§1502. Purpose; definitions; protection of information; relation to other laws
(a) Purpose
It is the purpose of this subchapter 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 subchapter:
(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 subchapter.
(3) Beginning farmer or rancher
The term “beginning farmer or rancher” means a farmer or rancher who has not actively operated and managed a farm or ranch with a bona fide insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than 10 crop years, as determined by the Secretary.
(4) Board
The term “Board” means the Board of Directors of the Corporation established under section 1505(a) of this title.
(5) Corporation
The term “Corporation” means the Federal Crop Insurance Corporation established under section 1503 of this title.
(6) Cover crop termination
The term “cover crop termination” means a practice that historically and under reasonable circumstances results in the termination of the growth of a cover crop.
(7) Department
The term “Department” means the United States Department of Agriculture.
(8) Farm financial benchmarking
The term “farm financial benchmarking” means-
(A) the process of comparing the performance of an agricultural enterprise against the performance of other similar enterprises, through the use of comparable and reliable data, in order to identify business management strengths, weaknesses, and steps necessary to improve management performance and business profitability; and
(B) benchmarking of the type conducted by farm management and producer associations consistent with the activities described in or funded pursuant to section 5925f of this title.
(9) Hemp
The term “hemp” has the meaning given the term in section 1639o of this title.
(10) Loss ratio
The term “loss ratio” means the ratio of all sums paid by the Corporation as indemnities under any eligible crop insurance policy to that portion of the premium designated for anticipated losses and a reasonable reserve, other than that portion of the premium designated for operating and administrative expenses.
(11) Organic crop
The term “organic crop” means an agricultural commodity that is organically produced consistent with section 6502 of this title.
(12) Secretary
The term “Secretary” means the Secretary of Agriculture.
(13) Transitional yield
The term “transitional yield” means the maximum average production per acre or equivalent measure that is assigned to acreage for a crop year by the Corporation in accordance with the regulations of the Corporation whenever the producer fails-
(A) to certify that acceptable documentation of production and acreage for the crop year is in the possession of the producer; or
(B) to present the acceptable documentation on the demand of the Corporation or an insurance company reinsured by the Corporation.
(14) Veteran farmer or rancher
The term “veteran farmer or rancher” means a farmer or rancher who-
(A) has served in the Armed Forces (as defined in section 101 of title 38); and
(B)(i) has not operated a farm or ranch;
(ii) has operated a farm or ranch for not more than 5 years; or
(iii) is a veteran (as defined in section 101 of that title) who has first obtained status as a veteran (as so defined) during the most recent 5-year period.
(c) Protection of confidential information
(1) General prohibition against disclosure
Except as provided in paragraph (2), the Secretary, any other officer or employee of the Department or an agency thereof, an approved insurance provider and its employees and contractors, and any other person may not disclose to the public information furnished by a producer under this subchapter.
(2) Authorized disclosure
(A) Disclosure in statistical or aggregate form
Information described in paragraph (1) may be disclosed to the public if the information has been transformed into a statistical or aggregate form that does not allow the identification of the person who supplied particular information.
(B) Consent of producer
A producer may consent to the disclosure of information described in paragraph (1). The participation of the producer in, and the receipt of any benefit by the producer under, this subchapter or any other program administered by the Secretary may not be conditioned on the producer providing consent under this paragraph.
(3) Violations; penalties
Section 2276(c) of this title shall apply with respect to the release of information collected in any manner or for any purpose prohibited by this subsection.
(4) Information
(A) Request
Subject to subparagraph (B), the Farm Service Agency shall, in a timely manner, provide to an agent or an approved insurance provider authorized by the producer any information (including Farm Service Agency Form 578s (or any successor form)) or maps (or any corrections to those forms or maps) that may assist the agent or approved insurance provider in insuring the producer under a policy or plan of insurance under this subchapter.
(B) Privacy
Except as provided in subparagraph (C), an agent or approved insurance provider that receives the information of a producer pursuant to subparagraph (A) shall treat the information in accordance with paragraph (1).
(C) Sharing
Nothing in this section prohibits the sharing of the information of a producer pursuant to subparagraph (A) between the agent and the approved insurance provider of the producer.
(d) Relation to other laws
(1) Terms and conditions of policies and plans
The terms and conditions of any policy or plan of insurance offered under this subchapter that is reinsured by the Corporation shall not-
(A) be subject to the jurisdiction of the Commodity Futures Trading Commission or the Securities and Exchange Commission; or
(B) be considered to be accounts, agreements (including any transaction that is of the character of, or is commonly known to the trade as, an “option”, “privilege”, “indemnity”, “bid”, “offer”, “put”, “call”, “advance guaranty”, or “decline guaranty”), or transactions involving contracts of sale of a commodity for future delivery, traded or executed on a contract market for the purposes of the Commodity Exchange Act (7 U.S.C. 1 et seq.).
(2) Effect on CFTC and Commodity Exchange Act
Nothing in this subchapter affects the jurisdiction of the Commodity Futures Trading Commission or the applicability of the Commodity Exchange Act (7 U.S.C. 1 et seq.) to any transaction conducted on a contract market under that Act by an approved insurance provider to offset the approved insurance provider’s risk under a plan or policy of insurance under this subchapter.
7 U.S.C. 1502(b)(3)
§1522. Research and development
(a) Definition of policy
In this section, the term “policy” means a policy, plan of insurance, provision of a policy or plan of insurance, and related materials.
(b) Reimbursement of research, development, and maintenance costs
(1) Research and development payment
(A) In general
The Corporation shall provide a payment to an applicant for research and development costs in accordance with this subsection.
(B) Reimbursement
(i) In general
An applicant who submits a policy under section 1508(h) of this title shall be eligible for the reimbursement of reasonable research and development costs if the policy is approved by the Board for sale to producers.
(ii) Reasonable costs
For the purpose of reimbursing research and development and maintenance costs under this section, costs of the applicant shall be considered reasonable costs if the costs are based on-
(I) for any employees or contracted personnel, wage rates equal to not more than 2 times the hourly wage rate plus benefits, as provided by the Bureau of Labor Statistics for the year in which such costs are incurred, calculated using the formula applied to an applicant by the Corporation in reviewing proposed project budgets under this section on October 1, 2016; and
(II) other actual documented costs incurred by the applicant.
(2) Advance payments
(A) In general
Subject to the other provisions of this paragraph, the Board may approve the request of an applicant for advance payment of a portion of reasonable research and development costs prior to submission and approval of the policy by the Board under section 1508(h) of this title.
(B) Procedures
The Board shall establish procedures for approving advance payment of reasonable research and development costs to applicants.
(C) Concept proposal
As a condition of eligibility for advance payments, an applicant shall submit a concept proposal for the policy that the applicant plans to submit to the Board under section 1508(h) of this title, consistent with procedures established by the Board for submissions under subparagraph (B), including-
(i) a summary of the qualifications of the applicant, including any prior concept proposals and submissions to the Board under section 1508(h) of this title and, if applicable, any work conducted under this section;
(ii) a projection of total research and development costs that the applicant expects to incur;
(iii) a description of the need for the policy, the marketability of and expected demand for the policy among affected producers, and the potential impact of the policy on producers and the crop insurance delivery system;
(iv) a summary of data sources available to demonstrate that the policy can reasonably be developed and actuarially appropriate rates established; and
(v) an identification of the risks the proposed policy will cover and an explanation of how the identified risks are insurable under this subchapter.
(D) Review
(i) Experts
If the requirements of subparagraph (B) and (C) are met, the Board may submit a concept proposal described in subparagraph (C) to not less than 2 independent expert reviewers, whose services are appropriate for the type of concept proposal submitted, to assess the likelihood that the proposed policy being developed will result in a viable and marketable policy, as determined by the Board.
(ii) Timing
The time frames described in subparagraphs (C) and (D) of section 1508(h)(4) of this title shall apply to the review of concept proposals under this subparagraph.
(E) Approval
(i) In general
The Board may approve up to 50 percent of the projected total research and development costs to be paid in advance to an applicant, in accordance with the procedures developed by the Board for the making of the payments, if, after consideration of the reviewer reports described in subparagraph (D) and such other information as the Board determines appropriate, the Board determines that-
(I) the concept, in good faith, will likely result in a viable and marketable policy consistent with section 1508(h) of this title;
(II) at the sole discretion of the Board, the concept, if developed into a policy and approved by the Board, would provide crop insurance coverage-
(aa) in a significantly improved form;
(bb) to a crop or region not traditionally served by the Federal crop insurance program; or
(cc) in a form that addresses a recognized flaw or problem in the program;
(III) the applicant agrees to provide such reports as the Corporation determines are necessary to monitor the development effort;
(IV) the proposed budget and timetable are reasonable, as determined by the Board; and
(V) the concept proposal meets any other requirements that the Board determines appropriate.
(ii) Waiver
The Board may waive the 50-percent limitation and, upon request of the submitter after the submitter has begun research and development activities, the Board may approve an additional 25 percent advance payment to the submitter for research and development costs, if, at the sole discretion of the Board, the Board determines that-
(I) the intended policy or plan of insurance developed by the submitter will provide coverage for a region or crop that is underserved by the Federal crop insurance program, including specialty crops; and
(II) the submitter is making satisfactory progress towards developing a viable and marketable policy or plan of insurance consistent with section 1508(h) of this title.
(F) Submission of policy
If the Board approves an advanced payment under subparagraph (E), the Board shall establish a date by which the applicant shall present a submission in compliance with section 1508(h) of this title (including the procedures implemented under that section) to the Board for approval.
(G) Final payment
(i) Approved policies
If a policy is submitted under subparagraph (F) and approved by the Board under section 1508(h) of this title and the procedures established by the Board (including procedures established under subparagraph (B)), the applicant shall be eligible for a payment of reasonable research and development costs in the same manner as policies reimbursed under paragraph (1)(B), less any payments made pursuant to subparagraph (E).
(ii) Policies not approved
If a policy is submitted under subparagraph (F) and is not approved by the Board under section 1508(h) of this title, the Corporation shall-
(I) not seek a refund of any payments made in accordance with this paragraph; and
(II) not make any further research and development cost payments associated with the submission of the policy under this paragraph.
(H) Policy not submitted
If an applicant receives an advance payment and fails to fulfill the obligation of the applicant to the Board by not submitting a completed submission without just cause and in accordance with the procedures established under subparagraph (B)) 1, including notice and reasonable opportunity to respond, as determined by the Board, the applicant shall return to the Board the amount of the advance plus interest.
(I) Repeated submissions
The Board may prohibit advance payments to applicants who have submitted-
(i) a concept proposal or submission that did not result in a marketable product; or
(ii) a concept proposal or submission of poor quality.
(J) Continued eligibility
A determination that an applicant is not eligible for advance payments under this paragraph shall not prevent an applicant from reimbursement under paragraph (1)(B).
(K) Waiver for hemp
The Board may waive the viability and marketability requirements under this paragraph in the case of research and development relating to a policy to insure the production of hemp.
(3) Marketability
(A) In general
Subject to subparagraph (B), the Corporation shall approve a reimbursement under paragraph (1) only after determining that the policy is marketable based on a reasonable marketing plan, as determined by the Board.
(B) Waiver for hemp
The Corporation may waive the marketability requirement under subparagraph (A) in the case of research and development relating to a policy to insure the production of hemp.
(4) Maintenance payments
(A) Requirement
The Corporation shall reimburse maintenance costs associated with the annual cost of underwriting for a policy described in paragraph (1).
(B) Duration
Payments with respect to maintenance costs may be provided for a period of not more than four reinsurance years subsequent to Board approval for payment under this subsection.
(C) Options for maintenance
On the expiration of the 4-year period described in subparagraph (B), the applicant responsible for maintenance of the policy may-
(i) maintain the policy and charge a fee to approved insurance providers that elect to sell the policy under this subsection; or
(ii) transfer responsibility for maintenance of the policy to the Corporation.
(D) Fee
(i) Amount
Subject to approval by the Board, the amount of the fee that is payable by an approved insurance provider that elects to sell the policy shall be an amount that is determined by the applicant maintaining the policy.
(ii) Approval
The Board shall approve the amount of a fee determined under clause (i) for maintenance of the policy unless the Board determines that the amount of the fee-
(I) is unreasonable in relation to the maintenance costs associated with the policy; or
(II) unnecessarily inhibits the use of the policy.
(iii) Review
After the Board approves the amount of a fee under clause (ii), the fee shall remain in effect and not be reviewed by the Board unless-
(I) the applicant petitions the Board for reconsideration of the fee;
(II) a substantial change is made to the policy, as determined by the Board; or
(III) there is substantial evidence that the fee is inhibiting sales or use of the policy, as determined by the Board.
(5) Treatment of payment
Payments made under this subsection for a policy shall be considered as payment in full by the Corporation for the research and development conducted with regard to the policy and any property rights to the policy.
(6) Reimbursement amount
The Corporation shall determine the amount of the payment under this subsection for an approved policy based on the complexity of the policy and the size of the area in which the policy or material is expected to be sold.
(c) Research and development authority
(1) Authority
The Corporation may conduct activities or enter into contracts to carry out research and development to maintain or improve existing policies or develop new policies to-
(A) increase participation in States in which the Corporation determines that-
(i) there is traditionally, and continues to be, a low level of Federal crop insurance participation and availability; and
(ii) the State is underserved by the Federal crop insurance program;
(B) increase participation in areas that are underserved by the Federal crop insurance program; and
(C) increase participation by producers of underserved agricultural commodities, including specialty crops.
(2) Underserved agricultural commodities and areas
(A) Authority
The Corporation may conduct research and development or enter into contracts under procedures prescribed by the Corporation with qualified persons to carry out research and development for policies that promote the purposes of paragraph (1).
(B) Consultation
Before conducting research and development or entering into a contract under subparagraph (A), the Corporation shall consult with groups representing producers of agricultural commodities that would be served by the policies that are the subject of the research and development.
(3) Qualified persons
A person with experience in crop insurance or farm or ranch risk management (including a college or university, an approved insurance provider, and a trade or research organization), as determined by the Corporation, shall be eligible to enter into a contract with the Corporation under this subsection.
(4) Types of contracts
A contract under this subsection may provide for research and development regarding new or expanded policies, including policies based on adjusted gross income, cost-of-production, quality losses, and an intermediate base program with a higher coverage and cost than catastrophic risk protection.
(5) Use of resulting policies
The Corporation may offer any policy developed under this subsection that is approved by the Board after expert review in accordance with section 1505(e) of this title.
(6) Research and development priorities
The Corporation shall establish as one of the highest research and development priorities of the Corporation the development of policies that increase participation by producers of underserved agricultural commodities, including sweet sorghum, biomass sorghum, rice, peanuts, sugarcane, alfalfa, pennycress, dedicated energy crops, and specialty crops.
(7) Whole farm diversified risk management insurance plan
(A) In general
Unless the Corporation approves a whole farm insurance plan, similar to the plan described in this paragraph, to be available to producers for the 2016 reinsurance year, the Corporation shall conduct activities or enter into contracts to carry out research and development to develop a whole farm risk management insurance plan, with a liability limitation of $1,500,000, that allows a diversified crop or livestock producer the option to qualify for an indemnity if actual gross farm revenue is below 85 percent of the average gross farm revenue or the expected gross farm revenue that can reasonably be expected of the producer, as determined by the Corporation.
(B) Eligible producers
The Corporation shall permit producers (including direct-to-consumer marketers and producers servicing local and regional and farm identity-preserved markets) who produce multiple agricultural commodities, including specialty crops, industrial crops, livestock, and aquaculture products, to participate in the plan developed under subparagraph (A) in lieu of any other plan under this subchapter.
(C) Diversification
The Corporation may provide diversification-based additional coverage payment rates, premium discounts, or other enhanced benefits in recognition of the risk management benefits of crop and livestock diversification strategies for producers that-
(i) grow multiple crops; or
(ii) may have income from the production of livestock that uses a crop grown on the farm.
(D) Market readiness
The Corporation may include coverage for the value of any packing, packaging, or any other similar on-farm activity the Corporation determines to be the minimum required in order to remove the commodity from the field.
(E) Review of modifications to improve effectiveness
(i) In general
Not later than 18 months after December 20, 2018-
(I) the Corporation shall hold stakeholder meetings to solicit producer and agent feedback; and
(II) the Board shall-
(aa) review procedures and paperwork requirements on agents and producers; and
(bb) modify procedures and requirements, as appropriate, to decrease burdens and increase flexibility and effectiveness.
(ii) Factors
In carrying out items (aa) and (bb) of subclause (i)(II), the Board shall consider-
(I) removing caps on nursery and livestock production;
(II) allowing a waiver to expand operations, especially for small and beginning farmers;
(III) minimizing paperwork for producers and agents;
(IV) implementing an option for producers with less than $1,000,000 in gross revenue that requires significantly less paperwork and recordkeeping;
(V) developing and using alternative records such as time-stamped photographs or technology applications to document planting and production history;
(VI) treating the different growth stages of aquaculture species as separate crops to recognize the difference in perils at different phases of growth;
(VII) moderating the impacts of disaster years on historic revenue, such as-
(aa) using an average of the historic and projected revenue;
(bb) counting indemnities as historic revenue for loss years;
(cc) counting payments under section 7333 of this title as historic revenue for loss years; or
(dd) using an assigned yield floor similar to the limitation described in section 1508(g)(6)(A)(i) of this title, as determined by the Secretary;
(VIII) improving agent training and outreach to underserved regions and sectors such as small dairy farms; and
(IX) providing coverage and indemnification of insurable losses-
(aa) after the losses exceed the deductible; and
(bb) up to the maximum amount of total coverage.
(8) Relation to limitations
A policy developed under this subsection may be prepared without regard to the limitations of this subchapter, including-
(A) the requirement concerning the levels of coverage and rates; and
(B) the requirement that the price level for each insured agricultural commodity must equal the expected market price for the agricultural commodity, as established by the Board.
(9) Tropical storm or hurricane insurance
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure crops (including tomatoes, peppers, and citrus) against losses due to a tropical storm or hurricane.
(B) Research and development
Research and development under subparagraph (A) shall-
(i) evaluate the effectiveness of risk management tools for a low frequency and catastrophic loss weather event; and
(ii) result in a policy that provides protection for at least 1 of the following:
(I) Production loss.
(II) Revenue loss.
(C) Report
Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research and development carried out under this paragraph; and
(ii) any recommendations with respect to those results.
(10) Quality loss
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding the establishment of each of the following alternative methods of adjusting for quality losses:
(i) A method that does not impact the actual production history of a producer.
(ii) A method that provides that, in circumstances in which a producer has suffered a quality loss to the insured crop of the producer that is insufficient to trigger an indemnity payment, the producer may elect to exclude that quality loss from the actual production history of the producer.
(iii) 1 or more methods that combine the methods described in clauses (i) and (ii).
(B) Requirements
Notwithstanding subsections (g) and (m) of section 1508 of this title, any method developed under subparagraph (A) that is used by the Corporation shall be-
(i) optional for a producer to use; and
(ii) offered at an actuarially sound premium rate.
(C) Report
Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(11) Citrus
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding the insurance of citrus fruit commodities and commodity types, including research and development of-
(i) improvements to 1 or more existing policies, including the whole-farm revenue protection pilot policy;
(ii) alternative methods of insuring revenue for citrus fruit commodities and commodity types; and
(iii) the development of new, or expansion of existing, revenue policies for citrus fruit commodities and commodity types.
(B) Report
Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(12) Hops
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure the production of hops or revenue derived from the production of hops.
(B) Report
Not later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(13) Subsurface irrigation practices
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding the creation of a separate practice for subsurface irrigation, including the establishment of a separate transitional yield within a county that is reflective of the average gain in productivity and yield associated with the installation of a subsurface irrigation system.
(B) Report
Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(14) Grain sorghum
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development-
(i) regarding improvements to 1 or more policies to insure irrigated grain sorghum;
(ii) regarding alternative methods for producers with not more than 4 years of production history to insure irrigated grain sorghum; and
(iii) to assess, by county, the difference in the rate, average yield, and coverage level of grain sorghum policies compared to policies for other feed grains in that county.
(B) Report
Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research and development carried out under subparagraph (A); and
(ii) any recommendations with respect to those results.
(15) Limited irrigation practices
(A) Authority
The Corporation shall-
(i) consider expanding the availability of the limited irrigation insurance program to neighboring and similarly situated States (such as the States of Colorado and Nebraska), as determined by the Secretary;
(ii) carry out research, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research, on the marketability of the existing limited irrigation insurance program; and
(iii) make recommendations on how to improve participation in that program.
(B) Research
In carrying out research under subparagraph (A), a qualified person shall-
(i) collaborate with researchers on the subjects of-
(I) reduced irrigation practices or limited irrigation practices; and
(II) expected yield reductions following the application of reduced irrigation;
(ii) collaborate with State and Federal officials responsible for the collection of water and the regulation of water use for the purpose of irrigation;
(iii) provide recommendations to encourage producers to carry out limited irrigation practices or reduced irrigation and water conservation practices; and
(iv) develop web-based applications that will streamline access to coverage for producers electing to conserve water use on irrigated crops.
(C) Report
Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research carried out under subparagraphs (A) and (B);
(ii) any recommendations to encourage producers to carry out limited irrigation practices or reduced irrigation and water conservation practices; and
(iii) the actions taken by the Corporation to carry out the recommendations described in clause (ii).
(16) Insurable irrigation practices for rice
(A) In general
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, to include new and innovative irrigation practices under the current rice policy or the development of a distinct policy endorsement rated for rice produced using-
(i) alternate wetting and drying practices (also referred to as “intermittent flooding”); and
(ii) furrow irrigation practices.
(B) Report
Not later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research and development carried out under paragraph (1); and
(ii) any recommendations with respect to those results.
(17) Greenhouse policy
(A) In general
(i) Research and development
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure in a controlled environment such as a greenhouse-
(I) the production of floriculture, nursery, and bedding plants;
(II) the establishment of cuttings or tissue culture in a growing medium; or
(III) other similar production, as determined by the Secretary.
(ii) Availability of policy
Notwithstanding the last sentence of section 1508(a)(1) of this title, and section 1508(a)(2) of this title, the Corporation shall make a policy described in clause (i) available if the requirements of section 1508(h) of this title are met.
(B) Research and development described
Research and development described in subparagraph (A)(i) shall evaluate the effectiveness of policies for the production of plants in a controlled environment, including policies that-
(i) are based on the risk of-
(I) plant diseases introduced from the environment;
(II) contaminated cuttings, seedlings, or tissue culture; or
(III) Federal or State quarantine or destruction orders associated with the contaminated items described in subclause (II);
(ii) consider other causes of loss applicable to a controlled environment, such as a loss of electricity due to weather;
(iii) consider appropriate best practices to minimize the risk of loss;
(iv) consider whether to provide coverage for various types of plants under 1 policy or to provide coverage for 1 species or type of plant per policy;
(v) have streamlined reporting and paperwork requirements that take into account short propagation schedules, variable crop years, and the variety of plants that may be produced in a single facility; and
(vi) provide protection for revenue losses.
(C) Report
Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes-
(i) the results of the research and development carried out under subparagraphs (A)(i) and (B); and
(ii) any recommendations with respect to those results.
(18) Local foods
(A) In general
(i) Feasibility study
The Corporation shall carry out a study to determine the feasibility of, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out a study to determine the feasibility of, a policy to insure production-
(I) of floriculture, fruits, vegetables, poultry, livestock, or the products of floriculture, fruits, vegetables, poultry, or livestock; and
(II) that is targeted toward local consumers and markets.
(ii) Availability of policy
Notwithstanding the last sentence of section 1508(a)(1) of this title, and section 1508(a)(2) of this title, the Corporation shall make available a policy described in clause (i) if-
(I) the results of the feasibility study under clause (i) are viable; and
(II) the requirements of section 1508(h) of this title are met.
(B) Feasibility study described
The feasibility study described in subparagraph (A)(i) shall evaluate the effectiveness of policies for production targeted toward local consumers and markets, including policies that-
(i) consider small-scale production in various areas, including urban, suburban, and rural areas;
(ii) consider a variety of marketing strategies;
(iii) allow for production in soil and in alternative systems such as vertical systems, greenhouses, rooftops, or hydroponic systems;
(iv) consider the price premium when accounting for production or revenue losses;
(v) consider whether to provide coverage-
(I) for various types of production under 1 policy; and
(II) for 1 species or type of plant per policy; and
(vi) have streamlined reporting and paperwork requirements.
(C) Report
Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that-
(i) examines whether a version of existing policies such as the whole-farm revenue protection insurance plan may be tailored to provide improved coverage for producers of local foods;
(ii) describes the results of the feasibility study carried out under subparagraph (A)(i); and
(iii) includes any recommendations with respect to those results.
(19) High-risk, highly productive batture land policy
(A) In general
(i) Research and development
The Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure producers of corn, cotton, and soybeans-
(I) with operations on highly productive batture land within the Lower Mississippi River Valley;
(II) that have a history of production of not less than 5 years; and
(III) that have been impacted by more frequent flooding over the past 10 years due to sedimentation or federally constructed engineering improvements.
(ii) Availability of policy
Notwithstanding the last sentence of section 1508(a)(1) of this title, and section 1508(a)(2) of this title, the Corporation shall make a policy described in clause (i) available if the requirements of section 1508(h) of this title are met.
(B) Research and development described
Research and development described in subparagraph (A)(i) shall evaluate the feasibility of less cost-prohibitive policies for batture-land producers in high risk areas, including policies that-
(i) consider premium rate adjustments;
(ii) consider automatic yield exclusion for consecutive-year losses; and
(iii) allow for flexibility of final plant dates and prevent plant regulations.
(C) Report
Not later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that-
(i) examines whether a version of existing policies may be tailored to provide improved coverage for batture-land producers;
(ii) describes the results of the research and development carried out under subparagraphs (A) and (B); and
(iii) includes any recommendations with respect to those results.
(d) Partnerships for risk management development and implementation
(1) Purpose
The purpose of this subsection is to authorize the Corporation to enter into partnerships with public and private entities for the purpose of either-
(A) increasing the availability of loss mitigation, financial, and other risk management tools for producers, with a priority given to risk management tools for producers of agricultural commodities covered by section 7333 of this title, specialty crops, and underserved agricultural commodities; or
(B) improving analysis tools and technology regarding compliance or identifying and using innovative compliance strategies.
(2) Authority
The Corporation may enter into partnerships with the National Institute of Food and Agriculture, the Agricultural Research Service, the National Oceanic Atmospheric Administration, and other appropriate public and private entities with demonstrated capabilities in developing and implementing risk management and marketing options for producers of specialty crops and underserved agricultural commodities.
(3) Objectives
The Corporation may enter into a partnership under paragraph (2)-
(A) to enhance the notice and timeliness of notice of weather conditions that could negatively affect crop yields, quality, and final product use in order to allow producers to take preventive actions to increase end product profitability and marketability and to reduce the possibility of crop insurance claims;
(B) to develop a multifaceted approach to pest management and fertilization to decrease inputs, decrease environmental exposure, and increase application efficiency;
(C) to develop or improve techniques for planning, breeding, planting, growing, maintaining, harvesting, storing, shipping, and marketing that will address quality and quantity challenges associated with year-to-year and regional variations;
(D) to clarify labor requirements and assist producers in complying with requirements to better meet the physically intense and time-compressed planting, tending, and harvesting requirements associated with the production of specialty crops and underserved agricultural commodities;
(E) to provide assistance to State foresters or equivalent officials for the prescribed use of burning on private forest land for the prevention, control, and suppression of fire;
(F) to provide producers with training and informational opportunities so that the producers will be better able to use financial management, farm financial benchmarking, crop insurance, marketing contracts, and other existing and emerging risk management tools;
(G) to improve analysis tools and technology regarding compliance or identifying and using innovative compliance strategies; and
(H) to develop other risk management tools to further increase economic and production stability.
(e) Funding
(1) Reimbursements
Of the amounts made available from the insurance fund established under section 1516(c) of this title, the Corporation may use to provide reimbursements under subsection (b) not more than $7,500,000 for fiscal year 2008 and each subsequent fiscal year.
(2) Contracting
(A) Conducting and contracting for research and development
Of the amounts made available from the insurance fund established under section 1516(c) of this title, the Corporation may use to conduct research and development and carry out contracting and partnerships under subsections (c) and (d) not more than-
(i) $12,500,000 for each of fiscal years 2008 through 2018; and
(ii) $8,000,000 for fiscal year 2019 and each fiscal year thereafter.
(B) Underserved States
Of the amount made available under subparagraph (A) for a fiscal year, the Corporation shall use not more than $5,000,000 for the fiscal year to conduct research and development and carry out contracting for research and development to carry out the purpose described in subsection (c)(1)(A).
(3) Unused funding
If the Corporation determines that the amount available under this section for a fiscal year is not needed for such purposes, the Corporation may use-
(A) not more than $5,000,000 for each fiscal year to improve program integrity, including by-
(i) increasing compliance-related training;
(ii) improving analysis tools and technology regarding compliance;
(iii) use of information technology, as determined by the Corporation; and
(iv) identifying and using innovative compliance strategies; and
(B) any excess amounts to carry out other activities authorized under this section.
7 U.S.C. 1522(c)(7)
§1508. Crop insurance
(a) Authority to offer insurance
(1) In general
If sufficient actuarial data are available (as determined by the Corporation), the Corporation may insure, or provide reinsurance for insurers of, producers of agricultural commodities grown in the United States under 1 or more plans of insurance determined by the Corporation to be adapted to the agricultural commodity concerned. To qualify for coverage under a plan of insurance, the losses of the insured commodity must be due to drought, flood, or other natural disaster (as determined by the Secretary).
(2) Period
Except in the cases of tobacco, potatoes, sweet potatoes, and hemp, insurance shall not extend beyond the period during which the insured commodity is in the field. As used in the preceding sentence, in the case of an aquacultural species, the term “field” means the environment in which the commodity is produced.
(3) Exclusion of losses due to certain actions of producer
(A) Exclusions
Insurance provided under this subsection shall not cover losses due to-
(i) the neglect or malfeasance of the producer;
(ii) the failure of the producer to reseed to the same crop in such areas and under such circumstances as it is customary to reseed; or
(iii) the failure of the producer to follow good farming practices, including scientifically sound sustainable and organic farming practices.
(B) Good farming practices determination review
(i) Informal administrative process
A producer shall have the right to a review of a determination regarding good farming practices made under subparagraph (A)(iii) in accordance with an informal administrative process to be established by the Corporation.
(ii) Administrative review
(I) No adverse decision
The determination shall not be considered an adverse decision for purposes of subtitle H of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6991 et seq.).
(II) Reversal or modification
Except as provided in clause (i), the determination may not be reversed or modified as the result of a subsequent administrative review.
(iii) Judicial review
(I) Right to review
A producer shall have the right to judicial review of the determination without exhausting any right to a review under clause (i).
(II) Reversal or modification
The determination may not be reversed or modified as the result of judicial review unless the determination is found to be arbitrary or capricious.
(C) Limitation on revenue coverage for potatoes
No policy or plan of insurance provided under this subchapter (including a policy or plan of insurance approved by the Board under subsection (h)) shall cover losses due to a reduction in revenue for potatoes except as covered under a whole farm policy or plan of insurance, as determined by the Corporation.
(4) Expansion to other areas or single producers
(A) Area expansion
The Corporation may offer plans of insurance or reinsurance for production of agricultural commodities in the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau in the same manner as provided in this section for production of agricultural commodities in the United States.
(B) Producer expansion
In an area in the United States or specified in subparagraph (A) where crop insurance is not available for a particular agricultural commodity, the Corporation may offer to enter into a written agreement with an individual producer operating in the area for insurance coverage under this subchapter if the producer has actuarially sound data relating to the production by the producer of the commodity or similar commodities and the data is acceptable to the Corporation.
(5) Dissemination of crop insurance information
(A) Available information
The Corporation shall make available to producers through local offices of the Department-
(i) current and complete information on all aspects of Federal crop insurance; and
(ii) a listing of insurance agents and companies offering to sell crop insurance in the area of the producers.
(B) Use of electronic methods
(i) Dissemination by Corporation
The Corporation shall make the information described in subparagraph (A) available electronically to producers and approved insurance providers.
(ii) Submission to Corporation
To the maximum extent practicable, the Corporation shall allow producers and approved insurance providers to use electronic methods to submit information required by the Corporation.
(6) Addition of new and specialty crops (including value-added crops)
(A) Annual review
Not later than 1 year after December 20, 2018, and annually thereafter, the manager of the Corporation shall prepare, to the maximum extent practicable, based on data shared from the noninsured crop disaster assistance program established by section 7333 of this title, written agreements, or other data, and present to the Board not less than 1 of each of the following:
(i) Research and development for a policy or plan of insurance for a commodity for which there is no existing policy or plan of insurance.
(ii) Expansion of an existing policy or plan of insurance to additional counties or States, including malting barley endorsements or contract options.
(iii) Research and development for a new policy or plan of insurance, or endorsement, for commodities with existing policies or plans of insurance, such as dollar plans.
(B) Report
Not later than 1 year after 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 subchapter to new and specialty crops.
(7) Adequate coverage for States and underserved producers
(A) Definitions
In this paragraph:
(i) Adequately served
The term “adequately served” means having a participation rate, by crop, that is at least 50 percent of the national average participation rate.
(ii) Underserved producer
The term “underserved producer” means an individual (including a member of an Indian Tribe) that is-
(I) a beginning farmer or rancher;
(II) a veteran farmer or rancher; or
(III) a socially disadvantaged farmer or rancher.
(B) Review
Using resources and information available to the Board or the Secretary, the Board shall review the policies and plans of insurance that are offered by approved insurance providers under this subchapter, including policies and plans of insurance for underserved producers, to determine if each State is adequately served by the policies and plans of insurance.
(C) Report
(i) In general
Not later than 30 days after completion of the review under subparagraph (B), and not less frequently than once every 3 years thereafter, the Board shall make publicly available and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the results of the review.
(ii) Recommendations
The report under clause (i) shall include recommendations to increase participation in States and among underserved producers that are not adequately served by the policies and plans of insurance, including any plans for administrative action or recommendations for Congressional action.
(8) Special provisions for cotton and rice
Notwithstanding any other provision of this subchapter, beginning with the 2001 crops of upland cotton, extra long staple cotton, and rice, the Corporation shall offer plans of insurance, including prevented planting coverage and replanting coverage, under this subchapter that cover losses of upland cotton, extra long staple cotton, and rice resulting from failure of irrigation water supplies due to drought and saltwater intrusion.
(9) Premium adjustments
(A) Prohibition
Except as provided in subparagraph (B), no person shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, either as an inducement to procure insurance or after insurance has been procured, any rebate, discount, abatement, credit, or reduction of the premium named in an insurance policy or any other valuable consideration or inducement not specified in the policy.
(B) Exceptions
Subparagraph (A) does not apply with respect to-
(i) a payment authorized under subsection (b)(5)(B);
(ii) a performance-based discount authorized under subsection (d)(3); or
(iii) a patronage dividend, or similar payment, that is paid-
(I) by an entity that was approved by the Corporation to make such payments for the 2005, 2006, or 2007 reinsurance year, in accordance with subsection (b)(5)(B) as in effect on the day before the date of enactment of this paragraph; and
(II) in a manner consistent with the payment plan approved in accordance with that subsection for the entity by the Corporation for the applicable reinsurance year.
(C) Publication of violations
(i) Publication required
Subject to clause (ii), the Corporation shall publish in a timely manner on the website of the Risk Management Agency information regarding each violation of this paragraph, including any sanctions imposed in response to the violation, in sufficient detail so that the information may serve as effective guidance to approved insurance providers, agents, and producers.
(ii) Protection of privacy
In providing information under clause (i) regarding violations of this paragraph, the Corporation shall redact the identity of the persons and entities committing the violations in order to protect the privacy of those persons and entities.
(10) Commissions
(A) Definition of immediate family
In this paragraph, the term “immediate family” means an individual’s father, mother, stepfather, stepmother, brother, sister, stepbrother, stepsister, son, daughter, stepson, stepdaughter, grandparent, grandson, granddaughter, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, the spouse of the foregoing, and the individual’s spouse.
(B) Prohibition
No individual (including a subagent) may receive directly, or indirectly through an entity, any compensation (including any commission, profit sharing, bonus, or any other direct or indirect benefit) for the sale or service of a policy or plan of insurance offered under this subchapter if-
(i) the individual has a substantial beneficial interest, or a member of the individual’s immediate family has a substantial beneficial interest, in the policy or plan of insurance; and
(ii) the total compensation to be paid to the individual with respect to the sale or service of the policies or plans of insurance that meet the condition described in clause (i) exceeds 30 percent or the percentage specified in State law, whichever is less, of the total of all compensation received directly or indirectly by the individual for the sale or service of all policies and plans of insurance offered under this subchapter for the reinsurance year.
(C) Reporting
Not later than 90 days after the annual settlement date of the reinsurance year, any individual that received directly or indirectly any compensation for the service or sale of any policy or plan of insurance offered under this subchapter in the prior reinsurance year shall certify to applicable approved insurance providers that the compensation that the individual received was in compliance with this paragraph.
(D) Sanctions
The procedural requirements and sanctions prescribed in section 1515(h) of this title shall apply to the prosecution of a violation of this paragraph.
(E) Applicability
(i) In general
Sanctions for violations under this paragraph shall only apply to the individuals or entities directly responsible for the certification required under subparagraph (C) or the failure to comply with the requirements of this paragraph.
(ii) Prohibition
No sanctions shall apply with respect to the policy or plans of insurance upon which compensation is received, including the reinsurance for those policies or plans.
(11) Cover crops
(A) In general
The voluntary practice of cover cropping shall be considered a good farming practice under paragraph (3)(A)(iii) if the cover crop is terminated in accordance with subparagraph (B).
(B) Termination
(i) In general
The termination of a cover crop shall be carried out according to-
(I) guidelines established by the Secretary; or
(II) an exception to the guidelines approved under clause (ii).
(ii) Exception to guidelines
The Corporation shall approve an exception to the guidelines under clause (i)(I) if that exception is recommended by-
(I) the Natural Resources Conservation Service; or
(II) an agricultural expert, as determined by the Corporation, unless the exception is determined to be unreasonable by the Corporation.
(C) Insurability of subsequent crop
Cover crop termination shall not affect the insurability of a subsequently planted insurable crop if the cover crop is terminated in accordance with subparagraph (B).
(D) Summer fallow
In a county in which summer fallow is an insurable practice, a cover crop in that county that is terminated in accordance with subparagraph (B) shall be considered as summer fallow for the purpose of insurability.
(b) Catastrophic risk protection
(1) Coverage availability
The Corporation shall offer a catastrophic risk protection plan to indemnify producers for crop loss due to loss of yield or prevented planting, if provided by the Corporation, when the producer is unable, because of drought, flood, or other natural disaster (as determined by the Secretary), to plant other crops for harvest on the acreage for the crop year.
(2) Amount of coverage
(A) In general
Subject to subparagraph (B)-
(i) in the case of each of the 1995 through 1998 crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 60 percent of the expected market price, or a comparable coverage (as determined by the Corporation); and
(ii) in the case of each of the 1999 and subsequent crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 55 percent of the expected market price, or a comparable coverage (as determined by the Corporation).
(B) Reduction in actual payment
The amount paid to a producer on a claim under catastrophic risk protection may reflect a reduction that is proportional to the out-of-pocket expenses that are not incurred by the producer as a result of not planting, growing, or harvesting the crop for which the claim is made, as determined by the Corporation.
(3) Alternative catastrophic coverage
Beginning with the 2001 crop year, the Corporation shall offer producers of an agricultural commodity the option of selecting either of the following:
(A) The catastrophic risk protection coverage available under paragraph (2)(A).
(B) An alternative catastrophic risk protection coverage that-
(i) indemnifies the producer on an area yield and loss basis if such a policy or plan of insurance is offered for the agricultural commodity in the county in which the farm is located;
(ii) provides, on a uniform national basis, a higher combination of yield and price protection than the coverage available under paragraph (2)(A); and
(iii) the Corporation determines is comparable to the coverage available under paragraph (2)(A) for purposes of subsection (e)(2)(A).
(4) Sale of catastrophic risk coverage
(A) In general
Catastrophic risk coverage may be offered by-
(i) approved insurance providers, if available in an area; and
(ii) at the option of the Secretary that is based on considerations of need, local offices of the Department.
(B) Need
For purposes 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 the amount of $655 per crop per county.
(B) Payment of catastrophic risk protection fee on behalf of producers
(i) Payment authorized
If State law permits a licensing fee to be paid by an insurance provider to a cooperative association or trade association and rebated to a producer through the payment of catastrophic risk protection administrative fees, a cooperative association or trade association located in that State may pay, on behalf of a member of the association in that State or a contiguous State who consents to be insured under such an arrangement, all or a portion of the administrative fee required by this paragraph for catastrophic risk protection.
(ii) Selection of provider
Nothing in this subparagraph limits the option of a producer to select the licensed insurance agent or other approved insurance provider from whom the producer will purchase a policy or plan of insurance or to refuse coverage for which a payment is offered to be made under clause (i).
(iii) Delivery of insurance
Catastrophic risk protection coverage for which a payment is made under clause (i) shall be delivered by a licensed insurance agent or other approved insurance provider.
(iv) Additional coverage encouraged
A cooperative association or trade association, and any approved insurance provider with whom a licensing fee is made, shall encourage producer members to purchase appropriate levels of coverage in order to meet the risk management needs of the member producers.
(C) Time for payment
The administrative fee required by this paragraph shall be paid by the producer on the same date on which the premium for a policy of additional coverage would be paid by the producer.
(D) Use of fees
(i) In general
The amounts paid under this paragraph shall be deposited in the crop insurance fund established under section 1516(c) of this title, to be available for the programs and activities of the Corporation.
(ii) Limitation
No funds deposited in the crop insurance fund under this subparagraph may be used to compensate an approved insurance provider or agent for the delivery of services under this subsection.
(E) Waiver of fee
(i) In general
The Corporation shall waive the amounts required under this paragraph for limited resource farmers and beginning farmers or ranchers, as defined by the Corporation, and veteran farmers or ranchers.
(ii) Coordination
The Corporation shall coordinate with other agencies of the Department that provide programs or services to farmers and ranchers described in clause (i) to make available coverage under the waiver under that clause and to share eligibility information to reduce paperwork and avoid duplication.
(6) Participation requirement
A producer may obtain catastrophic risk coverage for a crop of the producer on land in the county only if the producer obtains the coverage for the crop on all insurable land of the producer in the county.
(7) Limitation due to risk
The Corporation may limit catastrophic risk coverage in any county or area, or on any farm, on the basis of the insurance risk concerned.
(8) Transitional coverage for 1995 crops
Effective only for a 1995 crop planted or for which insurance attached prior to January 1, 1995, the Corporation shall allow producers of the crops until not later than the end of the 180-day period beginning on the date of enactment of the Federal Crop Insurance Reform Act of 1994 [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 subchapter then in effect, shall be eligible for the same benefits to which a producer would be entitled under comparable additional coverage under subsection (c).
(9) Simplification
(A) Catastrophic risk protection plans
In developing and carrying out the policies and procedures for a catastrophic risk protection plan under this subchapter, 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 subchapter without jeopardizing the actuarial soundness or integrity of the crop insurance program, the Corporation shall apply the policies and procedures to the other plans of insurance within a reasonable period of time (as determined by the Corporation) after the effective date of this paragraph.
(10) Loss adjustment
The rate for reimbursing an approved insurance provider or agent for expenses incurred by the approved insurance provider or agent for loss adjustment in connection with a policy of catastrophic risk protection shall not exceed 6 percent of the premium for catastrophic risk protection that is used to define loss ratio.
(c) General coverage levels
(1) 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 options
A producer shall have the option of purchasing additional coverage based on-
(A)(i) an individual yield and loss basis; or
(ii) an area yield and loss basis;
(B) an individual yield and loss basis, supplemented with coverage based on an area yield and loss basis to cover a part of the deductible under the individual yield and loss policy, as described in paragraph (4)(C); or
(C) a margin basis alone or in combination with the coverages available under subparagraph (A) or (B).
(4) Level of coverage
(A) Dollar denomination and percentage of yield
Except as provided in subparagraph (C), the level of coverage-
(i) shall be dollar denominated; and
(ii) may be purchased at any level not to exceed-
(I) in the case of the individual yield or revenue coverage, 85 percent;
(II) in the case of individual yield or revenue coverage aggregated across multiple commodities, 90 percent; and
(III) in the case of area yield or revenue coverage (as determined by the Corporation), 95 percent.
(B) Information
The Corporation shall provide producers with information on catastrophic risk and additional coverage in terms of dollar coverage (within the allowable limits of coverage provided in this paragraph).
(C) Supplemental coverage option
(i) In general
Notwithstanding subparagraph (A), in the case of the supplemental coverage option described in paragraph (3)(B), the Corporation shall offer producers the opportunity to purchase coverage in combination with a policy or plan of insurance offered under this subchapter that would allow indemnities to be paid to a producer equal to a part of the deductible under the policy or plan of insurance-
(I) at a county-wide level to the fullest extent practicable; or
(II) in counties that lack sufficient data, on the basis of such larger geographical area as the Corporation determines to provide sufficient data for purposes of providing the coverage.
(ii) Trigger
Coverage offered under paragraph (3)(B) and clause (i) shall be triggered only if the losses in the area exceed 10 percent of normal levels (as determined by the Corporation).
(iii) Coverage
Subject to the trigger described in clause (ii), coverage offered under paragraph (3)(B) and clause (i) shall not exceed the difference between-
(I) 90 percent; and
(II) the coverage level selected by the producer for the underlying policy or plan of insurance.
(iv) Ineligible crops and acres
Acres that are enrolled in the stacked income protection plan under section 1508b of this title shall not be eligible for supplemental coverage under this subparagraph.
(v) Calculation of premium
Notwithstanding subsection (d), the premium for coverage offered under paragraph (3)(B) and clause (i) shall-
(I) be sufficient to cover anticipated losses and a reasonable reserve; and
(II) include an amount for operating and administrative expenses established in accordance with subsection (k)(4)(F).
(5) Expected market price
(A) Establishment or approval
For the purposes of this subchapter, the Corporation shall establish or approve the price level (referred to in this subchapter as the “expected market price”) of each agricultural commodity for which insurance is offered.
(B) General rule
Except as otherwise provided in subparagraph (C), the expected market price of an agricultural commodity shall be not less than the projected market price of the agricultural commodity, as determined by the Corporation.
(C) Other authorized approaches
The expected market price of an agricultural commodity-
(i) may be based on the actual market price of the agricultural commodity at the time of harvest, as determined by the Corporation;
(ii) in the case of revenue and other similar plans of insurance, may be the actual market price of the agricultural commodity, as determined by the Corporation;
(iii) in the case of cost of production or similar plans of insurance, shall be the projected cost of producing the agricultural commodity, as determined by the Corporation; or
(iv) in the case of other plans of insurance, may be an appropriate amount, as determined by the Corporation.
(D) Grain sorghum price election
(i) In general
The Corporation, in conjunction with the Secretary (referred to in this subparagraph as the “Corporation”), shall-
(I) not later than 60 days after the date of enactment of this subparagraph, make available all methods and data, including data from the Economic Research Service, used by the Corporation to develop the expected market prices for grain sorghum under the production and revenue-based plans of insurance of the Corporation; and
(II) request applicable data from the grain sorghum industry.
(ii) Expert reviewers
(I) In general
Not later than 120 days after the date of enactment of this subparagraph, the Corporation shall contract individually with 5 expert reviewers described in subclause (II) to develop and recommend a methodology for determining an expected market price for sorghum for both the production and revenue-based plans of insurance to more accurately reflect the actual price at harvest.
(II) Requirements
The expert reviewers under subclause (I) shall be comprised of agricultural economists with experience in grain sorghum and corn markets, of whom-
(aa) 2 shall be agricultural economists of institutions of higher education;
(bb) 2 shall be economists from within the Department; and
(cc) 1 shall be an economist nominated by the grain sorghum industry.
(iii) Recommendations
(I) In general
Not later than 90 days after the date of contracting with the expert reviewers under clause (ii), the expert reviewers shall submit, and the Corporation shall make available to the public, the recommendations of the expert reviewers.
(II) Consideration
The Corporation shall consider the recommendations under subclause (I) when determining the appropriate pricing methodology to determine the expected market price for grain sorghum under both the production and revenue-based plans of insurance.
(III) Publication
Not later than 60 days after the date on which the Corporation receives the recommendations of the expert reviewers, the Corporation shall publish the proposed pricing methodology for both the production and revenue-based plans of insurance for notice and comment and, during the comment period, conduct at least 1 public meeting to discuss the proposed pricing methodologies.
(iv) Appropriate pricing methodology
(I) In general
Not later than 180 days after the close of the comment period in clause (iii)(III), but effective not later than the 2010 crop year, the Corporation shall implement a pricing methodology for grain sorghum under the production and revenue-based plans of insurance that is transparent and replicable.
(II) Interim methodology
Until the date on which the new pricing methodology is implemented, the Corporation may continue to use the pricing methodology that the Corporation determines best establishes the expected market price.
(III) Availability
On an annual basis, the Corporation shall make available the pricing methodology and data used to determine the expected market prices for grain sorghum under the production and revenue-based plans of insurance, including any changes to the methodology used to determine the expected market prices for grain sorghum from the previous year.
(6) Price elections
(A) In general
Subject to subparagraph (B), insurance coverage shall be made available to a producer on the basis of any price election that equals or is less than the price election established by the Corporation. The coverage shall be quoted in terms of dollars per acre.
(B) Minimum price elections
The Corporation may establish minimum price elections below which levels of insurance shall not be offered.
(C) Wheat classes and malting barley
The 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.
(D) Organic crops
(i) In general
As soon as possible, but not later than the 2015 reinsurance year, the Corporation shall offer producers of organic crops price elections for all organic crops produced in compliance with standards issued by the Department of Agriculture under the national organic program established under the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq.) that reflect the actual retail or wholesale prices, as appropriate, received by producers for organic crops, as determined by the Secretary using all relevant sources of information.
(ii) Annual report
The Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate an annual report on progress made in developing and improving Federal crop insurance for organic crops, including-
(I) the numbers and varieties of organic crops insured;
(II) the progress of implementing the price elections required under this subparagraph, including the rate at which additional price elections are adopted for organic crops;
(III) the development of new insurance approaches relevant to organic producers; and
(IV) any recommendations the Corporation considers appropriate to improve Federal crop insurance coverage for organic crops.
(7) Fire and hail coverage
For levels of additional coverage equal to 65 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, a producer may elect to delete from the additional coverage any coverage against damage caused by fire and hail if the producer obtains an equivalent or greater dollar amount of coverage for damage caused by fire and hail from an approved insurance provider. On written notice of the election to the company issuing the policy providing additional coverage and submission of evidence of substitute coverage on the commodity insured, the premium of the producer shall be reduced by an amount determined by the Corporation to be actuarially appropriate, taking into account the actuarial value of the remaining coverage provided by the Corporation. In no event shall the producer be given credit for an amount of premium determined to be greater than the actuarial value of the protection against losses caused by fire and hail that is included in the additional coverage for the crop.
(8) State premium subsidies
The Corporation may enter into an agreement with any State or agency of a State under which the State or agency may pay to the approved insurance provider an additional premium subsidy to further reduce the portion of the premium paid by producers in the State.
(9) Limitations on additional coverage
The Board may limit the availability of additional coverage under this subsection in any county or area, or on any farm, on the basis of the insurance risk involved. The Board shall not offer additional coverage equal to less than 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage.
(10) Administrative fee
(A) Fee required
If a producer elects to purchase coverage for a crop at a level in excess of catastrophic risk protection, the producer shall pay an administrative fee for the additional coverage of $30 per crop per county.
(B) Use of fees; waiver
Subparagraphs (D) and (E) of subsection (b)(5) shall apply with respect to the collection and use of administrative fees under this paragraph.
(C) Time for payment
Subsection (b)(5)(C) shall apply with respect to the collection date for the administrative fee.
(d) Premiums
(1) Premiums required
The Corporation shall fix adequate premiums for all the plans of insurance of the Corporation at such rates as the Board determines are actuarially sufficient to attain an expected loss ratio of not greater than-
(A) 1.1 through September 30, 1998;
(B) 1.075 for the period beginning October 1, 1998, and ending on the day before the date of enactment of the Food, Conservation, and Energy Act of 2008; and
(C) 1.0 on and after the date of enactment of that Act.
(2) Premium amounts
The premium amounts for catastrophic risk protection under subsection (b) and additional coverage under subsection (c) shall be fixed as follows:
(A) In the case of catastrophic risk protection, the amount of the premium established by the Corporation for each crop for which catastrophic risk protection is available shall be reduced by the percentage equal to the difference between the average loss ratio for the crop and 100 percent, plus a reasonable reserve, as determined by the Corporation.
(B) In the case of additional coverage equal to or greater than 50 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount of the premium shall-
(i) be sufficient to cover anticipated losses and a reasonable reserve; and
(ii) include an amount for operating and administrative expenses, as determined by the Corporation, on an industry-wide basis as a percentage of the amount of the premium used to define loss ratio.
(3) Performance-based discount
The Corporation may provide a performance-based premium discount for a producer of an agricultural commodity who has good insurance or production experience relative to other producers of that agricultural commodity in the same area, as determined by the Corporation.
(4) Billing date for premiums
Effective beginning with the 2012 reinsurance year, the Corporation shall establish August 15 as the billing date for premiums.
(e) Payment of portion of premium by Corporation
(1) In general
For the purpose of encouraging the broadest possible participation of producers in the catastrophic risk protection provided under subsection (b) and the additional coverage provided under subsection (c), the Corporation shall pay a part of the premium in the amounts provided in accordance with this subsection.
(2) Amount of payment
Subject to paragraphs (3), (6), and (7), the amount of the premium to be paid by the Corporation shall be as follows:
(A) In the case of catastrophic risk protection, the amount shall be equivalent to the premium established for catastrophic risk protection under subsection (d)(2)(A).
(B) In the case of additional coverage equal to or greater than 50 percent, but less than 55 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of-
(i) 67 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional coverage equal to or greater than 55 percent, but less than 65 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of-
(i) 69 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(D) In the case of additional coverage equal to or greater than 65 percent, but less than 75 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of-
(i) 64 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(E) In the case of additional coverage equal to or greater than 75 percent, but less than 80 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of-
(i) 60 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(F) In the case of additional coverage equal to or greater than 80 percent, but less than 85 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of-
(i) 51 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(G) Subject to subsection (c)(4), in the case of additional coverage equal to or greater than 85 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of-
(i) 41 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(H) In the case of the supplemental coverage option authorized in subsection (c)(4)(C), the amount shall be equal to the sum of-
(i) 80 percent of the additional premium associated with the coverage; and
(ii) the amount determined under subsection (c)(4)(C)(v)(II), subject to subsection (k)(4)(F), for the coverage to cover operating and administrative expenses.
(3) Prohibition on continuous coverage
Notwithstanding paragraph (2), during each of the 2001 and subsequent reinsurance years, additional coverage under subsection (c) shall be available only in 5 percent increments beginning at 50 percent of the recorded or appraised average yield.
(4) Premium payment disclosure
Each policy or plan of insurance under this subchapter shall prominently indicate the dollar amount of the portion of the premium paid by the Corporation.
(5) Enterprise and whole farm units
(A) In general
The Corporation may pay a portion of the premiums for plans or policies of insurance for which the insurable unit is defined on a whole farm or enterprise unit basis that is higher than would otherwise be paid in accordance with paragraph (2).
(B) Amount
The percentage of the premium paid by the Corporation to a policyholder for a policy with an enterprise or whole farm unit under this paragraph shall, to the maximum extent practicable, provide the same dollar amount of premium subsidy per acre that would otherwise have been paid by the Corporation under paragraph (2) if the policyholder had purchased a basic or optional unit for the crop for the crop year.
(C) Limitation
The amount of the premium paid by the Corporation under this paragraph may not exceed 80 percent of the total premium for the enterprise or whole farm unit policy.
(D) Nonirrigated crops
Beginning with the 2015 crop year, the Corporation shall make available separate enterprise units for irrigated and nonirrigated acreage of crops in counties.
(E) Enterprise units across county lines
The Corporation may allow a producer to establish a single enterprise unit by combining an enterprise unit with-
(i) 1 or more other enterprise units in 1 or more other counties; or
(ii) all basic units and all optional units in 1 or more other counties.
(6) Premium subsidy for area revenue plans
Subject to paragraph (4), in the case of a policy or plan of insurance that covers losses due to a reduction in revenue in an area, the amount of the premium paid by the Corporation shall be as follows:
(A) In the case of additional area coverage equal to or greater than 70 percent, but less than 75 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of-
(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(B) In the case of additional area coverage equal to or greater than 75 percent, but less than 85 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of-
(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional area coverage equal to or greater than 85 percent, but less than 90 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of-
(i) 49 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(D) In the case of additional area coverage equal to or greater than 90 percent of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of-
(i) 44 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(7) Premium subsidy for area yield plans
Subject to paragraph (4), in the case of a policy or plan of insurance that covers losses due to a loss of yield or prevented planting in an area, the amount of the premium paid by the Corporation shall be as follows:
(A) In the case of additional area coverage equal to or greater than 70 percent, but less than 80 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of-
(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(B) In the case of additional area coverage equal to or greater than 80 percent, but less than 90 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of-
(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional area coverage equal to or greater than 90 percent,1 of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of-
(i) 51 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(8) Premium for beginning and veteran farmers or ranchers
Notwithstanding any other provision of this subsection regarding payment of a portion of premiums, a beginning farmer or rancher or veteran farmer or rancher shall receive premium assistance that is 10 percentage points greater than premium assistance that would otherwise be available under paragraphs (2) (except for subparagraph (A) of that paragraph), (5), (6), and (7) for the applicable policy, plan of insurance, and coverage level selected by the beginning farmer or rancher or veteran farmer or rancher.
(9) Additional support
(A) In general
In addition to any other provision of this subsection (except paragraph (2)(A)) regarding payment of a portion of premiums, a beginning farmer or rancher shall receive additional premium assistance that is the number of percentage points specified in subparagraph (B) greater than the premium assistance that would otherwise be available for the applicable policy, plan of insurance, and coverage level selected by the beginning farmer or rancher.
(B) Percentage points adjustments
The percentage points referred to in subparagraph (A) are the following:
(i) For each of the first and second reinsurance years that a beginning farmer or rancher participates as a beginning farmer or rancher in the applicable policy or plan of insurance, 5 percentage points.
(ii) For the third reinsurance year that a beginning farmer or rancher participates as a beginning farmer or rancher in the applicable policy or plan of insurance, 3 percentage points.
(iii) For the fourth reinsurance year that a beginning farmer or rancher participates as a beginning farmer or rancher in the applicable policy or plan of insurance, 1 percentage point.
(f) Eligibility
(1) In general
To participate in catastrophic risk protection coverage under this section, a producer shall submit an application at the local office of the Department or to an approved insurance provider.
(2) Sales closing date
(A) In general
For coverage under this subchapter, each producer shall purchase crop insurance on or before the sales closing date for the crop by providing the required information and executing the required documents. Subject to the goal of ensuring actuarial soundness for the crop insurance program, the sales closing date shall be established by the Corporation to maximize convenience to producers in obtaining benefits under price and production adjustment programs of the Department.
(B) Established dates
Except as provided in subparagraph (C), the Corporation shall establish, for an insurance policy for each insurable crop that is planted in the spring, a sales closing date that is 30 days earlier than the corresponding sales closing date that was established for the 1994 crop year.
(C) Exception
If compliance with subparagraph (B) results in a sales closing date for an agricultural commodity that is earlier than January 31, the sales closing date for that commodity shall be January 31 beginning with the 2000 crop year.
(3) Records and reporting
To obtain catastrophic risk protection under subsection (b) or additional coverage under subsection (c), a producer shall-
(A) provide annually records acceptable to the Secretary regarding crop acreage, acreage yields, and production for each agricultural commodity insured under this subchapter or accept a yield determined by the Corporation; and
(B) report acreage planted and prevented from planting by the designated acreage reporting date for the crop and location as established by the Corporation.
(g) Yield determinations
(1) In general
Subject to paragraph (2), the Corporation shall establish crop insurance underwriting rules that ensure that yield coverage, as specified in this subsection, is provided to eligible producers obtaining catastrophic risk protection under subsection (b) or additional coverage under subsection (c).
(2) Yield coverage plans
(A) Actual production history
Subject to subparagraph (B) and paragraph (4)(C), the yield for a crop shall be based on the actual production history for the crop, if the crop was produced on the farm without penalty during each of the 4 crop years immediately preceding the crop year for which actual production history is being established, building up to a production data base for each of the 10 consecutive crop years preceding the crop year for which actual production history is being established.
(B) Assigned yield
If the producer does not provide satisfactory evidence of the yield of a commodity under subparagraph (A), the producer shall be assigned-
(i) a yield that is not less than 65 percent of the transitional yield of the producer (adjusted to reflect actual production reflected in the records acceptable to the Corporation for continuous years), as specified in regulations issued by the Corporation based on production history requirements;
(ii) a yield determined by the Corporation, in the case of-
(I) a producer that has not had a share of the production of the insured crop for more than two crop years, as determined by the Secretary;
(II) a producer that produces an agricultural commodity on land that has not been farmed by the producer; or
(III) a producer that rotates a crop produced on a farm to a crop that has not been produced on the farm; or
(iii) if the producer is a beginning farmer or rancher or veteran farmer or rancher who was previously involved in a farming or ranching operation, including involvement in the decisionmaking or physical involvement in the production of the crop or livestock on the farm, for any acreage obtained by the beginning farmer or rancher or veteran farmer or rancher, a yield that is the higher of-
(I) the actual production history of the previous producer of the crop or livestock on the acreage determined under subparagraph (A); or
(II) a yield of the producer, as determined in clause (i).
(C) Area yield
The Corporation may offer a crop insurance plan based on an area yield that allows an insured producer to qualify for an indemnity if a loss has occurred in an area (as specified by the Corporation) in which the farm of the producer is located. Under an area yield plan, an insured producer shall be allowed to select the level of area production at which an indemnity will be paid consistent with such terms and conditions as are established by the Corporation.
(D) Commodity-by-commodity basis
A producer may choose between individual yield or area yield coverage or combined coverage, if available, on a commodity-by-commodity basis.
(E) Sources of yield data
To determine yields under this paragraph, the Corporation-
(i) shall use county data collected by the Risk Management Agency, the National Agricultural Statistics Service, or both; or
(ii) if sufficient county data is not available, may use other data considered appropriate by the Secretary.
(3) Transitional yields for producers of feed or forage
(A) In general
If a producer does not provide satisfactory evidence of a yield under paragraph (2)(A), the producer shall be assigned a yield that is at least 80 percent of the transitional yield established by the Corporation (adjusted to reflect the actual production history of the producer) if the Secretary 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.
(4) Adjustment in actual production history to establish insurable yields
(A) Application
This paragraph shall apply whenever the Corporation uses the actual production records of the producer to establish the producer’s actual production history for an agricultural commodity for any of the 2001 and subsequent crop years.
(B) Election to use percentage of transitional yield
If, for one or more of the crop years used to establish the producer’s actual production history of an agricultural commodity, the producer’s recorded or appraised yield of the commodity was less than 60 percent of the applicable transitional yield, as determined by the Corporation, the Corporation shall, at the election of the producer-
(i) exclude any of such recorded or appraised yield; and
(ii)(I) replace each excluded yield with a yield equal to 60 percent of the applicable transitional yield; or
(II) in the case of beginning farmers or ranchers and veteran farmers or ranchers, replace each excluded yield with a yield equal to 80 percent of the applicable transitional yield.
(C) Election to exclude certain history
(i) In general
Notwithstanding paragraph (2), with respect to 1 or more of the crop years used to establish the actual production history of an agricultural commodity of the producer, the producer may elect to exclude any recorded or appraised yield for any crop year in which the per planted acre yield of the agricultural commodity in the county of the producer was at least 50 percent below the simple average of the per planted acre yield of the agricultural commodity in the county during the previous 10 consecutive crop years.
(ii) Contiguous counties
In any crop year that a producer in a county is eligible to make an election to exclude a yield under clause (i), a producer in a contiguous county is eligible to make such an election.
(iii) Irrigation practice
For purposes of determining whether the per planted acre yield of the agricultural commodity in the county of the producer was at least 50 percent below the simple average of the per planted acre yield of the agricultural commodity in the county during the previous 10 consecutive crop years, the Corporation shall make a separate determination for irrigated and nonirrigated acreage.
(D) Premium adjustment
In the case of a producer that makes an election under subparagraph (B) or (C), the Corporation shall adjust the premium to reflect the risk associated with the adjustment made in the actual production history of the producer.
(5) Adjustment to reflect increased yields from successful pest control efforts
(A) Situations justifying adjustment
The Corporation shall develop a methodology for adjusting the actual production history of a producer when each of the following apply:
(i) The producer’s farm is located in an area where systematic, area-wide efforts have been undertaken using certain operations or measures, or the producer’s farm is a location at which certain operations or measures have been undertaken, to detect, eradicate, suppress, or control, or at least to prevent or retard the spread of, a plant disease or plant pest, including a plant pest (as defined in section 7759 2 of this title).
(ii) The presence of the plant disease or plant pest has been found to adversely affect the yield of the agricultural commodity for which the producer is applying for insurance.
(iii) The efforts described in clause (i) have been effective.
(B) Adjustment amount
The amount by which the Corporation adjusts the actual production history of a producer of an agricultural commodity shall reflect the degree to which the success of the systematic, area-wide efforts described in subparagraph (A), on average, increases the yield of the commodity on the producer’s farm, as determined by the Corporation.
(6) Continued authority
(A) In general
The Corporation shall establish-
(i) underwriting rules that limit the decrease in the actual production history of a producer, at the election of the producer, to not more than 10 percent of the actual production history of the previous crop year provided that the production decline was the result of drought, flood, natural disaster, or other insurable loss (as determined by the Corporation); and
(ii) actuarially sound premiums to cover additional risk.
(B) Other authority
The authority provided under subparagraph (A) is in addition to any other authority that adjusts the actual production history of the producer under this subchapter.
(C) Effect
Nothing in this paragraph shall be construed to require a change in the administration of any provision of this subchapter as the subchapter was administered for the 2018 reinsurance year.
(h) Submission of policies and materials to Board
(1) Authority to submit
(A) In general
In addition to any standard forms or policies that the Board may require be made available to producers under subsection (c), a person (including an approved insurance provider, a college or university, a cooperative or trade association, or any other person) may prepare for submission or propose to the Board-
(i) other crop insurance policies and provisions of policies; and
(ii) rates of premiums for multiple peril crop insurance pertaining to wheat, soybeans, field corn, and any other crops determined by the Secretary.
(B) Review and submission by Corporation
(i) In general
The Corporation shall review any policy developed under section 1522(c) of this title or any pilot program developed under section 1523 of this title and submit the policy or program to the Board under this subsection if the Corporation, at the sole discretion of the Corporation, finds that the policy or program-
(I) subject to clause (ii), will likely result in a viable and marketable policy consistent with this subsection;
(II) would provide crop insurance coverage in a significantly improved form; and
(III) adequately protects the interests of producers.
(ii) Waiver for hemp
The Corporation may waive the viability and marketability requirement under clause (i)(I) in the case of a policy or pilot program relating to the production of hemp.
(2) Submission of policies
A policy or other material submitted to the Board under this subsection may be prepared without regard to the limitations contained in this subchapter, including the requirements concerning the levels of coverage and rates and the requirement that a price level for each commodity insured must equal the expected market price for the commodity as established by the Board.
(3) Review and approval by the Board
(A) In general
A policy, plan of insurance, or other material submitted to the Board under this subsection shall be reviewed by the Board and shall be approved by the Board for reinsurance and for sale by approved insurance providers to producers at actuarially appropriate rates and under appropriate terms and conditions if the Board determines that-
(i) the interests of producers are adequately protected;
(ii) the proposed policy or plan of insurance will-
(I) provide a new kind of coverage that is likely to be viable and marketable;
(II) provide crop insurance coverage in a manner that addresses a clear and identifiable flaw or problem in an existing policy; or
(III) provide a new kind of coverage for a commodity that previously had no available crop insurance, or has demonstrated a low level of participation or coverage level under existing coverage; and
(iii) the proposed policy or plan of insurance will not have a significant adverse impact on the crop insurance delivery system.
(B) Consideration
In approving policies or plans of insurance, the Board shall in a timely manner-
(i) first, consider policies or plans of insurance that address underserved commodities, including commodities for which there is no insurance;
(ii) second, consider existing policies or plans of insurance for which there is inadequate coverage or there exists low levels of participation; and
(iii) last, consider all policies or plans of insurance submitted to the Board that do not meet the criteria described in clause (i) or (ii).
(C) Specified review and approval priorities
In reviewing policies and other materials submitted to the Board under this subsection for approval, the Board-
(i) shall make the development and approval of a revenue policy for peanut producers a priority so that a revenue policy is available to peanut producers in time for the 2015 crop year;
(ii) shall make the development and approval of a margin coverage policy for rice producers a priority so that a margin coverage policy is available to rice producers in time for the 2015 crop year;
(iii) may approve a submission that is made pursuant to this subsection that would, beginning with the 2015 crop year, allow producers that purchase policies in accordance with subsection (e)(5)(A) to separate enterprise units by risk rating for acreage of crops in counties; and
(iv) in the case of reviewing policies and other materials relating to the production of hemp, may waive the viability and marketability requirement under subparagraph (A)(ii)(I).
(4) Guidelines for submission and review
The Corporation shall issue regulations to establish guidelines for the submission, and Board review, of policies or other material submitted to the Board under this subsection. At a minimum, the guidelines shall ensure the following:
(A) Confidentiality
(i) In general
A proposal submitted to the Board under this subsection (including any information generated from the proposal) shall be considered to be confidential commercial or financial information for the purposes of section 552(b)(4) of title 5.
(ii) Standard of confidentiality
If information concerning a proposal could be withheld by the Secretary under the standard for privileged or confidential information pertaining to trade secrets and commercial or financial information under section 552(b)(4) of title 5, the information shall not be released to the public.
(iii) Application
This subparagraph shall apply with respect to a proposal only during the period preceding any approval of the proposal by the Board.
(B) Personal presentation
The Board shall provide an applicant with the opportunity to present the proposal to the Board in person if the applicant so desires.
(C) Notification of intent to disapprove
(i) Time period
The Board shall provide an applicant with notification of intent to disapprove a proposal not later than 30 days prior to making the disapproval.
(ii) Modification of application
(I) Authority
An applicant that receives the notification may modify the application, and such application, as modified, shall be considered by the Board in the manner provided in subparagraph (D) within the 30-day period beginning on the date the modified application is submitted.
(II) Time period
Clause (i) shall not apply to the Board’s consideration of the modified application.
(iii) Explanation
Any notification of intent to disapprove a policy or other material submitted under this subsection shall be accompanied by a complete explanation as to the reasons for the Board’s intention to deny approval.
(D) Determination to approve or disapprove policies or materials
(i) Time period
Not later than 120 days after a policy or other material is submitted under this subsection, the Board shall make a determination to approve or disapprove the policy or material.
(ii) Explanation
Any determination by the Board to disapprove any policy or other material shall be accompanied by a complete explanation of the reasons for the Board’s decision to deny approval.
(iii) Failure to meet deadline
Notwithstanding any other provision of this subchapter, if the Board fails to make a determination within the prescribed time period, the submitted policy or other material shall be deemed approved by the Board for the initial reinsurance year designated for the policy or material, unless the Board and the applicant agree to an extension.
(E) Consultation
(i) Requirement
As part of the feasibility and research associated with the development of a policy or other material for fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture), the submitter prior to making a submission under this subsection shall consult with groups representing producers of those agricultural commodities in all major producing areas for the commodities to be served or potentially impacted, either directly or indirectly.
(ii) Submission to the Board
Any submission made to the Board under this subsection shall contain a summary and analysis of the feasibility and research findings from the impacted groups described in clause (i), including a summary assessment of the support for or against development of the policy and an assessment on the impact of the proposed policy to the general marketing and production of the crop from both a regional and national perspective.
(iii) Evaluation by the Board
In evaluating whether the interests of producers are adequately protected pursuant to paragraph (3) with respect to a submission made under this subsection, the Board shall review the information provided pursuant to clause (ii) to determine if the submission will create adverse market distortions with respect to the production of commodities that are the subject of the submission.
(5) Premium schedule
(A) Payment by Corporation
In the case of a policy or plan of insurance developed and approved under this subsection or section 1522 of this title, or conducted under section 1523 of this title (other than a policy or plan of insurance applicable to livestock), the Corporation shall pay a portion of the premium of the policy or plan of insurance that is equal to-
(i) the percentage, specified in subsection (e) for a similar level of coverage, of the total amount of the premium used to define loss ratio; and
(ii) an amount for administrative and operating expenses determined in accordance with subsection (k)(4).
(B) Transitional schedule
Effective only during the 2001 reinsurance year, in the case of a policy or plan of insurance developed and approved under this subsection or section 1522 of this title, or conducted under section 1523 of this title (other than a policy or plan of insurance applicable to livestock), and first approved by the Board after June 20, 2000, the payment by the Corporation of a portion of the premium of the policy may not exceed the dollar amount that would otherwise be authorized under subsection (e) (consistent with subsection (c)(5), as in effect on the day before June 20, 2000).
(6) Additional prevented planting policy coverage
(A) In general
Beginning with the 1995 crop year, the Corporation shall offer to producers additional prevented planting coverage that insures producers against losses in accordance with this paragraph.
(B) Approved insurance providers
Additional prevented planting coverage shall be offered by the Corporation through approved insurance providers.
(C) Timing of loss
A crop loss shall be covered by the additional prevented planting coverage if-
(i) crop insurance policies were obtained for-
(I) the crop year the loss was experienced; and
(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.
(i) Adoption of rates and coverages
(1) In general
The Corporation shall adopt, as soon as practicable, rates and coverages that will improve the actuarial soundness of the insurance operations of the Corporation for those crops that are determined to be insured at rates that are not actuarially sound, except that no rate may be increased by an amount of more than 20 percent over the comparable rate of the preceding crop year.
(2) Review of rating methodologies
To maximize participation in the Federal crop insurance program and to ensure equity for producers, the Corporation shall periodically review the methodologies employed for rating plans of insurance under this subchapter consistent with section 1507(c)(2) of this title.
(3) Analysis of rating and loss history
The Corporation shall analyze the rating and loss history of approved policies and plans of insurance for agricultural commodities by area.
(4) Premium adjustment
If the Corporation makes a determination that premium rates are excessive for an agricultural commodity in an area relative to the requirements of subsection (d)(2) for that area, then, for the 2002 crop year (and as necessary thereafter), the Corporation shall make appropriate adjustments in the premium rates for that area for that agricultural commodity.
(j) Claims for losses
(1) In general
Under rules prescribed by the Corporation, the Corporation may provide for adjustment and payment of claims for losses. The rules prescribed by the Corporation shall establish standards to ensure that all claims for losses are adjusted, to the extent practicable, in a uniform and timely manner.
(2) Denial of claims
(A) In general
Subject to subparagraph (B), if a claim for indemnity is denied by the Corporation or an approved provider on behalf of the Corporation, an action on the claim may be brought against the Corporation or Secretary only in the United States district court for the district in which the insured farm is located.
(B) Statute of limitations
A suit on the claim may be brought not later than 1 year after the date on which final notice of denial of the claim is provided to the claimant.
(3) Indemnification
The Corporation shall provide approved insurance providers with indemnification, including costs and reasonable attorney fees incurred by the approved insurance provider, due to errors or omissions on the part of the Corporation.
(4) Marketing windows
The Corporation shall consider marketing windows in determining whether it is feasible to require planting during a crop year.
(5) Settlement of claims on farm-stored production
A producer with farm-stored production may, at the option of the producer, delay settlement of a crop insurance claim relating to the farm-stored production for up to 4 months after the last date on which claims may be submitted under the policy of insurance.
(k) Reinsurance
(1) In general
Notwithstanding any other provision of this subchapter, the Corporation shall, to the maximum extent practicable, provide reinsurance to insurers approved by the Corporation that insure producers of any agricultural commodity under 1 or more plans acceptable to the Corporation.
(2) Terms and conditions
The reinsurance shall be provided on such terms and conditions as the Board may determine to be consistent with subsections (b) and (c) and sound reinsurance principles.
(3) Share of risk
The reinsurance agreements of the Corporation with the reinsured companies shall require the reinsured companies to bear a sufficient share of any potential loss under the agreement so as to ensure that the reinsured company will sell and service policies of insurance in a sound and prudent manner, taking into consideration the financial condition of the reinsured companies and the availability of private reinsurance.
(4) Rate
(A) In general
Except as otherwise provided in this paragraph, the rate established by the Board to reimburse approved insurance providers and agents for the administrative and operating costs of the providers and agents shall not exceed-
(i) for the 1998 reinsurance year, 27 percent of the premium used to define loss ratio; and
(ii) for each of the 1999 and subsequent reinsurance years, 24.5 percent of the premium used to define loss ratio.
(B) Proportional reductions
A policy of additional coverage that received a rate of reimbursement for administrative and operating costs for the 1998 reinsurance year that is lower than the rate specified in subparagraph (A)(i) shall receive a reduction in the rate of reimbursement that is proportional to the reduction in the rate of reimbursement between clauses (i) and (ii) of subparagraph (A).
(C) Other reductions
Beginning with the 2002 reinsurance year, in the case of a policy or plan of insurance approved by the Board that was not reinsured during the 1998 reinsurance year but, had it been reinsured, would have received a reduced rate of reimbursement during the 1998 reinsurance year, the rate of reimbursement for administrative and operating costs established for the policy or plan of insurance shall take into account the factors used to determine the rate of reimbursement for administrative and operating costs during the 1998 reinsurance year, including the expected difference in premium and actual administrative and operating costs of the policy or plan of insurance relative to an individual yield policy or plan of insurance and other appropriate factors, as determined by the Corporation.
(D) Time for reimbursement
Effective beginning with the 2012 reinsurance year, the Corporation shall reimburse approved insurance providers and agents for the allowable administrative and operating costs of the providers and agents as soon as practicable after October 1 (but not later than October 31) after the reinsurance year for which reimbursements are earned.
(E) Reimbursement rate reduction
In the case of a policy of additional coverage that received a rate of reimbursement for administrative and operating costs for the 2008 reinsurance year, for each of the 2009 and subsequent reinsurance years, the reimbursement rate for administrative and operating costs shall be 2.3 percentage points below the rates in effect as of the date of enactment of the Food, Conservation, and Energy Act of 2008 for all crop insurance policies used to define loss ratio, except that only ½ of the reduction shall apply in a reinsurance year to the total premium written in a State in which the State loss ratio is greater than 1.2.
(F) Reimbursement rate for area policies and plans of insurance
Notwithstanding subparagraphs (A) through (E), for each of the 2009 and subsequent reinsurance years, the reimbursement rate for area policies and plans of insurance widely available as of the date of enactment of this subparagraph or authorized under subsection (c)(4)(C) or section 1508b of this title shall be 12 percent of the premium used to define loss ratio for that reinsurance year.
(5) Cost and regulatory reduction
Consistent with section 118 of the Federal Crop Insurance Reform Act of 1994, and consistent with maintenance of program integrity, prevention of fraud and abuse, the need for program expansion, and improvement of quality of service to customers, the Board shall alter program procedures and administrative requirements in order to reduce the administrative and operating costs of approved insurance providers and agents in an amount that corresponds to any reduction in the reimbursement rate required under paragraph (4) during the 5-year period beginning on October 13, 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.
(8) Renegotiation of standard reinsurance agreement
(A) In general
Except as provided in subparagraph (B), notwithstanding section 536 of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 1506 note; Public Law 105–185) and section 148 of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1506 note; Public Law 106–224), the Corporation may renegotiate the financial terms and conditions of each Standard Reinsurance Agreement-
(i) to be effective for the 2011 reinsurance year beginning July 1, 2010; and
(ii) once during each period of 5 reinsurance years thereafter.
(B) Exceptions
(i) Adverse circumstances
Subject to clause (ii), subparagraph (A) shall not apply in any case in which the approved insurance providers, as a whole, experience unexpected adverse circumstances, as determined by the Secretary.
(ii) Effect of Federal law changes
If Federal law is enacted after the date of enactment of this paragraph that requires revisions in the financial terms of the Standard Reinsurance Agreement, and changes in the Agreement are made on a mandatory basis by the Corporation, the changes shall not be considered to be a renegotiation of the Agreement for purposes of subparagraph (A).
(C) Notification requirement
If the Corporation renegotiates a Standard Reinsurance Agreement under subparagraph (A)(ii), the Corporation shall notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate of the renegotiation.
(D) Consultation
The approved insurance providers may confer with each other and collectively with the Corporation during any renegotiation under subparagraph (A).
(E) 2011 reinsurance year
(i) In general
As part of the Standard Reinsurance Agreement renegotiation authorized under subparagraph (A)(i), the Corporation shall consider alternative methods to determine reimbursement rates for administrative and operating costs.
(ii) Alternative methods
Alternatives considered under clause (i) shall include-
(I) methods that-
(aa) are graduated and base reimbursement rates in a State on changes in premiums in that State;
(bb) are graduated and base reimbursement rates in a State on the loss ratio for crop insurance for that State; and
(cc) are graduated and base reimbursement rates on individual policies on the level of total premium for each policy; and
(II) any other method that takes into account current financial conditions of the program and ensures continued availability of the program to producers on a nationwide basis.
(F) Budget
(i) In general
The Board shall ensure that any Standard Reinsurance Agreement negotiated under subparagraph (A)(ii) shall-
(I) to the maximum extent practicable, be estimated as budget neutral with respect to the total amount of payments described in paragraph (9) as compared to the total amount of such payments estimated to be made under the immediately preceding Standard Reinsurance Agreement if that Agreement were extended over the same period of time;
(II) comply with the applicable provisions of this subchapter establishing the rates of reimbursement for administrative and operating costs for approved insurance providers and agents, except that, to the maximum extent practicable, the estimated total amount of reimbursement for those costs shall not be less than the total amount of the payments to be made under the immediately preceding Standard Reinsurance Agreement if that Agreement were extended over the same period of time, as estimated on February 7, 2014; and
(III) in no event significantly depart from budget neutrality unless otherwise required by this subchapter.
(ii) Use of savings
To the extent that any budget savings are realized in the renegotiation of a Standard Reinsurance Agreement under subparagraph (A)(ii), and the savings are determined not to be a significant departure from budget neutrality under clause (i), the savings shall be used to increase reimbursements or payments described under paragraphs (4) and (9).
(9) Due date for payment of underwriting gains
Effective beginning with the 2011 reinsurance year, the Corporation shall make payments for underwriting gains under this subchapter on-
(A) for the 2011 reinsurance year, October 1, 2012; and
(B) for each reinsurance year thereafter, October 1 of the following calendar year.
(10) Additional expenses
(A) In general
Beginning with the 2026 reinsurance year, and for each reinsurance year thereafter, in addition to the terms and conditions of the Standard Reinsurance Agreement, to cover additional expenses for loss adjustment procedures, the Corporation shall pay an additional administrative and operating expense subsidy to approved insurance providers for eligible contracts.
(B) Payment amount
In the case of an eligible contract, the payment to an approved insurance provider required under subparagraph (A) shall be the amount equal to 6 percent of the net book premium.
(C) Definitions
In this paragraph:
(i) Eligible contract
The term “eligible contract”-
(I) means a crop insurance contract entered into by an approved insurance provider in an eligible State; and
(II) does not include a contract for-
(aa) catastrophic risk protection under subsection (b);
(bb) an area-based plan of insurance or similar plan of insurance, as determined by the Corporation; or
(cc) a policy under which an approved insurance provider does not incur loss adjustment expenses, as determined by the Corporation.
(ii) Eligible State
The term “eligible State” means a State in which, with respect to an insurance year, the loss ratio for eligible contracts is greater than 120 percent of the total net book premium written by all approved insurance providers.
(11) Specialty crops
(A) Minimum reimbursement
Beginning with the 2026 reinsurance year, and for each reinsurance year thereafter, the rate of reimbursement to approved insurance providers and agents for administrative and operating expenses with respect to crop insurance contracts covering agricultural commodities described in section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 108–465) shall be equal to or greater than the percentage that is the greater of the following:
(i) 17 percent of the premium used to define loss ratio.
(ii) The percent of the premium used to define loss ratio that is otherwise applicable for the reinsurance year under the terms of the Standard Reinsurance Agreement in effect for the reinsurance year.
(B) Other contracts
In carrying out subparagraph (A), the Corporation shall not reduce, with respect to any reinsurance year, the amount or the rate of reimbursement to approved insurance providers and agents under the Standard Reinsurance Agreement described in clause (ii) of such subparagraph for administrative and operating expenses with respect to contracts covering agricultural commodities that are not subject to such subparagraph.
(C) Administration
The requirements of this paragraph and the adjustments made pursuant to this paragraph shall not be considered a renegotiation under paragraph (8)(A).
(12) A&O inflation adjustment
(A) In general
Subject to subparagraph (B), beginning with the 2026 reinsurance year, and for each reinsurance year thereafter, the Corporation shall increase the total administrative and operating expense reimbursements otherwise required under the Standard Reinsurance Agreement in effect for the reinsurance year in order to account for inflation, in a manner consistent with the increases provided with respect to the 2011 through 2015 reinsurance years under the enclosure included in Risk Management Agency Bulletin numbered MGR–10–007 and dated June 30, 2010.
(B) Special rule for 2026 reinsurance year
The increase under subparagraph (A) for the 2026 reinsurance year shall not exceed the percentage change for the preceding reinsurance year included in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.
(C) Administration
An increase under subparagraph (A)-
(i) shall apply with respect to all contracts covering agricultural commodities that were subject to an increase during the period of the 2011 through 2015 reinsurance years under the enclosure referred to in that subparagraph; and
(ii) shall not be considered a renegotiation under paragraph (8)(A).
(l) Optional coverages
The Corporation may offer specific risk protection programs, including protection against prevented planting, wildlife depredation, tree damage and disease, and insect infestation, under such terms and conditions as the Board may determine, except that no program may be undertaken if insurance for the specific risk involved is generally available from private companies.
(m) Quality loss adjustment coverage
(1) Effect of coverage
If a policy or plan of insurance offered under this subchapter includes quality loss adjustment coverage, the coverage shall provide for a reduction in the quantity of production of the agricultural commodity considered produced during a crop year, or a similar adjustment, as a result of the agricultural commodity not meeting the quality standards established in the policy or plan of insurance.
(2) Additional quality loss adjustment
(A) Producer option
Notwithstanding any other provision of law, in addition to the quality loss adjustment coverage available under paragraph (1), the Corporation shall offer producers the option of purchasing quality loss adjustment coverage on a basis that is smaller than a unit with respect to an agricultural commodity that satisfies each of the following:
(i) The agricultural commodity is sold on an identity-preserved basis.
(ii) All quality determinations are made solely by the Federal agency designated to grade or classify the agricultural commodity.
(iii) All quality determinations are made in accordance with standards published by the Federal agency in the Federal Register.
(iv) The discount schedules that reflect the reduction in quality of the agricultural commodity are established by the Secretary.
(B) Basis for adjustment
Under this paragraph, the Corporation shall set the quality standards below which quality losses will be paid based on the variability of the grade of the agricultural commodity from the base quality for the agricultural commodity.
(3) Review of criteria and procedures
(A) Review
The Corporation shall contract with a qualified person to review the quality loss adjustment procedures of the Corporation so that the procedures more accurately reflect local quality discounts that are applied to agricultural commodities insured under this subchapter.
(B) Procedures
Effective beginning not later than the 2004 reinsurance year, based on the review, the Corporation shall make adjustments in the procedures, taking into consideration the actuarial soundness of the adjustment and the prevention of fraud, waste, and abuse.
(4) Quality of agricultural commodities delivered to warehouse operators
In administering this subchapter, the Secretary shall accept, in the same manner and under the same terms and conditions, evidence of the quality of agricultural commodities delivered to-
(A) warehouse operators that are licensed under the United States Warehouse Act (7 U.S.C. 241 et seq.);
(B) warehouse operators that-
(i) are licensed under State law; and
(ii) have entered into a storage agreement with the Commodity Credit Corporation; and
(C) warehouse operators that-
(i) are not licensed under State law but are in compliance with State law regarding warehouses; and
(ii) have entered into a commodity storage agreement with the Commodity Credit Corporation.
(5) Special provisions for malting barley
The Corporation shall promulgate special provisions under this subsection specific to malting barley, taking into consideration any changes in quality factors, as required by applicable market conditions.
(6) Test weight for corn
(A) In general
The Corporation shall establish procedures to allow insured producers not more than 120 days to settle claims, in accordance with procedures established by the Secretary, involving corn that is determined to have low test weight.
(B) Implementation
As soon as practicable after February 7, 2014, the Corporation shall implement subparagraph (A) on a regional basis based on market conditions and the interests of producers.
(C) Termination of effectiveness
The authority provided by this paragraph terminates effective on the date that is 5 years after the date on which subparagraph (A) is implemented.
(n) Limitation on multiple benefits for same loss
(1) In general
Except as provided in paragraph (2), if a producer who is eligible to receive benefits under catastrophic risk protection under subsection (b) is also eligible to receive assistance for the same loss under any other program administered by the Secretary, the producer shall be required to elect whether to receive benefits under this subchapter or under the other program, but not both. A producer who purchases additional coverage under subsection (c) may also receive assistance for the same loss under other programs administered by the Secretary, except that the amount received for the loss under the additional coverage together with the amount received under the other programs may not exceed the amount of the actual loss of the producer.
(2) Exception
Paragraph (1) shall not apply to emergency loans under subtitle C of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961 et seq.).
(o) Crop production on native sod
(1) Definition of native sod
In this subsection, the term “native sod” means land-
(A) on which the plant cover is composed principally of native grasses, grasslike plants, forbs, or shrubs suitable for grazing and browsing; and
(B) that has never been tilled, or the producer cannot substantiate that the ground has ever been tilled, for the production of an annual crop as of the date of enactment of this subsection.
(2) Reduction in benefits
(A) In general
(i) First 4 crop years
During the first 4 crop years of planting, as determined by the Secretary, native sod acreage that has been tilled for the production of an annual crop beginning on February 8, 2014, and ending on December 20, 2018, shall be subject to a reduction in benefits under this subchapter as described in this paragraph.
(ii) Subsequent crop years
Native sod acreage that has been tilled for the production of an insurable crop after December 20, 2018, shall be subject to a reduction in benefits under this subchapter as described in this paragraph for not more than 4 cumulative years-
(I) during the first 10 years after initial tillage; and
(II) during each of which a crop on that acreage is insured under subsection (c).
(B) De minimis acreage exemption
The Secretary shall exempt areas of 5 acres or less from subparagraph (A).
(C) Administration
(i) Reduction
For purposes of the reduction in benefits for the acreage described in subparagraph (A)-
(I) the crop insurance guarantee shall be determined by using a yield equal to 65 percent of the transitional yield of the producer; and
(II) the crop insurance premium subsidy provided for the producer under this subchapter, except for coverage authorized pursuant to subsection (b)(1), shall be 50 percentage points less than the premium subsidy that would otherwise apply.
(ii) Yield substitution
During the period native sod acreage is covered by this subsection, a producer may not substitute yields for the native sod.
(3) Application
This subsection shall only apply to native sod acreage in the States of Minnesota, Iowa, North Dakota, South Dakota, Montana, and Nebraska.
(p) Coverage levels by practice
Beginning with the 2015 crop year, a producer that produces an agricultural commodity on both dry land and irrigated land may elect a different coverage level for each production practice.
7 U.S.C. 1508(e)