< Back to S. 677 (113th Congress, 2013–2015)

Text of the Crop Insurance Improvement Act of 2013

This bill was introduced on April 9, 2013, in a previous session of Congress, but was not enacted. The text of the bill below is as of Apr 9, 2013 (Introduced).

II

113th CONGRESS

1st Session

S. 677

IN THE SENATE OF THE UNITED STATES

April 9, 2013

introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry

A BILL

To amend the Federal Crop Insurance Act to extend and improve the crop insurance program, and for other purposes.

1.

Short title

This Act may be cited as the Crop Insurance Improvement Act of 2013 .

2.

Information sharing

Section 502(c) of the Federal Crop Insurance Act ( 7 U.S.C. 1502(c) ) is amended by adding at the end the following:

(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), 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 subtitle.

(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.

.

3.

Supplemental coverage option

(a)

Availability of supplemental coverage option

Section 508(c) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(c) ) is amended by striking paragraph (3) and inserting the following:

(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 authorized in paragraph (4)(C); or

(C)

a margin basis alone or in combination with—

(i)

individual yield and loss coverage; or

(ii)

area yield and loss coverage.

.

(b)

Level of coverage

Section 508(c) of the Federal Crop Insurance Act (7 U.S.C. 1508(c)) is amended by striking paragraph (4) and inserting the following:

(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 85 percent of the individual yield or 95 percent of the area yield (as determined by the Corporation).

(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 subtitle that would allow indemnities to be paid to a producer equal to part of the deductible under the policy or plan of insurance, if sufficient area data is available (as determined by the Corporation).

(ii)

Trigger

Coverage offered under this subparagraph 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) and the deductible imposed by clause (iv), coverage offered under this subparagraph shall cover the first loss incurred by the producer, not to exceed the difference between—

(I)

100 percent; and

(II)

the coverage level selected by the producer for the underlying policy or plan of insurance.

(iv)

Deductible

Coverage offered under this subparagraph shall be subject to a deductible in an amount equal to 10 percent of the expected value of the crop of the producer covered by the underlying policy or plan of insurance, as determined by the Corporation.

(v)

Calculation of premium

Notwithstanding subsection (d), the premium 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).

.

(c)

Payment of portion of premium by Corporation

Section 508(e)(2) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(2) ) is amended by adding at the end the following:

(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)

70 percent of the additional premium associated with the coverage; and

(ii)

the amount determined under subsection (c)(4)(C)(v)(II) for the coverage to cover operating and administrative expenses.

.

(d)

Conforming amendment

Section 508(k)(4)(F) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k)(4)(F) ) is amended by inserting or authorized under subsection (c)(4)(C) after of this subparagraph.

(e)

Effective date

The Federal Crop Insurance Corporation shall begin to provide additional coverage based on an individual yield and loss basis, supplemented with coverage based on an area yield and loss basis, not later than for the 2014 crop year.

4.

Permanent enterprise unit subsidy

Section 508(e)(5) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(5) ) is amended by striking subparagraph (A) and inserting the following:

(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).

.

5.

Enterprise units for irrigated and nonirrigated crops

Section 508(e)(5) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(e)(5) ) is amended by adding at the end the following:

(D)

Nonirrigated crops

Beginning with the 2014 crop year, the Corporation shall make available separate enterprise units for irrigated and nonirrigated acreages of crops in counties.

.

6.

Data collection

Section 508(g)(2) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(g)(2) ) is amended by adding at the end the following:

(E)

Sources of yield data

To determine yields under this paragraph, the Corporation

(i)

shall use data collected by the Risk Management Agency or 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.

.

7.

Adjustment in actual production history to establish insurable yields

Section 508(g)(4)(B) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(g)(4)(B) ) is amended—

(1)

in the matter preceding clause (i), by inserting for the 2013 crop year or any prior crop year, or 70 percent of the applicable transitional yield for the 2014 or any subsequent crop year, after transitional yield; and

(2)

in clause (ii), by striking 60 percent of the applicable transitional yield and inserting the applicable percentage of the transitional yield described in this subparagraph.

8.

Submission and review of policies

Section 508(h)(1) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(h)(1) ) is amended—

(1)

by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and indenting appropriately;

(2)

by striking (1) In general.—In addition and inserting the following:

(1)

Submission and review of policies

(A)

Submissions

In addition

; and

(3)

by adding at the end the following:

(B)

Review

The Corporation shall review any policy developed under section 522(c) or any pilot program developed under section 523 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)

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.

.

9.

Board review and approval

Section 508(h) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(h) ) is amended by striking paragraph (3) and inserting the following:

(3)

Review and approval by the board

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, in the sole discretion of the Board, determines that—

(A)

the interests of producers are adequately protected;

(B)

the rates of premium and price election methodology are actuarially appropriate;

(C)

the terms and conditions for the proposed policy or plan of insurance are appropriate and would not unfairly discriminate among producers;

(D)

the proposed policy or plan of insurance will, at the sole discretion of the Board

(i)

likely result in a viable and marketable policy that can reasonably attain levels of participation similar to other like policies or plans of insurance;

(ii)

provide crop insurance coverage in a significantly improved form or in a manner that addresses a recognized 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 under existing coverage;

(E)

the proposed policy or plan of insurance will, at the sole discretion of the Board, not have a significant adverse impact on the crop insurance delivery system; and

(F)

the proposed policy or plan of insurance meets such other requirements as are determined appropriate by the Board.

.

10.

Budget limitations on renegotiation of the standard reinsurance agreement

Section 508(k)(8) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k)(8) ) is amended by adding at the end the following:

(F)

Budget

(i)

In general

The Board shall ensure that any Standard Reinsurance Agreement negotiated under subparagraph (A)(ii), as compared to the previous Standard Reinsurance Agreement—

(I)

to the maximum extent practicable, shall be budget neutral; and

(II)

in no event, may significantly depart from budget neutrality.

(ii)

Use of savings

To the extent that any budget savings is 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 for programs administered or managed by the Risk Management Agency.

.

11.

Stacked income protection plan for producers of upland cotton

(a)

Availability of stacked income protection plan

The Federal Crop Insurance Act is amended by inserting after section 508A ( 7 U.S.C. 1508a ) the following:

508B.

Stacked income protection plan for producers of upland cotton

(a)

Availability

Beginning not later than the 2014 crop of upland cotton, if practicable, the Corporation shall make available to producers of maximum eligible acres of upland cotton an additional policy (to be known as the Stacked Income Protection Plan), which shall provide coverage consistent with the Group Risk Income Protection Plan (and the associated Harvest Revenue Option Endorsement) offered by the Corporation for the 2012 crop year.

(b)

Required terms

The Corporation may modify the Stacked Income Protection Plan on a program-wide basis, except that the Stacked Income Protection Plan shall comply with the following requirements:

(1)
(A)

Provide coverage for revenue loss of not more than 30 percent of expected county revenue, specified in increments of 5 percent.

(B)

The deductible is the minimum percent of revenue loss at which indemnities are triggered under the plan, not to be less than 10 percent of the expected county revenue.

(C)

Once the deductible is met, any losses in excess of the deductible will be paid up to the coverage selected by the producer.

(2)

Be offered to producers of upland cotton in all counties with upland cotton production—

(A)

at a county-wide level to the fullest extent practicable; or

(B)

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.

(3)

Be purchased in addition to any other individual or area coverage in effect on the producer’s acreage or as a stand-alone policy, except that if a producer has an individual or area coverage for the same acreage, the maximum coverage available under the Stacked Income Protection Plan shall not exceed the deductible for the individual or area coverage.

(4)

Establish coverage based on—

(A)

an expected price that is the expected price established under existing Group Risk Income Protection or area-wide policy offered by the Corporation for the applicable county (or area) and crop year; and

(B)

an expected county yield that is the higher of—

(i)

the expected county yield established for the existing area-wide plans offered by the Corporation for the applicable county (or area) and crop year (or, in geographic areas where area-wide plans are not offered, an expected yield determined in a manner consistent with those of area-wide plans); or

(ii)
(I)

the average of the applicable yield data for the county (or area) for the most recent 5 years, excluding the highest and lowest observations, from the Risk Management Agency or the National Agricultural Statistics, or both; or

(II)

if sufficient county data is not available, such other data considered appropriate by the Secretary.

(5)

Use a multiplier factor to establish maximum protection per acre (referred to as a protection factor) of not more than 120 percent.

(6)
(A)

Pay an indemnity based on the amount that the expected county revenue exceeds the actual county revenue, as applied to the individual coverage of the producer.

(B)

Indemnities under the Stacked Income Protection Plan shall not include or overlap the amount of the deductible selected under paragraph (1).

(7)

To the maximum extent practicable, in all counties for which data are available, establish separate coverage for irrigated and nonirrigated practices.

(8)

Notwithstanding section 508(d), include a premium that—

(A)

is sufficient to cover anticipated losses and a reasonable reserve; and

(B)

includes an amount for operating and administrative expenses established in accordance with section 508(k)(4)(F).

(c)

Relation to other coverages

(1)

In general

Except as provided in paragraph (2), the Stacked Income Protection Plan is in addition to all other coverages available to producers of upland cotton.

(2)

Limitation

Acreage of upland cotton insured under the supplemental coverage option described in section 508(c)(4)(C) shall not be eligible for the Stacked Income Protection Plan.

(d)

Payment of portion of premium by corporation

Subject to section 508(e)(4), the amount of premium paid by the Corporation for all qualifying coverage levels of the Stacked Income Protection Plan shall be—

(1)

80 percent of the amount of the premium established under subsection (b)(8)(A) for the coverage level selected; and

(2)

the amount determined under subsection (b)(8)(B) to cover administrative and operating expenses.

.

(b)

Conforming amendment

Section 508(k)(4)(F) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k)(4)(F) ) (as amended by section 3(d)) is amended by inserting or under section 508B after subsection (c)(4)(C) .

12.

Authority to correct errors

Section 515(c) of the Federal Crop Insurance Act ( 7 U.S.C. 1515(c) ) is amended—

(1)

in the first sentence, by striking The Secretary and inserting the following:

(1)

In general

The Secretary

;

(2)

in the second sentence, by striking Beginning with and inserting the following:

(2)

Frequency

Beginning with

; and

(3)

by adding at the end the following:

(3)

Corrections

(A)

In general

The Corporation shall establish procedures that allow an agent and approved insurance provider within a reasonable amount of time following the applicable sales closing date to correct information regarding the entity name, social security number, tax identification number, or such other eligibility information as determined by the Corporation that is provided by a producer for the purpose of obtaining coverage under any policy or plan of insurance made available under this subtitle to ensure that the eligibility information is consistent with the information reported by the producer to the Farm Service Agency.

(B)

Limitation

In accordance with the procedures of the Corporation, procedures under subparagraph (A) may include any subsequent correction to the eligibility information described in that subparagraph made by the Farm Service Agency if the corrections do not allow the producer—

(i)

to obtain a disproportionate benefit under the crop insurance program or any related program of the Department of Agriculture;

(ii)

to avoid ineligibility requirements for insurance; or

(iii)

to avoid an obligation or requirement under any Federal or State law.

.

13.

Implementation

Section 515 of the Federal Crop Insurance Act ( 7 U.S.C. 1515 ) is amended—

(1)

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

(1)

Systems maintenance and upgrades

(A)

In general

The Secretary shall maintain and upgrade the information management systems of the Corporation used in the administration and enforcement of this subtitle.

(B)

Requirement

(i)

In general

In maintaining and upgrading the systems, the Secretary shall ensure that new hardware and software are compatible with the hardware and software used by other agencies of the Department to maximize data sharing and promote the purposes of this section.

(ii)

Acreage report streamlining initiative project

As soon as practicable, the Secretary shall develop and implement an acreage report streamlining initiative project to allow producers to report acreage and other information directly to the Department.

; and

(2)

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

(1)

Information technology

(A)

In general

For purposes of subsection (j)(1), the Corporation may use, from amounts made available from the insurance fund established under section 516(c), not more than—

(i)
(I)

for fiscal year 2014, $25,000,000; and

(II)

for each of fiscal years 2015 through 2018, $10,000,000; or

(ii)

if the Acreage Crop Reporting Streamlining Initiative (ACRSI) project is substantially completed by September 30, 2014, not more than $15,000,000 for each of fiscal years 2015 through 2018.

(B)

Notification

Not later than July 1, 2014, the Secretary shall notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on the status of the substantial completion of the Acreage Crop Reporting Streamlining Initiative (ACRSI) project.

.

14.

Research and development

(a)

In general

Section 522(c) of the Federal Crop Insurance Act (7 U.S.C. 1522(c)) is amended—

(1)

in the subsection heading, by striking Contracting ;

(2)

in paragraph (1), in the matter preceding subparagraph (A), by striking may enter into contracts to carry out research and development to and inserting may conduct activities or enter into contracts to carry out research and development to maintain or improve existing policies or develop new policies to;

(3)

in paragraph (2)(A), by inserting conduct research and development or after The Corporation may;

(4)

in paragraph (5), by inserting after expert review in accordance with section 505(e) and procedures of the Board after approved by the Board ; and

(5)

in paragraph (6), by striking a pasture, range, and forage program and inserting policies that increase participation by producers of underserved agricultural commodities, including sweet sorghum, sorghum for biomass, specialty crops, sugarcane, and dedicated energy crops.

(b)

Funding

Section 522(e) of the Federal Crop Insurance Act ( 7 U.S.C. 1522(e) ) is amended—

(1)

in paragraph (2)

(A)

by striking (A) Authority.— and inserting (A) Conducting and contracting for research and development.— ;

(B)

in subparagraph (A), by inserting conduct research and development and after the Corporation may use to; and

(C)

in subparagraph (B), by inserting conduct research and development and after for the fiscal year to;

(2)

in paragraph (3), in the matter preceding subparagraph (A), by striking to provide either reimbursement payments or contract payments; and

(3)

by striking paragraph (4).

15.

Biomass and sweet sorghum energy crop insurance policies

Section 522(c) of the Federal Crop Insurance Act of 1938 ( 7 U.S.C. 1522(c) ) is amended by adding at the end the following:

(18)

Biomass and sweet sorghum energy crop insurance policies

(A)

Authority

The Corporation shall offer to enter into 1 or more contracts with qualified entities to carry out research and development regarding—

(i)

a policy to insure biomass sorghum that is grown expressly for the purpose of producing a feedstock for renewable biofuel, renewable electricity, or biobased products; and

(ii)

a policy to insure sweet sorghum that is grown for a purpose described in clause (i).

(B)

Research and development

Research and development with respect to each of the policies required in subparagraph (A) shall evaluate the effectiveness of risk management tools for the production of biomass sorghum or sweet sorghum, including policies and plans of insurance that—

(i)

are based on market prices and yields;

(ii)

to the extent that insufficient data exist to develop a policy based on market prices and yields, are based on the use of weather indices, including, at a minimum, excessive or inadequate rainfall, to protect the interests of crop producers; and

(iii)

provide protection for production or revenue losses, or both.

.

16.

Pilot programs

Section 523(a) of the Federal Crop Insurance Act ( 7 U.S.C. 1523(a) ) is amended—

(1)

in paragraph (1), by inserting , at the sole discretion of the Corporation, after may; and

(2)

by striking paragraph (5).

17.

Technical amendments

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

(1)

by striking paragraph (7); and

(2)

by redesignating paragraphs (8) through (11) as paragraphs (7) through (10), respectively.

18.

Repeal of direct payments

(a)

Repeal

Sections 1103 and 1303 of the Food, Conservation, and Energy Act of 2008 ( 7 U.S.C. 8713 , 8753) are repealed.

(b)

Continued application for 2013 crop year

Sections 1103 and 1303 of the Food, Conservation, and Energy Act of 2008 ( 7 U.S.C. 8713 , 8753), as in effect on the day before the date of enactment of this Act, shall continue to apply through the 2013 crop year with respect to all covered commodities (as defined in section 1001 of that Act ( 7 U.S.C. 8702 )) (except pulse crops) and peanuts on a farm.