crop insurance;
                                        (iii)     be actuarially sound; and
                              (iv) require the payment of premiums and administrative fees by an insured producer.
          (10) Time limits for response to submission of new policies.--
                    (A) In general.--The Board shall establish a reasonable time period within which the
          Board shall approve or disapprove a proposal from a person regarding a new policy
          submitted in accordance with this subsection.
                    (B) Effect of failure to meet time limits.--Except as provided in subparagraph (C), if the
          Board fails to provide a response to a proposal described in subparagraph (A) in
          accordance with subparagraph (A), the new policy shall be deemed to be approved by the
          Board for purposes of this subsection for the initial reinsurance year designated for the
          new policy in the request.
                    (C) Exceptions.--Subparagraph (B) shall not apply to a proposal submitted under this
          subsection if the Board and the person submitting the request agree to an extension of the
          time period.

     (i)  Adoption of rates and coverages
The Corporation shall adopt, as soon as practicable, rates and coverages that will improve the
actuarial soundness of the insurance operations of the Corporation for those crops that are
determined to be insured at rates that are not actuarially sound, except that no rate may be
increased by an amount of more than 20 percent over the comparable rate of the preceding crop
year.

     (j)  Claims for losses
               (1)  In general
           Under rules prescribed by the Corporation, the Corporation may provide for adjustment
     and payment of claims for losses. The rules prescribed by the Corporation shall establish
     standards to ensure that all claims for losses are adjusted, to the extent practicable, in a
     uniform and timely manner.
               (2)  Denial of claims
                         (A)  In general
                     Subject to subparagraph (B), if a claim for indemnity is denied by the Corporation or
          an approved provider, an action on the claim may be brought against the Corporation or
          Secretary only in the United States district court for the district in which the insured farm
          is located.
                         (B)  Statute of limitations
                     A suit on the claim may be brought not later than 1 year after the date on which final
          notice of denial of the claim is provided to the claimant.
               (3)  Indemnification
           The Corporation shall provide approved insurance providers with indemnification,
     including costs and reasonable attorney fees incurred by the approved insurance
      provider, due to errors or omissions on the part of the Corporation.
               (4)  Marketing windows
           The Corporation shall consider marketing windows in determining whether it is feasible
     to require planting during a crop year.

     (k)  Reinsurance
               (1)  In general
                    Notwithstanding any other provision of this chapter, the Corporation shall, to the
          maximum extent practicable, provide reinsurance to insurers approved by the
          Corporation that insure producers of any agricultural commodity under 1 or more plans
          acceptable to the Corporation.
               (2)  Terms and conditions
           The reinsurance shall be provided on such terms and conditions as the Board may
     determine to be consistent with subsections (b) and (c) of this section and sound reinsurance
     principles.
               (3)  Share of risk
           The reinsurance agreements of the Corporation with the reinsured companies shall require
     the reinsured companies to bear a sufficient share of any potential loss under the agreement so
     as to ensure that the reinsured company will sell and service policies of insurance in a sound
     and prudent manner, taking into consideration the financial condition of
      the reinsured companies and the availability of private reinsurance.
 (4) Rate.--
                    (A) In general.--Except as provided in subparagraph (B), the rate established by the Board
          to reimburse approved insurance providers and agents for the administrative and operating
          costs of the providers and agents shall not exceed--
                              (i) for the 1998 reinsurance year, 27 percent of the premium used to define loss
               ratio; and
                              (ii) for each of the 1999 and subsequent reinsurance years, 24.5 percent of the
               premium used to define loss ratio.
                    (B) Proportional reductions.--A policy of additional coverage that received a rate of
          reimbursement for administrative and operating costs for the 1998 reinsurance year that is
          lower than the rate specified in subparagraph (A)(i) shall receive a reduction in the rate of
          reimbursement that is proportional to the reduction in the rate of reimbursement between
          clauses (i) and (ii) of subparagraph (A).
      (5) Cost and regulatory reduction
           Consistent with section 118 of the Federal Crop Insurance Reform Act of 1994, and
     consistent with maintenance of program integrity, prevention of fraud and abuse, the need for
     program expansion, and improvement of quality of service to customers, the Board shall alter
     program procedures and administrative requirements in order to reduce the administrative and
     operating costs of approved insurance providers and agents in an amount that corresponds to
     any reduction in the reimbursement rate required under paragraph (4) during the 5-year period
     beginning  on October13, 1994.
               (6)  Agency discretion
           The determination of whether the Corporation is achieving, or has achieved,
     corresponding administrative cost savings shall not be subject to administrative review, and is
     wholly committed to agency discretion within the meaning of section 701(a)(2) of title 5.
               (7)  Plan
           The Corporation shall submit to Congress a plan outlining the measures that will be used
     to achieve the reduction required under paragraph (5). If the Corporation can identify
     additional cost reduction measures, the Corporation shall describe the measures in the plan.

     (l)  Optional coverages
The Corporation may offer specific risk protection programs, including protection against
prevented planting, wildlife depredation, tree damage and disease, and insect infestation, under
such terms and conditions as the Board may determine, except that no program may be undertaken
if insurance for the specific risk involved is generally available from private companies.

     (m)  Research
      (1) In general
           Except as provided in paragraph (2), the Corporation may conduct research, surveys, pilot
     programs, and investigations relating to crop insurance and agriculture-related risks and losses
     including insurance on losses involving reduced forage on rangeland caused by drought and by
     insect infestation, livestock poisoning and disease, destruction of bees due to the use of
     pesticides, and other unique special risks related to fruits, nuts, vegetables, aquacultural
     species, forest industry needs (including appreciation), and other agricultural products as
     determined by the Board.
               (2)  Exception
           No action may be undertaken with respect to a risk under paragraph (1) if insurance
     protection against the risk is generally available from private companies.
               (3)  Evaluation
           After the completion of any pilot program under this subsection, 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 of 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.

     (n)  Limitation on multiple benefits for same loss
          (1) In general.--Except as provided in paragraph (2), if a producer who is eligible to
     receive benefits under catastrophic risk protection under subsection (b) of this section is also
     eligible to receive assistance for the same loss under any other program administered by the
     Secretary, the producer shall be required to elect whether to receive benefits under this chapter
     or under the other program, but not both. A producer who purchases additional coverage under
     subsection (c) of this section may also receive assistance for the same loss under other
     programs administered by the Secretary, except that the amount received for the loss under the
     additional coverage together with the amount received under the other programs may not
     exceed the amount of the actual loss of the producer.
          (2) Exception.--Paragraph (1) shall not apply to emergency loans under subtitle C of the
     Consolidated Farm and Rural Development Act (7 U.S. C. 1961 et seq.).

(Feb. 16, 1938, ch. 30, title V, Sec. 508, 52 Stat. 74; June 22, 1938, ch. 563, 52 Stat. 835; June 21,
1941, ch. 214, Secs. 3-7, 10, 55 Stat. 255, 256; Dec. 23, 1944, ch. 713, Secs. 1-3, 58 Stat. 918, 919;
Aug. 1, 1947, ch. 440, Secs. 1-3, 61 Stat. 718; Aug. 25, 1949, ch. 512, Secs. 1-3, 63 Stat. 663;
Aug. 13, 1953, ch. 431, 67 Stat. 575; July 23, 1957, Pub. L. 85-111, 71 Stat. 309; Aug. 4, 1959,
Pub. L. 86-131, 73 Stat. 278; Sept. 12, 1964, Pub. L. 88-589, 78 Stat. 933; Sept. 26, 1980, Pub. L.
96-365, title I, Secs. 105, 106, 107(b), 94 Stat. 1314, 1315, 1317; Aug. 11, 1988, Pub. L. 100-387,
title II, Sec. 208(a), 102 Stat. 941; Nov. 28, 1990, Pub. L. 101-624, title XXII, Secs. 2203-2205,
104 Stat. 3955-3957; Dec. 13, 1991, Pub. L. 102-237, title VI, Sec. 601(4), (5),
105 Stat. 1878; Aug. 10, 1993, Pub. L. 103-66, title XIV, Sec. 1403(b)(1), (2), 107 Stat. 333, 334;
Oct. 13, 1994, Pub. L. 103-354, title I, Sec. 106, 108 Stat. 3183; Apr. 4, 1996, Pub. L. 104-127,
title I, Secs. 193(a)(1), (2), (c), (d), (f), 195, 110 Stat. 943-946; Pub. L. 105-185, title V, Secs. 532,
534, June 23, 1998, 112 Stat. 581, 583; Oct. 21, 1998, Pub. L. 105-277, Div. A, Sec. 101(a) [title
VIII, Sec. 803(a)], 112 Stat. 2681-___.)

Sec. 1509. Exemption of indemnities from levy

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

(Feb. 16, 1938, ch. 30, title V, Sec. 509, 52 Stat. 75; Oct. 13, 1994, Pub. L. 103-354, title I, Sec.
115(c), 108 Stat. 3204.)

Sec. 1510. Deposit and investment of funds; Federal Reserve banks as fiscal agents

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

(Feb. 16, 1938, ch. 30, title V, Sec. 510, 52 Stat. 75.)

Sec. 1511. Tax exemption

The Corporation, including its franchise, its capital, reserves, and surplus, and its income and
property, shall be exempt from all taxation on or after February 16, 1938, imposed by the United
States or by any Territory, dependency, or possession thereof, or by any State, county,
municipality, or local taxing authority. A contract of insurance of the Corporation, and a contract
of insurance reinsured by the Corporation, shall be exempt from taxation imposed by any State,
municipality, or local taxing authority.

(Feb. 16, 1938, ch. 30, title V, Sec. 511, 52 Stat. 75; Oct. 13, 1994, Pub. L. 103-354, title I, Sec.
108, 108 Stat. 3197.)

Sec. 1512. Corporation as fiscal agent of Government

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

(Feb. 16, 1938, ch. 30, title V, Sec. 512, 52 Stat. 75.)

Sec. 1513. Books of account and annual reports of Corporation

The Corporation shall at all times maintain complete and accurate books of accounts and shall
file annually with the Secretary a complete report as to the business of the Corporation.

(Feb. 16, 1938, ch. 30, title V, Sec. 513, 52 Stat. 76; Jan. 2, 1975, Pub. L. 93-604, title VI, Sec.
603, 88 Stat. 1963; Oct. 13, 1994, Pub. L. 103-354, title I, Sec. 102(b)(4)(C), 108 Stat. 3181.)

Sec. 1514. Crimes and offenses

(a) to (e) Repealed. June 25, 1948, ch. 645, Sec. 21, 62 Stat. 862, eff. Sept. 1, 1948

     (f)  Application of laws on interest of Members of Congress in contracts
 The provisions of section 22 of title 41 shall not apply to any crop insurance agreements made
under this chapter.

Sec. 1515. Advisory Committee for Federal Crop Insurance

     (a)  Establishment

The Secretary may establish within the Department an advisory committee to be known as the
"Advisory Committee for Federal Crop Insurance''.

     (b)  Primary responsibility

The primary responsibility of the Advisory Committee shall be to advise the Secretary on the
implementation of this chapter and on other issues related to crop insurance, as determined by the
Manager of the Corporation.

     (c)  Membership

The Advisory Committee shall be composed of the Manager of the Corporation, the Secretary
(or a designee of the Secretary), and not fewer than 12 members representing organizations and
agencies involved in the provision of crop insurance under this chapter. Not fewer than 3 of the
members of the Advisory Committee shall be representatives of the specialty crops industry. The
organizations or agencies represented by members on the Advisory Committee may include
insurance companies, insurance agents, farm producer organizations, experts on agronomic
practices, and banking and lending institutions.

     (d)  Administrative provisions

      (1) Terms

           Members of the Advisory Committee (other than the Manager of the Corporation and the
     Secretary) shall be appointed by the Secretary for a term of up to 2 years from nominations
     made by the organizations and agencies specified in subsection (c) of this section. The terms
     of the members (other than the Manager of the Corporation and the Secretary) shall be
     staggered.

               (2)  Chairperson

           The Advisory Committee shall be chaired by the Manager of the Corporation.

      (3) Meetings

           The Advisory Committee shall meet at least annually. The meetings of the Advisory
     Committee shall be publicly announced in advance and shall be open to the public.
     Appropriate records of the activities of the Advisory Committee shall be kept and made
     available to the public on request.

     (e)  Reports

Not later than June 30 of each year, the Advisory Committee shall submit to the Secretary a
report specifying the conclusions and recommendations of the Advisory Committee regarding--
               (1)  the progress toward implementation of this chapter;
          (2) the actuarial soundness of the Federal crop insurance program;
          (3) the rate of producer participation in both catastrophic risk protection under section
     1508(b) of this title and additional coverage under section 1508(c) of this title; and
          (4) the progress toward improved crop insurance coverage for new and specialty crops.

     (f)  Termination of authority

 The authority provided by this section shall terminate on September 30, 1998.

(Feb. 16, 1938, ch. 30, title V, Sec. 515, as added Oct. 13, 1994, Pub. L. 103-354, title I, Sec. 109,
108 Stat. 3197.)

Sec. 1516. Funding

     (a)  Authorization of appropriations

          (1) Discretionary expenses.--There are authorized to be appropriated for fiscal year 1999 and
     each subsequent fiscal year such sums as are necessary to cover the salaries and expenses of
     the Corporation.

               (2)  Mandatory expenses

           There are authorized to be appropriated such sums as are necessary to cover for each of
     the 1999 and subsequent reinsurance years-
                    (A) the administrative and operating expenses of the Corporation for the sales
ucommissions of agents; and
                    (B) premium subsidies, including the administrative and operating expenses of an
          approved insurance provider for the delivery of policies with additional coverage.

(b) Payment of Corporation Expenses From Insurance Fund.--
          (1) Expenses generally.--For each of the 1999 and subsequent reinsurance years, the
     Corporation may pay from the insurance fund established under subsection (c) all expenses of
     the Corporation (other than expenses covered by subsection (a)(1) and expenses covered by
     paragraph (2)(A), including--
                    (A) premium subsidies and indemnities;
                    (B) administrative and operating expenses of the Corporation necessary to pay the sales
          commissions of agents; and
                    (C) all administrative and operating expense reimbursements due under a reinsurance
          agreement with and approved insurance provider.
          (2) Research and development expenses.--
                    (A) In general.--For each of the 1999 and subsequent reinsurance years, the Corporation
          may pay from the insurance fund established under subsection (c) research and
          development expenses of the Corporation, but not to exceed $3,500,000 for each fiscal
          year.
                    (B) Dairy options pilot program.--Amounts necessary to carry out the dairy options
          program shall not be counted toward the limitation on research and development expenses
          specified in subparagraph (A).

     (c)  Insurance fund

          (1) In general

           There is established an insurance fund, for the deposit of premium income and amounts
     made available under subsection (a)(2) of this section, to be available without fiscal year
     limitation.

               (2)  Commodity Credit Corporation funds

           If at any time the amounts in the insurance fund are insufficient to enable the Corporation
     to carry out subsection (b) of this section, to the extent the funds of the Commodity Credit
     Corporation are available--
                    (A) the Corporation may request the Secretary to use the funds of the Commodity Credit
          Corporation to carry out subsection (b) of this section; and
                    (B) the Secretary may use the funds of the Commodity Credit Corporation to carry out
          subsection (b) of this section.

(Feb. 16, 1938, ch. 30, title V, Sec. 516, 52 Stat. 77; June 21, 1941, ch. 214, Secs. 6, 8, 55 Stat.
255, 256; Aug. 3, 1956, ch. 950, Sec. 10, 70 Stat. 1034; Sept. 26, 1980, Pub. L. 96-365, title I,
Secs. 109, 110, 94 Stat. 1317, 1318; May 22, 1981, Pub. L. 97-11, 95 Stat. 13; Dec. 23, 1985, Pub.
L. 99-198, title X, Sec. 1021, 99 Stat. 1459; Oct. 13, 1994, Pub. L. 103-354, title I, Sec. 110, 108
Stat. 3198; Apr. 4, 1996, Pub. L. 104-127, title I, Sec. 193(e), 110 Stat. 945; Pub. L. 105-185, title
V, Sec. 531, June 23, 1998, 112 Stat. 580.)

Sec. 1517. Separability

The sections of this chapter and subdivisions of sections are declared to be separable, and in
the event any one or more sections or parts of the same of this chapter be held to be
unconstitutional, the same shall not affect the validity of other sections or parts of sections of this
chapter.

(Feb. 16, 1938, ch. 30, title V, Sec. 517, 52 Stat. 77.)

Sec. 1518. "Agricultural commodity'' defined

    "Agricultural commodity'', as used in this chapter, means wheat, cotton, flax, corn, dry beans,
oats, barley, rye, tobacco, rice, peanuts, soybeans, sugar beets, sugar cane, tomatoes, grain
sorghum, sunflowers, raisins, oranges, sweet corn, dry peas, freezing and canning peas, forage,
apples, grapes, potatoes, timber and forests, nursery crops, citrus, and other fruits and vegetables,
nuts, tame hay, native grass, aquacultural species (including, but not limited to, any species of
finfish, mollusk, crustacean, or other aquatic invertebrate, amphibian, reptile, or aquatic plant
propagated or reared in a controlled or selected environment), or any other agricultural commodity,
excluding livestock and stored grain, determined by the Board under subsection (a) or (m) of
section 1508 of this title, or any one or more of such commodities, as the context may indicate.

(Feb. 16, 1938, ch. 30, title V, Sec. 518, as added June 21, 1941, ch. 214, Sec. 9, 55 Stat. 256;
amended Dec. 23, 1944, ch. 713, Sec. 4, 58 Stat. 919; Aug. 25, 1949, ch. 512, Sec. 9, 63 Stat. 665;
Sept. 26, 1980, Pub. L. 96-365, title I, Sec. 111, 94 Stat. 1319; Dec. 13, 1991, Pub. L. 102-237,
title VI, Sec. 601(6), 105 Stat. 1878; Oct. 13, 1994, Pub. L. 103-354, title I, Sec. 119(f)(3), 108
Stat. 3208.)

Sec. 1519. Repealed. Pub. L. 104-127, title I, Sec. 196(j), Apr. 4, 1996, 110 Stat. 950

 Section, act Feb. 16, 1938, ch. 30, title V, Sec. 519, formerly Sec. 518, 52 Stat. 77;
renumbered Sec. 519, June 21, 1941, ch. 214, Sec. 9, 55 Stat. 256; amended Oct. 13, 1994, Pub. L.
103-354, title I, Secs. 111, 112, 108 Stat. 3199, 3202, related to noninsured crop disaster assistance
program. See section 7333 of this title.

Sec. 1520. Producer eligibility

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

(Feb. 16, 1938, ch. 30, title V, Sec. 520, as added July 28, 1972, Pub. L. 92-357, 86 Stat. 501;
amended Oct. 13, 1994, Pub. L. 103-354, title I, Sec. 113, 108 Stat. 3203.)

Sec. 1521. Ineligibility for catastrophic risk and noninsured assistance payments

 If the Secretary determines that a person has knowingly adopted a material scheme or device
to obtain catastrophic risk, additional coverage, or noninsured assistance benefits under this chapter
to which the person is not entitled, has evaded this chapter, or has acted with the purposes of
evading this chapter, the person shall be ineligible to receive all benefits applicable to the crop year
for which the scheme or device was adopted. The authority provided by this section shall be in
addition to, and shall not supplant, the authority provided by section 1506(n) of this title.

(Feb. 16, 1938, ch. 30, title V, Sec. 521, as added Oct. 13, 1994, Pub. L. 103-354, title I, Sec. 114,
108 Stat. 3203.)

SEC. 535. CROP INSURANCE STUDY

(a) In general.--Not later than 90 days after the date of enactment of this Act, the Secretary of
Agriculture shall enter into a contract with 1 or more entities outside the Federal Government with
expertise in the establishment and delivery of crop and revenue insurance to agricultural producers,
under which the contractor shall conduct a study of crop insurance issues specified in the contract,
including--
 (1) improvement of crop insurance service to agricultural producers;
 (2) options for transforming the role of the Federal Government from a crop insurance
provider to solely that of a crop insurance regulator; and
 (3) privatization of crop insurance coverage.
(b) Contractor.--Not later than 180 days after the date the contract is entered into, the contractor
shall complete the study and submit a report on the study, including appropriate recommendations,
to the Secretary.
(c) Report.--Not later than 30 days after the date the Secretary receives the report, the Secretary
shall submit the report, and any comments on the report, to the Committee on Agriculture of the
House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate.

            Stand-Alone Provisions of P.L. 104-127
              Affecting the Crop Insurance Program

Sec. 192.  Risk Management Education (7 U.S.C. 7332)

 In consultation with the Commodity Futures Trading Commission, the Secretary shall provide
such education in management of the financial risks inherent in the production and marketing of
agricultural commodities as the Secretary considers appropriate.  As part of such educational
activities, the Secretary  may develop and implement programs to facilitate the participation of
agricultural producers in commodity futures trading programs, forward contracting options, and
insurance protection programs by assisting and training producers in the usage of such programs.
In implementing this authority, the Secretary may use existing research and extension authorities
and resources of the Department of Agriculture.

Sec. 194.  Establishment of Office of Risk Management

     (a)  Establishment - The Department of Agriculture Reorganization Act of 1994 is amended by
     inserting after section 226 (7 U.S.C. 6932) the following new section:

          "Sec. 226A.  Office of Risk Management (7 U.S.C. 6933)

           (a) Establishment - [Subject to subsection (e)], the Secretary shall establish and
     maintain in the Department an independent Office of Risk Management.

           (b) Functions of the Office of Risk Management - The Office of Risk Management
     shall have jurisdiction over the following functions:
            (1) Supervision of the Federal Crop Insurance Corporation.
                     (2) Administration and oversight of all aspects, including delivery through local
          offices of the Department, of all programs authorized under the Federal Crop Insurance
          Act (7 U.S.C. 1501 et seq.).
                     (3) Any pilot or other programs involving revenue insurance, risk management
          savings accounts, or the use of the futures market to manage risk and support farm income
          that may be established under the Federal Crop Insurance Act or other law.
   (4) Such other functions as the Secretary considers appropriate.

            (c)     Administrator -
                     (1) Appointment - The Office of Risk Management shall be headed by an
          Administrator who shall be appointed by the Secretary.
                     (2) Manager - the Administrator of the Office of Risk Management shall also serve
          as Manager of the Federal Crop Insurance Corporation.

            (d)     Resources -
                     (1) Functional Coordination - Certain functions of the Office of Risk
          Management, such as human resources, public affairs, and legislative affairs, may be
          provided by a consolidation of such functions under the Under Secretary of Agriculture
          for Farm and Foreign Agricultural Services.
                     (2) Minimum Provisions - Notwithstanding paragraph (1) or any other provision of
          law or order of the Secretary, the Secretary shall provide the Office of Risk Management
          with human and capital resources sufficient for the Office to carry out its functions in a
          timely and efficient manner."

 (b) Fiscal Year 1996 Funding - From funds appropriated for the salaries and expenses of
the Consolidated Farm Service Agency in the Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies Appropriations Act, 1996 (Public Law 104-37), the
Secretary of Agriculture may use such sums as necessary for the salaries and expenses of the office
of Risk Management established under subsection (a).

 (c) Conforming Amendment - Section 226(b) of the Act (7 U.S.C. 6932(b)) is amended by
striking paragraph (2).