The Managers on the part of the House and the Senate at the conference on the disagreeing votes of the two Houses on the amendment
of the Senate to the bill (H.R. 2559), to amend the Federal Crop Insurance Act to strengthen the safety net for agricultural producers by providing
greater access to more affordable risk management tools and improved protection from production and income loss, to improve the efficiency
and integrity of the Federal crop insurance program, and for other purposes, submit the following joint statement to the House and the Senate in
explanation of the effect of the action agreed upon by the managers and recommended in the accompanying conference report:
            The Senate amendment struck out all of the House bill after the enacting clause and inserted a substitute text.
            The House recedes from its disagreement to the amendment of the Senate with an amendment which is a substitute for the House bill
and the Senate amendment.  The differences between the House bill, the Senate amendment, and the substitute agreed to in conference are
noted below, except for clerical corrections, conforming changes made necessary by agreements reached by the conferees, and minor drafting
and clarifying changes.[1]  In the case where a provision of the House bill or the Senate amendment is adopted under the Conference substitute,
report language appurtenant to such provision of the House bill or Senate amendment, respectively, stands.
 

Short Title
            The House bill provides that this Act may be cited as the "Agricultural Risk Protection Act of 1999." (Section 1)
            The Senate amendment provides that this Act may be cited as the "Risk Management for the 21st Century Act."  (Section 1)
            The Conference substitute adopts the House provision providing that the Act be cited as the  “Agricultural Risk Protection Act of 2000.”
(Section 1)
 

                                              Title I—Crop Insurance Coverage

                                            Subtitle A – Crop Insurance Coverage
 

Premium Schedule for Additional Coverage
       The House bill amends section 508(d)(2) by striking subparagraphs (B) and (C) and inserts a new subparagraph (B).
       Paragraph (B) requires that the premium for insurance coverage equal to or greater than 50/100 (or an equivalent coverage) be
sufficient to cover anticipated losses and a reasonable reserve and include operating and administrative expenses, as determined by FCIC
based on an industry-wide percentage of the amount of premium used to define loss ratio.
      Amends section 508(e)(2) by striking paragraphs (B) and (C) that provide the amount of premium to be paid by FCIC for coverage of
less than 65/100 but greater than 50/100, and for coverage greater than 65/100, respectively.
      Adds new paragraphs (B) through (G) that provide for the new amount to be paid by FCIC for coverage levels ranging from 50 percent
coverage to 85 percent coverage.
      Provides that the amount to be paid by FCIC for each coverage level (or equivalent coverage) is the sum of the percent of premium
provided below (plus an amount of administrative and operating expenses determined under another section).
50-54% coverage = 67%
55-59% coverage = 64%
60-64% coverage = 64%
65-69% coverage = 59%
70-74% coverage = 59%
75-79% coverage = 54%
80-84% coverage = 40.6%
85% coverage = 30.6%
(Producers may choose any price election up to 100 percent of the price election, and coverage in 1 percent increments is authorized as under
current law.
Provides that each policy or plan of insurance contain a disclosure of the portion of premium paid by FCIC.
       The House bill amends section 508(d) by adding a new paragraph (3) to authorize FCIC to provide performance-based discounts to
producers with good production or insurance experience.
       Authorizes a 20 percent premium discount for the 2000 crop year for certain producers of specific crops that received a discounted
price due to Scab or Vomitoxin damage.
      The House bill amends section 508(c)(5) to provide that in the case of a cost of production or similar plan of insurance, the expected
market price (price election) is the projected cost of producing the crop.  (Section 101, 106 and 107)
      The Senate amendment amends section 508(d)(2) by striking subparagraph (C) and inserting a new (C) and (D) establishing premium
amounts.
      Paragraph (C) requires that the premium for insurance coverage equal to or greater than 65/100 but less than 75/100 (or a comparable
coverage for a plan of insurance not based on yield) be sufficient to cover anticipated losses and a reasonable reserve and include operating
and administrative expenses, as determined by FCIC based on an industry-wide percentage of the amount of premium used to define loss
ratio.
      Paragraph (D) requires that the premium for insurance coverage equal to 75/100, 80/100, and 85/100 (or a comparable coverage for a
plan of insurance not based on yield) is established at a level as indicated under paragraph (C).
      Amends section 508(e) by striking paragraph (1) providing that FCIC pay a portion of premium and inserts a new paragraph relative to
the same.
      Provides under paragraph (1)(A) that FCIC pay a portion of the premium as established in section 508(e)(2).
      Amends section 508(e)(2) by striking paragraphs (B) and (C) that provide for the amount of premium to be paid by FCIC for coverage of
less than 65/100 but greater than 50/100, and for coverage greater than 65/100, respectively.
      Adds new paragraphs (B) through (G) that provide for the new amount to be paid by FCIC for coverage levels ranging from 50/100 to
85/100.
      Provides that the amount to be paid by FCIC for each coverage level (or comparable coverage for a plan of insurance not based on yield)
is the sum of the percent of premium provided below (plus an amount of administrative and operating expenses determined under another
section).
50/100% coverage = 60%
55/100% coverage = 45%
60/100% coverage = 45%
65/100% coverage = 50%
70/100% coverage = 50%
75/100% coverage = 55%
80/100% coverage = 38%
85/100% coverage = 28%
(Producers must choose 100 percent price election to receive correlating percentage of assistance, and availability of coverage is limited to 5
percent increments).
      Provides under new paragraph (H) that paragraphs (A) through (G) are applicable for the 2001 through 2004 fiscal years.
      Amends section 508(a) by striking paragraph (3) relative to exclusions for coverage and inserting a new paragraph (3) relative to the
same.
      Provides conforming amendments amending section 508(e) by striking paragraph (4) requiring individual and area crop insurance
coverage and by striking reference to such authority under section 508(g)(2)(D).
      The Senate amendment amends section 508(c) by striking paragraph (5) relative to price levels and inserts a new paragraph relative to
price elections.
      Requires FCIC to establish or approve a price level, or expected market price, for each commodity insured.
      Provides that the expected market price (1) not be less than the projected market price of the crop;  (2) may be based on the actual
market price of the crop at the time of harvest;  (3) in the case of revenue or similar policies be the actual market price of the crop; or (4) in the
case of cost of production or similar policies be the cost of producing the crop.  (Section 103)
            The Conference substitute adopts the Senate provision relative to the expected market price with minor changes to clarify intent.  The
Conference substitute adopts the House provisions relative to premium amounts, performance-based discounts, payment schedule, and
premium payment disclosure with certain changes.  Language with respect to premium amounts and payment schedule has been modified to
clarify intent.  The provision providing discounts for producers of crops damaged by scab is omitted.  Premium assistance at the 75, 80, and 85
percent coverage levels are increased to 55 percent, 48 percent, and 38 percent, respectively, of the amount of premium used to define loss
ratio.  Current statutory authority to offer coverage in one percent increments is temporarily suspended.  (Section 101)
 
 
 

Premium Schedule for Other Plans of Insurance
      The House bill amends section 508(h)(2) by striking the second sentence limiting the portion of premium FCIC may pay for innovative
policies and by creating paragraphs (A) and (B).
      Subparagraph (B) requires that in the case of a policy submitted under section 508(h) (except paragraph (10) or subsection (m)(4)),
FCIC shall pay a portion of the premium equal to the percentage, prescribed under section 508(e) for a similar level of coverage, of the total
amount of the premium used to define loss ratio, and the dollar amount of the administrative and operating expenses that would be paid by FCIC
under section 508(e) for a similar level of coverage.  (Section 102)
      The Senate amendment amends section 508(e) by striking paragraph (1) relative to requiring FCIC to pay a portion of premiums and
inserts a new paragraph (1) related to the same.
      Provides under the new paragraph (1)(B) that FCIC may pay a portion of the premium as established in 508(e)(2) for innovative plans of
insurance approved by FCIC under section 508(h). (Section 103)
      The Conference substitute adopts the House provision relative to premium assistance for all policies or plans of insurance developed
and approved under section 508(h) or 522 or conducted under section 523 (except livestock pilot programs) with certain changes.  The
administrative and operating costs associated with all such policies or plans of insurance must comply with section 508(k)(4), including any
proportional reductions that may apply.  Section 508(k)(4), including any proportional reductions, applies to all such policies or plans of
insurance whether developed and approved on, before, or after the date of enactment of this Act.  However, the effective date of the
amendments made by section 102 are delayed until after the reinsurance year 2001 with respect to policies or plans of insurance developed
and approved subsequent to the date of enactment.  During the reinsurance year 2001, the portion of the premium paid by the Corporation for
such policies or plans of insurance developed and approved subsequent to the date of enactment may not exceed the dollar amount authorized
under the new payment schedule for multiple peril crop insurance.  Administrative and operating costs associated with such policies during the
reinsurance year 2001 are adjusted accordingly, subject to section 508(k)(4), including any proportional reductions that may apply. (Section
102)
 

Catastrophic Risk Protection
      The House bill amends section 508(b) by striking paragraph (3) relative to yield and loss basis and inserts a new paragraph (3) relative
to the same.
      Provides that, beginning with the 2000 crop year, FCIC must offer producers a choice between the current CAT coverage and an
alternative CAT coverage that indemnifies the producer on an area yield and loss basis, provides a higher combination of yield and price
election, and that FCIC determines is comparable to "CAT."
            The House bill amends section 508(b)(5) by adding a new subparagraph (F) relative to payment of fees on behalf of producers.
Authorizes a cooperative association or nonprofit trade association to pay "CAT" fees on behalf of consenting producers.
      Provides that licensing fees or other payments made by approved insurance providers to a cooperative association or nonprofit trade
association in connection with the sale of "CAT" or "buy-up" insurance shall not be construed as a rebate providing the producer receives prior
notice of the fee.
      Provides that nothing in the subparagraph limits the ability of a producer to choose an agent or an insurance provider or refuse "CAT"
coverage purchased pursuant to this subparagraph.  Further requires that "CAT" policies sold under such an arrangement must be through a
licensed agent or approved insurance provider.
      Requires that participating cooperative associations, nonprofit trade associations, and approved insurance providers that operate under
this subparagraph to encourage producer members to purchase appropriate coverage.
      The House bill amends section 508(b)(11) reducing loss adjustment expense reimbursements relative to CAT policies to approved
insurance providers from 11 percent of imputed premium to 8 percent of the same.
      Amends section 508(k)(4)(A)(ii) by reducing administrative and operating expense reimbursements to approved insurance providers
from 24.5 percent of premium used to define loss ratio to 24 percent of the same.
      Provides that amendments are applicable with respect to the 2001 and subsequent reinsurance years.  (Sections 108, 109 and
310(a)(1))
      The Senate amendment requires any person that sells or solicits the purchase of a policy or adjusts losses under the FCIA in any state
must be licensed and qualified to do business in that state, and must comply with all state regulations (including commission and anti-rebating
regulations) as required under state law.   (Sections 313)
      The Conference substitute adopts the House provisions relative to the provision of alternative catastrophic risk protection and the
reimbursement rate change for loss adjustments associated with catastrophic risk protection.  The reduction in administration and operating
cost reimbursement is omitted.  The Conference substitute further adopts the House provision relative to the payment of catastrophic risk
protection fees by associations on behalf of member producers, and the treatment of licensing fees received by associations in connection with
the issuance of insurance with changes.  Rebating in connection with the issuance of crop insurance coverage is subject to the State laws in
which the rebate is made.  If a cooperative association or trade association is located in a State that permits rebating in connection with the
issuance of crop insurance coverage, the association may pay catastrophic risk protection (CAT) fees on behalf of members in that State or in a
contiguous State.  A report to Congress on the operation and impact of this provision is required.   Finally, the Conference substitute increases
the fees associated with catastrophic risk protection from $60 to $100 per crop per county.  (Section 103)
 

Administrative Fee for additional coverage

             The Conference substitute provides for an administrative fee of $30 per crop per county to be paid by producers electing coverage in
excess of catastrophic risk protection.  (Section 104)
 
 

Assigned yields and actual production history adjustments
      The House bill amends section 508(g) by adding paragraph (4) relative to adjustment in actual production history to establish insurable
yields.
      Provides that this paragraph shall apply when FCIC uses the APH of a producer to establish insurable yields for a crop for the 2001 and
subsequent crop years.
      Provides that, if, for one or more of the crop years used by a producer to establish APH, the producer's yield is less than 60 percent of the
applicable "T" yield, the producer may exclude each of such crop years and replace the excluded yield with a yield equal to 60 percent of "T".
This section applies retroactively to already recorded yields and prospectively to future yields.
      Amends section 508(g) by adding paragraph (5) relative to APH adjustment to reflect participation in major pest control efforts.
      Requires FCIC to develop a methodology for adjusting the APH of a producer's crop when the producer's farm is located in an area
where efforts have been undertaken to eradicate or retard plant pests and disease, where the presence of the pest or disease has been found
to reduce applicable crop yields, and where the efforts undertaken have been effective.  Requires APH adjustments to reflect the success of the
effort undertaken. (Section 103)
      The Senate amendment amends section 508(g)(2)(B) by requiring FCIC to assign a producer a yield for a crop where the producer has
not had a share of the production of the crop for more than 2 years; has not before farmed the land; or rotates to a crop that has not before been
produced on the farm.
      The Senate amendment amends section 508(g) by adding paragraph (4) relative to transitional adjustments for disasters.
      Defines "a producer that has suffered a multiyear disaster" as a producer or successor entity that has suffered a natural disaster during at
least 3 of the immediately preceding 5 crop years that resulted in a cumulative reduction of at least 25 percent in APH of a crop.
      Provides that, beginning with the 2001 crop year, a producer of an insured crop that has suffered a multiyear disaster may exclude 1 year
of the crop's production history for each 5 years included in the crop's APH.
      Requires FCIC to pay for any increased premiums, indemnities, and administrative and operating expenses that result from the exercise
of a producer to exclude 1 year of a crop's production history.
      Prohibits FCIC from limiting any increase in a producer's APH due to the producer's actual production of the crop in succeeding years
until such time that the producer's APH has recovered to the level obtained in the year before the first year of multiyear disaster.
      Rescinds FCIC authority allowing eligible producers to exclude any 1 crop year in the first crop year where a policy is available to
adequately address natural disasters occurring in multiple crop years.
      Makes the paragraph applicable for the 2001 through 2004 reinsurance years. (Sections 104 & 105)
      The Conference substitute adopts the Senate provision relative to assigned yields and the House provision relative to adjustments to
actual production history with minor changes to clarify intent.  (Section 105)

Review and Adjustment in Rating Methodologies
      The House bill amends section 508(a) by adding a new paragraph (7) relative to the review and adjustment in rating methodologies.
      Requires FCIC to periodically review the methodologies employed for rating plans of insurance consistent with section 507(c)(2) relative
to contracting for such services.  Requires FCIC to analyze the rating and loss history of policies and plans of insurance for crops by area and
make appropriate adjustments for the 2000 crop year or as soon as possible where premium rates are found to be excessive. (Section 104)
      The Senate amendment requires FCIC to contract for the study and development of alternative rating methodologies for rating plans of
insurance for "CAT" and "buy-up" coverage, taking into account producers not electing to participate in crop insurance and those electing only
"CAT" coverage.
      Requires that, with respect to such rating studies, a priority be given to crops with the largest average acreage nationwide but lowest
percentage of producer participation at buy-up coverage levels.
      Requires FCIC to provide funding for rating studies from the account established under section 516(b)(2)(A) of the FCIA, and specifically
authorizes $1 million for fiscal years 2001 and 2002 and $250,000 in fiscal years 2003 and 2004.
      Provides that the paragraph relative to funding be applicable for the fiscal years 2001 through 2004. (Section 202)
      The Conference substitute adopts the House provision relative to review and adjustment in rating methodologies with a change to
require such adjustments take place in the 2002 crop year and thereafter, rather than in the 2000 crop year and thereafter.  (Section 106)
      The Managers urge the Corporation to complete the process of developing alternative rating methodologies for all insurable crops. The
Managers also urge the Corporation to base Multi-Peril Crop Insurance (MPCI) cotton rates in Texas on the results of the analysis prepared on
their behalf by researchers at Montana State University and to adopt these rates beginning with the 2001 crop year on the same basis as the
Corporation implemented revised MPCI Premium rates in the Mid-South and Far West regions.
 
 

Quality Adjustment
      The House bill amends section 508(a) by adding a new paragraph (9) relative to quality grade loss adjustment.
      Requires that, consistent with subsection (m)(4) relative to contracting for research requirements, FCIC enter into a contract by the 2000
crop year to analyze quality loss adjustment procedures and make adjustments necessary to more accurately reflect local quality discounts,
taking into account actuarial soundness requirements and prevention of fraud, waste, and abuse. (Section 112)
      The Senate amendment strikes 508(a)(6) requiring guidelines, reports, studies, and pilot programs relative to the addition of new and
specialty crops, and inserts a new paragraph (6) relative to quality adjustment.
      Requires FCIC to offer coverage that permits a reduction in production for purposes of determining a loss to reflect any production not
meeting quality standards.
      Allows producers to opt-out of quality adjustment coverage and receive a reduction in premium equal to the cost of the coverage.
      Requires FCIC to contract for the study of quality loss adjustment procedures and, based on the study, to adjust the coverage to better
reflect local quality discounts, taking into consideration actuarial soundness and the prevention of fraud, waste, and abuse.  (Section 101)
      The Conference substitute adopts the Senate provision relative to quality adjustments with certain changes.  Language to permit
producers to opt-out of such coverage and receive a premium reduction is omitted.  Language is included to permit producers to elect such
coverage, under limited circumstances, on a basis smaller than a unit, and a provision relative to the manner in which the Corporation sets
quality standards is also included.   (Section 107)

Double Insurance and Prevented Planting
            The House bill amends section 508(a) by adding a new paragraph (8) relative to prevented planting.
      Allows producers to opt-out of prevented planting coverage and receive a reduction in premium equal to the cost of the prevented
planting coverage.
      Requires FCIC to provide an equal percentage level of prevented planting coverage for each crop.
      Limits prevented planting payments to producers prevented from planting due to conditions generally affecting the area in which the
producer farms.
      Authorizes a producer who received a prevented planting payment to plant a second crop other than the crop prevented from being
planted on the same acreage, except that the second crop is not eligible for NAP or crop insurance coverage.
      Provides that a producer who elects to plant a second crop which is not insurable or NAP eligible still qualifies for AMTA loans and
payments, CRP, and guaranteed and direct loans and other benefits under the ConAct.
      Requires FCIC to assign a producer who receives a prevented planting payment and who elects to plant a second crop a yield for the
prevented crop for that year equal to 60 percent of the producer's actual production history for purposes of future APH.
Denies a prevented planting payment to a producer who plants a second crop before the latest planting date for the crop prevented from being
planted.
      The House bill amends section 508(a) by adding a new paragraph (10) relative to limitations on double insurance.
      Prohibits a policy or plan of insurance for more than one crop planted on the same acreage in the same crop year unless the coverage
for the additional crop is "CAT" coverage.
      Provides an exception to the limitation on double insurance where both crops are normally harvested within the same crop year on the
same acreage; there is an established practice of double-cropping in the area and the additional crop is customarily double-cropped in the area
with the first crop; a policy of insurance is offered for both crops; and the additional crop is planted on or before the final or late planting date for
that crop. (Sections 110 and 201)
      The Senate amendment is substantially the same as the H.R. 2559 except the following additional provisions.
      Makes the prevented planting paragraph applicable for the 2001 through 2004 crop years.
      Requires that changes made to prevented planting coverage be reflected in the rates for coverage not later than the 2001 reinsurance
year. (Section 102)
      The Senate amendment amends section 508(m) (subsection (n) designated as (m) under section 207 of Senate amendments.
      Requires that FCIC may only offer insurance or reinsurance on 1 crop produced on specific acreage during a crop year, unless there is
an established practice of double-cropping in an area, the additional insurance is offered to a crop that is customarily double-cropped in the
area, and the producer has a history of double-cropping or the acreage has historically been double-cropped.  (Section 308)
      The Conference substitute provides limitations with respect to double insurance and prevented planting coverage.
The Conference substitute establishes a new Section 508A for both double insurance and prevented planting and provides the following
definitions:
            "First Crop" means the first crop of the first agricultural commodity insured and planted for harvest, or prevented from being planted, on
specific acreage during a crop year.
            "Second Crop" means a second crop of the same or different agricultural commodity following the first crop that is planted for harvest on
the same acreage as the first crop in the same crop year.  However, the term does not include a replanted crop.
            "Replanted Crop" means the second planting of the first crop on the same acreage in the same crop year, if the replanting is required by
the terms of the policy of insurance on the first crop.
            In the case of double insurance, the Conference substitute provides a producer with two options if a first crop has a total or partial
insurable loss.  If the producer chooses not to plant a second crop, then the producer is entitled to 100 percent of the indemnity payment for the
first crop.
      If the producer plants a second crop, then the producer will receive an initial indemnity payment up to 35 percent of the total calculated
indemnity payment for the first crop.  The Managers intend that the Secretary adjust the percentage paid as necessary to prevent abuse of the
program.  If the producer is not paid an indemnity on the second crop, then the producer will receive an additional indemnity payment equal to
the total calculated indemnity on the first crop less the initial indemnity payment.  If an indemnity is paid with respect to the second crop, then the
producer is not entitled to receive the additional indemnity payment with respect to the first crop.
      In the case of a producer who chooses to plant a second crop, the premium owed for insurance on the first crop will be reduced
commensurate with any reduction in indemnity payment received on the first crop.  If no indemnity is paid on the second crop, then the producer
owes the full premium for insurance on the first crop.
      With regard to prevented planting, the Conference substitute provides a producer with two options if a first crop is prevented from being
planted.  If the producer chooses not to plant a second crop, then the producer may collect 100 percent of the prevented planting guarantee for
the first crop.
      If the producer plants a second crop, then the producer will receive up to 35 percent of the prevented planting guarantee for the first crop.
The Managers intend that the Secretary adjust the percentage paid as necessary to prevent abuse of the program.   In addition, except for
producers who double crop in a double cropping area, a producer who plants a second crop will be assigned a recorded yield of 60 percent of
the producer's actual production history for the crop on which a prevented planting guarantee payment is received.  This will be used in
determining a producer's actual production history for subsequent crop years for the first crop. The Corporation may only pay the prevented
planting guarantee to a producer if the conditions that prevented the first crop from being planted have also generally affected other producers in
the area.  In addition, the Corporation may not make a prevented planting guarantee payment for the first crop in the case of any producer who
plants a second crop before the latest planting date for the first crop.
      In the case of a producer who chooses to plant a second crop, the producer's premium for the first crop will be reduced commensurate
with any reduction in indemnity payment received on the first crop.

      The Conference substitute provides that, notwithstanding the restrictions placed on double insurance and prevented planting, a producer
will receive full indemnity payments and prevented planting guarantees on 2 or more crops in a double cropping area.   There must be an
established practice of planting 2 or more crops for harvest in the same crop year in the area, as determined by the Corporation, and an
additional coverage policy or plan of insurance must be offered with respect to the commodities planted on the same acreage in the same crop
year.  In addition, the producer must have a history of planting 2 or more crops in the same year; the applicable acreage must have historically
been planted to 2 or more crops in the same year; and the second or subsequent crops must be customarily planted after the first crop on the
same acreage in the same year.  The Managers intend that in determining when an agricultural commodity is customarily double cropped in a
double cropping area, that the Corporation consider the farming and irrigation practices applicable to the crops in the area. (Section 108)

Noninsured Crop Disaster Assistance Program
            The House bill amends section 196(i) of the AMTA in paragraph (1) by striking "gross revenues" wherever it appears and inserting
"gross income" and by striking paragraph (4) and adding a new paragraph (4).
      Paragraph (4) provides that a person with a qualifying adjusted gross income of greater than $2 million during the taxable year is
ineligible to receive NAP assistance.
      The House bill also amends section 196(b) of the FAIR Act of 1996 to require that to be eligible for NAP, producers must provide
annually to the Secretary, acting through the agency, records of crop acreage, acreage yields, and production for each eligible crop.  (Sections
111 and 205)
      The Senate amendment amends section 196(a)(2) of AMTA by adding a new subparagraph (C) allowing the Secretary to consider all
varieties of a crop eligible for NAP as a single eligible crop for program purposes.
      Amends section 196(b)(1) relative to when a producer must apply for NAP assistance, striking discretionary authority for the Secretary to
determine the application deadline and inserting the requirement that producers apply not later than March 15.
      Strikes paragraph 196(b)(2) providing the Secretary discretionary authority pertaining to what production records a producer must
submit, and inserting a requirement that, to be eligible for NAP, producers must annually submit crop acreage, acreage yields, and production
for each crop.
      Amends paragraph 196(b)(3) to require annual reporting of acreage planted or prevented from being planted.
      Strikes section 196(c) relating to loss requirements and inserts a new subsection (c) relative to the same.
      Provides that a producer of an eligible crop must have suffered a loss of a noninsured crop as a result of drought, flood, or other natural
disaster as determined by the Secretary.
      Authorizes the Secretary to make payments under NAP once a drought, flood, or other natural disaster determination is made.
      Changes the prevented planting payment trigger for eligible crops from a 35 percent acreage threshold to a 15 percent acreage
threshold.
      Authorizes the Secretary to make a NAP payment irrespective of any area loss trigger.
      Amends section 196 by inserting a new subsection (j) and (k) relative to new eligible crops and service fees, respectively, and
designating the current subsection (j) as subsection (l).
      Provides under section 196(j)(1) that the NAP payment to a producer of an eligible crop that is new to an area will be equal to 35 percent
of the established yield for the first year the crop is produced.
      Provides that the NAP payment to a producer of an eligible crop that is new to an area will be equal to 45 percent of the established yield
for the second through fourth years the crop is produced, except where a NAP payment was made in the first year in which case the payment is
35 percent.
      Makes a producer of an eligible crop ineligible for a NAP payment where the producer collects a NAP payment in the first 2 crop years,
until such time that the crop is produced for 3 consecutive crop years with no reported losses.
      Provides for a service fee for NAP eligibility under section 196(k), requiring producers to pay the Secretary an amount equal to the fee for
a CAT policy ($60 per crop per county) or $200 per producer per county, not to exceed $600 per producer. Provides for the waiver of NAP fees
for limited resource producers.
      Provides that NAP fees collected by the Secretary be deposited in the CCC Fund.  Makes amendments under this section applicable for
the 2001 through 2004 crop years.  (Section 106)
      The Conference substitute adopts the Senate provision relative to the Noninsured Crop Disaster Assistance Program with changes.
Producers are required to make an application for NAP eligibility not later than 30 days before the beginning of the coverage period.  Changes
relative to prevented planting and yields for new NAP eligible crops provided under the Senate amendment are omitted.  The NAP fee provided
in the Senate amendment is modified to require producers to pay the lesser of $100 per crop per county or $300 per producer per county, but
not to exceed $900 per producer.   (Section 109)
 
 

                                              Subtitle B – Improving Program Integrity
 

Improving Program Compliance and Integrity
      The House bill amends section 506(q) by designating paragraphs (1) and (2) as (2) and (3), creating paragraph (1) relative to purposes,
and creating new paragraphs (4) through (7) relative to certain compliance requirements.
      Paragraph (4) requires the Secretary to develop and implement a coordinated plan for FCIC and FSA to reconcile information received
from producers and, beginning with the 2000 crop year, requires FCIC and FSA to annually conduct such reconciliation to identify and address
any discrepancies.
      Paragraph (5) requires the Secretary to develop and implement a coordinated plan for FSA to assist FCIC in ongoing monitoring of FCIA
programs, including conducting fact findings relative to allegations of fraud, waste or abuse at the request of FCIC or on its own initiative after
consultation with FCIC; reporting fraud, waste, abuse, and program vulnerabilities to FCIC; assisting FCIC in auditing a statistically appropriate
number of claims.  Also provides that the Secretary ensure that FSA personnel are appropriately trained and, at minimum, receive the same
training and testing as loss adjusters.
      Requires maintenance of effort on the part of approved insurance providers in conducting audits of claims, requires FCIC to respond
within 90 days of receiving notice by approved insurance providers of intentional violations, and requires a coordinated response to violations by
FCIC and approved insurance providers.
      Paragraph (6) requires the Secretary to establish a mechanism under which state FSA committees are consulted concerning policies
and plans of insurance offered in the state.
Paragraph (7) requires the Secretary to submit an annual report to the House and Senate Agriculture Committees containing findings relative to
the efforts undertaken in paragraphs (4) and (5), identifying specific incidences of fraud, waste, and abuse along with actions taken to eliminate
the same.
      The House bill amends section 506(n) by striking "penalties" where it occurs and inserting "sanctions" and redesignating paragraph (2)
as paragraph (3).
      Strikes paragraph (1) relative to false information and inserts new paragraph (1) relating to the same.
      Provides that a producer, agent, loss, adjuster, approved insurance provider, or other person that intentionally provides false or
inaccurate information to FCIC or to an approved insurance provider with respect to a policy may, after notice and opportunity for a hearing, be
subject to sanctions.
      Provides that sanctions include a civil fine not to exceed the greater of the amount of the pecuniary gain obtained by the violator or
$10,000; debarment of a producer from specified farm programs for up to 5 years; and debarment of other persons from benefits under the
FCIA for up to 5 years.  Also provides that FCIC may require the producer to forfeit any premium owed notwithstanding denial of a claim or
collection of overpayment if the violation is material.
      Requires sanctions be disclosed on each policy.  (Sections 202 and 203)
      The Senate amendment strikes section 506(n), relative to penalties for false information, and provides a new subsection (n) relative to
sanctions for program noncompliance and fraud.
      Provides that a producer, agent, loss, adjuster, approved insurance provider, or other person that intentionally provides false or
inaccurate information to FCIC or to an approved insurance provider with respect to a policy may, after notice and opportunity for a hearing, be
subject to a sanction under this subsection.
      Provides that a producer, agent, loss adjuster, approved insurance provider, or other person that intentionally fails to comply with an FCIC
requirement is subject to sanctions, and that any such person (other than a producer) intentionally failing to comply with an SRA is also subject to
sanctions.
      Provides sanctions for material violations relative to providing false information and compliance failure. Sanctions include a civil fine not
to exceed the greater of the amount of the pecuniary gain obtained by the violator or $10,000; debarment of a producer from all farm programs
for up to 5 years; and debarment of other persons from benefits under the FCIA for up to 5 years.
      Requires the Secretary to consider the gravity of the violation in determining whether to impose a sanction and the amount or degree of
any sanction imposed.  Also requires disclosure of sanctions on each policy of insurance.
      Requires that funds collected under this subsection be deposited into the insurance fund provided under section 516(c)(1) of the FCIA
(general FCIA insurance fund).  Amends section 516(c)(1) of the FCIA by striking paragraph (1) and inserting a new paragraph (1) providing
that, along with premium income and amounts under section 516(a)(2), sanctions fees are to be deposited in this fund.
      The Senate amendment amends section 506(q) of the FCIA, relative to program compliance, by adding at the end paragraphs (3) and
(4).
      Paragraph (3) requires FCIC to develop procedures for an annual review of each agent and loss adjuster by approved insurance
providers, oversee such review, and consult with approved insurance providers relative to any remedial action required.
      Requires FCIC to file a report with the House and Senate Agriculture Committees by the end of each fiscal year relative to compliance,
along with recommendations for any necessary legislative or administrative changes.  (Sections 303 and 304)
      The Conference substitute adopts the House provisions relative to improving compliance and integrity with modifications.  Procedures
with respect to FSA inquiries into fraud, waste, and abuse as well as notice and response requirements concerning allegations of fraud, waste,
and abuse are clarified.  The Secretary is required to establish procedures by which the Corporation will be able to identify agents and loss
adjusters with disparate performance records in order to conduct a review and take remedial action where appropriate.  Certain information,
including the name and identification number of each insured and the crop to be insured, the elected coverage level, and price election selected
must be received by the Corporation approximately 30 days subsequent to the sales closing date.  The Conference substitute also adopts the
Senate provision relative to sanctions for program noncompliance and fraud, with a minor change to exclude the failure to comply with a
Standard Reinsurance Agreement from the class of activities that would trigger the imposition of sanctions enumerated under this section.  The
Conference substitute further adopts the Senate provision to require the Corporation to develop procedures for approved insurance providers to
review the performance of agents and loss adjusters.  Finally, the Conference substitute adopts provisions to require the Secretary to upgrade
information management systems and use data mining and data warehousing technologies, including contracting with private entities with
expertise in this area, in implementing compliance provisions.  Limited funding is authorized for fiscal years 2001 through 2005 to carry out
these compliance activities, excluding salaries.    (Section 121)
      In an effort to combat fraud and abuse in the crop insurance program, the Managers direct the Secretary to develop and implement a
coordinated plan for the Farm Service Agency to assist the Corporation in monitoring and reporting on crop insurance program activity at the
local field level. In addition, the Corporation must establish a working relationship with insurance providers in order that information regarding
fraud, waste, and abuse may be reported to the Corporation without fear of legal reprisal to the insurance providers.  The Managers expect the
Secretary to ensure that each of the agency roles are clearly defined with the Corporation responsible for implementing all rules and regulations
relating to the insurance program.
      The Managers expect that the Corporation will make full use of the capabilities of information management systems, specifically data
warehousing and data mining technologies, both within or outside of the Federal government, to fulfill the requirements of this section to improve
the compliance and integrity of the Federal crop insurance program.  The Managers expect the Corporation to use funds made available by this
Act, or otherwise available, to contract with the Center for Agribusiness Excellence at Tarleton State University and the Center for Agribusiness
and Agrotechnologies at Bradley University for management and development of a system to implement the requirements of this section.
      The Managers direct the Corporation to place the highest financial priority and emphasis on the interactive computer operations to
ensure that participating insurance companies are able to accurately transmit financial data back to the agency.
 

Protection of Confidential Information
      The House bill amends section 502 by adding a new subsection (c) relative to the protection of confidential information.
      Prohibits the Secretary, any other officer, employee, or agency of USDA, an approved insurance provider and its employees and
contractors, and any other person from disclosing producer-derived information to the public unless it is transformed into a statistical or
aggregate form that does not reveal the producer's identity.
      Provides for penalties consistent with section 1770(c) of the Food Security Act of 1985, including fines up to $10,000 and or
imprisonment for up to 1 year.  (Section 204)
      The Senate amendment has no comparable provision.
      The Conference substitute adopts the House provision protecting producer confidentiality with a minor change to allow producers to
consent to the release of otherwise protected information as long as program eligibility is not conditioned upon the release.  (Section 122)

Good Farming Practices
      The House bill amends section 508(a)(3)(C) relative to losses excluded from coverage by clarifying that scientifically sound sustainable
and organic farming practices are good farming practices. (Section 309)
      The Senate amendment is substantially the same as the House bill.
      The Conference substitute adopts the Senate provision relative to the inclusion of scientifically sound sustainable and organic farming
practices as good farming practices for purposes of what constitutes an insurable loss under the Federal Crop Insurance Act.  The Conference
substitute further requires that producers be provided with an informal administrative review of a determination regarding good farming
practices but proscribes any such review pursuant to the National Appeals Division.  Producers have a right to judicial review relative to a
determination regarding good farming practices without having to exhaust any informal administrative review.  However, any determination
regarding good farming practices may not be reversed under a judicial review unless it is found to be arbitrary or capricious.  (Section 123)
      The Managers understand that producers of organic cotton who destroy their crop when it has been exposed to chemicals used in boll
weevil eradication are currently being penalized relative to their actual production history despite the fact that they do not qualify for a crop
insurance indemnity.  The Managers expect the Corporation to immediately rectify this inequity with respect to any producer of an organic crop
who must destroy that crop in order to maintain organic certification.  To the extent that no indemnity is received for a lost crop under these
circumstances, no penalty relative to actual production history should obtain.

Records and Reporting
      The House bill amends section 508(f)(3)(A) of the FCIA relative to producer reporting requirements.
      Requires producers participating in the crop insurance program to annually report records acceptable to the Secretary regarding crop
acreage, acreage yields, and production for each crop insured.
      Amends section 506(h) of the FCIA by requiring the coordination of records kept under the FCIA and under the NAP program to avoid
duplication, to streamline submission procedures, and to enhance accuracy.
      Provides that such records collected under NAP and the FCIA be made available to appropriate state and federal agencies to carry out
these programs and other agricultural programs and related responsibilities.
      Amends section 196(b) of the FAIR Act of 1996 to require that to be eligible for NAP, producers must provide annually to the Secretary,
acting through the agency, records of crop acreage, acreage yields, and production for each eligible crop. (Section 205)
      The Senate amendment amends section 508(f)(3)(A) of the FCIA relative to producer reporting requirements.
      Requires producers participating in the crop insurance program to annually report records acceptable to the Secretary regarding crop
acreage, acreage yields, and production for each crop insured.
      Amends section 506(h) of the FCIA by requiring the coordination of records kept under the FCIA and under the NAP program to avoid
duplication, to streamline submission procedures, and to enhance accuracy.
      Provides that such records collected under NAP and the FCIA be made available to appropriate state and federal agencies to carry out
these programs and other agricultural programs and related responsibilities.
      The Senate amendment also strikes paragraph 196(b)(2) providing the Secretary discretionary authority pertaining to what production
records a producer must submit, and inserting a requirement that, to be eligible for NAP, producers must annually submit crop acreage, acreage
yields, and production for each crop.   Amends paragraph 196(b)(3) to require annual reporting of acreage planted or prevented from being
planted.  (Sections 306 and 106)
      The Conference substitute adopts the House provision with changes to omit provisions dealt with elsewhere in the Act.  (Section 124)
 

                                           Subtitle C—Research and Pilot Programs
 

Research and Development

      The House bill amends section 508(h) by adding a new paragraph (6) relative to reimbursement of research, development, and
maintenance costs.
      Requires FCIC to reimburse an applicant for research, development, and maintenance costs directly related to a policy submitted to and
approved by the Board and, if applicable, sold to producers.
      Authorizes payments to applicants beginning with fiscal year 2001 and limits reimbursement for maintenance to no more than 4
reinsurance years from approval, after which FCIC assumes maintenance of successful policies.
      Provides that payments under this paragraph be considered payment in full for research and development and any property rights.
      Requires FCIC to determine the amount of reimbursement based upon the complexity of the policy or material and the size of the area to
be served.  Requires FCIC to issue final regulations not later than October 1, 2000.
      The House bill also authorizes $55 million for each fiscal year for reimbursement and direct contracting for research and development of
new policies.
      The House bill amends section 508(m) by adding a new paragraph (4).
      Paragraph (4) requires FCIC to make full use of the reimbursement provisions of section 508(h) to encourage and promote private
research and development of new policies and plans of insurance.
      Provides that where FCIC determines that a crop, including a specialty crop, is not adequately served by crop insurance, FCIC may enter
into contracts directly with any person or entity with experience in crop insurance or farm or ranch risk management, including universities,
approved insurance providers, and trade and research organizations, to conduct research and development, without regard to the limitations
contained in the FCIA.
      Provides that the authority of FCIC to contract for the research and development of policies, includes research and development for
policies based on adjusted gross income, cost of production, quality losses, and an intermediate base program with a higher coverage and cost
than "CAT".
      Delays effective date of contracting authority until October 1, 2000.
      Provides that FCIC may offer any policy developed under this subparagraph that is approved by the Board.
      Requires FCIC to contract for research and development regarding one or more revenue coverage plans involving current or new market
instruments.  Requires FCIC to report the results of the contract within 15 months from enactment of this paragraph.
      Amends section 508(m)(2) relative to the prohibition of FCIC research with respect to risk protection generally available from the private
sector, to prohibit FCIC from conducting its own research and development of new policies on or after October 1, 2000.  Provides that FCIC
may continue to offer any policies developed by FCIC before that date.
      Amends section 508(m) by adding a new paragraph (5), relative to partnerships for risk management development and implementation.
      Authorizes FCIC to enter into partnerships with public and private entities to increase the availability of loss mitigation, financial, and risk
management tools for producers of crops covered under NAP and other under-served and specialty crop producers.
      Authorizes FCIC to enter into partnerships with CSREES, ARS, NOAA, and other appropriate public and private entities with
demonstrated ability in developing and implementing risk management and marketing options for specialty and under-served crops.
      Provides a list of objectives to be obtained as a result of any partnerships.
      Provides that funds not used for reimbursements or for direct contracting for specialty and under-served crops may be used by FCIC to
enter into such partnerships.
      Provides that funding for partnerships during fiscal years 2001 through 2004 are available where amounts used for reimbursements and
direct contracting are less than $44 million, $47 million, $50 million, and $52 million for fiscal years 2001 through 2004, respectively, and where
the amount for partnerships does not exceed the difference between the amounts provided above and the amount actually spent thereon.
      This paragraph is applicable beginning on October 1, 2000.
      The House bill amends section 508(h)(6) by adding a new subparagraph (E) relative to expenditures on reimbursements and direct
contracting for research and development.
      Provides that of the amounts made available for reimbursements and direct contracting for research and development, $25 million shall
be reserved for direct contracting for specialty and under-served crops.  Provides that any unused portions of the reserved amount may be used
for reimbursements, with priority for under-served crops.  Also provides that of the amounts made available for reimbursements and direct
contracting for research and development, more than $25 million may be used for contracting for specialty and under-served crops where
necessary.
      Authorizes $55 million for each fiscal year for reimbursement and direct contracting for research and development of new policies.
      Amends section 516(a)(2) by adding a new subparagraph (D) authorizing appropriations for costs associated with research,
development, and maintenance costs.
      Amends section 516(b)(1) by adding a new subparagraph (E) authorizing reimbursements, research, and development costs to be paid
by the FCIA Fund.  (Section 302, 303 and 304)
      The Senate amendment provides that with respect to research and analysis concerning any crop insurance issue, including outreach,
education, pilot programs, or the development of new plans of insurance, FCIC is limited to the authority provided under the newly created
section 522 and the funds made available under section 516(b)(2)(A) of the FCIA when contracting or reimbursing research costs related to
policy development or modification.  Newly created section 523 relative to specialty crops is exempted from this limitation.
      Requires that FCIC establish the development of a pasture, range, and forage program to promote land stewardship as "1 of the highest
research and development priorities."
      Requires FCIC to contract for a study to determine whether the development of a plan of insurance providing coverage for multiple years
would curb fraud and abuse, and requires a report on findings to the House and Senate Agriculture Committee within 1 year of enactment.
      The Senate amendment also amends the FCIA by adding at the end section 523, relative to specialty crops.
      Authorizes the Specialty Crops Coordinator to make grants or enter into contract for research and development of policies to serve
under-served specialty crops and reimburse costs associated with such research and development.
      Authorizes the Specialty Crops Coordinator to enter into partnerships with public and private entities to increase the availability of risk
management tools for specialty crop producers.
      Authorizes $20 million in funding from section 516(c)(1) (FCIA Fund) for each of fiscal years 2001 through 2004 to enter into cooperative
agreements with public and private entities to develop and implement risk management tools for specialty crop producers.  Provides that such
amounts may not come from section 516(b)(2)(A).
      Provides a list of objectives to be obtained as a result of any partnerships.
      Prohibits FCIC from establishing a sales closing date for specialty crops that is before the end of the 120-day period beginning on the
date of the final release of materials for policies from RMA and the Specialty Crops Coordinator.
      Allows producers of specialty crops to purchase new coverage or increase coverage levels at any time during the insurance period,
subject to a 30-day waiting period and an inspection by FCIC to verify acceptability of the approved insurance provider, provided FCIC is able
to adequately rate the risk.
      Requires FCIC and the Specialty Crop Coordinator to jointly conduct feasibility studies for developing new policies for specialty crops,
and requires a progress report to Congress not later than 1 year from the date of enactment.
      The authority for the Specialty Crops Coordinator to enter into partnerships and the extension of the sales closing date and time for
purchase of coverage is applicable for the 2001 through 2004 fiscal years.
      Requires that not later than 180 days after enactment, the Secretary must submit a report to the President and the House and Senate
Agriculture Committees assessing USDA's progress in expanding coverage to specialty crops and USDA's plans to continue that progress.
      Also requires that the report include an assessment of whether "CAT" has resulted in uniform quality of protection for all regions of the
country and fulfilled the goal of increased participation, especially in states with traditionally low participation rates and high proportion of
specialty crops.  The report should also address the question of whether USDA should resume offering CAT and performing loss adjustments.
      The Senate amendment strikes subsection (m) providing FCIC its current authority to conduct research, surveys, pilot programs, and
investigations relating to crop insurance and agriculture-related risks and losses.  Subsection (n) is designated as subsection (m).
      Amends section 516(b)(2)(A) to increase mandatory funding for research and development expenses from not to exceed $3.5 million for
each fiscal year to $4.5 million in fiscal years 2001 and 2002, $3.75 million in fiscal years 2003 and 2004, and returning to $3.5 million for each
subsequent fiscal year.
      Provides a conforming amendment relative to section references in section 518, defining agricultural commodity.  (Section 202, 207 and
309)
      The Conference substitute adopts the House provisions relative to reimbursements, contracting, and partnership for policy research and
development with certain changes.  The provision includes authority to reimburse research and development costs associated with policies
developed before enactment.  Reimbursement for research and development costs is limited to policies that are determined to be marketable.
Reimbursement for maintenance is limited to 4 reinsurance years from the date of Board approval after which the provider responsible for
maintenance has three options.  The provider may transfer maintenance responsibility to the Corporation, charge a Board-approved fee to be
paid by other providers electing to offer the policy, or continue to maintain the policy and absorb the appurtenant costs.  The provision authorizes
the Corporation to enter into contracts for research and development on policies in order to (1) increase participation in States where the
Corporation determines there is low crop insurance participation or availability, and the State is under-served by the program; (2) increase
participation in areas that are under-served by the program; and (3) increase participation by producers of under-served agricultural
commodities, including specialty crops.  The provision requires the Corporation to consult with groups representing producers that would be
served by a policy that is the subject of the research and development before entering into a contract.  The Conference substitute adopts the
Senate provisions to require the Corporation to establish the development of a pasture, range, and forage program as one of the highest
priorities and to require the Corporation to contract for a study relative to offering coverage for multiple years to reduce fraud, waste, and abuse.
Provisions are included to make partnership authority under this section eligible for funding for contracting, and to reserve $5 million of such
funding for contracting for policy development to increase participation in States where the Corporation determines there is low crop insurance
participation or availability and the State is under-served by the program.  The Managers consider it a high priority to develop policies that work
for producers and products in these low participation states.  The provision also requires the Corporation to contract for research and
development relative to a cost of production policy.  Finally, funding for reimbursements and contracting are limited to new levels.  (Section 131)
      The Managers recognize that it is difficult to predict the range of new and innovative approaches to the private development of insurance
products under the new environment created under this bill.  There is no reason to believe all policies will necessarily fit under the current
structure of yield-based or revenue-based products; some may focus on a narrower array of perils than are now included in available coverage.
These could include plans to protect against the uncontrollable risks associated with the use of certain conservation techniques such as
integrated pest management, best management practices, or conservation tillage systems.  The Corporation should take such factors into
account when considering approval of such proposals.
      The Managers expect the Corporation to study the feasibility of offering a vine and tree replacement program as an option for growers of
grapes, citrus, tree fruit, nut, kiwi, blueberries, and other high-value, permanent crops.
 
 

Pilot Program

            The House bill amends section 508(h) by repealing obsolete pilot programs contained in paragraphs (6) and (8) relative to cost of
production and assigned yields, respectively.
      Authorizes FCIC to offer pilot programs on a regional, state, or national basis after considering the interests of producers and the
interests and risks of FCIC, and to operate the pilot program, including any modifications, for up to 3 years with authority to extend for additional
periods.
      Amends section 508(h)(4) to require FCIC to promulgate regulations within 180 days of enactment to establish guidelines for the
submission and Board review of policies submitted under section 508(h), including streamlined guidelines governing the submission and Board
review of pilot programs that the Board determines are limited in scope and duration and involve a reduced level of liability to the government
and an increased level of liability to the approved insurance provider.
      Provides that FCIC must notify the applicant of its intent to disapprove a low risk pilot program within 60 days of the submission.
      Requires FCIC to approve or not approve a low risk pilot program within 90 days of submission, and requires a detailed explanation for
any disapproval.
      Provides that where FCIC fails to make a timely determination with respect to a low risk pilot program, the pilot is approved for the initial
reinsurance year unless an extension is agreed to.
      Amends section 508(h) by striking paragraph (10) relative to time limits for submission of new policies and inserts a new paragraph (10)
relative to livestock pilot programs.
      Requires FCIC to conduct 1 or more livestock pilot programs to evaluate risk management tools, including futures and options contracts
and policies and plans of insurance, including protection for environmental liability, and requires that the greatest number and variety of
programs be evaluated.
      Requires FCIC to begin the conduct of livestock pilot programs during the 2001 fiscal year and without regard to the limitations in the
FCIA, except that no coverage may be offered where that coverage is generally available from private insurance.
      Requires FCIC to conduct the livestock pilot programs in a number of counties that will facilitate comprehensive evaluation, and provides
that any producer of eligible livestock owning a farm or ranch in a selected county is eligible to participate.
      Defines livestock as cattle, sheep, swine, goats, and poultry.
       Requires FCIC to operate all livestock pilot programs so that, to the maximum extent practicable, associated costs (other than for
research and development) are not expected to exceed $20 million for fiscal year 2001, $30 million for fiscal year 2002, $40 million for fiscal
year 2003, and $55 million for fiscal year 2004 and each subsequent fiscal year.
      Amends section 518 of the FCIA by striking the livestock exclusion from insurance.   (Section 105)
      The Senate amendment authorizes FCIC to conduct research, surveys, pilot programs, and investigations relating to crop insurance and
agriculture-related risks and losses based on proposals developed by FCIC and others to determine their suitability to meet producer needs.
      Provides an exception that FCIC may not conduct such research activity to provide risk protection where such protection is generally
available from the private sector.
      Provides under newly created section 522(a)(3) a list of eligible activities for research activity, including after October 1, 2000, livestock
and livestock products, wild salmon, and loss or damage to trees or fruit due to "sharka."
      Clarifies the scope of pilot programs under newly created section 522(a)(4).  Authorizes FCIC to offer pilot programs on a regional, state,
or national basis after considering the interests of producers and the interests and risks of FCIC, and to operate the pilot program, including any
modifications, for up to 4 years with authority to extend for additional periods.  Also authorizes FCIC to provide premium discounts to producers
using whole farm or single crop units of insurance and to cross state and county boundaries to form units.
      Requires under newly created section 522(a)(5) that FCIC evaluate each pilot program and submit a report to the Senate and House
Agriculture Committees with a recommendation on whether to offer the pilot on a national basis.
      Authorizes under newly created section 522(a)(6) funds to carry out research and pilot programs (except for research related to
alternative rating methodologies authorized under section 202 of the Senate amendment).  Authorized amounts may not exceed $10 million in
FY2001, $30 million in FY2002, $50 million in FY2003, and $60 million in FY2004.
      Provides that provisions under section 201 of the Senate amendment that require funding are applicable for fiscal years 2001 through
2004, including authority for timber, wild salmon, and livestock coverage, general pilot authority, and general research funding.
            The Senate amendment provides that the purpose of the pilot program is to determine what incentives are necessary for approved
insurance providers to develop and offer risk management products, rate premiums, and competitively market such products.
      Requires FCIC to establish a pilot program under which approved insurance providers may propose to the FCIC Board loss of yield or
revenue insurance coverage for 1 or more commodities, including commodities not insurable (but excluding livestock), rates of premium, and
underwriting systems.
      Requires FCIC to approve the risk management product before it can be marketed.
      Provides that the FCIC Board may approve a risk management product submitted if the Board determines that the interests of producers
are protected; premium rates are actuarially appropriate and underwriting systems are actuarially appropriate and adequate; the product is
reinsured under the FCIA, through private reinsurance, or self-insured; the size of the pilot is adequate; the product is not generally available
through private insurance plans; and any other requirements imposed by FCIC.
      Requires that all information concerning a risk management product be considered confidential commercial or financial information, and
provides the standard that if the Secretary could withhold such information, the information may not be released.
      Defines original provider as an approved insurance provider that submits a product for approval under this section.  Provides that risk
management products approved under this section may only be sold by the original provider, unless another approved insurance provider
desiring to offer the product pays a fee established by the original provider.  (Sections 201 and 205)
            The Conference substitute adopts the Senate provisions relative to the scope of pilot programs and to a pilot program for insurance
coverage on wild salmon.  Pilot authority for insurance coverage for timber due to drought, flood, fire or other natural disaster and for trees or fruit
affected by plum pox (including quarantined trees or fruit) are omitted because statutory authority currently exists to insure the crops against
these perils.  The House bill language relative to expedited consideration of low risk pilot programs is omitted.  The Conference substitute
adopts the House bill’s provision relative to livestock pilot programs, except that pilot authority to offer insurance coverage for environmental
liability is omitted and the definition of livestock is modified to include but not be limited to the livestock referenced in the House bill.  Funding for
all livestock programs is also limited to new levels.  The provision authorizes a premium-rate reduction pilot program.  Finally, House bill
language clarifying regulatory jurisdiction over policies or plans of insurance is included but in a separate section of the Act.
(Section 132)
      The Managers intend for the Corporation to proceed with crop insurance coverage for sorghum silage beginning with the 2001 crop year
by implementing the pilot program that was drafted and presented to grain sorghum producers in October of 1999.  The Corporation shall
develop the program in a way that provides sorghum silage the same coverage as corn silage with the program to be fully developed by
September 30, 2000.
      The Managers are aware of proposals to implement a pilot insurance policy to provide coverage on timber losses resulting from drought,
flood, fire, or other natural disaster. The Managers expect the Corporation to implement this pilot under current authority, with special
consideration given to Florida.
      The Managers are aware of the serious concerns the plum pox virus is causing in several states, including Pennsylvania. The Managers
believe the Corporation has the same authority to develop a policy to provide coverage for plum pox as has been developed for citrus canker.
The Managers expect the Corporation to develop an insurance policy that provides coverage for trees against losses associated with plum pox
virus.
      The Managers intend that the premium rate reduction pilot program authorized by this provision explore whether premium rate
competition can benefit producers without harming program integrity or the crop insurance delivery system.  The Managers hope and expect
that the Corporation will approve proposed premium reductions, as long as such proposed reductions meet the standards of approval contained
in Section 132(d) of the Conference substitute.
      The Managers are aware that Section 508(e)(3) of the Federal Crop Insurance Act already authorizes premium reductions if an
approved insurance provider can demonstrate to the Corporation that it can provide crop insurance more efficiently than the expense
reimbursement provided by the Corporation.  The 508(e)(3) standard, however, is too limiting because an approved insurance provider’s gross
income includes underwriting gain as well as the expense reimbursement.  As a result, the Managers intend that the limitations on premium
reductions contained in Section 508(e)(3) of the Federal Crop Insurance Act not apply to the premium rate reduction pilot program authorized by
this provision.
 

Education and Risk Management Assistance
      The Senate amendment requires FCIC to establish two programs for the fiscal years 2001 through 2004, not to exceed the available
funding limitations.
      Requires FCIC to establish a program of education and information for states in which there is traditionally and continues to be a low
level of program participation and coverage availability, and which the Secretary determines is under-served.
      Requires FCIC to establish a program of research and development to develop new approaches to increasing participation in states in
which there is traditionally and continues to be a low level of program participation and coverage availability, and which the Secretary
determines is under-served.  Requires that $10 million in each of fiscal years 2001 through 2004 be made available for the Education,
Information, and Insurance Provider Recruitment program from the account provided under section 516(a)(2)(C) (mandatory funding account for
risk management payments).
      Requires that $5 million in each of fiscal years 2001 through 2004 be made available for the Research and Development program from
the account provided under section 516(a)(2)(C) (mandatory funding account for risk management payments).  (Section 206)
      The House bill has no comparable provision.
      The Conference substitute adopts the Senate provision relative to education and research with certain changes.  The provision
authorizing the Corporation to establish a program of research and development for new approaches to increase program participation in
specified states is omitted and partnerships for risk management education is authorized.  The Secretary, acting through the CSREES, is
required to establish a program under which competitive grants are made to qualified persons for the purpose of educating producers about risk
management activities.  Funding for the education and information program provided under the Senate amendment and the partnerships for risk
management education program are each limited to $5 million for each fiscal year beginning with 2001.  The provision also provides for an
agricultural management assistance program under which the Secretary is to offer cost share assistance to producers located in states with
historically low crop insurance participation for the uses as specified in the Act.  Funding for this program is limited to $10 million for each fiscal
year beginning with 2001.  (Section 133)
      Farmers have voiced support for marketing clubs, supported through small grants from USDA.  The clubs provide an opportunity for
farmers to improve their understanding of marketing and managing price risk by sharing their marketing experiences with their peers.  The
Managers encourage the Secretary to continue to support development of marketing clubs for farmers.
 

Options Pilot Program
      The Senate amendment amends section 191 of the AMTA relative to options pilot program authority by extending such authority until
December 31, 2004.
      Expands authority to operate options pilot programs from not more than 100 counties with a limit of 6 counties per state, to not more than
300 counties with a limit of 25 counties per state.
      Authorizes the Secretary to enter into a contract with any producer who volunteers to participate in the pilot program during any calendar
year in which a county in which the farm of the producer is located is authorized to operate the pilot program.
      Requires FCIC transfer $27 million for each of fiscal years 2002 through 2004 from section 516(a)(2)(C) (mandatory funds for risk
management payments) to the Secretary to fund the operation of the expanded options pilot program.  (Section 204)
      The House bill has no comparable provision.
      The Conference substitute adopts the Senate provision relative to the options pilot program with certain changes.  Authority to conduct
the options pilot program is expanded to include an increased number of counties with such authority continuing until the expiration of the 1996
Farm Bill.  Finally, funding is limited under this section. (Section 134)
 
 

                                                     Subtitle D—Administration
 
 

Relation to Other Laws

            The House bill provides that any policy or plan of insurance offered under the FCIA is not subject to the jurisdiction of the CFTC or SEC.
Provides a savings clause that states that the provision does not affect the jurisdiction of the CFTC with respect to transactions conducted on a
contract market.
            The Senate amendment provides that any policy or plan of insurance offered under the FCIA is not subject to the jurisdiction of the CFTC,
but does not affect the jurisdiction of the CFTC with respect to transactions conducted on a contract market.
      The Conference substitute adopts the provision included in section 105 of the House Bill relative to jurisdiction over policies or plans of
insurance and over any underlying instrument utilized in such a policy or plan of insurance. (Section 141)

Management of Corporation
      The House bill strikes section 505(a) relative to the Board of Directors of FCIC and inserts a new section 505(a) and (b), relative to the
same.
      Provides that the management of FCIC is to be vested in the Board of Directors, subject to the supervision of the Secretary.
      Provides that the Board consist of the manager of FCIC (serving as a non voting ex officio member), 1 member active in the crop
insurance business, 1 member active in the regulation of insurance, the Under Secretary for Farm and Foreign Agricultural Services, 1
additional Under Secretary for Agriculture, USDA's Chief Economist, and 4 active producers who are policy holders, are from different
geographic regions, represent a cross-section of commodities grown, with 1 producer being a specialty crop producer.
      Provides that the private sector members of the Board be appointed and serve at the pleasure of the Secretary, and not otherwise be
employed by the government.
      Requires that a private-sector member of the Board serve as its Chairman and be elected by the Board.
      Provides that the amendment made by section 301 takes effect 30 days from enactment, allowing current Board members to continue to
serve until the earlier of their replacement date or 180 days after enactment.  (Section 301)
      The Senate amendment strikes section 505(a) relative to the Board of Directors of FCIC and inserts a new section 505(a).
      Provides that the management of FCIC is to be vested in the Board of Directors, subject to the supervision of the Secretary.
      Provides that the Board consist of 4 producers from each region of the country, 1 member active in the crop insurance business, 1
member active in the reinsurance business, the Under Secretary for Farm and Foreign Agricultural Services, the Under Secretary for Rural
Development, and USDA's Chief Economist.
      Provides that the private sector members of the Board be appointed and serve at the pleasure of the Secretary, not be employed by the
government, be appointed to staggered 4 year terms, and serve no more than 2 consecutive terms.
      Requires that a private sector member of the Board serve as its Chairman and be elected by the Board.
      Requires RMA to assist the Board in developing, reviewing, and recommending new plans of insurance and pilot projects, terms of the
SRA, and with other issues involved in the administration of the program.
      Provides for the appointment of an Executive Director by the Secretary to assist the Board and report to the Secretary.
      Provides for a staff of 4 to report to the Executive Director, all 4 having knowledge and experience in quantitative mathematics and
actuarial rating.
      Requires the Executive Director and staff to assist the Board in reviewing and approving policies and plans of insurance submitted under
sections 508, 522, or 523, and report at least monthly to the Board on crop insurance issues.
      Requires the Executive Director and staff to review subsidized and unsubsidized insurance, make recommendations for approval or
disapproval, make recommendations to encourage cooperation between the U.S. attorneys, FCIC, and approved insurance providers to
minimize fraud, and make recommendations with respect to rating methodologies.
      Provides $500,000 for fiscal year 2001 from the FCIA Fund to pay the salaries and expenses of the Executive Director and staff.
      Requires that RMA transfer $500,000 for fiscal year 2001, and $1 million for each subsequent fiscal year to the Executive Director for
salaries and expenses, subject to the availability of appropriations.  (Section 301)
      The Conference substitute adopts the House provision relative to the composition of the Corporation Board of Directors with changes to
permit the Secretary the option of appointing 1 person experienced in reinsurance or 1 person experienced in the regulation of insurance,
requiring that Board members be limited to two consecutive terms and be appointed for staggered 4-year terms.  The new Board is to be
appointed during the period beginning February 1, 2001 and ending April 1, 2001.  Finally, the Board of Directors is required to contract with
persons experienced as actuaries and in underwriting for expert reviews of policies and plans of insurance offered under the Federal Crop
Insurance Act.  Funding for such reviews is authorized from mandatory funds formerly dedicated to research and development.  The authority
provided under this section, including funding dedicated to carry out this section, is in addition to the general management authority over the
Corporation, including any other contracting authority under the title, that is vested in the Board of Directors.   (Section 142)
 

Contracting for Rating of Plans of Insurance
      The House bill amends section 507(c)(2) relative to requiring FCIC to contract for certain services by including the contracting for
actuarial services, services relating to loss adjustment, and rating plans of insurance.  Underscores that FCIC should concentrate on the
regulation of insurance and on the evaluation process for newly developed  policies under section 508(h). (Section 306)
      Section 202 of the Senate amendment corresponds with sections 306 and 104 of House bill
      The Conference substitute adopts the House provision relative to contracting for rating plans of insurance.   (Section 143)
 

Electronic Availability of Crop Insurance Information
      The House bill amends section 508(a)(5) by making technical amendments and adding a new subparagraph (B) relative to electronic
availability of crop insurance information.
      Requires FCIC to make general insurance information electronically available to producers and insurance providers, and also requires,
where practicable, that FCIC allow producers and providers to provide insurance information electronically.  (Section 307)
      The Senate amendment has no comparable provision.
      The Conference substitute adopts the House provision relative to the electronic availability of crop insurance information.  (Section 144)
 

Adequate Coverage for States
      The Senate amendment amends section 508(a) adding paragraph (9) relative to adequate coverage for states.
      Defines adequately served as having a participation rate that is at least 50 percent of the national average.
      Requires FCIC to review policies offered by approved insurance providers to determine if each state is adequately served.
      Requires that not later than 30 days after completion of the review, FCIC must submit to Congress a report of the results along with
recommendations to increase participation in states not adequately served.  (Section 305)
      The House bill has no comparable provision.
      The Conference substitute adopts the Senate provision relative to adequate coverage for states.  (Section 145)
 

Submission of Policies and Materials to Board
      The House bill amends section 508(h)(1) to clarify that a "person" that may propose a policy to the Board for approval includes an
approved insurance provider, a college or university, a cooperative or trade association, or other persons. Clarifies that policies are to be sold
to producers by approved insurance providers.
      Requires FCIC to consider any modified policy proposal within 30 days from the submission of the modifications, and requires that any
decision to disapprove a policy must be accompanied by a complete explanation.
      Requires that FCIC make a determination to approve or disapprove a policy proposal within 120 days from submission, and any
decision to disapprove a policy must be accompanied by a complete explanation.  Provides that the proposed policy is approved for the initial
reinsurance year where FCIC fails to provide a timely determination unless the parties agree to an extension.
      Amends section 516(b)(2) to authorize the current $3.5 million in mandatory funds for research and development to be used for costs
associated with considering and contracting for assistance in considering policies submitted for approval and carrying out policies resulting
from direct contracting,
      The House bill also requires FCIC to issue regulations establishing guidelines within 180 days of enactment to govern the submission of
policies.  (Sections 305 and 105)