Agricultural Adjustment Act of 1938

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Federal Crop Insurance Act.xml

75-30 - Agricultural Adjustment Act of 1938 & Federal Crop
Insurance Act
[As Amended Through P.L. 113–79, Enacted February 7, 2014]
TABLE OF CONTENTS 1
Sec. 1. Short title.
Sec. 2. Declaration of policy.
TITLE II—ADJUSTMENT IN FREIGHT RATES, NEW USES AND MARKETS,
AND DISPOSITION OF SURPLUSES
Sec. 201. Adjustments in freight rates for farm products.
Sec. 202. New uses and new markets for farm commodities.
TITLE III—LOANS, PARITY PAYMENTS, CONSUMER SAFEGUARDS,
MARKETING QUOTAS, AND MARKETING CERTIFICATES
Subtitle A—Definitions, Parity Payments, and Consumer Safeguards
Sec. 301. Definitions.
Sec. 303. Parity payments.
Sec. 304. Consumer safeguards.
Subtitle B—Marketing Quotas
PART II—ACREAGE ALLOTMENTS—CORN
Sec. 326. Adjustment of farm marketing quotas.
Sec. 330. Nonestablishment of acreage allotments.
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PART III—MARKETING QUOTAS—WHEAT
331. Legislative findings.
332. Proclamations of supplies and allotments.
333. National acreage allotment.
334. Apportionment of national acreage allotment.
334a. Commercial area.
335. Marketing penalties.
336. Referendum.
338. Transfer of quotas.
339. Land use.

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PART IV—MARKETING QUOTAS—COTTON
341. Legislative findings.
342. National marketing quota.
342a. National cotton production goal.
343. Referendum.
344. Acreage allotments.
344a. Sales, lease and transfer of upland cotton acreage allotments.
345. Farm marketing quotas.
346. Penalties; export market acreage.

PART V—MARKETING QUOTAS—RICE
Sec. 351. Legislative findings.
PART VII—FLEXIBLE MARKETING ALLOTMENTS
Sec. 359a. Definitions.
Sec. 359b. Flexible marketing allotments for sugar.
Sec. 359c. Establishment of flexible marketing allotments.
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SUGAR

table of contents is not part of the Act but is included for user convenience.

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359c. Establishment of flexible marketing allotments.
359d. Allocation of marketing allotments.
359e. Reassignment of deficits.
359f. Provisions applicable to producers.
359g. Special rules.
359h. Regulations; violations; publication of Secretary’s determinations; jurisdiction of the courts; United States attorneys.
359i. Appeals.
359j. Administration.
359k. Administration of tariff rate quotas.
359l. Period of effectiveness.
Subtitle C—Administrative Provisions
PART I—PUBLICATION

AND

REVIEW

OF

QUOTAS

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361.
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364.
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Application of part.
Publication and notice of quota.
Review by review committee.
Review committee.
Institution of proceedings.
Court review.
Stay of proceedings and exclusive jurisdiction.
No effect on other quotas.

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371.
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General adjustments of quotas.
Payment and collection of penalties.
Reports and records.
Measurement of farms and report of plantings.
Regulations.
Court jurisdiction.
Preservation of unused acreage allotments.
Eminent domain.
Reconstitution of farms.

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379a. Legislative findings.
379b. Wheat marketing allocation.
379c. Marketing certificates.
379d. Marketing restrictions.
379e. Assistance in purchase and sale of marketing certificates.
379f. Conversion factors.
379g. Authority to facilitate transition.
379h. Reports and records.
379i. Penalties.
379j. Regulations.

PART II—ADJUSTMENT

OF

QUOTAS

AND

ENFORCEMENT

Subtitle D—Wheat Marketing Allocation

Subtitle F—Miscellaneous Provisions and Appropriations
PART I—MISCELLANEOUS
Sec. 383. Insurance of cotton and reconcentration of cotton.
Sec. 385. Finality of farmers payments and loans.
Sec. 386. Exemption from laws prohibiting interest of members of Congress in contracts.
Sec. 387. Photographic reproductions and maps.
Sec. 388. Utilization of local agencies.
Sec. 389. Personnel.
Sec. 390. Separability.
PART II—APPROPRIATIONS
Sec. 391. Appropriations.
Sec. 392. Administrative expenses.
Sec. 393. Allotment of appropriations.
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AND

ADMINISTRATIVE EXPENSES

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Sec. 2

TITLE V—CROP INSURANCE
Subtitle A—Federal Crop Insurance Act
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501. Short title and application of other provisions.
502. Purpose and definitions.
503. Creation of Federal Crop Insurance Corporation.
504. Capital stock.
505. Management of Corporation.
506. General powers.
507. Personnel.
508. Crop insurance.
508A. Double insurance and prevented planting.
509. Indemnities exempt from levy.
510. Deposit of funds.
511. Tax exemption.
512. Fiscal agency of government.
513. Accounting by Corporation.
514. Crimes and offenses.
515. Program compliance and integrity.
516. Funding.
517. Separability.
518. Agricultural commodity.
520. Producer eligibility.
521. Ineligibility for catastrophic risk and noninsured assistance payments.
522. Research and development.
523. Pilot programs.
524. Education and risk management assistance.
Subtitle B—Supplemental Agricultural Disaster Assistance

Sec. 531. Supplemental agricultural assistance.disaster
AN ACT To provide for the conservation of national soil resources and to provide
an adequate and balanced flow of agricultural commodities in interstate and foreign commerce and for other purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, ø7 U.S.C. 1281¿
That this Act may be cited as the ‘‘Agricultural Adjustment Act of
1938’’.
DECLARATION OF POLICY

SEC. 2. ø7 U.S.C. 1282¿ It is hereby declared to be the policy
of Congress to continue the Soil Conservation and Domestic Allotment Act, as amended, for the purpose of conserving national resources, preventing the wasteful use of soil fertility, and of preserving, maintaining, and rebuilding the farm and ranch land resources in the national public interest; to accomplish these purposes through the encouragement of soil-building and soil-conserving crops and practices; to assist in the marketing of agricultural commodities for domestic consumption and for export; and to
regulate interstate and foreign commerce in cotton, wheat, corn,
and rice to the extent necessary to provide an orderly, adequate,
and balanced flow of such commodities in interstate and foreign
commerce through storage of reserve supplies, loans, marketing
prices for such commodities and parity of income, and assisting
consumers to obtain an adequate and steady supply of such commodities at fair prices.
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TITLE I—AMENDMENTS TO SOIL CONSERVATION AND
DOMESTIC ALLOTMENT ACT
øThis title contains amendments to the Soil Conservation and
Domestic Allotment Act, as amended. Insofar as now applicable,
these amendments are incorporated in the Soil Conservation Laws
Vol.¿
TITLE II—ADJUSTMENT IN FREIGHT RATES, NEW USES
AND MARKETS, AND DISPOSITION OF SURPLUSES
ADJUSTMENTS IN FREIGHT RATES FOR FARM PRODUCTS

SEC. 201. ø7 U.S.C. 1291¿ (a) The Secretary of Agriculture is
authorized to make complaint to the Surface Transportation Board
with respect to rates, charges, tariffs, and practices relating to the
transportation of farm products, and to prosecute the same before
the Board. Before hearing or disposing of any complaint (filed by
any person other than the Secretary) with respect to rates, charges,
tariffs, and practices relating to the transportation of farm products, the Board shall cause the Secretary to be notified, and, upon
application by the Secretary, shall permit the Secretary to appear
and be heard.
(b) If such rate, charge, tariff, or practice complained of is one
affecting the public interest, upon application by the Secretary, the
Board shall make the Secretary a party to the proceeding. In such
case the Secretary shall have the rights of a party before the Board
and the rights of a party to invoke and pursue original and appellate judicial proceedings involving the Board’s determination. The
liability of the Secretary in any such case shall extend only to liability for court costs.
(c) For the purposes of this section, the Surface Transportation
Board is authorized to avail itself of the cooperation, records, services, and facilities of the Department of Agriculture.
(d) The Secretary is authorized to cooperate with and assist cooperative associations of farmers making complaint to the Surface
Transportation Board with respect to rates, charges, tariffs, and
practices relating to the transportation of farm products.
NEW USES AND NEW MARKETS FOR FARM COMMODITIES

SEC. 202. ø7 U.S.C. 1292¿ (a) The Secretary is hereby authorized and directed to establish, equip, and maintain four regional research laboratories, one in each major farm producing area, and, at
such laboratories to conduct researches into and to develop new scientific, chemical, and technical uses and new and extended markets and outlets for farm commodities and products and byproducts
thereof. Such research and development shall be devoted primarily
to those farm commodities in which there are regular or seasonal
surpluses, and their products and byproducts.
(b) For the purposes of subsection (a), the Secretary is authorized to acquire land and interests therein, and to accept in the
name of the United States donations of any property, real or personal, to any laboratory established pursuant to this section, and
to utilize voluntary or uncompensated services at such laboratories.
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Donations to any one of such laboratories shall not be available for
use by any other of such laboratories.
(c) In carrying out the purposes of subsection (a), the Secretary
is authorized and directed to cooperate with other departments or
agencies of the Federal Government, States, State agricultural experiment stations, and other State agencies and institutions, counties, municipalities, business or other organizations, corporations,
associations, universities, scientific societies, and individuals, upon
such terms and conditions as he may prescribe.
(d) To carry out the purposes of subsection (a), the Secretary
is authorized to utilize in each fiscal year, beginning with the fiscal
year beginning July 1, 1938, a sum not to exceed $4,000,000 of the
funds appropriated pursuant to section 391 of this Act, or section
15 of the Soil Conservation and Domestic Allotment Act, as amended, for such fiscal year. The Secretary shall allocate one-fourth of
such sum annually to each of the four laboratories established pursuant to this section.
(f) There is hereby allocated to the Secretary of Commerce for
each fiscal year, beginning with the fiscal year beginning July 1,
1938, out of funds appropriated for such fiscal year pursuant to
section 391 of this Act, or section 15 of the Soil Conservation and
Domestic Allotment Act, as amended, the sum of $1,000,000 to be
expended for the promotion of the sale of farm commodities and
products thereof in such manner as he shall direct. Of the sum allocated under this subsection to the Secretary of Commerce for the
fiscal year beginning July 1, 1938, $100,000 shall be devoted to
making a survey and investigation of the cause or causes of the reduction in exports of agricultural commodities from the United
States, in order to ascertain methods by which the sales in foreign
countries of basic agricultural commodities produced in the United
States may be increased.
(g) It shall be the duty of the Secretary to use available funds
to stimulate and widen the use of all farm commodities in the
United States and to increase in every practical way the flow of
such commodities and the products thereof into the markets of the
world.
TITLE III—LOANS, PARITY PAYMENTS, CONSUMER SAFEGUARDS, MARKETING QUOTAS, AND MARKETING CERTIFICATES
SUBTITLE A—DEFINITIONS, PARITY PAYMENTS,
SAFEGUARDS

AND

CONSUMER

DEFINITIONS

SEC. 301. ø7 U.S.C. 1301¿ (a) GENERAL DEFINITIONS.—For the
purposes of this title and the declaration of policy—
(1)(A) The ‘‘parity price’’ for any agricultural commodity, as
of any date, shall be determined by multiplying the adjusted
base price of such commodity as of such date by the parity
index as of such date.
(B) The ‘‘adjusted base price’’ of any agricultural commodity, as of any date, shall be (i) the average of the prices received by farmers for such commodity, at such time as the SecFebruary 7, 2014

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retary may select during each year of the ten-year period ending on the 31st of December last before such date, or during
each marketing season beginning in such period if the Secretary determines use of a calendar year basis to be impracticable, divided by (ii) the ratio of the general level of prices received by farmers for agricultural commodities during such period to the general level of prices received by farmers for agricultural commodities during the period January 1910 to December 1914, inclusive. As used in this subparagraph, the term
‘‘prices’’ shall include wartime subsidy payments made to producers under programs designed to maintain maximum prices
established under the Emergency Price Control Act of 1942.
(C) The ‘‘parity index’’, as of any date, shall be the ratio
of (i) the general level of prices for articles and services that
farmers buy, wages paid hired farm labor, interest on farm indebtedness secured by farm real estate, and taxes on farm real
estate, for the calendar month ending last before such date to
(ii) the general level of such prices, wages, rates, and taxes
during the period January 1910 to December 1914, inclusive.
(D) The prices and indices provided for herein, and the
data used in computing them, shall be determined by the Secretary, whose determination shall be final.
(E) 2 ø * * *¿
(F) Notwithstanding the provisions of subparagraphs (A)
and (E), if the parity price for any agricultural commodity,
computed as provided in subparagraphs (A) and (E) appears to
be seriously out of line with the parity prices of other agricultural commodities, the Secretary may, and upon the request of
a substantial number of interested producers shall, hold public
hearings to determine the proper relationship between the parity price of such commodity and the parity prices of other agricultural commodities. Within sixty days after commencing such
hearing the Secretary shall complete such hearing, proclaim
his findings as to whether the facts require a revision of the
method of computing the parity price of such commodity, and
put into effect any revision so found to be required.
(G) 3 ø * * *¿
(2) ‘‘Parity’’, as applied to income, shall be that gross income from agriculture which will provide the farm operator
and his family with a standard of living equivalent to those afforded persons dependent upon other gainful occupations. ‘‘Parity’’ as applied to income from any agricultural commodity for
any year, shall be that gross income which bears the same relationship to parity income from agriculture for such year as
the average gross income from such commodity for the preceding ten calendar years bears to the average gross income
from agriculture for such ten calendar years.
(3) The term ‘‘interstate and foreign commerce’’ means
sale, marketing, trade, and traffic between any State or Territory or the District of Columbia or Puerto Rico, and any place
outside thereof; or between points within the same State or
2 Subpara. (E) provides for computing transitional parity prices, which were last computed in
1955.
3 Subpara. (G) was applicable only to the six-year period beginning Jan. 1, 1950.

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Territory or within the District of Columbia or Puerto Rico,
through any place outside thereof; or within any Territory or
within the District of Columbia or Puerto Rico.
(4) The term ‘‘affect interstate and foreign commerce’’
means, among other things, in such commerce, or to burden or
obstruct such commerce or the free and orderly flow thereof; or
to create or tend to create a surplus of any cultural commodity
which burdens or obstructs such commerce or the free and orderly flow thereof.
(5) The term ‘‘United States’’ means the several States and
Territories and the District of Columbia and Puerto Rico.
(6) The term ‘‘State’’ includes a Territory and the District
of Columbia and Puerto Rico.
(7) The term ‘‘Secretary’’ means the Secretary of Agriculture, and the term ‘‘Department’’ means the Department of
Agriculture.
(8) The term ‘‘person’’ means an individual, partnership,
firm, joint-stock company, corporation, association, trust, estate, or any agency of a State.
(9) The term ‘‘corn’’ means field corn.
(b) DEFINITIONS APPLICABLE TO ONE OR MORE COMMODITIES.—
For the purposes of this title—
(1)(A) ‘‘Actual production’’ as applied to any acreage of corn
means the number of bushels of corn which the local committee determines would be harvested as grain from such acreage if all the corn on such acreage were so harvested. In case
of a disagreement between the farmer and the local committee
as to the actual production of the acreage of corn on the farm,
or in case the local committee determines that such actual production is substantially below normal, the local committee, in
accordance with regulations of the Secretary, shall weigh representative samples of ear corn taken from the acreage involved, make proper deductions for moisture content, and determine the actual production of such acreage on the basis of
such samples.
(B) ‘‘Actual production’’ of any number of acres of cotton,
rice or peanuts on a farm means the actual average yield for
the farm times such number of acres.
(2) ‘‘Bushel’’ means in the case of ear corn that amount of
ear corn, including not to exceed 151⁄2 per centum of moisture
content, which weighs seventy pounds, and in the case of
shelled corn, means that amount of shelled corn including not
to exceed 151⁄2 per centum of moisture content, which weighs
fifty-six pounds.
(3)(A) ‘‘Carry-over’’, in the case of corn, rice, and peanuts
for any marketing year shall be the quantity of the commodity
on hand in the United States at the beginning of such marketing year, not including any quantity which was produced in
the United States during the calendar year then current.
(B) ‘‘Carry-over’’ of cotton for any marketing year shall be
the quantity of cotton on hand in the United States at the beginning of such marketing year, not including any part of the
crop which was produced in the United States during the calendar year then current.
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(C) ‘‘Carry-over’’ of wheat, for any marketing year shall be
the quantity of wheat on hand in the United States at the beginning of such marketing year, not including any wheat which
was produced in the United States during the calendar year
then current, and not including any wheat held by the Federal
Crop Insurance Corporation under title V. 4
(4) 5 ø * * *¿
(5) 6 ø * * *¿
(6)(A) ‘‘Market’’, in the case of corn, cotton, rice, and
wheat, means to dispose of, in raw or processed form, by voluntary or involuntary sale, barter, or exchange, or by gift inter
vivos, and, in the case of corn and wheat, by feeding (in any
form) to poultry or livestock which, or the products of which,
are sold, bartered, or exchanged, or to be so disposed of, but
does not include disposing of any of such commodities as premium to the Federal Crop Insurance Corporation under Title
V. 7
(B) ‘‘Marketed’’, ‘‘marketing’’, and ‘‘for market’’ shall have
corresponding meanings to the term ‘‘market’’ in the connection
in which they are used.
(C) ‘‘Market’’, in the case, of peanuts, means to dispose of
peanuts, including farmers’ stock peanuts, shelled peanuts,
cleaned peanuts, or peanuts in processed form, by voluntary or
involuntary sale, barter, or exchange, or by gift inter vivos.
(7) ‘‘Marketing year’’ 8 means, in the case of the following
commodities, the period beginning on the first and ending with
the second date specified below:
Corn, September 1–August 31;
Cotton, August 1–July 31;
Rice, August 1–July 31;
Tobacco (flue-cured), July 1–June 30;
Tobacco (other than flue-cured), October 1–September
30;
Wheat, June 1–May 31.
(8)(A) ‘‘National average yield’’ as applied to cotton or
wheat shall be the national average yield per acre of the commodity during the ten calendar years in the case of wheat, and
during the five calendar years in the case of cotton, preceding
the year in which such national average yield is used in any
computation authorized in this title, adjusted for abnormal
weather conditions and, in the case of wheat, but not in the
case of cotton, for trends in yields.
(B) ‘‘Projected national yield’’ as applied to any crop of
wheat shall be determined on the basis of the national yield
per harvested acre of the commodity during each of the five
calendar years immediately preceding the year in which such
projected national yield is determined, adjusted for abnormal
4 Title

V of this Act is the Federal Crop Insurance Act.
definitions in subsecs. (4) and (5) relate to marketing quotas and acreage allotments for
corn, which are no longer applicable.
6 See footnote 301–4.
7 See footnote 301–3.
8 The marketing year for peanuts is defined as August 1–July 31 by sec. 359(a).
5 The

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weather conditions affecting such yield, for trends in yields and
for any significant changes in production practices.
(9) ‘‘Normal production’’ as applied to any number of acres
of corn or rice means the normal yield for the farm times such
number of acres. ‘‘Normal production’’ as applied to any number of acres of cotton or wheat means the projected farm yield
times such number of acres.
(10)(A) ‘‘Normal supply’’ in the case of corn, rice, wheat,
and peanuts for any marketing year shall be (i) the estimated
domestic consumption of the commodity for the marketing year
ending immediately prior to the marketing year for which normal supply is being determined, plus (ii) the estimated exports
of the commodity for the marketing year for which normal supply is being determined, plus (iii) an allowance for carry-over.
The allowance for carry-over shall be the following percentage
of the sum of the consumption and exports used in computing
normal supply: 15 per centum in the case of corn; 10 per centum in the case of rice; 20 per centum in the case of wheat;
and 15 per centum in the case of peanuts. In determining normal supply the Secretary shall make such adjustments for current trends in consumption and for unusual conditions as he
may deem necessary.
(B) The ‘‘normal supply’’ of cotton for any marketing year
shall be the estimated domestic consumption of cotton for the
marketing year for which such normal supply is being determined, plus the estimated exports of cotton for such marketing
year, plus 30 per centum of the sum of such consumption and
exports as an allowance for carry-over.
(11)(A) ‘‘Normal year’s domestic consumption’’, in the case
of corn and wheat, shall be the yearly average quantity of the
commodity, wherever produced, that was consumed 9 in the
United States during the ten marketing years immediately
preceding the marketing year in which such consumption is determined, adjusted for current trends in such consumption.
(B) ‘‘Normal year’s domestic consumption’’, in the case of
cotton, shall be the yearly average quantity of the commodity
produced in the United States that was consumed in the
United States during the ten marketing years immediately
preceding the marketing year in which such consumption is determined, adjusted for current trends in such consumption.
(C) ‘‘Normal year’s domestic consumption’’, in the case of
rice, shall be the yearly average quantity of rice produced in
the United States that was consumed in the United States during the five marketing years immediately preceding the marketing year in which such consumption is determined, adjusted
for current trends in such consumption.
(12) ‘‘Normal year’s exports’’ in the case of corn, cotton,
rice, and wheat shall be the yearly average quantity of the
commodity produced in the United States that was exported
from the United States during the ten marketing years (or, in
the case of rice, the five marketing years) immediately pre9 The

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word ‘‘consumed’’ appears in the original legislation as ‘‘cosumed.’’

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ceding the marketing year in which such exports are determined, adjusted for current trends in such exports.
(13)(B) ‘‘Normal yield’’ for any county, in the case of peanuts, shall be the average yield per acre of peanuts for the
county, adjusted for abnormal weather conditions, during the
five calendar years immediately preceding the year in which
such normal yield is determined.
(C) In applying subparagraph (A) or (B), if for any such
year the data are not available, or there is no actual yield, an
appraised yield for such year determined in accordance with
regulations issued by the Secretary, shall be used as the actual
yield for such year. In applying such subparagraphs, if, on account of drought, flood, insect pests, plant disease, or other uncontrollable natural cause, the yield in any year of such tenyear period or five-year period, as the case may be, is less than
75 per centum of the average (computed without regard to
such year) such year shall be eliminated in calculating the normal yield per acre.
(D) ‘‘Normal yield’’ for any county, in the case of rice and
wheat, shall be the average yield per acre of rice or wheat, as
the case may be, for the county during the five calendar years
immediately preceding the year for which such normal yield is
determined in the case of rice, or during the five years immediately preceding the year in which such normal yield is determined in the case of wheat, adjusted for abnormal weather
conditions and for trends in yields. If for any such year data
are not available, or there is no actual yield, an appraised yield
for such year, determined in accordance with regulations
issued by the Secretary, taking into consideration the yields
obtained in surrounding counties during such year and the
yield in years for which data are available, shall be used as the
actual yield for such year.
(E) ‘‘Normal yield’’ for any farm, in the case of rice and
wheat, shall be the average yield per acre of rice or wheat, as
the case may be, for the farm during the five calendar years
immediately preceding the year for which such normal yield is
determined in the case of rice, or during the five years immediately preceding the year in which such normal yield is determined in the case of wheat, adjusted for abnormal weather
conditions and for trends in yields. If for any such year the
data are not available or there is no actual yield, then the normal yield for the farm shall be appraised in accordance with
regulations issued by the Secretary, taking into consideration
abnormal weather conditions, trends in yields, the normal yield
for the county, the yields obtained on adjacent farms during
such year and the yield in years for which data are available.
(F) In applying subparagraphs (D) and (E), if on account
of drought, flood, insect pests, plant disease, or other uncontrollable natural cause, the yield for any year of such five-year
period is less than 75 per centum of the average, 75 per centum of such average shall be substituted therefor in calculating
the normal yield per acre. If, on account of abnormally favorable weather conditions, the yield for any year of such five-year
period is in excess of 125 per centum of the average, 125 per
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centum of such average shall be substituted therefor in calculating the normal yield per acre.
(G) ‘‘Normal yield’’ for any farm, in the case of corn or peanuts, shall be the average yield per acre of corn or peanuts, as
the case may be, for the farm, adjusted for abnormal weather
conditions during the five calendar years immediately preceding the year in which such normal yield is determined. If
for any such year the data are not available or there is no actual yield, then the normal yield for the farm shall be appraised in accordance with regulations of the Secretary, taking
into consideration abnormal weather conditions, the normal
yield for the county, and the yield in years for which data are
available.
(H) ‘‘Normal yield’’ for any county, for any crop of cotton,
shall be the average yield per acre of cotton for the county, adjusted for abnormal weather conditions and any significant
changes in production practices during the five calendar years
immediately preceding the year in which the national marketing quota for such crop is proclaimed. If for any such year
the data are not available, or there is no actual yield, an appraised yield for such year, determined in accordance with regulations issued by the Secretary, shall be used as the actual
yield for such year.
(I) ‘‘Normal yield’’ for any farm, for any crop of cotton,
shall be the average yield per acre of cotton for the farm, adjusted for abnormal weather conditions and any significant
changes in production practices during the three calendar
years immediately preceding the year in which such normal
yield is determined. If for any such year the data are not available, or there is no actual yield, then the normal yield for the
farm shall be appraised in accordance with regulations of the
Secretary, taking into consideration abnormal weather conditions, the normal yield for the county, changes in production
practices, and the yield in years for which data are available.
(J) ‘‘Projected county yield’’ for any crop of wheat shall be
determined on the basis of the yield per harvested acre of such
commodity in the county during each of the five calendar years
immediately preceding the year in which such projected county
yield is determined, adjusted for abnormal weather conditions
affecting such yield for trends to yields and for any significant
changes in production practices.
(K) ‘‘Projected farm yield’’ for any crop of wheat shall be
determined on the basis of the yield per harvested acre of such
commodity on the farm during each of the three calendar
years 10 immediately preceding the year in which such projected farm yield is determined, adjusted for abnormal weather
conditions affecting such yield, for trends in yields and for any
significant changes in production practices, but in no event
shall such projected farm yield be less than the normal yield
10 The parenthetical clause ‘‘(five calendar years in the case of wheat)’’ which was added after
the words ‘‘calendar years’’ by sec. 1(12) of the Agriculture and Consumer Protection Act of 1973,
P.L. 93–86, 87 Stat. 229, Aug. 10, 1973, was effective only with respect to the 1974 through
1977 crops.

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for such farm as provided in subparagraph (E) of this paragraph.
(L) ‘‘Projected national, State, and county yields’’ for any
crop of cotton shall be determined on the basis of the yield per
harvested acre of such crop in the United States, the State and
the county, respectively, during each of the five calendar years
immediately preceding the year in which such projected yield
for the United States, the State, and the county, respectively,
is determined, adjusted for abnormal weather conditions affecting such yield, for trends in yield, and for any significant
changes in production practices.
(M) ‘‘Projected farm yield’’ for any crop of cotton shall be
determined on the basis of the yield per harvested acre of such
crop on the farm during each of the three calendar years immediately preceding the year in which such projected farm
yield is determined, adjusted for abnormal weather conditions
affecting such yield, for trends in yields, and for any significant
changes in production practices, but in no event shall such projected farm yield be less than the normal yield for such farm
as provided in subparagraph (I) of this paragraph.
(14) ‘‘Reserve supply level’’, in the case of corn, shall be a
normal year’s domestic consumption and exports of corn plus
10 per centum of a normal year’s domestic consumption and
exports, to insure a supply adequate to meet domestic consumption and export needs in years of drought, flood, or other
adverse conditions, as well as in years of plenty.
(15)(A) ‘‘Total supply’’ of wheat, corn, rice, and peanuts for
any marketing year shall be the carry-over of the commodity
for such marketing year, plus the estimated production of the
commodity in the United States during the calendar year in
which such marketing year begins and the estimated imports
of the commodity into the United States during such marketing year.
(B) ‘‘Total supply’’ of cotton for any marketing year shall
be the carry-over at the beginning of such marketing year, plus
the estimated production of cotton in the United States during
the calendar year in which such marketing year begins and the
estimated imports of cotton into United States during such
marketing year.
(c) The latest available statistics of the Federal Government
shall be used by the Secretary in making the determinations required to be made by the Secretary under this Act.
(d) In making any determination under this Act or under the
Agricultural Act of 1949 with respect to the carryover of any agricultural commodity, the Secretary shall exclude from such determination the stocks of any commodity acquired pursuant to, or
under the authority of the Strategic and Critical Materials Stock
Piling Act (60 Stat. 596).
PARITY PAYMENTS

SEC. 303. ø7 U.S.C. 1303¿ If and when appropriations are
made therefor, the Secretary is authorized and directed to make
payments to producers of corn, wheat, cotton, or rice, on their norFebruary 7, 2014

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mal production of such commodities in amounts which, together
with the proceeds thereof, will provide a return to such producers
which is as nearly equal to parity price as the funds so made available will permit. All funds available for such payment with respect
to these commodities shall, unless otherwise provided by law, be
apportioned to these commodities in proportion to the amount by
which each fails to reach the parity income. Such payments shall
be in addition to and not in substitution for any other payments
authorized by law.
CONSUMER SAFEGUARDS

SEC. 304. ø7 U.S.C. 1304¿ The powers conferred under this Act
shall not be used to discourage the production of supplies of foods
and fibers sufficient to maintain normal domestic human consumption as determined by the Secretary from the records of domestic
human consumption in the years 1920 to 1929, inclusive, taking
into consideration increased population, quantities of any commodity that were forced into domestic consumption by decline in
exports during such period, current trends in domestic consumption
and exports of particular commodities, and the quantities of substitutes available for domestic consumption within any general
class of food commodities. In carrying out the purposes of this Act
it shall be the duty of the Secretary to give due regard to the maintenance of a continuous and stable supply of agricultural commodities from domestic production adequate to meet consumer demand
at prices fair to both producers and consumers.
SUBTITLE B—MARKETING QUOTAS
øNote: Part II was made inapplicable to the 2008 through 2012
crops of corn by sec. 1602(a)(1) of the Food, Conservation, and Energy Act of 2008, P.L. 110–246, 122 Stat. 1729.¿
PART II—ACREAGE ALLOTMENTS—CORN
ADJUSTMENT OF FARM MARKETING QUOTAS

SEC. 326. 11 ƒ7 U.S.C. 1326≈ (a) Whenever in any county or
other area the Secretary finds that the actual production of corn
plus the amount of corn stored under seal in such county or other
area is less than the normal production of the marketing percentage
of the farm acreage allotment in such county or other area, the Secretary shall terminate farm marketing quotas for corn in such county or other area.
(b) Whenever, upon any farm, the actual production of the acreage of corn is less than the normal production of the marketing percentage of the farm acreage allotment, there may be marketed, without penalty, from such farm an amount of corn from the corn stored
under seal pursuant to section 324 which, together with the actual
11 Section 326 was repealed by P.L. 83–690, 68 Stat. 902 insofar as it was applicable to corn;
(b) and (c) below were made applicable to wheat by para. (6), P.L. 74, 77th Congress, 55 Stat.
203. Sec. 326 as set forth below is inapplicable to the 1996 through 2002 crops of corn.

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production of the then current crop, will equal the normal production of the marketing percentage of the farm acreage allotment.
(c) Whenever, in any marketing year, marketing quotas are not
in effect with respect to the crop of corn produced in the calendar
year in which such marketing year begins, all marketing quotas applicable to previous crops of corn shall be terminated.
NONESTABLISHMENT OF ACREAGE ALLOTMENTS

SEC. 330. ƒ7 U.S.C. 1329a≈ Notwithstanding any other provision of law, acreage allotments and a commercial corn-producing
area shall not be established for the 1959 and subsequent crops of
corn.
ƒNote: Part III was made inapplicable to the 2008 through
2012 crops of wheat by sec. 1602(a)(1) of the Food, Conservation,
and Energy Act of 2008, P.L. 110–246, 122 Stat. 1729.≈
PART III—MARKETING QUOTAS—WHEAT
LEGISLATIVE FINDINGS

SEC. 331. ƒ7 U.S.C. 1331≈ Wheat is a basic source of food for
the Nation, is produced throughout the United States by more than
a million farmers, is sold on the country-wide market and, as wheat
or flour, flows almost entirely through instrumentalities of interstate
and foreign commerce from producers to consumers.
Abnormally excessive and abnormally deficient supplies of
wheat on the country-wide market acutely and directly affect, burden, and obstruct interstate and foreign commerce. Abnormally excessive supplies overtax the facilities of interstate and foreign transportation, congest terminal markets and milling centers in the flow
of wheat from producers to consumers, depress the price of wheat
in interstate and foreign commerce and otherwise disrupt the orderly marketing of such commodity in such commerce. Abnormally
deficient supplies result in an inadequate flow of wheat and its
products in interstate and foreign commerce with consequent injurious effects to the instrumentalities of such commerce and with excessive increases in the prices of wheat and its products in interstate
and foreign commerce.
It is in the interest of the general welfare that interstate and
foreign commerce in wheat and its products be protected from such
burdensome surpluses and distressing shortages, and that a supply
of wheat be maintained which is adequate to meet domestic consumption and export requirements in years of drought, flood, and
other adverse conditions as well as in years of plenty, and that the
soil resources of the Nation be not wasted in the production of such
burdensome surpluses. Such surpluses result in disastrously low
prices of wheat and other grains to wheat producers, destroy the
purchasing power of grain producers for industrial products, and
reduce the value of the agricultural assets supporting the national
credit structure. Such shortages of wheat result in unreasonably
high prices of flour and bread to consumers and loss of market outlets by wheat producers.
The conditions affecting the production and marketing of wheat
are such that, without Federal assistance, farmers, individually or
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in cooperation, cannot effectively prevent the recurrence of such surpluses and shortages and the burdens on interstate and foreign
commerce resulting therefrom, maintain normal supplies of wheat,
or provide for the orderly marketing thereof in interstate and foreign
commerce.
Wheat which is planted and not disposed of prior to the date
prescribed by the Secretary for the disposal of excess acres of wheat
is an addition to the total supply of wheat and has a direct effect
on the price of wheat in interstate and foreign commerce and may
also affect the supply and price of livestock and livestock products.
In the circumstances, wheat not disposed of prior to such date must
be considered in the same manner as mechanically harvested wheat
in order to achieve the policy of the Act.
The diversion of substantial acreages from wheat to the production of commodities which are in surplus supply or which will be
in surplus supply if they are permitted to be grown on the diverted
acreage would burden, obstruct, and adversely affect interstate and
foreign commerce in such commodities, and would adversely affect
the prices of such commodities in interstate and foreign commerce.
Small changes in the supply of a commodity could create a sufficient surplus to affect seriously the price of such commodity in interstate and foreign commerce. Large changes in the supply of such
commodity could have a more acute effect on the price of the commodity in interstate and foreign commerce and, also, could overtax
the handling, processing, and transportation facilities through
which the flow of interstate and foreign commerce in such commodity is directed. Such adverse effects caused by overproduction in
one year could further result in a deficient supply of the commodity
in the succeeding year, causing excessive increases in the price of the
commodity in interstate and foreign commerce in such year. It is,
therefore, necessary to prevent acreage diverted from the production
of wheat to be used to produce commodities which are in surplus
supply or which will be in surplus supply if they are permitted to
be grown on the diverted acreage.
The provisions of this part affording a cooperative plan to
wheat producers are necessary in order to minimize recurring surpluses and shortages of wheat in interstate and foreign commerce,
to provide for the maintenance of adequate reserve supplies thereof,
to provide for an adequate and orderly flow of wheat and its products in interstate and foreign commerce at prices which are fair and
reasonable to farmers and consumers, and to prevent acreage diverted from the production of wheat from adversely affecting other
commodities in interstate and foreign commerce.
PROCLAMATIONS OF SUPPLIES AND ALLOTMENTS

SEC. 332. ƒ7 U.S.C. 1332≈ (a) Whenever prior to April 15 in
any calendar year the Secretary determines that the total supply of
wheat in the marketing year beginning in the next succeeding calendar year will, in the absence of a marketing quota program, likely
be excessive, the Secretary shall proclaim that a national marketing
quota for wheat shall be in effect for such marketing year and for
either the following marketing year or the following two marketing
years, if the Secretary determines and declares in such proclamation
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that a two- or three-year marketing quota program is necessary to
effectuate the policy of the Act.
(b) If a national marketing quota for wheat has been proclaimed for any marketing year, the Secretary shall determine and
proclaim the amount of the national marketing quota for such marketing year not earlier than January 1 or later than April 15 of the
calendar year preceding the year in which such marketing year begins. The amount of the national marketing quota for wheat for any
marketing year shall be an amount of wheat which the Secretary estimates (i) will be utilized during such marketing year for human
consumption in the United States as food, food products, and beverages, composed wholly or partly of wheat, (ii) will be utilized during such marketing year in the United States for seed, (iii) will be
exported either in the form of wheat or products thereof and (iv) will
be utilized during such marketing year in the United States as livestock (including poultry) feed, excluding the estimated quantity of
wheat which will be utilized for such purpose as a result of the substitution of wheat for feed grains under section 328 of the Food and
Agriculture Act of 1962; less (A) an amount of wheat equal to the
estimated imports of wheat into the United States during such marketing year and, (B) if the stocks of wheat owned by the Commodity
Credit Corporation are determined by the Secretary to be excessive,
an amount of wheat determined by the Secretary to be a desirable
reduction in such marketing year in such stocks to achieve the policy of the Act: Provided, That if the Secretary determines that the
total stocks of wheat in the Nation are insufficient to assure an adequate carryover for the next succeeding marketing year, the national
marketing quota otherwise determined shall be increased by the
amount the Secretary determines to be necessary to assure an adequate carryover: And provided further, That the national marketing
quota for wheat for any marketing year shall be not less than one
billion bushels.
(c) If after the proclamation of a national marketing quota for
wheat for any marketing year, the Secretary has reason to believe
that, because of a national emergency or because of a material increase in the demand for wheat, the national marketing quota
should be terminated or the amount thereof increased, he shall
cause an immediate investigation to be made to determine whether
such action is necessary in order to meet such emergency or increase
in the demand for wheat. If on the basis of such investigation, the
Secretary finds that such action is necessary, he shall immediately
proclaim such finding and the amount of any such increase found
by him to be necessary and thereupon such national marketing
quota shall be so increased or terminated. In case any national
marketing quota is increased under this subsection, the Secretary
shall provide for such increase by increasing acreage allotments established under this part by a uniform percentage.
(d) Notwithstanding any other provision of this Act, the Secretary shall not proclaim a national marketing quota for the crops
of wheat planted for harvest in the calendar years 1966 through
1970, and farm marketing quotas shall not be in effect for such
crops of wheat.
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NATIONAL ACREAGE ALLOTMENT

SEC. 333. ƒ7 U.S.C. 1333≈ The Secretary shall proclaim a national acreage allotment for each crop of wheat. The amount of the
national acreage allotment for any crop of wheat shall be the number of acres which the Secretary determines on the basis of the projected national yield and expected underplantings (acreage other
than that not harvested because of program incentives) of farm acreage allotments will produce an amount of wheat equal to the national marketing quota for wheat for the marketing year for such
crop, or if a national marketing quota was not proclaimed, the
quota which would have been determined if one had been proclaimed.
APPORTIONMENT OF NATIONAL ACREAGE ALLOTMENT

SEC. 334. ƒ7 U.S.C. 1334≈ (a) The national allotment for
wheat, less a reserve of not to exceed 1 per centum thereof for apportionment as provided in this subsection and less the special acreage
reserve provided for in this subsection, shall be apportioned by the
Secretary among the States on the basis of the preceding year’s allotment for each such State, including all amounts allotted to the
State and including for 1967 the increased acreage in the State allotted for 1966 under section 335, adjusted to the extent deemed necessary by the Secretary to establish a fair and equitable apportionment base for each State, taking into consideration established crop
rotation practices, estimated decrease in farm allotments because of
loss of history, and other relevant factors. The reserve acreage set
aside herein for apportionment by the Secretary shall be used (1) to
make allotments to counties in addition to the county allotments
made under subsection (b) of this section, on the basis of the relative
needs of counties for additional allotments because of reclamation
and other new areas coming into production of wheat, or (2) to increase the allotment for any county, in which wheat is the principal
crop produced, on the basis of its relative need for such increase if
the average ratio of wheat acreage allotment to cropland on old
wheat farms in such county is less by at least 20 per centum than
such average ratio on old wheat farms in an adjoining county or
counties in which wheat is the principal grain crop produced or if
there is a definable contiguous area consisting of at least 10 per centum of the cropland acreage in such county in which the average
ratio of wheat acreage allotment to cropland on old wheat farms is
less by at least 20 per centum than such average ratio on the remaining old wheat farms in such county, provided that such low
ratio of wheat acreage allotment to cropland is due to the shift prior
to 1951 from wheat to one or more alternative income-producing
crops which, because of plant disease or sustained loss of markets,
may no longer be produced at a fair profit and there is no other alternative income-producing crop suitable for production in the area
or county. The increase in the county allotment under clause (2) of
the preceding sentence shall be used to increase allotments for old
wheat farms in the affected area to make such allotments comparable with those on similar farms in the adjoining areas or counties but the average ratio of increased allotments to cropland on
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ment to cropland on old wheat farms in the adjoining areas or
counties. There also shall be made available a special acreage reserve of not in excess of one million acres as determined by the Secretary to be desirable for the purposes hereof which shall be in addition to the national acreage reserve provided for in this subsection.
Such special acreage reserve shall be made available to the States
to make additional allotments to counties on the basis of the relative
needs of counties, as determined by the Secretary, for additional allotments to make adjustments in the allotments on old wheat farms
(that is, farms on which wheat has been seeded or regarded as seeded to one or more of the, three crops immediately preceding the crop
for which the allotment is established) on which the ratio of wheat
acreage allotment to cropland on the farm is less than one-half the
average ratio of wheat acreage allotment to cropland on old wheat
farms in the county. Such adjustments shall not provide an allotment for any farm which would result in an allotment-cropland
ratio for the farm in excess of one-half of such county average ratio
and the total of such adjustments in any county shall not exceed the
acreage made available therefor in the county. Such apportionment
from the special acreage reserve shall be made only to counties
where wheat is a major income-producing crop, only to farms on
which there is limited opportunity for production of an alternative
income-producing crop, and only if an efficient farming operation
on the farm requires the allotment of additional acreage from the
special acreage reserve. For the purposes of making adjustments
hereunder the cropland on the farm shall not include any land developed as cropland subsequent to the 1963 crop year.
(b) The State acreage allotment for wheat, less a reserve of not
to exceed 3 per centum thereof for apportionment as provided in
subsection (c) of this section, shall be apportioned by the Secretary
among the counties in the State, on the basis of the preceding year’s
wheat allotment in each such county, including for 1967, the increased acreage in the county allotted for 1966 pursuant to section
335, adjusted to the extent deemed necessary by the Secretary in
order to establish a fair and equitable apportionment base for each
county, taking into consideration established crop rotation practices,
estimated decrease in farm allotments because of loss of history, and
other relevant factors.
(c)(1) The allotment to the county shall be apportioned by the
Secretary, through the local committees, among the farms within
the county on the basis of past acreage of wheat, tillable acres, crop
rotation practices, type of soil, and topography: Not more than 3 per
centum of the State allotment shall be apportioned to farms on
which wheat has not been planted during any of the three marketing years immediately preceding the marketing year in which the
allotment is made. For the purpose of establishing farm acreage allotments—(i) the past acreage of wheat on any farm for 1958 or
1965 shall be the base acreage determined for the farm under the
regulations issued by the Secretary for determining 1958 or 1965
farm wheat acreage allotments; (ii) if subsequent to the determination of such base acreage the 1958 or 1965 wheat acreage allotment
for the farm is increased through administrative, review, or court
proceedings, the 1958 or 1965 farm base acreage shall be increased
in the same proportion; and (iii) the past acreage of wheat for 1959
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and any subsequent year except 1965 shall be the wheat acreage on
the farm which is not in excess of the farm wheat acreage allotment,
plus, in the case of any farm which is in compliance with its farm
wheat acreage allotment, the acreage diverted under such wheat allotment programs: Provided, That for 1959 and subsequent years in
the case of any farm on which the entire amount of the farm marketing excess is delivered to the Secretary or stored in accordance
with applicable regulations to avoid or postpone payment of the penalty, the past acreage of wheat for the year in which such farm marketing excess is so delivered or stored shall be the farm base acreage
of wheat determined for the farm under the regulations issued by
the Secretary for determining farm wheat acreage allotments for
such year, but if any part of the amount of wheat so stored is later
depleted and penalty becomes due by reason of such depletion for
the purpose of establishing farm wheat acreage allotments subsequent to such depletion the past acreage of wheat or the farm for
the year in which the excess was produced shall be reduced to the
farm wheat acreage allotment for such year.
(2) Notwithstanding any other provision of law, each old or new
farm acreage allotment for the 1962 crop of wheat as determined on
the basis of a minimum national acreage allotment of fifty million
acres shall be reduced by 10 per centum. In the event notices of farm
acreage allotments for the 1962 crop of wheat have been mailed to
farm operators prior to the effective date of this subparagraph (2),
new notices showing the required reduction shall be mailed to farm
operators as soon as practicable.
(3) Notwithstanding the provisions of paragraph (1) of this subsection, the past acreage of wheat for 1967 and any subsequent year
shall be the acreage of wheat planted, plus the acreage regarded as
planted, for harvest as grain on the farm which is not in excess of
the farm acreage allotment.
(4) Notwithstanding any other provision of this subsection (c),
the farm acreage allotment for the 1967 and any subsequent crop
of wheat shall be established for each old farm by apportioning the
county wheat acreage allotment among farms in the county on
which wheat has been planted, or is considered to have been planted, for harvest as grain in any one of the three years immediately
preceding the year for which allotments are determined on the past
acreage of wheat and the farm acreage allotment for the year immediately preceding the year for which the allotment is being established, adjusted as hereinafter provided. For purposes of this paragraph, the acreage allotment for the immediately preceding year
may be adjusted to reflect established crop rotation practices, may
be adjusted downward to reflect a reduction in the tillable acreage
on the farm, and may be adjusted upward to reflect such other factors as the Secretary determines should be considered for the purpose of establishing a fair and equitable allotment: Provided, That
(i) for the purposes of computing the allotment for any year, the
acreage allotment for the farm for the immediately preceding year
shall be decreased by 7 per centum if for the year immediately preceding the year for which such reduction is made neither a voluntary diversion program nor a voluntary certificate program was
in effect and there was noncompliance with the farm acreage allotment for such year; (ii) for purposes of clause (i) any farm on which
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the entire amount of farm marketing excess is delivered to the Secretary, stored, or adjusted to zero in accordance with applicable regulations to avoid or postpone payment of the penalty when farm
marketing quotas are in effect, shall be considered in compliance
with the allotment, but if any part of the amount of wheat so stored
is later depleted and penalty becomes due by reason of such depletion, the allotment for such farm next computed after determination
of such depletion shall be reduced by reducing the allotment for the
immediately preceding year by 7 per centum and (iii) for purposes
of clause (i) if the Secretary determines that the reduction in the allotment does not provide fair and equitable treatment to producers
on farms following special crop rotation practices, he may modify
such reduction in the allotment as he determines to be necessary’ to
provide fair and equitable treatment to such producers.
(e) 12 ƒ * * *≈
(f) 13 ƒ * * *≈
(g) Notwithstanding any other provision of law, no acreage in
the commercial wheat producing area seeded to wheat for harvest
as grain in 1958 or thereafter except 1965 in excess of acreage allotments shall be considered in establishing future State and county
acreage allotments. The planting on a farm in the commercial
wheat producing area of wheat of the 1958 or any subsequent crop
for which no farm wheat acreage allotment was established shall
not make the farm eligible for an allotment as an old farm pursuant
to the first sentence of subsection (c) of this section nor shall such
farm by reason of such planting be considered ineligible for an allotment as a new farm under the second sentence of such subsection.
(i) If with respect to any crop of wheat, the Secretary finds that
the acreage allotments of farms producing any type of wheat are inadequate to provide for the production of a sufficient quantity of
such type of wheat to satisfy the demand therefor, the wheat acreage
allotment for such crop for each farm located in a county designated
by the Secretary as a county which (1) is capable of producing such
type of wheat, and (2) has produced such type of wheat for commercial food products during one or more of the five years immediately
preceding the year in which such crop is harvested, shall be increased by such uniform percentage as he deems necessary to provide for such quantity. No increase shall be made under this subsection in the wheat acreage allotment of any farm for any crop if
any wheat other than such type of wheat is planted on such farm
for such crop. Any increases in wheat acreage allotments authorized
by this subsection shall be in addition to the National, State, and
county wheat acreage allotments, and such increases shall not be
considered in establishing future State, county, and farm allotments. The provisions of paragraph (6) of Public Law 74, Seventyseventh Congress (7 U.S.C. 1340(6)), and section 326(b) of this Act,
relating to the reduction of the storage amount of wheat shall apply
to the allotment for the farm established without regard to this subsection and not to the increased allotment under this subsection.
The land use provisions of section 339 shall not be applicable to any
farm receiving an increased allotment under this subsection and the
12 Subsec.
13 Subsec.

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(e) was applicable only with respect to the 1962 and 1963 crops of Durum wheat.
(f) was applicable only with respect to the 1955, 1956 and 1957 crops of wheat.

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producers on such farms shall not be required to comply with such
provisions as a condition of eligibility for price support.
(j) Notwithstanding any other provision of this Act, the Secretary shall increase the acreage allotments for the 1970 and subsequent crops of wheat for privately owned farms in the irrigable portion of the area known as the Tulelake division of the Klamath
project of California located in Modoc and Siskiyou Counties, California, as defined by the United States Department of the Interior,
Bureau of Reclamation, and hereinafter referred to as the area. The
increase for the area for each such crop shall be determined by adding, to the extent applications are made therefor, to the total allotments established for privately owned farms in the area for the particular crop without regard to this subsection (hereinafter referred
to as the original allotments) an acreage sufficient to make available for each such crop a total allotment of twelve thousand acres
for the area. The additional allotments made available by this subsection shall be in addition to the National, State, and county allotments otherwise established under this section, and the acreage
planted to wheat pursuant to such increases in allotments shall not
be taken into account in establishing future State, county, and farm
acreage allotments except as may be desirable in providing increases
in allotments for subsequent years under this subsection for the production of Durum wheat. The Secretary shall apportion the additional allotment acreage made available under this subsection between Modoc and Siskiyou Counties on the basis of the relative
needs for additional allotments for the portion of the area in each
county. The Secretary shall allot such additional acreage to individual farms in the area for which applications for increased acreages are made on the basis of tillable acres, crop rotation practices,
type of soil and topography, and the original allotment for the farm,
if any. The increase in the wheat acreage allotment for any farm
under this subsection (1) shall not be taken into account in computing the farm wheat marketing allocation under section 379b,
and (2) shall be conditioned upon the production of Durum wheat
on the original allotment and on the increased acreage. The producers on a farm receiving an increased allotment under this subsection shall not be eligible for diversion payments under section
339.
(k) Notwithstanding any other provision of this Act, if the Secretary determines that because of a natural disaster a portion of the
farm wheat acreage allotments in a county cannot be timely planted
or replanted, he may authorize the transfer of all or a part of the
wheat acreage allotment for any farm in the county so affected to
another farm in the county or in an adjoining county on which one
or more of the producers on the farm from which the transfer is to
be made will be engaged in the production of wheat and will share
in the proceeds thereof in accordance with such regulations as the
Secretary may prescribe. Any farm allotment transferred under this
subsection shall be deemed to be planted on the farm which it was
transferred for the purposes of acreage history credits under this
Act.
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Sec. 334a

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COMMERCIAL AREA

SEC. 334a. ƒ7 U.S.C. 1334b≈ If the acreage allotment for any
State for any crop of wheat is twenty five thousand acres or less,
the Secretary, in order to promote efficient administration of this
Act and the Agricultural Act of 1949, may designate such State as
outside the commercial wheat producing area for the marketing
year for such crop. If such State is so designated, acreage allotments
for such crop and marketing quotas for the marketing year therefor
shall not be applicable to any farm in such State. Acreage allotments in any State shall not be increased by reason of such designation.
MARKETING PENALTIES

SEC. 335. 14 ƒ7 U.S.C. 1335≈ ƒ * * *≈
REFERENDUM

SEC. 336. ƒ7 U.S.C. 1336≈ If a national marketing quota for
wheat for one, two or three marketing years is proclaimed, the Secretary shall, not later than August 1 of the calendar year in which
such national marketing quota is proclaimed, conduct a referendum, by secret ballot, of farmers to determine whether they
favor or oppose marketing quotas for the marketing year or years
for which proclaimed. Any producer who has a farm acreage allotment shall be eligible to vote in any referendum held pursuant to
this section, except that a producer who has a farm acreage allotment of less than fifteen acres shall not be eligible to vote unless the
farm operator elected pursuant to section 335 to be subject to the
farm marketing quota. The Secretary shall proclaim the results of
any referendum held hereunder within thirty days after the date of
such referendum and if the Secretary determines that more than
one-third of the farmers voting in the referendum voted against
marketing quotas, the Secretary shall proclaim that marketing
quotas will not be in effect with respect to the crop of wheat produced for harvest in the calendar year following the calendar year
in which the referendum is held. If the Secretary determines that
two-thirds or more of the farmers voting in a referendum approve
marketing quotas for a period of two or three marketing years, no
referendum shall be held for the subsequent year or years of such
period. Notwithstanding any other provision hereof the referendum
with respect to the national marketing quota for wheat for the marketing year beginning June 1, 1986, may be conducted not later
than thirty-one days after adjournment sine die of the first session
of the Ninety-ninth Congress.
TRANSFER OF QUOTAS

SEC. 338. ƒ7 U.S.C. 1338≈ Farm marketing quotas for wheat
shall not be transferable, but, in accordance with regulations prescribed by the Secretary for such purpose, any farm marketing
quota in excess of the supply of wheat for such farm for any mar14 Sec. 335 was amended effective only for the 1987 through 1990 crops of wheat by sec. 305
of the Food Security Act of 1985, P.L. 99–198, 99 Stat. 1380, Dec. 23, 1985.

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Sec. 339

keting year may be allocated to other farms on which the acreage
allotment has not been exceeded.
LAND USE

SEC. 339. ƒ7 U.S.C. 1339≈ (a)(1) During any year in which
marketing quotas for wheat are in effect, the producers on any farm
(except a new farm receiving an allotment from the reserve for new
farms) on which any crop is produced on acreage required to be diverted from the production of wheat shall be subject to a penalty on
such crop, in addition to any marketing quota penalty applicable to
such crops, as provided in this subsection unless (1) the crop is designated by the Secretary as one which is not in surplus supply and
will not be in surplus supply if it is permitted to be grown on the
diverted acreage, or as one the production of which will not substantially impair the purpose of the requirements of this section, or (2)
no wheat is produced on the farm, and the producers have not filed
an agreement or a statement of intention to participate in the payment program formulated pursuant to subsection (b) of this section.
The acreage required to be diverted from the production of wheat on
the farm shall be an acreage of cropland equal to the number of
acres determined by multiplying the farm acreage allotment by the
diversion factor determined by dividing the number of acres by
which the national acreage allotment (less an acreage equal to the
increased acreage allotment for 1966 pursuant to section 335) is reduced below fifty-five million acres by the number of acres in the
national acreage allotment (less an acreage equal to the increased
acreage allotted for 1966 pursuant to section 335). The actual production of any crop subject to penalty under this subsection shall be
regarded as available for marketing and the penalty on such crop
shall be computed on the actual acreage of such crop at the rate of
65 per centum of the parity price per bushel of wheat as of May 1
of the calendar year in which such crop is harvested, multiplied by
the normal yield of wheat per acre established for the farm. Until
the producers on any farm pay the penalty on such crop, the entire
crop of wheat produced on the farm and any subsequent crop of
wheat subject to marketing quotas in which the producer has an interest shall be subject to a lien in favor of the United States for the
amount of the penalty. Each producer having an interest in the crop
or crops on acreage diverted or required to be diverted from the production of wheat shall be jointly and severally liable for the entire
amount of the penalty. The persons liable for the payment or collection of the penalty under this section shall be liable also for interest
thereon at the rate of 6 per centum per annum from the date the
penalty becomes due until the date of payment of such penalty.
(2) The Secretary may require that the acreage on any farm diverted from the production of wheat be land which was diverted
from the production of wheat in the previous year, to the extent he
determines that such requirement is necessary to effectuate the purposes of this subtitle.
(3) The Secretary may permit the diverted acreage to be grazed
in accordance with regulations prescribed by the Secretary.
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Sec. 341

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(b) 15 ƒ * * *≈
(c) 16 ƒ * * *≈
(d) 17 ƒ * * *≈
(e) 18 ƒ * * *≈
(f) 19 ƒ * * *≈
(g) The Secretary is authorized to promulgate such regulations
as may be desirable to carry out the provisions of this section.
(h) 20 ƒ * * *≈
øNote: Part IV was made inapplicable to the 2008 through
2012 crops of cotton by sec. 1602(a)(1) of the Food, Conservation,
and Energy Act of 2008, P.L. 110–246, 122 Stat. 1729.¿
PART IV—MARKETING QUOTAS—COTTON
LEGISLATIVE FINDINGS

SEC. 341. ƒ7 U.S.C. 1341≈ American cotton is a basic source
of clothing and industrial products used by every person in the
United States and by substantial numbers of people in foreign countries. American cotton is sold on a world-wide market and moves
from the places of production almost entirely in interstate and foreign commerce to processing establishments located throughout the
world at places outside the State where the cotton is produced.
Fluctuations in supplies of cotton and the marketing of excessive supplies of cotton in interstate and foreign commerce disrupt
the orderly marketing of cotton in such commerce with consequent
injury to and destruction of such commerce. Excessive supplies of
cotton directly and materially affect the volume of cotton moving in
interstate and foreign commerce and cause disparity in prices of cotton and industrial products moving in interstate and foreign commerce with consequent diminution of the volume of such commerce
in industrial products.
The conditions affecting the production and marketing of cotton
are such that, without Federal assistance, farmers, individually or
in cooperation, cannot effectively prevent the recurrence of excessive
supplies of cotton and fluctuations in supplies, cannot prevent indiscriminate dumping of excessive supplies on the Nation-wide and foreign markets, cannot maintain normal carryovers of cotton, and
cannot provide for the orderly marketing of cotton in interstate and
foreign commerce.
It is in the interest of the general welfare that interstate and
foreign commerce in cotton be protected from the burdens caused by
the marketing of excessive supplies of cotton in such commerce, that
a supply of cotton be maintained which is adequate to meet domestic consumption and export requirements in years of drought, flood,
and other adverse conditions as well as in years of plenty, and that
the soil resources of the Nation be not wasted in the production of
excessive supplies of cotton.
15 Subsecs.

(b), (c), (d), (e), (f) and (h) were effective only through the 1970 crop.
footnote 339–1.
footnote 339–1.
18 See footnote 339–1.
19 See footnote 339–1.
20 See footnote 339–1.
16 See
17 See

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Sec. 342a

The provisions of this part affording a cooperative plan to cotton producers are necessary and appropriate to prevent the burdens
on interstate and foreign commerce caused by the marketing in such
commerce of excessive supplies, and to promote, foster, and maintain an orderly flow of an adequate supply of cotton in such commerce.
NATIONAL MARKETING QUOTA

SEC. 342. ƒ7 U.S.C. 1342≈ Whenever during any calendar year
the Secretary determines that the total supply of cotton for the marketing year beginning in such calendar year will exceed the normal
supply for such marketing year, the Secretary shall proclaim such
fact and a national marketing quota shall be in effect for the crop
of cotton produced in the next calendar year. The Secretary shall
also determine and specify in such proclamation the amount of the
national marketing quota in terms of the number of bales of cotton
(standard bales of five hundred pounds gross weight) adequate, together with (1) the estimated carryover at the beginning of the marketing year which begins in the next calendar year and (2) the estimated imports during such marketing year, to make available a
normal supply of cotton: Provided, That beginning with the 1961
crop, the national marketing quota shall be not less than a number
of bales equal to the estimated domestic consumption and estimated
exports (less estimated imports) for the marketing year for which the
quota is proclaimed, except that the Secretary shall make such adjustments in the amount of such quota as he determines necessary
after taking into consideration the estimated stocks of cotton in the
United States (including the qualities of such stocks) and stocks in
foreign countries which would be available for the marketing year
for which the quota is being proclaimed if no adjustment of such
quota is made hereunder, to assure the maintenance of adequate but
not excessive stocks in the United States to provide a continuous
and stable supply of the different qualities of cotton needed in the
United States and in foreign cotton consuming countries, and for
purposes of national security but the Secretary, in making such adjustments, may not reduce the national marketing quota or any year
below (i) one million bales less than the estimated domestic consumption and estimated exports for the marketing year for which
such quota is being proclaimed, or (ii) ten million bales, whichever
is larger. Such proclamation shall be made not later than October
15 of the calendar year in which such determination is made. ƒ
* * *≈ 21 Notwithstanding any other provision of this Act, the national marketing quota for upland cotton for 1959 and subsequent
years shall be not less than the number of bales required to provide
a national acreage allotment for each such year of sixteen million
acres.
NATIONAL COTTON PRODUCTION GOAL

SEC. 342a. ƒ7 U.S.C. 1342a≈ The Secretary shall, not later
than November 15, of the calendar years 1970 through 1976, proclaim a national cotton production goal for the 1971 and subsequent
21 Proviso

February 7, 2014

effective only to the 1957 and 1958 crops of cotton has been omitted.

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crops of upland cotton. The national cotton production goal for any
year shall be the number of bales of upland cotton (standard bales
of four hundred and eighty pounds net weight) equal to the estimated domestic consumption and estimated exports for the marketing year beginning in the calendar year for which such national
cotton production goal is proclaimed, plus an allowance of not less
than 5 per centum of such estimated consumption and estimated exports for market expansion except that the Secretary shall make
such adjustments in the amount of such production goal as he determines necessary after taking into consideration the estimated
stocks of upland cotton in the United States (including the qualities
of such stocks) and stocks in foreign countries, which would be
available for the marketing year, to assure the maintenance of adequate but not excessive carryover stocks in the United States (not
less than 50 per centum of the average offtake for the three preceding marketing years) to provide a continuous and stable supply
of the different qualities of upland cotton needed in the United
States and in foreign cotton consuming countries and, in addition,
to provide an adequate reserve for purposes of national security.
REFERENDUM

SEC. 343. ƒ7 U.S.C. 1343≈ Not later than December 15 following the issuance of the marketing quota proclamation provided
for in section 342, the Secretary shall conduct a referendum, by secret ballot, of farmers engaged in the production of cotton in the calendar year in which the referendum is held, to determine whether
such farmers are in favor of or opposed to the quota so proclaimed:
Provided, That ƒ * * *≈ 22 If more than one third of the farmers
voting in the referendum oppose the national marketing quota, such
quota shall become ineffective upon proclamation of the results of
the referendum. The Secretary shall proclaim the results of any referendum held hereunder within thirty days after the date of such
referendum. Notwithstanding any other provision hereof the referendum with respect to the national marketing quota for cotton for
the marketing year beginning August 1, 1986, may be conducted not
later than thirty-one days after adjournment sine die of the first session of the Ninety-ninth Congress.
ACREAGE ALLOTMENTS

SEC. 344. ƒ7 U.S.C. 1344≈ (a) Whenever a national marketing
quota is proclaimed under section 342, the Secretary shall determine and proclaim a national acreage allotment for the crop of cotton to be produced in the next calendar year. The national acreage
allotment for cotton shall be that acreage, based upon the national
average yield per acre of cotton for the four years immediately preceding the calendar year in which the national marketing quota is
proclaimed, required to make available from such crop an amount
of cotton equal to the national marketing quota.
(b) The national acreage allotment for cotton for 1953 and subsequent years shall be apportioned to the States on the basis of the
acreage planted to cotton (including the acreages regarded as hav22 Proviso

February 7, 2014

effective only as to 1950 crop cotton omitted.

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Sec. 344

ing been planted to cotton under the provisions of Public Law 12,
Seventy-ninth Congress) during the five calendar years immediately
preceding the calendar year in which the national marketing quota
is proclaimed, with adjustments for abnormal weather conditions
during such period: Provided, That ƒ * * *≈ 23 Provided, That
there is hereby established a national acreage reserve consisting of
three hundred and ten thousand acres which shall be in addition
to the national acreage allotment; and such reserve shall be apportioned to the States on the basis of their needs for additional acreage for establishing minimum farm allotments under subsection
(f)(1), as determined by the Secretary without regard to State and
count acreage reserves (except that the amount apportioned to Nevada sell be one thousand acres). For the 1960 and succeeding crops
of cotton, the needs of States (other than Nevada) for such additional acreage for such purpose may be estimated by the Secretary,
after taking into consideration such needs as determined or estimated for the preceding crop of cotton and the size of the national
acreage allotment for such crop. The additional acreage so apportioned to the State shall be apportioned to the counties on the basis
of the needs of the counties for such additional acreage for such purpose, and added to the county acreage allotment for apportionment
to farms pursuant to subsection (f) of this section (except that no
part of such additional acreage shall be used to increase the county
reserve above 15 per centum of the county allotment determined
without regard to such additional acreage). Additional acreage apportioned to a State for any year under the foregoing proviso shall
not be taken into account in establishing future State acreage allotments. Needs for additional acreage under the foregoing provisions
and under the last provision in subsection (e) shall be determined
or estimated as though allotments were first computed without regard to subsection (f)(1).
(c) 24 ƒ * * *≈
(d) 25 ƒ * * *≈
(e) The State acreage allotment for cotton shall be apportioned
to counties on the same basis as to years and conditions as is applicable to the State under subsections (b), (c), and (d) of this section:
Provided, That the State committee may reserve not to exceed 10 per
centum of its State acreage allotment (15 per centum if the State’s
1948 planted acreage was in excess of one million acres and less
than half its 1943 allotment) which shall be used to make adjustments in county allotments for trends in acreage, for counties adversely affected by abnormal conditions affecting plantings, or for
small or new farms, or to correct inequities in farm allotments and
to prevent hardship: Provided further, That ƒ * * *≈ 26. Provided
further, That if the additional acreage allocated to a State under
the proviso in subsection (b) is less than the requirements as determined or estimated by the Secretary for establishing minimum farm
allotments for the State under subsection (f)(1), the acreage reserved
23 A proviso which was effective only with respect to the 1957 and 1958 crops of cotton has
been deleted.
24 Subsec. (c) was applicable only to the 1950 and 1951 crops of cotton.
25 Subsec. (d) was applicable only to the 1952 crop of cotton.
26 A proviso which was effective only with respect to the 1957 and 1958 crops of cotton has
been deleted.

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under this subsection shall not be less than the smaller of (1) the
remaining acreage so determined or estimated to be required for establishing minimum farm allotments or (2) 3 per centum of the
State acreage allotment; and the acreage which is required to be reserved under this proviso shall be allocated to counties on the basis
of their needs for additional acreage for establishing minimum farm
allotments under subsection (f)(1), and added to the county acreage
allotment for apportionment to farms pursuant to subsection (f) of
this section (except that no part of such additional acreage shall be
used to increase the county reserve above 15 per centum of the county allotment determined without regard to such additional acreages).
(f) The county acreage allotment, less not to exceed the percentage provided for in paragraph (3) of this subsection shall be apportioned to farms on which cotton has been planted (or regarded as
having been planted under the provisions of Public Law 12, Seventy-ninth Congress) in any one of the three years immediately preceding the year for which such allotment is determined on the following basis:
(1) Insofar as such acreage is available, there shall be allotted the smaller of the following: (A) ten acres; or (B) the acreage
allotment established for the farm for the 1958 crop.
(2) The remainder shall be allotted to farms other than
farms to which an allotment has been made under paragraph
(1)(B) so that the allotment to each farm under this paragraph
together with the amount of the allotment to such farm under
paragraph (1)(A) shall be a prescribed percentage (which percentage shall be the same for all such farms in the county or
administrative areas) of the acreage, during the preceding year,
on the farm which is tilled annually or in regular rotation, excluding from such acreages the acres devoted to the production
of sugar cane for sugar, sugar beets for sugar, wheat, tobacco,
or rice for market; peanuts picked and threshed; wheat or rice
or feeding to livestock for market; or lands determined to be
voted primarily to orchards or vineyards, and nonirrigated
lands in irrigated area: Provided, however, That if a farm
would be allotted under this paragraph an acreage together
with the amount of the allotment to such farm under paragraph
(1)(A) in excess of the largest acreage planted (and regarded as
planted under Public Law 12, Seventy-ninth Congress) to cotton
during any of the preceding three years, the acreage allotment
for such farm shall not exceed such largest acreage so planted
(and regarded as planted under Public Law 12, Seventy-ninth
Congress) in any such year.
(3) The county committee may reserve not in excess of 15
per centum of the county allotment ƒ * * *≈ 27 which, in addition to the acreage made available under the proviso in subsection (e), shall be used for (A) establishing allotments for
farms on which cotton was not planted (or regarded as planted
under Public Law 12, Seventy-ninth Congress) during any of
the three calendar years immediately preceding the year for
which the allotment is made, on the basis of land, labor, and
27 Material

February 7, 2014

omitted which does not change 15 per centum maximum.

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equipment available for the production of cotton, crop rotation
practices, and the soil and other physical facilities affecting the
production of cotton; and (B) making adjustments of the farm
acreage allotments established under paragraphs (1) and (2) of
this subsection so as to establish allotments which are fair and
reasonable in relation to the factors set forth in this paragraph
and abnormal conditions of production on such farms, or in
making adjustments in farm acreage allotments to correct inequities and to prevent hardship: Provided, That not less than
20 percent of the acreage reserved under this subsection shall,
to the extent required, be allotted upon such basis as the Secretary deems fair and reasonable to farms (other than farms to
which an allotment has been made under subsection (f)(1)(B),
if any, to which an allotment of not exceeding fifteen acres may
be made under other provisions of this subsection.
(4) 28
(5) 29
(6) Notwithstanding the provisions of paragraph (2) of this
subsection, if the county committee recommends such action
and the Secretary determines that such action will result in a
more equitable distribution of the county allotment among
farms in the county, the remainder of the county acreage allotment (after making allotments as provided in paragraph (1) of
this subsection) shall be allotted to farms other than farms to
which an allotment has been made under paragraph (1)(B) of
this subsection so that the allotment to each farm under this
paragraph together with the amount of the allotment of such
farm under paragraph (1)(A) of this subsection shall be a prescribed percentage (which percentage shall be the same for all
such farms in the county) of the average acreage planted to cotton on the farm during the three years immediately preceding
the year for which such allotment is determined, adjusted as
may be necessary for abnormal conditions affecting plantings
during such three year period: Provided, That the county committee may in its discretion limit any farm acreage allotment
established under the provisions of this paragraph for any year
to an acreage not in excess of 50 per centum of the cropland on
the farm, as determined pursuant to the provisions of paragraph (2) of this subsection: Provided further, That any part of
the county acreage allotment not apportioned under this paragraph by reason of the initial application of such 50 per centum
limitation shall be added to the county acreage reserve under
paragraph (3) of this subsection and shall be available for the
purposes specified therein. If the county acreage allotment is apportioned among the farms of the county in accordance with the
provisions of this paragraph, the acreage reserved under paragraph (3) of this subsection may be used to make adjustments
so as to establish allotments which are fair and reasonable to
farms receiving allotments under this paragraph in relation to
the factors set forth in paragraph (3).
28 Paras.
29 See

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(4) and (5) were applicable only to the 1950 crop of cotton.
footnote 344–6.

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(7)(A) In the event that any farm acreage allotment is less
than that prescribed by paragraph (1), such acreage allotment
shall be increased to the acreage prescribed by paragraph (1).
The additional acreage required to be allotted to farms under
this paragraph shall be in addition to the county, State, and
national acreage allotments and the production from such acreage shall be in addition to the national marketing quota.
(B) Notwithstanding any other provision of law—
(i) the acreage by which any farm acreage allotment for
1959 or any subsequent crop established under paragraph
(1) exceeds the acreage which would have been allotted to
such farm if its allotment had been computed on the basis
of the same percentage factor applied to other farms in the
county under paragraph (2), (6), or (8) shall not be taken
into account in establishing the acreage allotment for such
farm for any crop for which acreage is allotted to such farm
under paragraph (2), (6), or (8); and acreage shall be allotted under paragraph (2), (6), or (8) to farms which did not
receive 1958 crop allotments in excess of ten acres if and
only if the Secretary determines (after considering the allotments to other farms in the county for such crop compared
with their 1958 allotments and other relevant factors) that
equity and justice require the allotment of additional acreage to such farm under paragraph (2), (6), or (8),
(ii) the acreage by which any county acreage allotment
for 1959 or any subsequent crop is increased from the national or State reserve on the basis of its needs for additional acreage for establishing minimum farm allotments
shall not be taken into account in establishing future county acreage allotments, and
(iii) the additional acreage allotted pursuant to subparagraph (A) of this paragraph (7) shall not be taken into
account in establishing future State, county, or farm acreage allotments.
(8) Notwithstanding the foregoing provisions of paragraphs
(2) and (6) of this subsection, the Secretary shall, if allotments
were in effect the preceding year, provide for the county acreage
allotment for the 1959 and succeeding crops of cotton, less the
acreage reserved under paragraph (3) of this subsection, to be
apportioned to farms on which cotton has been planted in any
one of the three years immediately preceding the year for which
such allotment is determined, on the basis of the farm acreage
allotment for the year immediately preceding the year for which
such apportionment is made, adjusted as may be necessary (i)
for any change in the acreage of cropland available for the production of cotton, or (ii) to meet the requirements of any provision (other than those contained in paragraphs (2) and (6)) with
respect to the counting of acreage for history purposes: Provided, That, beginning with allotments established for the 1961
crop of cotton, if the acreage actually planted (or regarded as
planted under the Soil Bank Act, the environmental quality incentives program established under chapter 4 of subtitle D of
title XII of the Food Security Act of 1985, and the release and
reapportionment provisions of subsection (m)(2) of this section)
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to cotton on the farm in the preceding year was less than 75 per
centum of the farm allotment for such year or, in the case of
a farm which qualified for price support on the crop produced
in such year under section 103(b) of the Agricultural Act of
1949, as amended, 75 per centum of the farm domestic allotment established under section 350 for such year, whichever is
smaller, in lieu of using such allotment as the farm base as provided in this paragraph, the base shall be the average of (1) the
cotton acreage for the farm for the preceding year as determined
for purposes of this proviso and (2) the allotment established for
the farm pursuant to the provisions of this subsection (f) for
such preceding year; and the 1958 allotment used for establishing the minimum farm allotment under paragraph (1) of
this subsection (f) shall be adjusted to the average acreage so
determined. The base for a farm shall not be adjusted as provided in this paragraph if the county committee determines that
failure to plant at least 75 per centum of the farm allotment
was due to conditions beyond the control of producers on the
farm. The Secretary shall establish limitations to prevent allocations of allotment to farms not affected by the foregoing proviso, which would be excessive on the basis of the cropland, past
cotton acreage, allotments for other commodities, and good soil
conservation practices on such farms.
(g) Notwithstanding the foregoing provisions of this section—
(1) State, county, and farm acreage allotments and yields
for cotton shall be established in conformity with Public Law
28, Eighty-first Congress.
(2) In apportioning the county allotment among the farms
within the county, the Secretary, through the local committees,
shall take into consideration different conditions within separate administrative areas within a county if any exist, including types, kinds, and productivity of the soil so as to prevent
discrimination among the administrative areas of the county.
(i) Notwithstanding any other provision of this Act, any acreage
planted to cotton in excess of the farm acreage allotment shall not
be taken into account in establishing State, county, and farm acreage allotments. Notwithstanding any other provision of this Act, beginning with the 1960 crop the planting of cotton on a farm in any
of the immediately preceding three years that allotments were in effect but no allotment was established for such farm for any year of
such three year period shall not make the farm eligible for an allotment as an old farm under subsection (f) of this section: Provided,
however, That by reason of such planting the farm need not be considered as ineligible for a new farm allotment under subsection
(f)(3) of this section.
(j) Notwithstanding any other provision of this Act, State and
county committees shall make available for inspection by owners or
operators of farms receiving cotton acreage allotments all records
pertaining to cotton acreage allotments and marketing quotas.
(k) Notwithstanding any other provision of this section except
subsection (g)(1), there shall be allotted to each State for which an
allotment is made under this section not less than the smaller of (A)
four thousand acres or (B) the highest acreage planted to cotton in
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any one of the three calendar years immediately preceding the year
for which the allotment is made.
(l) 30 ƒ * * *≈
(m) Notwithstanding any other provision of law—
(1) (Applicable only to 1954 crop of cotton.)
(2) Any part of any farm cotton acreage allotment on which
cotton will not be planted and which is voluntarily surrendered
to the county committee shall be deducted from the allotment to
such farm and may be reapportioned by the county committee
to other farms in the same county receiving allotments in
amounts determined by the county committee to be fair and reasonable on the basis of past acreage of cotton, land, labor,
equipment available for the production of cotton, crop rotation
practices, and soil and other physical facilities affecting the
production of cotton. If all of the allotted acreage voluntarily
surrendered is not needed in the county, the county committee
may surrender the excess acreage to the State committee to be
used for the same purposes as the State acreage reserve under
subsection (e) of this section. Any allotment released under this
provision shall be regarded for the purposes of establishing future allotments as having been planted on the farm and in the
county where the release was made rather than on the farm and
in the county to which the allotment was transferred, except
that this shall not operate to make the farm from which the allotment was transferred eligible for an allotment as having cotton planted thereon during the three-year base period: Provided,
That notwithstanding any other provisions of law, any part of
any farm acreage allotment may be permanently released in
writing to the county committee by the owner and operator of
the farm, and reapportioned as provided herein. Acreage released under this paragraph shall be credited to the State in determining future allotments. The provisions of this paragraph
shall apply also to extra long staple cotton covered by section
341 of this Act.
(3) 31 ƒ * * *≈
(n) Notwithstanding any other provision of this Act, if the Secretary determines for any year that because of a natural disaster a
portion of the farm cotton acreage allotments in a county cannot be
timely planted or replanted in such year, he may authorize for such
year the transfer of all or part of the cotton acreage allotment for
any farm in the county so affected to another farm in the county or
in an adjoining county on which one or more of the producers on
the farm from which the transfer is to be made will be engaged in
the production of cotton and will share in the proceeds thereof, in
accordance with such regulations as the Secretary may prescribe.
Any farm allotment transferred under this paragraph shall be
deemed to be released acreage for the purpose of acreage history
credits under section 344(f)(8), 344(m)(2), and 377 of this Act: Provided, That, notwithstanding the provisions of section 344(m)(2) of
this Act, the transfer of any farm allotment under this subsection
for any year shall operate to make the farm from which the allot30 Subsec. (l), relating to war crops under P.L. 79–12, does not apply to the 1955 and succeeding crops of cotton.
31 Para. (3) was applicable only to the 1954 crop of cotton.

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Sec. 344a

ment was transferred eligible for an allotment as having cotton
planted thereon during the three-year base period.
SALES, LEASE AND TRANSFER OF UPLAND COTTON ACREAGE
ALLOTMENTS

SEC. 344a. ƒ7 U.S.C. 1344b≈ (a) Notwithstanding any other
provision of law, the Secretary, if he determines that it will not impair the effective operation of the program involved, (1) may permit
the owner and operator of any farm for which a cotton acreage allotment is established to sell or lease all or any part or the right to
all or any part of such allotment (excluding that part of the allotment which the Secretary determines was apportioned to the farm
from the national acreage reserve) to any other owner or operator
of a farm for transfer to such farm; (2) may permit the owner of a
farm to transfer all or any part of such allotment to any other farm
owned or controlled by him: Provided, That the authority granted
under this section may be exercised for the calendar years 1966
through 1970, but all transfers hereunder shall be for such period
of years as the parties thereto may agree.
(b) Transfers under this section shall be subject to the following
conditions: (i) no allotment shall be transferred to a farm in another
State or to a person for use in another State; (ii) no farm allotment
may be sold or leased for transfer to a farm in another county unless the producers of cotton in the county from which transfer is
being made have voted in a referendum within three years of the
date of such transfer, by a two-thirds majority of the producers participating in such referendum, to permit the transfer of allotments
to farms outside the county, which referendum, insofar as practicable, shall be held in conjunction with the marketing quota referendum for the commodity; (iii) no transfer of an allotment from
a farm subject to a mortgage or other lien shall be permitted unless
the transfer is agreed to by the lien-holder; (iv) no sale of a farm
allotment shall be permitted if any sale of cotton allotment to the
same farm has been made within the three immediately preceding
crop years; (v) the total cotton allotment for any farm to which allotment is transferred by sale or lease shall not exceed the farm acreage allotment (excluding reapportioned acreage) established for such
farm for 1965 by more than one hundred acres; (vi) the cotton in
excess of the remaining acreage allotment on the farm shall be
planted on any farm from which the allotment (or part of an allotment) is sold for a period of five years following such sale, nor shall
any cotton in excess of the remaining acreage allotment on the farm
be planted on any farm from which the allotment (or part of an allotment) is leased during the period of such lease, and the producer
on such farm shall so agree as a condition precedent to the Secretary’s approval of any such sale or lease; and (vii) no transfer of
allotment shall be effective until a record thereof is filed with the
county committee of the county to which such transfer is made and
such committee determines that the transfer complies with the provisions of this section. Such record may be filed with such committee only during the period beginning June 1 and ending December 31.
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(c) The transfer of an allotment shall have the effect of transferring also the acreage history, farm base, and marketing quota attributable to such allotment and if the transfer is made prior to the
determination of the allotment for any year the transfer shall include the right of the owner or operator to have an allotment determined for the farm for such year: Provided, That in the case of a
transfer by lease, the amount of the allotment shall be considered
for purposes of determining allotments after the expiration of the
lease to have been planted on the farm from which such allotment
is transferred.
(d) The land in the farm from which the entire cotton allotment
and acreage history have been transferred shall not be eligible for
a new farm cotton allotment during the five years following the year
in which such transfer is made.
(e) The transfer of a portion of a farm allotment which was established under minimum farm allotment provisions for cotton or
which operates to bring the farm within the minimum farm allotment provision for cotton shall cause the minimum farm allotment
or base to be reduced to an amount equal to the allotment remaining on the farm after such transfer.
(f) The Secretary shall prescribe regulations for the administration of this section, which shall include provisions for adjusting the
size of the allotment transferred if the farm to which the allotment
is transferred has a substantially higher yield per acre and such
other terms and conditions as he deems necessary.
(g) If the sale or lease occurs during a period in which the farm
is covered by a conservation reserve contract, cropland conversion
agreement, cropland adjustment agreement, or other similar land
utilization agreement, the rates of payment provided for in the contract or agreement of the farm from which the transfer is made
shall be subject to an appropriate adjustment, but no adjustment
shall be made in the contract or agreement of the farm to which the
allotment is transferred.
(h) The Secretary shall by regulations authorize the exchange
between farms in the same county, or between farms in adjoining
counties within a State, of cotton acreage allotment for rice acreage
allotment. Any such exchange shall be made on the basis of application filed with the county committee by the owners and operators of
the farms, and the transfer of allotment between the farms shall include transfer of the related acreage history for the commodity. The
exchange shall be acre for acre or on such other basis as the Secretary determines is fair and reasonable, taking into consideration
the comparative productivity of the soil for the farms involved and
other relevant factors. No farm from which the entire cotton or rice
allotment has been transferred shall be eligible for an allotment of
cotton or rice as a new farm within a period of five crop years after
the date of such exchange.
(i) The provisions of this section relating to cotton shall apply
only to upland cotton.
FARM MARKETING QUOTAS

SEC. 345. ƒ7 U.S.C. 1345≈ The farm marketing quota for any
crop of cotton shall be the actual production of the acreage planted
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Sec. 350

to cotton on the farm less the farm marketing excess. The farm marketing excess shall be the normal production of that acreage planted
to cotton on the farm which is in excess of the farm acreage allotment: Provided, That such farm marketing excess shall not be larger than the amount by which the actual production of cotton on the
farm exceeds the normal production of the farm acreage allotment,
if the producer establishes such actual production to the satisfaction
of the Secretary.
PENALTIES; EXPORT MARKET ACREAGE

SEC. 346. ƒ7 U.S.C. 1346≈ (a) Whenever farm marketing quotas
are in effect with respect to any crop of cotton the producer shall be
subject to a penalty on the farm marketing excess at a rate per
pound equal to 50 per centum of the parity price per pound for cotton as of June 15 of the calendar year in which such crop is produced.
(b) The farm marketing excess of cotton shall be regarded as
available for marketing and the amount of penalty shall be computed upon the normal production of the acreage on the farm planted to cotton in excess of the farm acreage allotment. If a downward
adjustment in the amount of the farm marketing excess is made
pursuant to the proviso in section 345, the difference between the
amount of the penalty computed upon the farm marketing excess before such adjustment and as computed upon the adjusted farm marketing excess shall be returned to or allowed the producer.
(c) The person liable for payment or collection of the penalty
shall be liable also for interest thereon at the rate of 6 per centum
per annum from the date the penalty becomes due until the date of
payment of such penalty.
(d) Until the penalty on the farm marketing excess is paid, all
cotton produced on the farm and marketed by the producers shall
be subject to the penalty provided by this section and a lien on the
entire crop of cotton produced on the farm shall be in effect in favor
of the United States.
(e) 32 ƒ * * *≈
COTTON EQUALIZATION PAYMENTS

SEC. 348. 33

ƒ7 U.S.C. 1348≈ ƒ * * *≈
EXPORT MARKET ACREAGE

SEC. 349. 34

ƒ7 U.S.C. 1349≈ ƒ * * *≈
DOMESTIC ACREAGE ALLOTMENTS

SEC. 350. 35 ƒ7 U.S.C. 1350≈ ƒ * * * ≈
32 Subsec.

(e) was applicable only to the 1966 through 1970 crops of cotton.
348 provided for payments on upland cotton through July 31, 1966. Sec. 349 provided
for export market acreage for the 1964 and 1965 crops of upland cotton.
34 See footnote 348–1.
33 Sec.

35 Sec.

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350 was applicable only through the 1977 crop of upland cotton.

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[Note: Part V was made inapplicable to the 2008 through 2012
crops of rice by sec. 1602(a)(1) of the Food, Conservation, and Energy Act of 2008, P.L. 110–246, 122 Stat. 1729.]
PART V—MARKETING QUOTAS—RICE
LEGISLATIVE FINDINGS

SEC. 351. ƒ7 U.S.C. 1351≈ (a) The marketing of rice constitutes
one of the great basic industries of the United States with ramifying
activities which directly affect interstate and foreign commerce at
every point, and stable conditions therein are necessary to the general welfare. Rice produced for market is sold on a Nation-wide
market, and, with its products, moves almost wholly in interstate
and foreign commerce from the producer to the ultimate consumer.
The farmers producing such commodity are subject in their operations to uncontrollable natural causes, in many cases such farmers
carry on their farming operations on borrowed money or leased
lands, and are not so situated as to be able to organize effectively,
as can labor and industry, through unions and corporations enjoying Government sanction and protection for joint economic action.
For these reasons, among others, the farmers are unable without
Federal assistance to control effectively the orderly marketing of
such commodity with the result that abnormally excessive supplies
thereof are produced and dumped indiscriminately on the Nationwide market.
(b) The disorderly marketing of such abnormally excessive supplies affects, burdens, and obstructs interstate and foreign commerce
by (1) materially affecting the volume of such commodity marketed
therein, (2) disrupting the orderly marketing of such commodity
therein, (3) reducing the prices for such commodity with consequent
injury and destruction of such commerce in such commodity, and
(4) causing a disparity between the prices for such commodity in
interstate and foreign commerce and industrial products therein,
with a consequent diminution of the volume of interstate and foreign commerce in industrial products.
(c) Whenever an abnormally excessive supply of rice exists, the
marketing of such commodity by the producers thereof directly and
substantially affects interstate and foreign commerce in such commodity and its products, and the operation of the provisions of this
part becomes necessary and appropriate in order to promote, foster,
and maintain an orderly flow of such supply in interstate and foreign commerce.

PART VII—FLEXIBLE MARKETING
ALLOTMENTS FOR SUGAR
SEC. 359a. ø7 U.S.C. 1359aa¿ DEFINITIONS.

In this part:
(1) HUMAN CONSUMPTION.—The term ‘‘human consumption’’, when used in the context of a reference to sugar (whether in the form of sugar, in-process sugar, syrup, molasses, or
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Sec. 359b

in some other form) for human consumption, includes sugar for
use in human food, beverages, or similar products.
(2) MAINLAND STATE.—The term ‘‘mainland State’’ means
a State other than an offshore State.
(3) MARKET.—
(A) IN GENERAL.—The term ‘‘market’’ means to sell or
otherwise dispose of in commerce in the United States.
(B) INCLUSIONS.—The term ‘‘market’’ includes—
(i) the forfeiture of sugar under the loan program
for sugar established under section 156 of the Federal
Agriculture Improvement and Reform Act of 1996 (7
U.S.C. 7272);
(ii) with respect to any integrated processor and
refiner, the movement of raw cane sugar into the refining process; and
(iii) the sale of sugar for the production of ethanol
or other bioenergy product, if the disposition of the
sugar is administered by the Secretary under section
9010 of the Farm Security and Rural Investment Act
of 2002.
(C) MARKETING YEAR.—Forfeited sugar described in
subparagraph (B)(i) shall be considered to have been marketed during the crop year for which a loan is made under
the loan program described in that subparagraph.
(4) OFFSHORE STATE.—The term ‘‘offshore State’’ means a
sugarcane producing State located outside of the continental
United States.
(5) STATE.—Notwithstanding section 301, the term ‘‘State’’
means—
(A) a State;
(B) the District of Columbia; and
(C) the Commonwealth of Puerto Rico.
(6) UNITED STATES.—The term ‘‘United States’’, when used
in a geographical sense, means all of the States.
SEC. 359b. ø7 U.S.C. 1359bb¿ FLEXIBLE MARKETING ALLOTMENTS FOR
SUGAR.
(a) SUGAR ESTIMATES.—
(1) IN GENERAL.—Not later than August 1 before the begin-

ning of each of the 2008 through 2018 crop years for sugarcane
and sugar beets, the Secretary shall estimate—
(A) the quantity of sugar that will be subject to human
consumption in the United States during the crop year;
(B) the quantity of sugar that would provide for reasonable carryover stocks;
(C) the quantity of sugar that will be available from
carry-in stocks for human consumption in the United
States during the crop year;
(D) the quantity of sugar that will be available from
the domestic processing of sugarcane, sugar beets, and inprocess beet sugar; and
(E) the quantity of sugars, syrups, and molasses that
will be imported for human consumption or to be used for
the extraction of sugar for human consumption in the
United States during the crop year, whether the articles
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are under a tariff-rate quota or are in excess or outside of
a tariff-rate quota.
(2) EXCLUSION.—The estimates under this subsection shall
not apply to sugar imported for the production of polyhydric alcohol or to any sugar refined and reexported in refined form
or in products containing sugar.
(3) REESTIMATES.—The Secretary shall make reestimates
of sugar consumption, stocks, production, and imports for a
crop year as necessary, but not later than the beginning of
each of the second through fourth quarters of the crop year.
(b) SUGAR ALLOTMENTS.—
(1) ESTABLISHMENT.—By the beginning of each crop year,
the Secretary shall establish for that crop year appropriate allotments under section 359c for the marketing by processors of
sugar processed from sugar cane or sugar beets or in-process
beet sugar (whether the sugar beets or in-process beet sugar
was produced domestically or imported) at a level that is—
(A) sufficient to maintain raw and refined sugar prices
above forfeiture levels so that there will be no forfeitures
of sugar to the Commodity Credit Corporation under the
loan program for sugar established under section 156 of
the Federal Agriculture Improvement and Reform Act of
1996 (7 U.S.C. 7272); but
(B) not less than 85 percent of the estimated quantity
of sugar for domestic human consumption for the crop
year.
(2) PRODUCTS.—The Secretary may include sugar products,
the majority content of which is sucrose for human consumption, derived from sugar cane, sugar beets, molasses, or sugar
in the allotments established under paragraph (1) if the Secretary determines it to be appropriate for purposes of this part.
(c) COVERAGE OF ALLOTMENTS.—
(1) IN GENERAL.—The marketing allotments under this
part shall apply to the marketing by processors of sugar intended for domestic human consumption that has been processed from sugar cane, sugar beets, or in-process beet sugar,
whether such sugar beets or in-process beet sugar was produced domestically or imported.
(2) EXCEPTIONS.—Consistent with the administration of
marketing allotments for each of the 2002 through 2007 crop
years, the marketing allotments shall not apply to sugar sold—
(A) to facilitate the exportation of the sugar to a foreign country, except that the exports of sugar shall not be
eligible to receive credits under reexport programs for refined sugar or sugar containing products administered by
the Secretary;
(B) to enable another processor to fulfill an allocation
established for that processor; or
(C) for uses other than domestic human consumption,
except for the sale of sugar for the production of ethanol
or other bioenergy if the disposition of the sugar is administered by the Secretary under section 9010 of the Farm
Security and Rural Investment Act of 2002.
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Sec. 359c

(3) REQUIREMENT.—The sale of sugar described in paragraph (2)(B) shall be—
(A) made prior to May 1; and
(B) reported to the Secretary.
(d) PROHIBITIONS.—
(1) IN GENERAL.—During all or part of any crop year for
which marketing allotments have been established, no processor of sugar beets or sugarcane shall market for domestic
human consumption a quantity of sugar in excess of the allocation established for the processor, except—
(A) to enable another processor to fulfill an allocation
established for that other processor; or
(B) to facilitate the exportation of the sugar.
(2) CIVIL PENALTY.—Any processor who knowingly violates
paragraph (1) shall be liable to the Commodity Credit Corporation for a civil penalty in an amount equal to 3 times the
United States market value, at the time of the commission of
the violation, of that quantity of sugar involved in the violation.
SEC. 359c. ø7 U.S.C. 1359cc¿ ESTABLISHMENT OF FLEXIBLE MARKETING
ALLOTMENTS.
(a) IN GENERAL.—The Secretary shall establish flexible mar-

keting allotments for sugar for any crop year in which the allotments are required under section 359b(b) in accordance with this
section.
(b) OVERALL ALLOTMENT QUANTITY.—
(1) IN GENERAL.—The Secretary shall establish the overall
quantity of sugar to be allotted for the crop year (referred to
in this part as the ‘‘overall allotment quantity’’) at a level that
is—
(A) sufficient to maintain raw and refined sugar prices
above forfeiture levels to avoid forfeiture of sugar to the
Commodity Credit Corporation; but
(B) not less than a quantity equal to 85 percent of the
estimated quantity of sugar for domestic human consumption for the crop year.
(2) ADJUSTMENT.—Subject to paragraph (1), the Secretary
shall adjust the overall allotment quantity to maintain—
(A) raw and refined sugar prices above forfeiture levels to avoid the forfeiture of sugar to the Commodity Credit Corporation; and
(B) adequate supplies of raw and refined sugar in the
domestic market.
(c) MARKETING ALLOTMENT FOR SUGAR DERIVED FROM SUGAR
BEETS AND SUGAR DERIVED FROM SUGARCANE.—The overall allotment quantity for the crop year shall be allotted between—
(1) sugar derived from sugar beets by establishing a marketing allotment for a crop year at a quantity equal to the
product of multiplying the overall allotment quantity for the
crop year by 54.35 percent; and
(2) sugar derived from sugarcane by establishing a marketing allotment for a crop year at a quantity equal to the
product of multiplying the overall allotment quantity for the
crop year by 45.65 percent.
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(d) FILLING CANE SUGAR AND BEET SUGAR ALLOTMENTS.—
(1) CANE SUGAR.—Each marketing allotment for cane
sugar established under this section may only be filled with
sugar processed from domestically grown sugarcane.
(2) BEET SUGAR.—Each marketing allotment for beet sugar
established under this section may only be filled with sugar domestically processed from sugar beets or in-process beet sugar.
(e) STATE CANE SUGAR ALLOTMENTS.—
(1) IN GENERAL.—The allotment for sugar derived from
sugarcane shall be further allotted, among the States in the
United States in which sugarcane is produced, after a hearing
(if requested by the affected sugarcane processors and growers)
and on such notice as the Secretary by regulation may prescribe, in a fair and equitable manner as provided in this subsection and section 359d(b)(1)(D).
(2) OFFSHORE ALLOTMENT.—
(A) COLLECTIVELY.—Prior to the allotment of sugar derived from sugarcane to any other State, 325,000 short
tons, raw value shall be allotted to the offshore States.
(B) INDIVIDUALLY.—The collective offshore State allotment provided for under subparagraph (A) shall be further
allotted among the offshore States in which sugarcane is
produced, after a hearing (if requested by the affected sugarcane processors and growers) and on such notice as the
Secretary by regulation may prescribe, in a fair and equitable manner on the basis of—
(i) past marketings of sugar, based on the average
of the 2 highest years of production of raw cane sugar
from the 1996 through 2000 crops;
(ii) the ability of processors to market the sugar
covered under the allotments for the crop year; and
(iii) past processings of sugar from sugarcane,
based on the 3-year average of the 1998 through 2000
crop years.
(3) MAINLAND ALLOTMENT.—The allotment for sugar derived from sugarcane, less the amount provided for under paragraph (2), shall be allotted among the mainland States in the
United States in which sugarcane is produced, after a hearing
(if requested by the affected sugarcane processors and growers)
and on such notice as the Secretary by regulation may prescribe, in a fair and equitable manner on the basis of—
(A) past marketings of sugar, based on the average of
the 2 highest years of production of raw cane sugar from
the 1996 through 2000 crops;
(B) the ability of processors to market the sugar covered under the allotments for the crop year; and
(C) past processings of sugar from sugarcane, based on
the 3 crop years with the greatest processings (in the
mainland States collectively) during the 1991 through
2000 crop years.
(f) FILLING CANE SUGAR ALLOTMENTS.—Except as provided in
section 359e, a State cane sugar allotment established under subsection (e) for a crop year may be filled only with sugar processed
from sugarcane grown in the State covered by the allotment.
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(g) ADJUSTMENT OF MARKETING ALLOTMENTS.—
(1) ADJUSTMENTS.—
(A) IN GENERAL.—Subject to subparagraph (B), the
Secretary shall, based on reestimates under section
359b(a)(3), adjust upward or downward marketing allotments in a fair and equitable manner, as the Secretary determines appropriate, to reflect changes in estimated sugar
consumption, stocks, production, or imports.
(B) LIMITATION.—In carrying out subparagraph (A),
the Secretary may not reduce the overall allotment quantity to a quantity of less than 85 percent of the estimated
quantity of sugar for domestic human consumption for the
crop year.
(2) ALLOCATION TO PROCESSORS.—In the case of any increase or decrease in an allotment, each allocation to a processor of the allotment under section 359d, and each proportionate share established with respect to the allotment under
section 359f(c), shall be increased or decreased by the same
percentage that the allotment is increased or decreased.
(3) CARRY-OVER OF REDUCTIONS.—Whenever a marketing
allotment for a crop year is required to be reduced during the
crop year under this subsection, if, at the time of the reduction,
the quantity of sugar marketed exceeds the processor’s reduced
allocation, the allocation of an allotment next established for
the processor shall be reduced by the quantity of the excess
sugar marketed.
SEC. 359d. ø7 U.S.C. 1359dd¿ ALLOCATION OF MARKETING ALLOTMENTS.
(a) ALLOCATION TO PROCESSORS.—Whenever marketing allot-

ments are established for a crop year under section 359c, in order
to afford all interested persons an equitable opportunity to market
sugar under an allotment, the Secretary shall allocate each such allotment among the processors covered by the allotment.
(b) HEARING AND NOTICE.—
(1) CANE SUGAR.—
(A) IN GENERAL.—The Secretary shall make allocations for cane sugar after a hearing, if requested by the affected sugarcane processors and growers, and on such notice as the Secretary by regulation may prescribe, in such
manner and in such quantities as to provide a fair, efficient, and equitable distribution of the allocations under
this paragraph. Each such allocation shall be subject to adjustment under section 359c(g).
(B) MULTIPLE PROCESSOR STATES.—Except as provided
in subparagraphs (C) and (D), the Secretary shall allocate
the allotment for cane sugar among multiple cane sugar
processors in a single State based on—
(i) past marketings of sugar, based on the average
of the 2 highest years of production of raw cane sugar
from among the 1996 through 2000 crops;
(ii) the ability of processors to market sugar covered by that portion of the allotment allocated for the
crop year; and
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(iii) past processings of sugar from sugarcane,
based on the average of the 3 highest years of production during the 1996 through 2000 crop years.
(C) TALISMAN PROCESSING FACILITY.—In the case of allotments under subparagraph (B) attributable to the operations of the Talisman processing facility before the date
of enactment of this subparagraph, the Secretary shall allocate the allotment among processors in the State under
subparagraph (A) in accordance with the agreements of
March 25 and 26, 1999, between the affected processors
and the Secretary of the Interior.
(D) PROPORTIONATE SHARE STATES.—In the case of
States subject to section 359f(c), the Secretary shall allocate the allotment for cane sugar among multiple cane
sugar processors in a single State based on—
(i) past marketings of sugar, based on the average
of the 2 highest years of production of raw cane sugar
from among the 1997 through 2001 crop years;
(ii) the ability of processors to market sugar covered by that portion of the allotments allocated for the
crop year; and
(iii) past processings of sugar from sugarcane,
based on the average of the 2 highest crop years of
crop production during the 1997 through 2001 crop
years.
(E) NEW ENTRANTS.—
(i) IN GENERAL.—Notwithstanding subparagraphs
(B) and (D), the Secretary, on application of any processor that begins processing sugarcane on or after the
date of enactment of this subparagraph, and after a
hearing (if requested by the affected sugarcane processors and growers) and on such notice as the Secretary by regulation may prescribe, may provide the
processor with an allocation that provides a fair, efficient and equitable distribution of the allocations from
the allotment for the State in which the processor is
located.
(ii) PROPORTIONATE SHARE STATES.—In the case of
proportionate share States, the Secretary shall establish proportionate shares in a quantity sufficient to
produce the sugarcane required to satisfy the allocations.
(iii) LIMITATIONS.—The allotment for a new processor under this subparagraph shall not exceed—
(I) in the case of the first crop year of operation of a new processor, 50,000 short tons (raw
value); and
(II) in the case of each subsequent crop year
of operation of the new processor, a quantity established by the Secretary in accordance with this
subparagraph and the criteria described in subparagraph (B) or (D), as applicable.
(iv) NEW ENTRANT STATES.—
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(I) IN GENERAL.—Notwithstanding subparagraphs (A) and (C) of section 359c(e)(3), to accommodate an allocation under clause (i) to a new
processor located in a new entrant mainland
State, the Secretary shall provide the new entrant
mainland State with an allotment.
(II) EFFECT ON OTHER ALLOTMENTS.—The allotment to any new entrant mainland State shall
be subtracted, on a pro rata basis, from the allotments otherwise allotted to each mainland State
under section 359c(e)(3).
(v) ADVERSE EFFECTS.—Before providing an initial
processor allocation or State allotment to a new entrant processor or a new entrant State under this subparagraph, the Secretary shall take into consideration
any adverse effects that the provision of the allocation
or allotment may have on existing cane processors and
producers in mainland States.
(vi) ABILITY TO MARKET.—Consistent with section
359c and this section, any processor allocation or State
allotment made to a new entrant processor or to a new
entrant State under this subparagraph shall be provided only after the applicant processor, or the applicable processors in the State, have demonstrated the
ability to process, produce, and market (including the
transfer or delivery of the raw cane sugar to a refinery
for further processing or marketing) raw cane sugar
for the crop year for which the allotment is applicable.
(vii) PROHIBITION.—Not more than 1 processor allocation provided under this subparagraph may be applicable to any individual sugar processing facility.
(F) TRANSFER OF OWNERSHIP.—If a sugarcane processor is sold or otherwise transferred to another owner or
is closed as part of an affiliated corporate group processing
consolidation, the Secretary shall transfer the allotment allocation for the processor to the purchaser, new owner,
successor in interest, or any remaining processor of an affiliated entity, as applicable, of the processor.
(2) BEET SUGAR.—
(A) IN GENERAL.—Except as otherwise provided in this
paragraph and sections 359c(g), 359e(b), and 359f(b), the
Secretary shall make allocations for beet sugar among beet
sugar processors for each crop year that allotments are in
effect on the basis of the adjusted weighted average quantity of beet sugar produced by the processors for each of
the 1998 through 2000 crop years, as determined under
this paragraph.
(B) QUANTITY.—The quantity of an allocation made for
a beet sugar processor for a crop year under subparagraph
(A) shall bear the same ratio to the quantity of allocations
made for all beet sugar processors for the crop year as the
adjusted weighted average quantity of beet sugar produced
by the processor (as determined under subparagraphs (C)
and (D)) bears to the total of the adjusted weighted averFebruary 7, 2014

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age quantities of beet sugar produced by all processors (as
so determined).
(C) WEIGHTED AVERAGE QUANTITY.—Subject to subparagraph (D), the weighted quantity of beet sugar produced by a beet sugar processor during each of the 1998
through 2000 crop years shall be (as determined by the
Secretary)—
(i) in the case of the 1998 crop year, 25 percent of
the quantity of beet sugar produced by the processor
during the crop year;
(ii) in the case of the 1999 crop year, 35 percent
of the quantity of beet sugar produced by the processor
during the crop year; and
(iii) in the case of the 2000 crop year, 40 percent
of the quantity of beet sugar produced by the processor
(including any quantity of sugar received from the
Commodity Credit Corporation) during the crop year.
(D) ADJUSTMENTS.—
(i) IN GENERAL.—The Secretary shall adjust the
weighted average quantity of beet sugar produced by
a beet sugar processor during the 1998 through 2000
crop years under subparagraph (C) if the Secretary determines that the processor—
(I) during the 1996 through 2000 crop years,
opened a sugar beet processing factory;
(II) during the 1998 through 2000 crop years,
closed a sugar beet processing factory;
(III) during the 1998 through 2000 crop years,
constructed a molasses desugarization facility; or
(IV) during the 1998 through 2000 crop years,
suffered substantial quality losses on sugar beets
stored during any such crop year.
(ii) QUANTITY.—The quantity of beet sugar produced by a beet sugar processor under subparagraph
(C) shall be—
(I) in the case of a processor that opened a
sugar beet processing factory, increased by 1.25
percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years
(without consideration of any adjustment under
this subparagraph) for each sugar beet processing
factory that is opened by the processor;
(II) in the case of a processor that closed a
sugar beet processing factory, decreased by 1.25
percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years
(without consideration of any adjustment under
this subparagraph) for each sugar beet processing
factory that is closed by the processor;
(III) in the case of a processor that constructed a molasses desugarization facility, increased by 0.25 percent of the total of the adjusted
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weighted average quantities of beet sugar produced by all processors during the 1998 through
2000 crop years (without consideration of any adjustment under this subparagraph) for each molasses desugarization facility that is constructed
by the processor; and
(IV) in the case of a processor that suffered
substantial quality losses on stored sugar beets,
increased by 1.25 percent of the total of the adjusted weighted average quantities of beet sugar
produced by all processors during the 1998
through 2000 crop years (without consideration of
any adjustment under this subparagraph).
(E) PERMANENT TERMINATION OF OPERATIONS OF A
PROCESSOR.—If a processor of beet sugar has been dissolved, liquidated in a bankruptcy proceeding, or otherwise
has permanently terminated operations (other than in conjunction with a sale or other disposition of the processor or
the assets of the processor), the Secretary shall—
(i) eliminate the allocation of the processor provided under this section; and
(ii) distribute the allocation to other beet sugar
processors on a pro rata basis.
(F) SALE OF ALL ASSETS OF A PROCESSOR TO ANOTHER
PROCESSOR.—If a processor of beet sugar (or all of the assets of the processor) is sold to another processor of beet
sugar, the Secretary shall transfer the allocation of the
seller to the buyer unless the allocation has been distributed to other sugar beet processors under subparagraph
(E).
(G) SALE OF FACTORIES OF A PROCESSOR TO ANOTHER
PROCESSOR.—
(i) EFFECT OF SALE.—Subject to subparagraphs (E)
and (F), if 1 or more factories of a processor of beet
sugar (but not all of the assets of the processor) are
sold to another processor of beet sugar during a crop
year, the Secretary shall assign a pro rata portion of
the allocation of the seller to the allocation of the
buyer to reflect the historical contribution of the production of the sold 1 or more factories to the total allocation of the seller, unless the buyer and the seller
have agreed upon the transfer of a different portion of
the allocation of the seller, in which case, the Secretary shall transfer that portion agreed upon by the
buyer and seller.
(ii) APPLICATION OF ALLOCATION.—The assignment
of the allocation under clause (i) shall apply—
(I) during the remainder of the crop year for
which the sale described in clause (i) occurs; and
(II) during each subsequent crop year.
(iii) USE OF OTHER FACTORIES TO FILL ALLOCATION.—If the assignment of the allocation under clause
(i) to the buyer for the 1 or more purchased factories
cannot be filled by the production of the 1 or more
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purchased factories, the remainder of the allocation
may be filled by beet sugar produced by the buyer
from other factories of the buyer.
(H) NEW ENTRANTS STARTING PRODUCTION, REOPENING,
OR ACQUIRING AN EXISTING FACTORY WITH PRODUCTION HISTORY.—
(i) DEFINITION OF NEW ENTRANT.—
(I) IN GENERAL.—In this subparagraph, the
term ‘‘new entrant’’ means an individual, corporation, or other entity that—
(aa) does not have an allocation of the
beet sugar allotment under this part;
(bb) is not affiliated with any other individual, corporation, or entity that has an allocation of beet sugar under this part (referred
to in this clause as a ‘‘third party’’); and
(cc) will process sugar beets produced by
sugar beet growers under contract with the
new entrant for the production of sugar at the
new or re-opened factory that is the basis for
the new entrant allocation.
(II) AFFILIATION.—For purposes of subclause
(I)(bb), a new entrant and a third party shall be
considered to be affiliated if—
(aa) the third party has an ownership interest in the new entrant;
(bb) the new entrant and the third party
have owners in common;
(cc) the third party has the ability to exercise control over the new entrant by organizational rights, contractual rights, or any
other means;
(dd) the third party has a contractual relationship with the new entrant by which the
new entrant will make use of the facilities or
assets of the third party; or
(ee) there are any other similar circumstances by which the Secretary determines that the new entrant and the third
party are affiliated.
(ii) ALLOCATION FOR A NEW ENTRANT THAT HAS
CONSTRUCTED A NEW FACTORY OR REOPENED A FACTORY THAT WAS NOT OPERATED SINCE BEFORE 1998.—If
a new entrant constructs a new sugar beet processing
factory, or acquires and reopens a sugar beet processing factory that last processed sugar beets prior to
the 1998 crop year and there is no allocation currently
associated with the factory, the Secretary shall—
(I) assign an allocation for beet sugar to the
new entrant that provides a fair and equitable
distribution of the allocations for beet sugar so as
to enable the new entrant to achieve a factory utilization rate comparable to the factory utilization
rates of other similarly-situated processors; and
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(II) reduce the allocations for beet sugar of all
other processors on a pro rata basis to reflect the
allocation to the new entrant.
(iii) ALLOCATION FOR A NEW ENTRANT THAT HAS
ACQUIRED AN EXISTING FACTORY WITH A PRODUCTION
HISTORY.—
(I) IN GENERAL.—If a new entrant acquires an

existing factory that has processed sugar beets
from the 1998 or subsequent crop year and has a
production history, on the mutual agreement of
the new entrant and the company currently holding the allocation associated with the factory, the
Secretary shall transfer to the new entrant a portion of the allocation of the current allocation
holder to reflect the historical contribution of the
production of the 1 or more sold factories to the
total allocation of the current allocation holder,
unless the new entrant and current allocation
holder have agreed upon the transfer of a different portion of the allocation of the current allocation holder, in which case, the Secretary shall
transfer that portion agreed upon by the new entrant and the current allocation holder.
(II) PROHIBITION.—In the absence of a mutual
agreement described in subclause (I), the new entrant shall be ineligible for a beet sugar allocation.
(iv) APPEALS.—Any decision made under this subsection may be appealed to the Secretary in accordance with section 359i.
SEC. 359e. ø7 U.S.C. 1359ee¿ REASSIGNMENT OF DEFICITS.
(a) ESTIMATES OF DEFICITS.—At any time allotments

are in effect under this part, the Secretary, from time to time, shall determine whether (in view of then-current inventories of sugar, the estimated production of sugar and expected marketings, and other
pertinent factors) any processor of sugarcane will be unable to market the sugar covered by the portion of the State cane sugar allotment allocated to the processor and whether any processor of sugar
beets will be unable to market sugar covered by the portion of the
beet sugar allotment allocated to the processor.
(b) REASSIGNMENT OF DEFICITS.—
(1) CANE SUGAR.—If the Secretary determines that any
sugarcane processor who has been allocated a share of a State
cane sugar allotment will be unable to market the processor’s
allocation of the State’s allotment for the crop year—
(A) the Secretary first shall reassign the estimated
quantity of the deficit to the allocations for other processors within that State, depending on the capacity of each
other processor to fill the portion of the deficit to be assigned to it and taking into account the interests of producers served by the processors;
(B) if after the reassignments the deficit cannot be
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ments for other cane sugar States, depending on the capacity of each other State to fill the portion of the deficit to
be assigned to it, with the reassigned quantity to each
State to be allocated among processors in that State in
proportion to the allocations of the processors;
(C) if after the reassignments the deficit cannot be
completely eliminated, the Secretary shall reassign the estimated quantity of the deficit to the Commodity Credit
Corporation and shall sell such quantity of sugar from inventories of the Corporation unless the Secretary determines that such sales would have a significant effect on
the price of sugar; and
(D) if after the reassignments and sales, the deficit
cannot be completely eliminated, the Secretary shall reassign the remainder to imports of raw cane sugar.
(2) BEET SUGAR.—If the Secretary determines that a sugar
beet processor who has been allocated a share of the beet sugar
allotment will be unable to market that allocation—
(A) the Secretary first shall reassign the estimated
quantity of the deficit to the allotments for other sugar
beet processors, depending on the capacity of each other
processor to fill the portion of the deficit to be assigned to
it and taking into account the interests of producers served
by the processors;
(B) if after the reassignments the deficit cannot be
completely eliminated, the Secretary shall reassign the estimated quantity of the deficit to the Commodity Credit
Corporation and shall sell such quantity of sugar from inventories of the Corporation unless the Secretary determines that such sales would have a significant effect on
the price of sugar; and
(C) if after the reassignments and sales, the deficit
cannot be completely eliminated, the Secretary shall reassign the remainder to imports of raw cane sugar.
(3) CORRESPONDING INCREASE.—The allocation of each
processor receiving a reassigned quantity of an allotment
under this subsection for a crop year shall be increased to reflect the reassignment.
SEC. 359f. ø7 U.S.C. 1359ff¿ PROVISIONS APPLICABLE TO PRODUCERS.
(a) PROCESSOR ASSURANCES.—
(1) IN GENERAL.—If allotments for a crop year are allocated

to processors under section 359d, the Secretary shall obtain
from the processors such assurances as the Secretary considers
adequate that the allocation will be shared among producers
served by the processor in a fair and equitable manner that
adequately reflects producers’ production histories.
(2) ARBITRATION.—
(A) IN GENERAL.—Any dispute between a processor
and a producer, or group of producers, with respect to the
sharing of the allocation to the processor shall be resolved
through arbitration by the Secretary on the request of either party.
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(B) PERIOD.—The arbitration shall, to the maximum
extent practicable, be—
(i) commenced not more than 45 days after the request; and
(ii) completed not more than 60 days after the request.
(b) SUGAR BEET PROCESSING FACILITY CLOSURES.—
(1) IN GENERAL.—If a sugar beet processing facility is
closed and the sugar beet growers that previously delivered
beets to the facility elect to deliver their beets to another processing company, the growers may petition the Secretary to
modify allocations under this part to allow the delivery.
(2) INCREASED ALLOCATION FOR PROCESSING COMPANY.—
The Secretary may increase the allocation to the processing
company to which the growers elect to deliver their sugar
beets, with the approval of the processing company, to a level
that does not exceed the processing capacity of the processing
company, to accommodate the change in deliveries.
(3) DECREASED ALLOCATION FOR CLOSED COMPANY.—The
increased allocation shall be deducted from the allocation to
the company that owned the processing facility that has been
closed and the remaining allocation shall be unaffected.
(4) TIMING.—The determinations of the Secretary on the
issues raised by the petition shall be made within 60 days after
the filing of the petition.
(c) PROPORTIONATE SHARES OF CERTAIN ALLOTMENTS.—
(1) DEFINITION OF SEED.—
(A) IN GENERAL.—In this subsection, the term ‘‘seed’’
means only those varieties of seed that are dedicated to
the production of sugarcane from which is produced sugar
for human consumption.
(B) EXCLUSION.—The term ‘‘seed’’ does not include
seed of a high-fiber cane variety dedicated to other uses,
as determined by the Secretary.
(2) IN GENERAL.—
(A) STATES AFFECTED.—In any case in which a State
allotment is established under section 359c(f) and there
are in excess of 250 sugarcane producers in the State
(other than Puerto Rico), the Secretary shall make a determination under subparagraph (B).
(B) DETERMINATION.—The Secretary shall determine,
for each State allotment described in subparagraph (A),
whether the production of sugarcane, in the absence of
proportionate shares, will be greater than the quantity
needed to enable processors to fill the allotment and provide a normal carryover inventory of sugar.
(3) ESTABLISHMENT OF PROPORTIONATE SHARES.—If the
Secretary determines under paragraph (2) that the quantity of
sugar produced from sugarcane produced by producers in the
area covered by a State allotment for a crop year will be in excess of the quantity needed to enable processors to fill the allotment for the crop year and provide a normal carryover inventory of sugar, the Secretary shall establish a proportionate
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age of sugarcane that may be harvested on the farm for sugar
or seed during the crop year the allotment is in effect as provided in this subsection. Each such proportionate share shall
be subject to adjustment under paragraph (8) and section
359c(g).
(4) METHOD OF DETERMINING.—For purposes of determining proportionate shares for any crop of sugarcane:
(A) The Secretary shall establish the State’s per-acre
yield goal for a crop of sugarcane at a level (not less than
the average per-acre yield in the State for the 2 highest
years from among the 1999, 2000, and 2001 crop years, as
determined by the Secretary) that will ensure an adequate
net return per pound to producers in the State, taking into
consideration any available production research data that
the Secretary considers relevant.
(B) The Secretary shall adjust the per-acre yield goal
by the average recovery rate of sugar produced from sugarcane by processors in the State.
(C) The Secretary shall convert the State allotment for
the crop year involved into a State acreage allotment for
the crop by dividing the State allotment by the per-acre
yield goal for the State, as established under subparagraph
(A) and as further adjusted under subparagraph (B).
(D) The Secretary shall establish a uniform reduction
percentage for the crop by dividing the State acreage allotment, as determined for the crop under subparagraph (C),
by the sum of all adjusted acreage bases in the State, as
determined by the Secretary.
(E) The uniform reduction percentage for the crop, as
determined under subparagraph (D), shall be applied to
the acreage base for each sugarcane-producing farm in the
State to determine the farm’s proportionate share of sugarcane acreage that may be harvested for sugar or seed.
(5) ACREAGE BASE.—For purposes of this subsection, the
acreage base for each sugarcane-producing farm shall be determined by the Secretary, as follows:
(A) The acreage base for any farm shall be the number
of acres that is equal to the average of the acreage planted
and considered planted for harvest for sugar or seed on the
farm in the 2 highest of the 1999, 2000, and 2001 crop
years.
(B) Acreage planted to sugarcane that producers on a
farm were unable to harvest to sugarcane for sugar or seed
because of drought, flood, other natural disaster, or other
condition beyond the control of the producers may be considered as harvested for the production of sugar or seed for
purposes of this paragraph.
(6) VIOLATION.—
(A) IN GENERAL.—Whenever proportionate shares are
in effect in a State for a crop of sugarcane, producers on
a farm shall not knowingly harvest, or allow to be harvested, for sugar or seed an acreage of sugarcane in excess
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erwise violate proportionate share regulations issued by
the Secretary under section 359h(a).
(B) DETERMINATION OF VIOLATION.—No producer shall
be considered to have violated subparagraph (A) unless the
processor of the sugarcane harvested by such producer
from acreage in excess of the proportionate share of the
farm markets an amount of sugar that exceeds the allocation of such processor for a crop year.
(C) CIVIL PENALTY.—Any producer on a farm who violates subparagraph (A) by knowingly harvesting, or allowing to be harvested, an acreage of sugarcane for sugar in
excess of the farm’s proportionate share shall be liable to
the Commodity Credit Corporation for a civil penalty equal
to one and one-half times the United States market value
of the quantity of sugar that is marketed by the processor
of such sugarcane in excess of the allocation of such processor for the crop year. The Secretary shall prorate penalties imposed under this subparagraph in a fair and equitable manner among all the producers of sugarcane harvested from excess acreage that is acquired by such processor.
(7) WAIVER.—Notwithstanding the preceding subparagraph, the Secretary may authorize the county and State committees established under section 8(b) of the Soil Conservation
and Domestic Allotment Act (16 U.S.C. 590h(b)) to waive or
modify deadlines and other proportionate share requirements
in cases in which lateness or failure to meet the other requirements does not affect adversely the operation of proportionate
shares.
(8) ADJUSTMENTS.—Whenever the Secretary determines
that, because of a natural disaster or other condition beyond
the control of producers that adversely affects a crop of sugarcane subject to proportionate shares, the amount of sugar from
sugarcane produced by producers subject to the proportionate
shares will not be sufficient to enable processors in the State
to meet the State’s cane sugar allotment and provide a normal
carryover inventory of sugar, the Secretary may uniformly
allow producers to harvest an amount of sugarcane in excess
of their proportionate share, or suspend proportionate shares
entirely, as necessary to enable processors to meet the State allotment and provide a normal carryover inventory of sugar.
SEC. 359g. ø7 U.S.C. 1359gg¿ SPECIAL RULES.
(a) TRANSFER OF ACREAGE BASE HISTORY.—
(1) TRANSFER AUTHORIZED.—For the

purpose of establishing proportionate shares for sugarcane farms under section
359f(c), the Secretary, on application of any producer, with the
written consent of all owners of a farm, may transfer the acreage base history of the farm to any other parcels of land of the
applicant.
(2) CONVERTED ACREAGE BASE.—
(A) IN GENERAL.—Sugarcane acreage base established
under section 359f(c) that has been or is converted to nonagricultural use on or after May 13, 2002, may be trans-

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ferred to other land suitable for the production of sugarcane that can be delivered to a processor in a proportionate share State in accordance with this paragraph.
(B) NOTIFICATION.—Not later than 90 days after the
Secretary becomes aware of a conversion of any sugarcane
acreage base to a nonagricultural use, the Secretary shall
notify the 1 or more affected landowners of the transferability of the applicable sugarcane acreage base.
(C) INITIAL TRANSFER PERIOD.—The owner of the base
attributable to the acreage at the time of the conversion
shall be afforded 90 days from the date of the receipt of
the notification under subparagraph (B) to transfer the
base to 1 or more farms owned by the owner.
(D) GROWER OF RECORD.—If a transfer under subparagraph (C) cannot be accomplished during the period specified in that subparagraph, the grower of record with regard to the acreage base on the date on which the acreage
was converted to nonagricultural use shall—
(i) be notified; and
(ii) have 90 days from the date of the receipt of
the notification to transfer the base to 1 or more farms
operated by the grower.
(E) POOL DISTRIBUTION.—
(i) IN GENERAL.—If transfers under subparagraphs
(B) and (C) cannot be accomplished during the periods
specified in those subparagraphs, the county committee of the Farm Service Agency for the applicable
county shall place the acreage base in a pool for possible assignment to other farms.
(ii) ACCEPTANCE OF REQUESTS.—After providing
reasonable notice to farm owners, operators, and growers of record in the county, the county committee shall
accept requests from owners, operators, and growers of
record in the county.
(iii) ASSIGNMENT.—The county committee shall assign the acreage base to other farms in the county
that are eligible and capable of accepting the acreage
base, based on a random drawing from among the requests received under clause (ii).
(F) STATEWIDE REALLOCATION.—
(i) IN GENERAL.—Any acreage base remaining unassigned after the transfers and processes described in
subparagraphs (A) through (E) shall be made available
to the State committee of the Farm Service Agency for
allocation among the remaining county committees in
the State representing counties with farms eligible for
assignment of the base, based on a random drawing.
(ii) ALLOCATION.—Any county committee receiving
acreage base under this subparagraph shall allocate
the acreage base to eligible farms using the process
described in subparagraph (E).
(G) STATUS OF REASSIGNED BASE.—After acreage base
has been reassigned in accordance with this subparagraph,
the acreage base shall—
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(i) remain on the farm; and
(ii) be subject to the transfer provisions of paragraph (1).
(b) PRESERVATION OF ACREAGE BASE HISTORY.—If for reasons
beyond the control of a producer on a farm, the producer is unable
to harvest an acreage of sugarcane for sugar or seed with respect
to all or a portion of the proportionate share established for the
farm under section 359f(c), the Secretary, on the application of the
producer and with the written consent of all owners of the farm,
may preserve for a period of not more than 5 consecutive years the
acreage base history of the farm to the extent of the proportionate
share involved. The Secretary may permit the proportionate share
to be redistributed to other farms, but no acreage base history for
purposes of establishing acreage bases shall accrue to the other
farms by virtue of the redistribution of the proportionate share.
(c) REVISIONS OF ALLOCATIONS AND PROPORTIONATE SHARES.—
The Secretary, after such notice as the Secretary by regulation may
prescribe, may revise or amend any allocation of a marketing allotment under section 359d, or any proportionate share established or
adjusted for a farm under section 359f(c), on the same basis as the
initial allocation or proportionate share was required to be established.
(d) TRANSFERS OF MILL ALLOCATIONS.—
(1) TRANSFER AUTHORIZED.—A producer in a proportionate
share State, upon written consent from all affected crop-share
owners (or the representative of the affected crop-share owners) of a farm may deliver sugarcane to another processing
company if the additional delivery, when combined with such
other processing company’s existing deliveries, does not exceed
the processing capacity of the company.
(2) ALLOCATION ADJUSTMENT.—Notwithstanding section
359d, the Secretary shall adjust the allocations of each of such
processing companies affected by a transfer under paragraph
(1) to reflect the change in deliveries, based on—
(A) the number of acres of sugarcane base being transferred; and
(B) the pro rata amount of allocation at the processing
company holding the applicable allocation that equals the
contribution of the grower to allocation of the processing
company for the sugarcane acreage base being transferred.
SEC. 359h. ø7 U.S.C. 1359hh¿ REGULATIONS; VIOLATIONS; PUBLICATION
OF SECRETARY’S DETERMINATIONS; JURISDICTION OF
THE COURTS; UNITED STATES ATTORNEYS.
(a) REGULATIONS.—The Secretary or the Commodity Credit

Corporation, as appropriate, shall issue such regulations as may be
necessary to carry out the authority vested in the Secretary in administering this part.
(b) VIOLATION.—Any person knowingly violating any regulation
of the Secretary issued under subsection (a) shall be subject to a
civil penalty of not more than $5,000 for each violation.
(c) PUBLICATION IN FEDERAL REGISTER.—Each determination
issued by the Secretary to establish, adjust, or suspend allotments
under this part shall be promptly published in the Federal Register
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and shall be accompanied by a statement of the reasons for the determination.
(d) JURISDICTION OF COURTS; UNITED STATES ATTORNEYS.—
(1) JURISDICTION OF COURTS.—The several district courts
of the United States are vested with jurisdiction specifically to
enforce, and to prevent and restrain any person from violating,
this part or any regulation issued thereunder.
(2) UNITED STATES ATTORNEYS.—Whenever the Secretary
shall so request, it shall be the duty of the several United
States attorneys, in their respective districts, to institute proceedings to enforce the remedies and to collect the penalties
provided for in this part. The Secretary may elect not to refer
to a United States attorney any violation of this part or regulation when the Secretary determines that the administration
and enforcement of this part would be adequately served by
written notice or warning to any person committing the violation.
(e) NONEXCLUSIVITY OF REMEDIES.—The remedies and penalties provided for in this part shall be in addition to, and not exclusive of, any remedies or penalties existing at law or in equity.
SEC. 359i. ø7 U.S.C. 1359ii¿ APPEALS.
(a) IN GENERAL.—An appeal

may be taken to the Secretary
from any decision under section 359d establishing allocations of
marketing allotments, or under section 359f or 359g(d), by any person adversely affected by reason of any such decision.
(b) PROCEDURE.—
(1) NOTICE OF APPEAL.—Any such appeal shall be taken by
filing with the Secretary, within 20 days after the decision
complained of is effective, notice in writing of the appeal and
a statement of the reasons therefor. Unless a later date is specified by the Secretary as part of the Secretary’s decision, the
decision complained of shall be considered to be effective as of
the date on which announcement of the decision is made. The
Secretary shall deliver a copy of any notice of appeal to each
person shown by the records of the Secretary to be adversely
affected by reason of the decision appealed, and shall at all
times thereafter permit any such person to inspect and make
copies of appellant’s reasons for the appeal and shall on application permit the person to intervene in the appeal.
(2) HEARING.—The Secretary shall provide each appellant
an opportunity for a hearing before an administrative law
judge in accordance with sections 554 and 556 of title 5, United
States Code. The expenses for conducting the hearing shall be
reimbursed by the Commodity Credit Corporation.
SEC. 359j. ø7 U.S.C. 1359jj¿ ADMINISTRATION.
(a) USE OF CERTAIN AGENCIES.—In carrying

out this part, the
Secretary may use the services of local committees of sugar beet or
sugarcane producers, sugarcane processors, or sugar beet processors, State and county committees established under section 8(b)
of the Soil Conservation and Domestic Allotment Act (16 U.S.C.
590h(b)), and the departments and agencies of the United States
Government.

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(b) USE OF COMMODITY CREDIT CORPORATION.—The Secretary
shall use the services, facilities, funds, and authorities of the Commodity Credit Corporation to carry out this part.
SEC. 359k. ø7 U.S.C. 1359kk¿ ADMINISTRATION OF TARIFF RATE
QUOTAS.
(a) ESTABLISHMENT.—
(1) IN GENERAL.—Except as provided in paragraph (2) and

notwithstanding any other provision of law, at the beginning
of the quota year, the Secretary shall establish the tariff-rate
quotas for raw cane sugar and refined sugars at the minimum
level necessary to comply with obligations under international
trade agreements that have been approved by Congress.
(2) EXCEPTION.—Paragraph (1) shall not apply to specialty
sugar.
(b) ADJUSTMENT.—
(1) BEFORE APRIL 1.—Before April 1 of each fiscal year, if
there is an emergency shortage of sugar in the United States
market that is caused by a war, flood, hurricane, or other natural disaster, or other similar event as determined by the Secretary—
(A) the Secretary shall take action to increase the supply of sugar in accordance with sections 359c(b)(2) and
359e(b), including an increase in the tariff-rate quota for
raw cane sugar to accommodate the reassignment to imports; and
(B) if there is still a shortage of sugar in the United
States market, and marketing of domestic sugar has been
maximized, and domestic raw cane sugar refining capacity
has been maximized, the Secretary may increase the tariffrate quota for refined sugars sufficient to accommodate the
supply increase, if the further increase will not threaten to
result in the forfeiture of sugar pledged as collateral for a
loan under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272).
(2) ON OR AFTER APRIL 1.—On or after April 1 of each fiscal
year—
(A) the Secretary may take action to increase the supply of sugar in accordance with sections 359c(b)(2) and
359e(b), including an increase in the tariff-rate quota for
raw cane sugar to accommodate the reassignment to imports; and
(B) if there is still a shortage of sugar in the United
States market, and marketing of domestic sugar has been
maximized, the Secretary may increase the tariff-rate
quota for raw cane sugar if the further increase will not
threaten to result in the forfeiture of sugar pledged as collateral for a loan under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7272).
SEC. 359l. ø7 U.S.C. 1359ll¿ PERIOD OF EFFECTIVENESS.
(a) IN GENERAL.—This part shall be effective only

through 2018 crop years for sugar.
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(b) TRANSITION.—The Secretary shall administer flexible marketing allotments for sugar for the 2007 crop year for sugar on the
terms and conditions provided in this part as in effect on the day
before the date of enactment of this section.
SUBTITLE C—ADMINISTRATIVE PROVISIONS
PART I—PUBLICATION

AND

REVIEW

OF

QUOTAS

APPLICATION OF PART

SEC. 361. ø7 U.S.C. 1361¿ This part shall apply to the publication and review of farm marketing quotas established for corn,
wheat, cotton, and rice, established under subtitle B.
PUBLICATION AND NOTICE OF QUOTA

SEC. 362. ø7 U.S.C. 1362¿ All acreage allotments, and the farm
marketing quotas established for farms in a county or other local
administrative area shall, in accordance with regulations of the
Secretary, be made and kept freely available for public inspection
in such county or other local administrative area. An additional
copy of this information shall be kept available in the office of the
county agricultural extension agent or with the chairman of the
local committee. Notice of the farm marketing quota of his farm
shall be mailed to the farmer.
Notice of the farm acreage allotment established for each farm
shown by the records of the county committee to be entitled to such
allotment shall insofar as practicable be mailed to the farm operator in sufficient time to be received prior to the date of the referendum.
REVIEW BY REVIEW COMMITTEE

SEC. 363. ø7 U.S.C. 1363¿ Any farmer who is dissatisfied with
his farm marketing quota may, within fifteen days after mailing to
him of notice as provided in section 362, have such quota reviewed
by a local review committee composed of three farmers from the
same or nearby counties appointed by the Secretary. Such committee shall not include any member of the local committee which
determined the farm acreage allotment, the normal yield, or the
farm marketing quota for such farm. Unless application for review
is made within such period, the original determination of the farm
marketing quota shall be final.
REVIEW COMMITTEE

SEC. 364. ø7 U.S.C. 1364¿ The members of the review committee shall receive as compensation for their services the same per
diem as that received by the members of the committee utilized for
the purposes of the Soil Conservation and Domestic Allotment Act,
as amended. The members of the review committee shall not be entitled to receive compensation for more than thirty days in any one
year.
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INSTITUTION OF PROCEEDINGS

SEC. 365. ø7 U.S.C. 1365¿ If the farmer is dissatisfied with the
determination of the review committee, he may, within fifteen days
after a notice of such determination is mailed to him by registered
mail or by certified mail, file a bill in equity against the review
committee as defendant in the United States district court, or institute proceedings for review in any court of the State having general
jurisdiction, sitting in the county or the district in which his farm
is located, for the purpose of obtaining a review of such determination. Bond shall be given in an amount and with surety satisfactory
to the court to secure the United States for the costs of the proceeding. The bill of complaint in such proceeding may be served by
delivering a copy thereof to any one of the members of the review
committee. Thereupon the review committee shall certify and file
in the court a transcript of the record upon which the determination complained of was made, together with its findings of fact.
COURT REVIEW

SEC. 366. ø7 U.S.C. 1366¿ The review by the court shall be
limited to questions of law, and the findings of fact by the review
committee, if supported by evidence, shall be conclusive. If application is made to the court for leave to adduce additional evidence,
and it is shown to the satisfaction of the court that such additional
evidence is material and that there were reasonable grounds for
failure to adduce such evidence in the hearing before the review
committee, the court may direct such additional evidence to be
taken before the review committee in such manner and upon such
terms and conditions as to the court may seem proper. The review
committee may modify its findings of fact or its determination by
reason of the additional evidence so taken, and it shall file with the
court such modified findings or determination, which findings of
fact shall be conclusive. The court shall hear and determine the
case upon the original record of the hearings before the review
committee and upon such record as supplemented if supplemented,
by further hearing before the review committee pursuant to direction of the court. The court shall affirm the review committee’s determination, or modified determination, if the court determines
that the same is in accordance with law. If the court determines
that such determination or modified determination is not in accordance with law, the court shall remand the proceeding to the review
committee with direction either to make such determination as the
court shall determine to be in accordance with law or to take such
further proceedings as, in the court’s opinion, the law requires.
STAY OF PROCEEDINGS AND EXCLUSIVE JURISDICTION

SEC. 367. ø7 U.S.C. 1367¿ The commencement of judicial proceedings under this part shall not, unless specifically ordered by
the court, operate as a stay of the review committee’s determination. Notwithstanding any other provision of law, the jurisdiction
conferred by this part to review the legal validity of a determination made by a review committee pursuant to this part shall be exclusive. No court of the United States or of any State shall have
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jurisdiction to pass upon the legal validity of any such determination except in a proceeding under this part.
NO EFFECT ON OTHER QUOTAS

SEC. 368. ø7 U.S.C. 1368¿ Notwithstanding any increase of any
farm marketing quota for any farm as a result of review of the determination thereof under this part, the marketing quotas for other
farms shall not be affected.
PART II—ADJUSTMENT

OF

QUOTAS

AND

ENFORCEMENT

GENERAL ADJUSTMENTS OF QUOTAS

SEC. 371. ø7 U.S.C. 1371¿ (a) If at any time the Secretary has
reason to believe that in the case of cotton, or rice the operation
of farm marketing quotas in effect will cause the amount of such
commodity which is free of marketing restrictions to be less than
the normal supply for the marketing year for the commodity then
current, he shall cause an immediate investigation to be made with
respect thereto. In the course of such investigation due notice and
opportunity for hearing shall be given to interested persons. If
upon the basis of such investigation the Secretary finds the existence of such fact, he shall proclaim the same forthwith. He shall
also in such proclamation specify such increase in, or termination
of, existing quotas as he finds, on the basis of such investigation,
is necessary to make the amount of such commodity which is free
of marketing restrictions equal to the normal supply.
(b) If the Secretary has reason to believe that, because of a national emergency or because of a material increase in export demand, any national marketing quota or acreage allotment for cotton, or rice should be increased or terminated, he shall cause an
immediate investigation to be made to determine whether the increase or termination is necessary to meet such emergency or increase in export demand. If, on the basis of such investigation, the
Secretary finds that such increase or termination is necessary, he
shall immediately proclaim such finding (and if he finds an increase is necessary, the amount of the increase found by him to be
necessary) and thereupon such quota or allotment shall be increased, or shall terminate, as the case may be.
(c) In case any national marketing quota or acreage allotment
for any commodity is increased under this section, each farm marketing quota or acreage allotment for the commodity shall be increased in the same ratio.
PAYMENT AND COLLECTION OF PENALTIES

SEC. 372. ø7 U.S.C. 1372¿ (a) The penalty with respect to the
marketing, by sale, of wheat, cotton, or rice, if the sale is to any
person within the United States, shall be collected by the buyer.
(b) All penalties provided for in subtitle B shall be collected
and paid in such manner, at such times, and under such conditions
as the Secretary may by regulations prescribe. Such penalties shall
be remitted to the Secretary by the person liable for the penalty,
except that if any other person is liable for the collection of the
penalty, such other person shall remit the penalty. Except as proFebruary 7, 2014

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vided in section 320B, the amount of such penalties shall be covered into the general fund of the Treasury of the United States.
(c) Whenever, pursuant to a claim filed with the Secretary
within two years after payment to him of any penalty collected
from any person pursuant to this Act, the Secretary finds that such
penalty was erroneously, illegally, or wrongfully collected and that
the claimant bore the burden of the payment of such penalty, the
Secretary shall certify to the Secretary of the Treasury for payment
to the claimant, in accordance with regulations, prescribed by the
Secretary of the Treasury, such amounts as the Secretary finds the
claimant is entitled to receive as a refund of such penalty.
Notwithstanding any other provision of the law, the Secretary
is authorized to prescribe by regulations for the identification of
farms and it shall be sufficient to schedule receipts into special deposit accounts or to schedule such receipts for transfer therefrom,
or directly, into the separate fund provided for in subsection (b)
hereof by means of such identification without reference to the
names of the producers on such farms.
The Secretary is authorized to prescribe regulations governing
the filing of such claims and the determination of such refunds.
(d) No penalty shall be collected under this Act with respect to
the marketing of any agricultural commodity grown for experimental purposes only by any publicly owned agricultural experiment station. Effective with the 1978 crops, no penalty shall be collected under this Act with respect to the marketing of any agricultural commodity grown on State prison farms for consumption
within such State prison system.
REPORTS AND RECORDS

SEC. 373. ø7 U.S.C. 1373¿ (a) This subsection shall apply to
warehousemen, processors, and common carriers of corn, wheat,
cotton, or rice, and all ginners of cotton, all persons engaged in the
business of purchasing corn, wheat, cotton, or rice from producers,
and. 37 Any such person shall, from time to time on request of the
Secretary, report to the Secretary such information and keep such
records as the Secretary finds to be necessary to enable him to
carry out the provisions of this title. Such information shall be reported and such records shall be kept in accordance with forms
which the Secretary shall prescribe. For the purpose of ascertaining
the correctness of any report made or record kept, or of obtaining
information required to be furnished in any report, but not so furnished, the Secretary is hereby authorized to examine such books,
papers, records, accounts, correspondence, contracts, documents,
and memoranda as he has reason to believe are relevant and are
within the control of such person. Any such person failing to make
any report or keep any record as required by this subsection or
making any false report or record shall be deemed guilty of a mis37 Effective beginning with the 2005 crop of each kind of tobacco, sec. 611(j)(2)(A) of P.L. 108–
357, 108 Stat. 1523, Oct. 22, 2004, amended the first sentence of subsec. (a) by striking ‘‘all persons engaged in the business of redrying, prizing, or stemming tobacco for producers,’’. Although
the law does not contain the comma at the end of the phrase purported to be struck, the phrase
was struck to effectuate the probable intent of Congress. The ending of the sentence with ‘‘, and’’
is so in original.

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demeanor and upon conviction thereof shall be subject to a fine of
not more than $500.
(b) Farmers engaged in the production of corn, wheat, cotton,
or rice for market shall furnish such proof of their acreage, yield,
storage, and marketing of the commodity in the form of records,
marketing cards, reports, storage under seal, or otherwise as the
Secretary may prescribe as necessary for the administration of this
title.
(c) All data reported to or acquired by the Secretary pursuant
to this section shall be kept confidential by all officers and employees of the Department, and only such data so reported or acquired
as the Secretary deems relevant shall be disclosed by them, and
then only in a suit or administrative hearing under this title. Nothing in this section shall be deemed to prohibit the issuance of general statements based upon the reports of a number of parties
which statements do not identify the information furnished by any
person.
MEASUREMENT OF FARMS AND REPORT OF PLANTINGS

SEC. 374. ø7 U.S.C. 1374¿ (a) The Secretary shall provide for
ascertaining, by measurement or otherwise, the acreage of any agricultural commodity or land use on farms for which the ascertainment of such acreage is necessary to determine compliance under
any program administered by the Secretary. Insofar as practicable,
the acreage of the commodity and land use shall be ascertained
prior to harvest, and, if any acreage so ascertained is not in compliance with the requirements of the program the Secretary, under
such terms and conditions as he prescribes, may provide a reasonable time for the adjustment of the acreage of the commodity or
land use to the requirements of the program. Where cotton is
planted in skiprow patterns, the same rules that were in effect for
the 1971 through 1973 crops for classifying the acreage planted to
cotton and the area skipped shall also apply to the 1974 through
1995 crops, except that, for the 1991 through 1995 crops, the rules
shall allow 30 inch rows (or, at the option of those cotton producers
who had an established practice of using 32 inch rows before the
1991 crop, 32 inch rows) to be taken into account for classifying the
acreage planted to cotton and the area skipped. For the 1992
through 1995 crops, the rules establishing the requirements for eligibility for conserving use for payment acres shall be the same
rules as were in effect for 1991 crops.
(b) With respect to cotton, the Secretary, upon such terms and
conditions as he may by regulation prescribe, shall provide,
through the county and local committees for the measurement
prior to planting of an acreage on the farm equal to the farm acreage allotment if so requested by the farm operator, and any farm
on which the acreage planted to cotton does not exceed such measured acreage shall be deemed to be in compliance with the farm
acreage allotment.
(c) The Secretary shall by appropriate regulations provide for
the remeasurement upon request by the farm operator of the acreage planted to such commodity on the farm and for the measurement of the acreage planted to such commodity on the farm reFebruary 7, 2014

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maining after any adjustment of excess acreage hereunder and
shall prescribe the conditions under which the farm operator shall
be required to pay the county committee for the expense of the
measurement of adjusted acreage or the expense of remeasurement
after the initial measurement or the measurement of adjusted acreage. The regulations shall also provide for the refund of any deposit
or payment made for the expense of the remeasurement of the initially determined acreage or the adjusted acreage when because of
an error in the determination of such acreage the remeasurement
brings the acreage within the allotment or permitted acreage or results in a change in acreage in excess of a reasonable variation normal to measurements of acreage of the commodity. Unless the requirements for measurement of adjusted acreage are met by the
farm operator, the acreage prior to such adjustment as determined
by the county committee shall be considered the acreage of the
commodity on the farm in determining whether the applicable farm
allotment has been exceeded.
REGULATIONS

SEC. 375. 38

ø7 U.S.C. 1375¿ (a) The Secretary shall provide by
regulations for the identification, wherever necessary, of corn,
wheat, cotton, rice, or peanuts so as to afford aid in discovering and
identifying such amounts of the commodities as are subject to and
such amounts thereof as are not subject to marketing restrictions
in effect under this title.
(b) The Secretary shall prescribe such regulations as are necessary for the enforcement of this title.
COURT JURISDICTION

SEC. 376. ø7 U.S.C. 1376¿ The several district courts of the
United States are hereby vested with jurisdiction specifically to enforce the provisions of this title. If and when the Secretary shall
so request, it shall be the duty of the several United States attorneys in their respective districts, under the direction of the Attorney General, to institute proceedings to collect the penalties provided in this title. The remedies and penalties provided for herein
shall be in addition to, and not exclusive of, any of the remedies
or penalties under existing law. This section also shall be applicable to liquidated damages provided for pursuant to section 349 of
this title.
øNote: Sec. 377 was made inapplicable to the 2008 through
2012 crops of upland cotton by sec. 1602(a)(2) of the Food, Conservation, and Energy Act of 2008, P.L. 110–246, 122 Stat. 1729.¿
PRESERVATION OF UNUSED ACREAGE ALLOTMENTS

SEC. 377. ƒ7 U.S.C. 1377≈ In any case in which, during any
year beginning with 1956, the acreage planted to a commodity on
any farm is less than the acreage allotment for such farm, the entire
acreage allotment for such farm (excluding any allotment released
38 Effective beginning with the 2005 crop of each kind of tobacco, sec. 611(k)(2) of P.L. 108–
357, 108 Stat. 1523, Oct. 22, 2004, struck ‘‘subsection (c)’’ of this sec. This sec. did not contain
a subsec. (c).

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from the farm or reapportioned to the farm and any allotment provided for the farm pursuant to subsection (f)(7)(A) of section 344)
shall, except as provided herein, be considered for the purpose of establishing future State, county and farm acreage allotments to have
been planted to such commodity in such year on such farm, but the
1956 acreage allotment of any commodity shall be regarded as
planted under this section only if the owner or operator on such
farm notified the county committee prior to the sixtieth day preceding the beginning of the marketing year for such commodity of
his desire to preserve such allotment: Provided, That beginning with
the 1960 crop, except for federally owned land, the current farm
acreage allotment established for a commodity shall not be preserved as history acreage pursuant to the provisions of this section
unless for the current year or either of the two preceding years an
acreage equal to 75 per centum or more of the farm acreage allotment for such year ƒ * * *≈ 39 or, in the case of upland cotton on
a farm which qualified for price support on the crop produced in
any such year under section 103(b) of the Agricultural Act of 1949,
as amended, 75 per centum of the farm domestic allotment established under section 350 for any such year, whichever is smaller
was actually planted or devoted to the commodity on the farm (or
was regarded as planted under provisions of the Soil Bank Act or
the environmental quality incentives program established under
chapter 4 of subtitle D of title XII of the Food Security Act of 1985):
3Provided further, That this section shall not be applicable in any
case, within the period 1956 to 1959, in which the amount of the
commodity required to be stored to postpone or avoid payment of
penalty has been reduced because the allotment was not fully planted. Acreage history credits for released or reapportioned acreage
shall be governed by the applicable provisions of this title pertaining to the release and reapportionment of acreage allotments.
EMINENT DOMAIN

SEC. 378. ø7 U.S.C. 1378¿ (a) Notwithstanding any other provision of this Act, the allotment determined for any commodity for
any land from which the owner is displaced because of acquisition
of the land for any purpose, other than for the continued production of allotted crops, by any Federal, State, or other agency having
the right of eminent domain shall be placed in an allotment pool
and shall be available only for use in providing allotments for other
farms owned by the owners so displaced. Upon application to the
county committee, within three years after the date of such displacement, any owner so displaced shall be entitled to have allotments established for other farms owned by him, taking into consideration the land, labor, and equipment available on such other
farms for the production of the commodity, crop-rotation practices,
and the soil and other physical factors affecting the production of
the commodity: Provided, That the acreage used to establish or increase the allotments for such farms shall be transferred from the
pool and shall not exceed the allotment most recently established
39 A provision as to peanuts added by sec. 806 of the Food and Agriculture Act of 1977, P.L.
95–113, 91 Stat. 947, Sept. 29, 1977, effective for the 1978–81 crops of peanuts, has been omitted.

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for the farm acquired from the applicant and placed in the pool.
During the period of eligibility for the making of allotments under
this section for a displaced owner, acreage allotments for the farm
from which the owner was so displaced shall be established in accordance with the procedure applicable to other farms, and such allotment shall be considered to have been fully planted. After such
allotment is made under this section, the proportionate part, or all,
as the case may be, of the past acreage used in establishing the allotment most recently placed in the pool for the farm from which
the owner was so displaced shall be transferred to and considered
for the purposes of future State, county, and farm acreage allotments to have been planted on the farm to which allotment is
made under this section. Except where paragraph (c) requires the
transfer of allotment to another portion of the same farm, for the
purpose of this section (1) that part of any farm from which the
owner is so displaced and that part from which he is not so displaced shall be considered as separate farms; and (2) an owner who
voluntarily relinquishes possession of the land subsequent to its acquisition by an agency having the right of eminent domain shall be
considered as having been displaced because of such acquisition.
The former owner of land acquired as described in this subsection
shall not be considered for the purposes hereof to have been displaced from such land during any period for which such land is
leased to such former owner: Provided, That the occupancy of the
former owner under the lease follows immediately after his occupancy as owner: And provided further, That if a former owner has
been displaced prior to the effective date of this amendment and
no allotment from the land owned by such former owner has been
transferred from the allotment pool and such former owner leases
the land formerly owned by him prior to two years from the effective date of this amendment such allotment shall be retransferred
from the pool to such land and the occupancy of such former owner
under the lease for the purposes of this subsection shall be deemed
to have begun immediately after his displacement as owner. During any year of the 3-year period the allotment from a farm may
remain in the allotment pool, the displaced owner may, in accordance with regulations of the Secretary, release for one year at a
time any part or all of such farm allotment to the county committee
for reapportionment to other farms in the county having allotments
for such commodity on the basis of the past acreage of the commodity, land, labor, equipment available for the production of the
commodity, crop rotation practices, and soil and other physical facilities affecting the production of the commodity; and the allotment reapportioned shall, for purposes of establishing future farm
allotments, not be regarded as planted on the farm to which the
allotment was transferred.
(b) The provisions of this section shall not be applicable if (1)
there is any marketing quota penalty due with respect to the marketing of the commodity from the farm acquired by the Federal,
State, or other agency or by the owner of the farm; (2) any of the
commodity produced on such farm has not been accounted for as
required by the Secretary; or (3) the allotment next established for
the farm acquired by the Federal, State, or other agency would
have been reduced because of false or improper identification of the
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commodity produced on or marketed from such farm or due to a
false acreage report.
(c) This section shall not be applicable, in the case of and cotton 40, to any farm from which the owner was displaced prior to
1950, in the case of wheat and corn, to any farm from which the
owner was displaced prior to 1954, and in the case of rice, to any
farm from which the owner was displaced prior to 1955. In any
case where the cropland acquired for nonfarming purposes from an
owner by an agency having the right of eminent domain represents
less than 15 per centum of the total cropland on the farm, the allotment attributable to that portion of the farm so acquired shall be
transferred to that portion of the farm not so acquired.
RECONSTITUTION OF FARMS

SEC. 379. ø7 U.S.C. 1379¿ In any case in which the ownership
of a tract of land is transferred from a parent farm, the acreage allotments, history acreages, and base acreages for the farm shall be
divided between such tract and the parent farm in the same proportion that the cropland acreage in such tract bears to the cropland acreage in the parent farm, except that the Secretary shall
provide by regulation the method to be used in determining the division, if any, of the acreage allotments, histories, and bases in any
case in which—
(1) the tract of land transferred from the parent farm has
been or is being transferred to any agency having the right to
acquire it by eminent domain;
(2) the tract of land transferred from the parent farm is to
be used for nonagricultural purposes;
(3) the parent farm resulted from a combination of two or
more tracts of land and records are available showing the contribution of each tract to the allotments, histories, and bases
of the parent farm;
(4) the appropriate county committee determines that a division based on cropland proportions would result in allotments and bases not representative of the operations normally
carried out on any transferred tract during the base period;
(5) the parent farm is divided among heirs in settling an
estate; or
(6) neither the tract transferred from the parent farm nor
the remaining portion of the parent farm receives allotments
in excess of allotments for similar farms in the community having allotments of the commodity or commodities involved and
such allotments are consistent with good land uses.
øNote: Subtitle D was made inapplicable to the 2008 through
2012 crops of wheat by sec. 1602(a)(1) of the Food, Conservation,
and Energy Act of 2008, P.L. 110–246, 122 Stat. 1729.¿
40 Effective beginning with the 2005 crop of each kind of tobacco, sec. 611(l)(1) of P.L. 108–
357, 108 Stat. 1523, Oct. 22, 2004, amended the first sentence of subsec. (c) by striking ‘‘cotton,
and tobacco’’ and inserting ‘‘and cotton’’. Although there was no comma after ‘‘cotton,’’ in the
original, the amendment was executed to effectuate the probable intent of Congress. The word
‘‘and’’ before ‘‘cotton’’ is so in original.

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Sec. 379c

SUBTITLE D—WHEAT MARKETING ALLOCATION
LEGISLATIVE FINDINGS

SEC. 379a. ƒ7 U.S.C. 1379a≈ Wheat, in addition to being a
basic food, is one of the great export crops of American agriculture
and its production for domestic consumption and for export is necessary to the maintenance of a sound national economy and to the
general welfare. The movement of wheat from producer to consumer,
in the form of the commodity or any of the products thereof, is preponderantly in interstate and foreign commerce. Unreasonably low
prices of wheat to producers impair their purchasing power for nonagricultural products and place them in a position of serious disparity with other industrial groups. The conditions affecting the
production of wheat are such that without Federal assistance, producers cannot effectively prevent disastrously low prices for wheat.
It is necessary, in order to assist wheat producers in obtaining fair
prices, to regulate the price of wheat used for domestic food and for
exports in the manner provided in this subtitle.
WHEAT MARKETING ALLOCATION

SEC. 379b. ƒ7 U.S.C. 1379b≈ During any marketing year for
which a marketing quota is in effect for wheat, beginning with the
marketing year for the 1964 crop, a wheat marketing allocation program shall be in effect as provided in this subtitle. Whenever a
wheat marketing allocation program is in effect for any marketing
year the Secretary shall determine (1) the wheat marketing allocation for such year which shall be the amount of wheat which in determining the national marketing quota for such marketing year he
estimated would be used during such year for food products for consumption in the United States, and that portion of the amount of
wheat which in determining such quota he estimated would be exported in the form of wheat or products thereof during the marketing year on which the Secretary determines that marketing certificates shall be issued to producers in order to achieve, insofar as
practicable, the price and income objectives of this subtitle, and (2)
the national allocation percentage which shall be the percentage
which the national marketing allocation is of the national marketing quota. Each farm shall receive a wheat marketing allocation
for such marketing year equal to the number of bushels obtained by
multiplying the number of acres in the farm acreage allotment for
wheat by the projected farm yield, and multiplying the resulting
number of bushels by the national allocation percentage. If a noncommercial wheat-production area is established for any marketing
year, farms in such area shall be given wheat marketing allocations
which are determined by the Secretary to be fair and reasonable in
relation to the wheat marketing allocation given producers in the
commercial wheat-producing area.
MARKETING CERTIFICATES

SEC. 379c. ƒ7 U.S.C. 1379c≈ (a) The Secretary shall provide for
the issuance of wheat marketing certificates for each marketing year
for which a wheat marketing allocation program is in effect for the
purpose of enabling producers on any farm with respect to which
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certificates are issued to receive, in addition to the other proceeds
from the sale of wheat, an amount equal to the value of such certificates. The wheat marketing certificates issued with respect to any
farm for any marketing year shall be in the amount of the farm
wheat marketing allocation for such year, but not to exceed (i) the
actual acreage of wheat planted on the farm for harvest in the calendar year in which the marketing year begins multiplied by the
normal yield of wheat for the farm, plus (ii) the amount of wheat
stored under section 379c(b) or to avoid or postpone a marketing
quota penalty, which is released from storage during the marketing
year on account of underplanting or underproduction, and if this
limitation operates to reduce the amount of wheat marketing certificates which would otherwise be issued with respect to the farm,
such reduction shall be made first from the amount of export certificates which would otherwise be issued. The Secretary shall provide
for the sharing of wheat marketing certificates among producers on
the farm on the basis of their respective shares in the wheat crop
produced on the farm, or the proceeds therefrom; except that in any
case in which the Secretary determines that such basis would not
be fair and equitable, the Secretary shall provide for such sharing
on such other basis as he may determine to be fair and equitable.
The Secretary shall, in accordance with such regulation as he may
prescribe, provide for the issuance of domestic marketing certificates
for the portion of the wheat marketing allocation representing wheat
used for food products for consumption in the United States. The
Secretary shall also provide for the issuance of export marketing
certificates to eligible producers at the end of the marketing year on
a pro rata basis. For such purposes, the value per bushel of export
marketing certificates shall be an average of the total net proceeds
from the sale of export marketing certificates during the marketing
year after deducting the total amount of wheat export subsidies paid
to exporters. An acreage on the farm which the Secretary finds was
not planted to wheat for harvest in 1965 because of drought, flood,
or other natural disaster shall be deemed by the Secretary to be an
actual acreage of wheat planted for harvest for purposes of this subsection, provided such acreage is not subsequently planted to any
other price supported crop for 1965. An acreage on the farm not
planted to wheat because of drought, flood, or other natural disaster
shall be deemed to be an actual acreage of wheat planted for harvest for purposes of this subsection provided such acreage is not subsequently planted to any crop for which there are marketing quotas
or voluntary adjustment programs in effect. Producers on any farm
who have planted not less than 90 per centum of the acreage of
wheat required to be planted in order to earn the full amount of
marketing certificates for which the farm is eligible shall be deemed
to have planted the entire acreage required to be planted for that
purpose.
(b) 41 No producer shall be eligible to receive wheat marketing
certificates with respect to any farm for any marketing year in
which a marketing quota penalty is assessed for any commodity on
such farm or in which the farm has not complied with the land-use
41 The omitted language was effective only with respect to the crops planted for harvest in
the calendar years 1965 through 1970.

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Sec. 379d

requirements of section 339 to the extent prescribed by the Secretary,
or in which, except as the Secretary may by regulation prescribe, the
producer exceeds the farm acreage allotment on any other farm for
any commodity in which he has an interest as a producer. No producer shall be deemed to have exceeded a farm acreage allotment
for wheat if the entire amount of the farm marketing excess is delivered to the Secretary or stored in accordance with applicable regulations to avoid or postpone payment of the penalty. No producer shall
be deemed to have exceeded the farm acreage allotment for wheat
on any other farm if such farm is exempt from the farm market
quota for such crop under section 335. ƒ * * *≈ Any wheat delivered to the Secretary hereunder shall become the property of the
United States and shall be disposed of by the Secretary for relief
purposes in the United States or in foreign countries or in such
other manner as he shall determine will divert it from the normal
channels of trade and commerce. Notwithstanding any other provision of this Act, the Secretary may provide that a producer shall not
be eligible to receive marketing certificates, or may adjust the
amount of marketing certificates to be received by the producer, with
respect to any farm for any year in which a variety of wheat is
planted on the farm which has been determined by the Secretary,
after consultation with State Agricultural Experiment Stations,
agronomists, cereal chemists and other qualified technicians, to
have undesirable milling or baking qualities and has made public
announcement thereof.
(c) The Secretary shall determine and proclaim for each marketing year the face value per bushel of wheat marketing certificates.
The face value per bushel of domestic certificates shall be the
amount by which the level of price support for wheat accompanied
by domestic certificates exceeds the level of price support for wheat
not accompanied by certificates (noncertificate wheat).
(d) Marketing certificates and transfers thereof shall be represented by such documents, marketing cards, records, accounts,
certifications, or other statements or forms as the Secretary may prescribe.
(e) In any case in which the failure of a producer to comply
fully with the term and conditions of the programs formulated
under this Act preclude the issuance of marketing certificates, the
Secretary may, nevertheless, issue such certificates in such amounts
as he determines to be equitable in relation to the seriousness of the
default.
MARKETING RESTRICTIONS

SEC. 379d. ƒ7 U.S.C. 1379d≈ (a) Marketing certificates shall be
transferable only in accordance with regulations prescribed by the
Secretary. Any unused certificates legally held by any person shall
be purchased by Commodity Credit Corporation if tendered to the
Corporation for purchase in accordance with regulations prescribed
by the Secretary.
(b) During any marketing year for which a wheat marketing allocation program is in effect, (i) all persons engaged in the processing of wheat into food products shall, prior to marketing any
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sumption, acquire domestic marketing certificates equivalent to the
number of bushels of wheat contained in such product and (ii) all
persons exporting wheat shall, prior to such export, acquire export
market certificates equivalent to the number of bushels so exported.
The cost of the export marketing certificates per bushel to the exporter shall be that amount determined by the Secretary on a daily
basis which would make United States wheat and wheat flour generally competitive in the world market, avoid disruption of world
market prices, and fulfill the international obligations of the United
States. The Secretary may exempt from the requirements of this subsection wheat exported for donation abroad and other noncommercial exports of wheat, wheat processed for use on the farm where
grown, wheat produced by a State or agency thereof and processed
for use by the State or agency thereof wheat processed for donation,
and wheat processed for uses determined by the Secretary to be noncommercial. Such exemptions may be made applicable with respect
to any wheat processed or exported beginning July 1, 1964. There
shall be exempt from the requirements of this subsection beverage
distilled from wheat prior to July 1, 1964. A beverage distilled from
wheat after July 1, 1964, shall be deemed to be removed for sale or
consumption at the time it is placed in barrels for aging except that
upon the giving of a bond as prescribed by the Secretary, the purchase of and payment for such marketing certificates as may be required may be deferred until such beverage is bottled for sale.
Wheat shipped to a Canadian port for storage in bond, or storage
under a similar arrangement, and subsequent exportation shall be
deemed to have been exported for purposes of this subsection when
it is exported from the Canadian port. Marketing certificates shall
be valid to cover only sales or removals for sale or consumption or
exportations made during the marketing year with respect to which
they are issued, and after being once used to cover a sale or removal
for sale or consumption or export of a food product or an export of
wheat shall be void and shall be disposed of in accordance with regulations prescribed by the Secretary. Notwithstanding the foregoing
provisions hereof the Secretary may require marketing certificates
issued for any marketing year to be acquired to cover sales, removals or exportations made on or after the date during the calendar
year in which wheat harvested in such calendar year begins to be
marketed as determined by the Secretary even though such wheat
is marketed prior to the beginning of the marketing year, and marketing certificates for such marketing year shall be valid to cover
sales, removals, or exportations made on or after the date so determined by the Secretary. Whenever the face value per bushel of domestic marketing certificates for a marketing year is different from
the face value of domestic marketing certificates for the preceding
marketing year, the Secretary may require marketing certificates
issued for the preceding marketing year to be acquired to cover all
wheat processed into food products during such preceding marketing year even though the food product may be marketed or removed for sale or consumption after the end of the marketing year.
Notwithstanding the foregoing, the Secretary is authorized, to temporarily suspend the requirement for export marketing certificates
for the period beginning July 1, 1971, and ending June 30, 1974.
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Sec. 379f

(c) Upon the giving of a bond or other undertaking satisfactory
to the Secretary to secure the purchase of and payment for such
marketing certificates as may be required, and subject to such regulations as he may prescribe, any person required to have marketing
certificates in order to market or export a commodity may be permitted to market any such commodity without having first acquired
marketing certificates.
(d) As used in this subtitle, the term ‘‘food products’’ means
flour (excluding flour second clears not used for human consumption as determined by the Secretary), semolina, farina, bulgur, beverage, and any other product composed wholly or partly of wheat
which the Secretary may determine to be a food product. The Secretary may at his election administer the exemption for wheat processed into flour second clears through refunds either to processors
of such wheat or to the users of such clears. For the purpose of such
refunds, the wheat equivalent of flour second clears may be determined on the basis of conversion factors authorized by section 379f
of the Agricultural Adjustment Act of 1938, even though certificates
had been surrendered on the basis of the weight of the wheat.
ASSISTANCE IN PURCHASE AND SALE OF MARKETING CERTIFICATES

SEC. 379e. ƒ7 U.S.C. 1379e≈ For the purpose of facilitating the
purchase and sale of marketing certificates, the Commodity Credit
Corporation is authorized to issue, buy, and sell marketing certificates in accordance with regulations prescribed by the Secretary.
Such regulations may authorize the Corporation to issue and sell
certificates in excess of the quantity of certificates which it purchases. Such regulations may authorize the Corporation in the sale
of marketing certificates to charge, in addition to the face value
thereof an amount determined by the Secretary to be appropriate to
cover estimated administrative costs in connection with the purchase and sale of the certificates and estimated interest incurred on
funds of the Corporation invested in certificates purchased by it.
Notwithstanding any other provision of this Act, Commodity Credit
Corporation shall sell marketing certificates for the marketing years
for the 1966 through the 1970 wheat crops to persons engaged in
the processing of food products at the face value thereof less any
amount which price support for wheat accompanied by domestic certificates exceeds $2 per bushel. Notwithstanding any other provision
of this Act, Commodity Credit Corporation shall sell marketing certificates for the marketing years for the 1971, 1972, and 1973 crops
of wheat to persons engaged in the processing of food products but
in determining the cost to processors the face value shall be 75 cents
per bushel.
CONVERSION FACTORS

SEC. 379f. ƒ7 U.S.C. 1379f≈ The Secretary shall establish conversion factors which shall be used to determine the amount of
wheat contained in any food product. The conversion factor for any
such food product shall be determined upon the basis of the weight
of wheat used in the manufacture of such product.
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AUTHORITY TO FACILITATE TRANSITION

SEC. 379g. ƒ7 U.S.C. 1379g≈ (a) The Secretary is authorized to
take such action as he determines to be necessary to facilitate the
transition from the program currently in effect to the program provided for in this subtitle. Notwithstanding any other provision of
this subtitle, such authority shall include, but shall not be limited,
to the authority to exempt all or a portion of the wheat or food products made therefrom in the channels of trade on the effective date
of the program under this subtitle from the marketing restrictions
in subsection (b) of section 379d, or to sell certificates to persons
owning such wheat or food products at such prices as the Secretary
may determine. Any such certificate shall be issued by Commodity
Credit Corporation.
(b) Whenever the face value per bushel of domestic marketing
certificates for a marketing year is substantially different from the
face value of domestic marketing certificates for the preceding marketing year, the Secretary is authorized to take such action as he determines necessary to facilitate the transition between marketing
years. Notwithstanding any other provision of this subtitle, such authority shall include, but shall not be limited to, the authority to sell
certificates to persons engaged in the processing of wheat into food
products covering such quantities of wheat, at such prices, and
under such terms and conditions as the Secretary may by regulation
provide. Any such certificate shall be issued by Commodity Credit
Corporation.
(c) The Secretary is authorized to take such action as he determines to be necessary to facilitate the transition from the certificate
program provided for under section 379d to a program under which
no certificates are required. Notwithstanding any other provision of
law, such authority shall include, but shall not be limited to the authority to exempt all or a portion of wheat or food products made
therefrom in the channels of trade on July 1, 1973, from the marketing restrictions in subsection (b) of section 379d, or to sell certificates to persons owning such wheat or food products made therefrom at such price and under such terms and conditions as the Secretary may determine. Any such certificate shall be issued by the
Commodity Credit Corporation. Nothing herein shall authorize the
Secretary to require certificates on wheat processed after June 30,
1973.
REPORTS AND RECORDS

SEC. 379h. ƒ7 U.S.C. 1379h≈ This section shall apply to processors of wheat, warehousemen and exporters of wheat and food
products, and all persons purchasing, selling, or otherwise dealing
in wheat marketing certificates. Any such person shall, from time
to time on request of the Secretary, report to the Secretary such information and keep such records as the Secretary finds to be necessary to enable him to carry out the provisions of this subtitle.
Such information shall be reported and such records shall be kept
in such manner as the Secretary shall prescribe. For the purpose of
ascertaining the correctness of any report made or record kept, or
of obtaining information required to be furnished in any report, but
not so furnished, the Secretary is hereby authorized to examine such
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Sec. 379j

books, papers, records, accounts, correspondence, contracts, documents, and memorandums as he has reason to believe are relevant
and are within the control of such person.
PENALTIES

SEC. 379i. ƒ7 U.S.C. 1379i≈ (a) Any person who knowingly violates or attempts to violate or who knowingly participates or aids
in the violation of any of the provisions of subsection (b) of section
379d of this Act shall forfeit to the United States a sum equal to
two times the face value of the marketing certificates involved in
such violation. Such forfeiture shall be recoverable in a civil action
brought in the name of the United States.
(b) Any person, except a producer in his capacity as a producer,
who knowingly violates or attempts to violate or who knowingly participates or aids in the violation of any of the provision of this subtitle, or of any regulation, governing the acquisition, disposition, or
handling of marketing certificates or who knowingly fails to make
any report or keep any record as required by section 379h shall be
deemed guilty of a misdemeanor and upon conviction thereof shall
be subject to a fine of not more than $5,000 for each violation.
(c) Any person who, in his capacity as a producer, knowingly
violates or attempts to violate or participates or aids in the violation
of any provision of this subtitle, or of any regulation governing the
acquisition, disposition, or handling of marketing certificates or
fails to make any report or keep any record as required by section
379h shall, (i) forfeit any right to receive marketing certificates, in
whole or in part as the Secretary may determine, with respect to the
farm or farms and for the marketing year with respect to which any
such act or default is committed, or (ii), if such marketing certificates have already been issued, pay to the Secretary, upon demand,
the amount of the face value of such certificates, or such part thereof
as the Secretary may determine. Such determination by the Secretary with respect to the amount of such marketing certificates to
be forfeited or the amount to be paid by such producer shall take
into consideration the circumstances relating to the act or default
committed and the seriousness of such act or default.
(d) Any persons who falsely makes, issues, alters, forges, or
counterfeits any marketing certificate, or with fraudulent intent possesses, transfers, or uses any such falsely made, issued, altered,
forged, or counterfeited marketing certificate, shall be deemed guilty
of a felony and upon conviction thereof shall be subject to a fine of
not more than $10,000 or imprisonment of not more than ten years,
or both.
REGULATIONS

SEC. 379j. ƒ7 U.S.C. 1379j≈ The Secretary shall prescribe such
regulations as may be necessary to carry out the provisions of this
subtitle including but not limited to regulations governing the acquisition, disposition, or handling of marketing certificates.
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SUBTITLE E—RICE CERTIFICATES
ƒRICE

CERTIFICATES≈

ƒSEC. 380a–380p. Effective only as to the 1957–58 rice crops.≈
SUBTITLE F—MISCELLANEOUS PROVISIONS

AND

APPROPRIATIONS

PART I—MISCELLANEOUS
COTTON PRICE ADJUSTMENT PAYMENTS

SEC. 381. ø7 U.S.C. 1381¿ (a) øApplicable only to the 1937 crop
of cotton.¿
(b) øApplicable only to the 1937 crop of cotton.¿
EXTENSION OF 1937 COTTON LOAN

SEC. 382. ø7 U.S.C. 1382¿ øApplicable only to the 1937 crop of
cotton.¿
INSURANCE OF COTTON AND RECONCENTRATION OF COTTON

SEC. 383. ø7 U.S.C. 1383¿ (a) The Commodity Credit Corporation shall place all insurance of every nature taken out by it on cotton, and all renewals, extensions, or continuations of existing insurance, with insurance agents who are bona fide residents of and
doing business in the State where the cotton is warehoused: Provided, That such insurance may be secured at a cost not greater
than similar insurance offered on said cotton elsewhere.
(b) Cotton held as security for any loan heretofore or hereafter
made or arranged for by the Commodity Credit Corporation shall
not hereafter be reconcentrated without the written consent of the
producer or borrower.
FINALITY OF FARMERS PAYMENTS AND LOANS

SEC. 385. ø7 U.S.C. 1385¿ The facts constituting the basis for
any Soil Conservation Act payment, any payment under the wheat,
feed grain, upland cotton, extra long staple cotton, and rice programs authorized by the Agricultural Act of 1949 and this Act, any
loan, or price support operation, or the amount thereof, when officially determined in conformity with the applicable regulations prescribed by the Secretary or by the Commodity Credit Corporation,
shall be final and conclusive and shall not be reviewable by any
other officer or agency of the Government. In case any person who
is entitled to any such payment dies, becomes incompetent, or disappears before receiving such payment, or is succeeded by another
who renders or completes the required performance, the payment
shall, without regard to any other provisions of law, be made as the
Secretary of Agriculture may determine to be fair and reasonable
in all the circumstances and provide by regulations. This section
also shall be applicable to payments provided for under section 348
of this title.
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Sec. 388

EXEMPTION FROM LAWS PROHIBITING INTEREST OF MEMBERS OF
CONGRESS IN CONTRACTS

SEC. 386. ø7 U.S.C. 1386¿ The provisions of section 3741 of the
Revised Statutes (U.S.C., 1934 edition, title 41, Sec. 22) and sections 114 and 115 of the Criminal Code of the United States
(U.S.C., 1934 edition, title 18, secs. 204 and 205) ønow 18 U.S.C.
431 and 432¿ shall not be applicable to loans or payments made
under this Act (except under section 383(a)).
PHOTOGRAPHIC REPRODUCTIONS AND MAPS

SEC. 387. ø7 U.S.C. 1387¿ The Secretary may furnish reproductions of information such as geo-referenced data from all
sources, aerial or other photographs, mosaics, and maps as have
been obtained in connection with the authorized work of the Department to farmers and governmental agencies at the estimated
cost of furnishing such reproductions, and to persons other than
farmers at such prices as the Secretary may determine (but not
less than the estimated costs of data processing, updating, revising,
reformatting, repackaging and furnishing the reproductions and information), the money received from such sales to be deposited in
the Treasury to the credit of the appropriation charged with the
cost of making such reproductions. This section shall not affect the
power of the Secretary to make other disposition of such or similar
materials under any other provisions of existing law.
UTILIZATION OF LOCAL AGENCIES

SEC. 388. ø7 U.S.C. 1388¿ (a) The provisions of section 8(b)
and section 11 of the Soil Conservation and Domestic Allotment
Act, as amended, relating to the utilization of State, county, local
committees, the extension service, and other approved agencies,
and to recognition and encouragement of cooperative associations,
shall apply in the administration of this Act; and the Secretary
shall, for such purposes, utilize the same local, county, and State
committees as are utilized under sections 7 to 17, inclusive, of the
Soil Conservation and Domestic Allotment Act, as amended. The
local administrative areas designated under section 8(b) of the Soil
Conservation and Domestic Allotment Act, as amended, for the administration of programs under that Act, and the local administrative areas designated for the administration of this Act shall be the
same.
(b)(1) The Secretary is authorized and directed, from any funds
made available for the purposes of the Acts in connection with
which county committees are utilized, to make payments to county
committees of farmers to cover the estimated administrative expenses incurred or to be incurred by them in cooperating in carrying out the provisions of such Acts. All or part of such estimated
administrative expenses of any such committee may be deducted
pro rata from the Soil Conservation Act payments, parity payments, or loans, or other payments under such Acts, made unless
payment of such expenses is otherwise provided by law. The Secretary may make such payments to such committees in advance of
determination of performance by farmers.
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(2)(A) The Secretary shall provide compensation to members of
such county committees (at not less than the level in effect on December 31, 1985 for county committees) for work actually performed by such persons in cooperating in carrying out the Acts in
connection with which such committees are used.
(B) The rate of compensation received by such persons for such
work on the date of enactment of the Food Security Act of 1985
shall be increased at the discretion of the Secretary.
(c)(1) The Secretary shall make payments to members of local,
county, and State committees to cover expenses for travel incurred
by such persons (including, in the case of a member of a local or
county committee, travel between the home of such member and
the local county office of the Agricultural Stabilization and Conservation Service) in cooperation in carrying out the Acts in connection with which such Committees are used.
(2) Such travel expenses shall be paid in the manner authorized under section 5703 of title 5, United States Code, for the payment of expenses and allowances for individuals employed intermittently in the Federal Government service.
PERSONNEL

SEC. 389. ø7 U.S.C. 1389¿ The Secretary is authorized and directed to provide for the execution by the Agricultural Adjustment
Administration of such of the powers conferred upon him by this
Act as he deems may be appropriately exercised by such administration; and for such purposes the provisions of law applicable to
appointment and compensation of persons employed by the Agricultural Adjustment Administration shall apply.
SEPARABILITY

SEC. 390. ø7 U.S.C. 1390¿ If any provision of this Act, or the
application thereof to any person or circumstance, is held invalid,
the validity of the remainder of the Act and the application of such
provision to other persons or circumstances, and the provisions of
the Soil Conservation and Domestic Allotment Act, as amended,
shall not be affected thereby. Without limiting the generality of the
foregoing, if any provision of this Act should be held not to be within the power of the Congress to regulate interstate and foreign
commerce, such provision shall not be held invalid if it is within
the power of the Congress to provide for the general welfare or any
other power of the Congress. If any provision of this Act for the
marketing quotas with respect to any commodity should be held invalid, no provision of this Act for marketing quotas with respect to
any other commodity shall be affected thereby. If the application of
any provision for a referendum should be held invalid, the application of other provisions shall not be affected thereby. If by reason
of any provision for a referendum the application of any such other
provision to any person or circumstance is held invalid, the application of such other provision to other persons or circumstances shall
not be affected thereby.
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PART II—APPROPRIATIONS

AND

Sec. 392

ADMINISTRATIVE EXPENSES

APPROPRIATIONS

SEC. 391. ø7 U.S.C. 1391¿ (a) Beginning with the fiscal year
ending June 30, 1938, there is hereby authorized to be appropriated, for each fiscal year for the administration of this Act and
for the making of soil conservation and other payments such sums
as Congress may determine, in addition to any amount made available pursuant to section 15 of the Soil Conservation and Domestic
Allotment Act, as amended.
(b) øApplicable only to fiscal year 1938.¿
(c) During each fiscal year, beginning with the fiscal year ending June 30, 1941, the Commodity Credit Corporation is authorized
and directed to loan to the Secretary such sums, not to exceed
$50,000,000, as he estimates will be required during such fiscal
year, to make crop insurance premium advances and to make advances pursuant to the applicable provisions of sections 8 and 12
of the Soil Conservation and Domestic Allotment Act, as amended,
in connection with programs applicable to crops harvested in the
calendar year in which such fiscal year ends, and to pay the administrative expenses of county agricultural conservation associations
for the calendar year in which such fiscal year ends. The sums so
loaned during any fiscal year shall be transferred to the current
appropriation available for carrying out sections 7 to 17 of such Act
and shall be repaid, with interest at a rate to be determined by the
Secretary but not less than the cost of money to the Commodity
Credit Corporation for a comparable period, during the succeeding
fiscal year from the appropriation available for that year or from
any unobligated balance of the appropriation for any other year.
ADMINISTRATIVE EXPENSES

SEC. 392. ø7 U.S.C. 1392¿ (a) The Secretary is authorized and
directed to make such expenditures as he deems necessary to carry
out the provisions of this Act and sections 7 to 17, inclusive, of the
Soil Conservation and Domestic Allotment Act, as amended, including personal services and rents in the District of Columbia and
elsewhere; traveling expenses; supplies and equipment; lawbooks,
books of reference, directories, periodicals, and newspapers; and
the preparation and display of exhibits, including such displays at
community, county, State, interstate, and international fairs within
the United States. The Secretary of the Treasury is authorized and
directed upon the request of the Secretary to establish one or more
separate appropriation accounts into which there shall be transferred from the respective funds available for the purposes of the
several Acts, in connection with which personnel or other facilities
of the Agricultural Adjustment Administration are utilized, proportionate amounts estimated by the Secretary to be required by the
Agricultural Adjustment Administration for administrative expenses in carrying out or cooperating in carrying out any of the
provisions of the respective Acts.
(b) In the administration of this title and sections 7 to 17, inclusive, of the Soil Conservation and Domestic Allotment Act, as
amended, the aggregate amount expended in any fiscal year, beginFebruary 7, 2014

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ning with the fiscal year ending June 30, 1942, for administrative
expenses in the District of Columbia, including regional offices, and
in the several States (not including the expenses of county and
local committees) shall not exceed 3 per centum of the total amount
available for such fiscal year for carrying out the purposes of this
title and such Act, unless otherwise provided by appropriation or
other law. In the administration of section 32 of the Act entitled
‘‘An Act to amend the Agricultural Adjustment Act, and for other
purposes,’’ approved August 24, 1935 (49 Stat. 774), as amended,
and the Agricultural Marketing Agreement Act of 1937, as amended, and those sections of the Agricultural Adjustment Act (of 1933),
as amended, which were reenacted and amended by the Agricultural Marketing Agreement Act of 1937, as amended, the aggregate
amount expended in any fiscal year, beginning with the fiscal year
ending June 30, 1942, for administrative expenses in the District
of Columbia, including regional offices, and in the several States
(not including the expenses of county and local committees) shall
not exceed 4 per centum of the total amount available for such fiscal year for carrying out the purposes of said Acts, unless otherwise
provided by appropriation or other law. In the event any administrative expenses of any county or local committee are deducted in
any fiscal year, beginning with the fiscal year ending June 30,
1939, from Soil Conservation Act payments, parity payments, or
loans, each farmer receiving benefits under such provisions shall be
apprised of the amount or percentage deducted from such benefit
payment or loan on account of such administrative expenses. The
names and addresses of the members and employees of any county
or local committee, and the amount of such compensation received
by each of them, shall be posted annually in a conspicuous place
in the area within which they are employed.
ALLOTMENT OF APPROPRIATIONS

SEC. 393. ø7 U.S.C. 1393¿ All funds for carrying out the provisions of this Act shall be available for allotment to bureaus and offices of the Department, and for transfer to such other agencies of
the Federal Government, and to such State agencies, as the Secretary may request to cooperate or assist in carrying out the provisions of this Act.
TITLE V—CROP INSURANCE

Subtitle A—Federal Crop Insurance Act
SEC. 501. ø7 U.S.C. 1501¿ SHORT TITLE AND APPLICATION OF OTHER
PROVISIONS.

This subtitle may be cited as the ‘‘Federal Crop Insurance Act’’.
Except as otherwise expressly provided the provisions in titles I to
IV, inclusive, shall not apply with respect to this subtitle, and the
term ‘‘Act’’ wherever it appears in such titles shall not be construed
to include this subtitle.
SEC. 502. ø7 U.S.C. 1502¿ PURPOSE AND DEFINITIONS.
(a) PURPOSE.—It is the purpose of this subtitle

to promote the
national welfare by improving the economic stability of agriculture

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Sec. 502

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 subtitle:
(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 subtitle.
(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 5 crop years,
as determined by the Secretary.
(4) BOARD.—The term ‘‘Board’’ means the Board of Directors of the Corporation established under section 505(a).
(5) CORPORATION.—The term ‘‘Corporation’’ means the
Federal Crop Insurance Corporation established under section
503.
(6) DEPARTMENT.—The term ‘‘Department’’ means the
United States Department of Agriculture.
(7) 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 1672D
of the Food, Agriculture, Conservation, and Trade Act of
1990 (7 U.S.C. 5925f).
(8) 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.
(9) ORGANIC CROP.—The term ‘‘organic crop’’ means an agricultural commodity that is organically produced consistent
with section 2103 of the Organic Foods Production Act of 1990
(7 U.S.C. 6502).
(10) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture.
(11) 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 CorFebruary 7, 2014

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poration 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.
(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 subtitle.
(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 subtitle or any other
program administered by the Secretary may not be conditioned on the producer providing consent under this paragraph.
(3) VIOLATIONS; PENALTIES.—Section 1770(c) of the Food
Security Act of 1985 (7 U.S.C. 2276(c)) 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 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.
(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
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Sec. 505

under this subtitle 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 subtitle 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
subtitle.
CREATION OF FEDERAL CROP INSURANCE CORPORATION

SEC. 503. ø7 U.S.C. 1503¿ To carry out the purposes of this
subtitle, there is hereby created as an agency of and within the Department a body corporate with the name ‘‘Federal Crop Insurance
Corporation’’. The principal office of the Corporation shall be located in the District of Columbia, but there may be established
agencies or branch offices elsewhere in the United States under
rules and regulations prescribed by the Board.
CAPITAL STOCK

SEC. 504. ø7 U.S.C. 1504¿ (a) The Corporation shall have a
capital stock of $500,000,000 subscribed by the United States of
America, payment for which shall, with the approval of the Secretary, be subject to call in whole or in part by the Board.
(b) There is hereby authorized to be appropriated such sums as
are necessary for the purpose of subscribing to the capital stock of
the Corporation.
(c) Receipts for payments by the United States of America for
or on account of such stock shall be issued by the Corporation to
the Secretary of the Treasury and shall be evidence of the stock
ownership by the United States of America.
(d) Within thirty days after the date of enactment of the Federal Crop Insurance Act of 1980, the Secretary of the Treasury
shall cancel, without consideration, receipts for payments for or on
account of the stock of the Corporation outstanding on such date
of enactment and such receipts shall cease to be liabilities of the
Corporation.
SEC. 505. ø7 U.S.C. 1505¿ MANAGEMENT OF CORPORATION.
(a) BOARD OF DIRECTORS.—
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(1) ESTABLISHMENT.—The management of the Corporation
shall be vested in a Board of Directors subject to the general
supervision of the Secretary.
(2) COMPOSITION.—The Board shall consist of only the following members:
(A) The manager of the Corporation, who shall serve
as a nonvoting ex officio member.
(B) The Under Secretary of Agriculture responsible for
the Federal crop insurance program.
(C) One additional Under Secretary of Agriculture (as
designated by the Secretary).
(D) The Chief Economist of the Department of Agriculture.
(E) One person experienced in the crop insurance business.
(F) One person experienced in reinsurance or the regulation of insurance.
(G) Four active producers who are policy holders, are
from different geographic areas of the United States, and
represent a cross-section of agricultural commodities
grown in the United States, including at least one specialty crop producer.
(3) APPOINTMENT OF PRIVATE SECTOR MEMBERS.—The
members of the Board described in subparagraphs (E), (F), and
(G) of paragraph (2)—
(A) shall be appointed by, and hold office at the pleasure of, the Secretary;
(B) shall not be otherwise employed by the Federal
Government;
(C) shall be appointed to staggered 4-year terms, as
determined by the Secretary; and
(D) shall serve not more than two consecutive terms.
(4) CHAIRPERSON.—The Board shall select a member of the
Board to serve as Chairperson.
(b) Vacancies in the Board so long as there shall be four members in office shall not impair the powers of the Board to execute
the functions of the Corporation, and four of the members in office
shall constitute a quorum for the transaction of the business of the
Board.
(c) The Directors of the Corporation who are employed in the
Department shall receive no additional compensation for their services as such Directors, but may be allowed necessary traveling and
subsistence expenses when engaged in business of the Corporation,
outside of the District of Columbia. The Directors of the Corporation who are not employed by the Federal Government shall be
paid such compensation for their services as Directors as the Secretary shall determine, but such compensation shall not exceed the
daily equivalent of the rate prescribed for grade GS–18 under section 5332 of title 5 of the United States Code when actually employed, and actual necessary traveling and subsistence expenses, or
a per diem allowance in lieu of subsistence expenses, as authorized
by section 5703 of title 5 of the United States Code for persons in
Government service employed intermittently, when on the business
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Sec. 506

of the Corporation away from their homes or regular places of business.
(d) The manager of the Corporation shall be its chief executive
officer, with such power and authority as may be conferred by the
Board. The manager shall be appointed by, and hold office at the
pleasure of, the Secretary.
(e) EXPERT REVIEW OF POLICIES, PLANS OF INSURANCE, AND
RELATED MATERIAL.—
(1) REVIEW BY EXPERTS.—The Board shall establish procedures under which any policy or plan of insurance, as well as
any related material or modification of such a policy or plan of
insurance, to be offered under this subtitle shall be subject to
independent reviews by persons experienced as actuaries and
in underwriting, as determined by the Board.
(2) REVIEW OF CORPORATION POLICIES AND PLANS.—Except
as provided in paragraph (3), the Board shall contract with at
least five persons to each conduct a review of the policy or plan
of insurance, of whom—
(A) not more than one person may be employed by the
Federal Government; and
(B) at least one person must be designated by approved insurance providers pursuant to procedures determined by the Board.
(3) REVIEW OF PRIVATE SUBMISSIONS.—If the reviews under
paragraph (1) cover a policy or plan of insurance, or any related material or modification of a policy or plan of insurance,
submitted under section 508(h)—
(A) the Board shall contract with at least five persons
to each conduct a review of the policy or plan of insurance,
of whom—
(i) not more than one person may be employed by
the Federal Government; and
(ii) none may be employed by an approved insurance provider; and
(B) each review must be completed and submitted to
the Board not later than 30 days prior to the end of the
120-day period described in section 508(h)(4)(D).
(4) CONSIDERATION OF REVIEWS.—The Board shall include
reviews conducted under this subsection as part of the consideration of any policy or plan or insurance, or any related material or modification of a policy or plan of insurance, proposed
to be offered under this subtitle.
(5) FUNDING OF REVIEWS.—Each contract to conduct a review under this subsection shall be funded from amounts made
available under section 516(b)(2)(A)(ii).
(6) RELATION TO OTHER AUTHORITY.—The contract authority provided in this subsection is in addition to any other contracting authority that may be exercised by the Board under
section 506(l).
SEC. 506. ø7 U.S.C. 1506¿ GENERAL POWERS.
(a) SUCCESSION.—The Corporation shall

corporate name.
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(b) CORPORATE SEAL.—The Corporation may adopt, alter, and
use a corporate seal, which shall be judicially noticed.
(c) PROPERTY.—The Corporation may purchase or lease and
hold such real and personal property as it deems necessary or convenient in the transaction of its business and may dispose of such
property held by it upon such terms as it deems appropriate.
(d) SUIT.—Subject to section 508(j)(2)(A), the Corporation, subject to the provisions of section 508(j), may sue and be sued in its
corporate name, but no attachment, injunction, garnishment, or
other similar process, mesne or final, shall be issued against the
Corporation or its property. The district courts of the United
States, including the district courts of the District of Columbia and
of any territory or possession, shall have exclusive original jurisdiction, without regard to the amount in controversy, of all suits
brought by or against the Corporation. The Corporation may intervene in any court in any suit, action, or proceeding in which it has
an interest. Any suit against the Corporation shall be brought in
the District of Columbia, or in the district wherein the plaintiff resides or is engaged in business.
(e) BYLAWS AND REGULATIONS.—The Corporation may adopt,
amend, and repeal bylaws, rules, and regulations governing the
manner in which its business may be conducted and the powers
granted to it by law may be exercised and enjoyed.
(f) MAILS.—The Corporation shall be entitled to the use of the
United States mails in the same manner as the other executive
agencies of Government.
(g) ASSISTANCE.—The Corporation, with the consent of any
board, commission, independent establishment, or executive department of the Government, including any field service thereof, may
avail itself of the use of information, services, facilities, officials,
and employees thereof in carrying out the provisions of this subtitle.
(h) COLLECTION AND SHARING OF INFORMATION.—
(1) SURVEYS AND INVESTIGATIONS.—The Corporation may
conduct surveys and investigations relating to crop insurance,
agriculture-related risks and losses, and other issues related to
carrying out this subtitle.
(2) DATA COLLECTION.—The Corporation shall assemble
data for the purpose of establishing sound actuarial bases for
insurance on agricultural commodities.
(3) SHARING OF RECORDS.—Notwithstanding section 502(c),
records submitted in accordance with this subtitle and section
196 of the Agricultural Market Transition Act (7 U.S.C. 7333)
shall be available to agencies and local offices of the Department, appropriate State and Federal agencies and divisions,
and approved insurance providers for use in carrying out this
subtitle, such section 196, and other agricultural programs.
(i) EXPENDITURES.—The Corporation shall determine the character and necessity for its expenditures under this subtitle and the
manner in which they shall be incurred, allowed, and paid, without
regard to the provisions of any other laws governing the expenditure of public funds and such determinations shall be final and
conclusive upon all other officers of the Government.
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Sec. 506

(j) SETTLING CLAIMS.—The Corporation shall have the authority to make final and conclusive settlement and adjustment of any
claim by or against the Corporation or a fiscal officer of the Corporation.
(k) OTHER POWERS.—The Corporation shall have such powers
as may be necessary or appropriate for the exercise of the powers
herein specifically conferred upon the Corporation and all such incidental powers as are customary in corporations generally.
(l) CONTRACTS.—The Corporation may enter into and carry out
contracts or agreements, and issue regulations, necessary in the
conduct of its business, as determined by the Board. State and local
laws or rules shall not apply to contracts, agreements, or regulations of the Corporation or the parties thereto to the extent that
such contracts, agreements, or regulations provide that such laws
or rules shall not apply, or to the extent that such laws or rules
are inconsistent with such contracts, agreements, or regulations.
(m) SUBMISSION OF CERTAIN INFORMATION.—
(1) SOCIAL SECURITY ACCOUNT AND EMPLOYER IDENTIFICATION NUMBERS.—The Corporation shall require, as a condition
of eligibility for participation in the multiple peril crop insurance program, submission of social security account numbers,
subject to the requirements of section 205(c)(2)(C)(iii) 42 of the
Social Security Act, and employer identification numbers, subject to the requirements of section 6109(f) of the Internal Revenue Code of 1986.
(2) NOTIFICATION BY POLICYHOLDERS.—Each policyholder
shall notify each individual or other entity that acquires or
holds a substantial beneficial interest in such policyholder of
the requirements and limitations under this subtitle.
(3) IDENTIFICATION OF HOLDERS OF SUBSTANTIAL INTERESTS.—The Manager of the Corporation may require each policyholder to provide to the Manager, at such times and in such
manner as prescribed by the Manager, the name of each individual that holds or acquires a substantial beneficial interest
in the policyholder.
(4) DEFINITION.—For purposes of this subsection, the term
‘‘substantial beneficial interest’’ means not less than 5 percent
of all beneficial interests in the policyholder.
(n) ACTUARIAL SOUNDNESS.—
(1) PROJECTED LOSS RATIO AS OF OCTOBER 1, 1995.—The
Corporation shall take such actions as are necessary to improve the actuarial soundness of Federal multiperil crop insurance coverage made available under this subtitle to achieve, on
and after October 1, 1995, an overall projected loss ratio of not
greater than 1.1, including—
(A) instituting appropriate requirements for documentation of the actual production history of insured producers to establish recorded or appraised yields for Federal
crop insurance coverage that more accurately reflect the
associated actuarial risk, except that the Corporation may
not carry out this paragraph in a manner that would pre42 Clause (iii) of section 205(c)(2)(C) of the Social Security Act (42 U.S.C. 405(c)(2)(C)) was redesignated as clause (iv) by section 321(a)(9) of Public Law 103–296 (108 Stat. 1536).

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vent beginning farmers (as defined by the Secretary) from
obtaining Federal crop insurance;
(B) establishing in counties, to the extent practicable,
a crop insurance option based on area yields in a manner
that allows an insured producer to qualify for an indemnity if a loss has occurred in a specified area in which the
farm of the insured producer is located;
(C) establishing a database that contains the social security account and employee identification numbers of participating producers, agents, and loss adjusters and using
the numbers to identify insured producers, agents, and
loss adjusters who are high risk for actuarial purposes and
insured producers who have not documented at least 4
years of production history, to assess the performance of
insurance providers, and for other purposes permitted by
law; and
(D) taking any other measures authorized by law to
improve the actuarial soundness of the Federal crop insurance program while maintaining fairness and effective coverage for agricultural producers.
(2) PROJECTED LOSS RATIO.—The Corporation shall take
such actions, including the establishment of adequate premiums, as are necessary to improve the actuarial soundness of
Federal multiperil crop insurance made available under this
subtitle to achieve an overall projected loss ratio of not greater
than 1.0.
(3) NONSTANDARD CLASSIFICATION SYSTEM.—To the extent
that the Corporation uses the nonstandard classification system, the Corporation shall apply the system to all insured producers in a fair and consistent manner.
(o) REGULATIONS.—The Secretary and the Corporation are each
authorized to issue such regulations as are necessary to carry out
this subtitle.
(p) PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS.—
(1) SENSE OF CONGRESS.—It is the sense of Congress that,
to the greatest extent practicable, all equipment and products
purchased by the Corporation using funds made available to
the Corporation should be American-made.
(2) NOTICE REQUIREMENT.—In providing financial assistance to, or entering into any contract with, any entity for the
purchase of equipment and products to carry out this subtitle,
the Corporation, to the greatest extent practicable, shall provide to the entity a notice describing the statement made in
paragraph (1).
(r) PROCEDURES FOR RESPONDING TO CERTAIN INQUIRIES.—
(1) PROCEDURES REQUIRED.—The Corporation shall establish procedures under which the Corporation will provide a
final agency determination in response to an inquiry regarding
the interpretation by the Corporation of this subtitle or any
regulation issued under this subtitle.
(2) IMPLEMENTATION.—Not later than 180 days after the
date of enactment of this subsection, the Corporation shall
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Sec. 507

issue regulations to implement this subsection. At a minimum,
the regulations shall establish—
(A) the manner in which inquiries described in paragraph (1) are required to be submitted to the Corporation;
and
(B) a reasonable maximum number of days within
which the Corporation will respond to all inquiries.
(3) EFFECT OF FAILURE TO TIMELY RESPOND.—If the Corporation fails to respond to an inquiry in accordance with the
procedures established pursuant to this subsection, the person
requesting the interpretation of this subtitle or regulation may
assume the interpretation is correct for the applicable reinsurance year.
PERSONNEL

SEC. 507. ø7 U.S.C. 1507¿ (a) The Secretary shall appoint such
officers and employees as may be necessary for the transaction of
the business of the Corporation pursuant to civil-service laws and
regulations, fix their compensation in accordance with the provisions of the Classification Act of 1923 43, as amended, define their
authority and duties, and delegate to them such of the powers vested in the Corporation as the Secretary may determine appropriate.
However, personnel paid by the hour, day, or month when actually
employed may be appointed and their compensation fixed without
regard to civil-service laws and regulations or the Classification Act
of 1923, as amended.
(b) Insofar as applicable, the benefits of the Act entitled ‘‘An
Act to provide compensation for employees of the United States suffering injuries while in the performance of their duties, and for
other purposes,’’ approved September 7, 1916, as amended (5
U.S.C. Chapter 8, subchapter I), shall extend to persons given employment under the provisions of this subtitle, including the employees of the committees and associations referred to in subsection
(c) of this section and the members of such committees.
(c) In the administration of this subtitle, the Board shall, to
the maximum extent possible, (1) establish or use committees or
associations of producers and make payments to them to cover the
administrative and program expenses, as determined by the Board,
incurred by them in cooperating in carrying out this subtitle, (2)
contract with private insurance companies, private rating bureaus,
and other organizations as appropriate for actuarial services, services relating to loss adjustment and rating plans of insurance, and
other services to avoid duplication by the Federal Government of
services that are or may readily be available in the private sector
and to enable the Corporation to concentrate on regulating the provision of insurance under this subtitle and evaluating new products
and materials submitted under section 508(h) or 523, and reim43 Section 1106(a) of the Classification Act of 1949 (63 Stat. 972) provides as follows: ‘‘Whenever reference is made in any other law to the Classification Act of 1923, as amended, such reference shall be held and considered to mean [the Classification Act of 1949]. Whenever reference
is made in any other law to a grade of the Classification Act of 1923, as amended, such reference
shall be held and considered to mean the corresponding grade shown in section 604 of the Classification Act of 1949.’’ The Classification Act of 1949 is now codified as Chapter 51 and subchapter III of Chapter 53 of title 5, United States Code. See section 7(b) of Public Law 89–554
(80 Stat. 631).

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burse such companies for the administrative and program expenses, as determined by the Board, incurred by them, under terms
and provisions and rates of compensation consistent with those
generally prevailing in the insurance industry, and (3) encourage
the sale of Federal crop insurance through licensed private insurance agents and brokers and give the insured the right to renew
such insurance for successive terms through such agents and brokers, in which case the agent or broker shall be reasonably compensated from premiums paid by the insured for such sales and renewals recognizing the function of the agent or broker to provide
continuing services while the insurance is in effect: Provided, That
such compensation shall not be included in computations establishing premium rates. The Board shall provide such agents and
brokers with indemnification, including costs and reasonable attorney fees, from the Corporation for errors or omissions on the part
of the Corporation or its contractors for which the agent or broker
is sued or held liable, except to the extent the agent or broker has
caused the error or omission. Nothing in this subsection shall permit the Corporation to contract with other persons to carry out the
responsibility of the Corporation to review and approve policies,
rates, and other materials submitted under section 508(h).
(d) The Secretary may allot to bureaus and offices of the Department or transfer to such other agencies of the State and Federal Governments as he may request to assist in carrying out this
subtitle any funds made available pursuant to the provisions of section 516.
(e) In carrying out the provisions of this subtitle the Board
may, in its discretion, utilize producer-owned and producer-controlled cooperative associations.
(f) The Board should use, to the maximum extent possible, the
resources, data, boards, and the committees of (1) the Soil Conservation Service, in assisting the Board in the classification of
land as to risk and production capability and in the development
of acceptable conservation practices; (2) the Forest Service, in assisting the Board in the development of a timber insurance plan;
(3) the Agricultural Stabilization and Conservation Service, in assisting the Board in the determination of individual producer yields
and in serving as a local contact point for farmers where the Board
deems necessary; and (4) other Federal agencies in any way the
Board deems necessary in carrying out this subtitle.
(g)(1) The Corporation shall establish a management-level position to be known as the Specialty Crops Coordinator.
(2) The Specialty Crops Coordinator shall have primary responsibility for addressing the needs of specialty crop producers,
and for providing information and advice, in connection with the
activities of the Corporation to improve and expand the insurance
program for specialty crops. In carrying out this paragraph, the
Specialty Crops Coordinator shall act as the liaison of the Corporation with representatives of specialty crop producers and assist the
Corporation with the knowledge, expertise, and familiarity of the
producers with risk management and production issues pertaining
to specialty crops.
(3) The Specialty Crops Coordinator shall use information collected from Corporation field office directors in States in which speFebruary 7, 2014

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cialty crops have a significant economic effect and from other
sources, including the extension service and colleges and universities.
SEC. 508. ø7 U.S.C. 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, and
sweet potatoes, insurance shall not extend beyond the period
during which the insured commodity is in the field. As used in
the preceding sentence, in the case of an aquacultural species,
the term ‘‘field’’ means the environment in which the commodity is produced.
(3) 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.—
(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).

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(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
subtitle (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 subtitle 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.—
(A) DATA COLLECTION.—Not later than 180 days after
the date of enactment of this paragraph, the Secretary
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ister for data collection to assist the Corporation in formulating crop insurance policies for new and specialty crops.
(B) ADDITION OF NEW CROPS.—Not later than 1 year
after the date of enactment of this paragraph, and annually thereafter, the Corporation shall report to Congress on
the progress and expected timetable for expanding crop insurance coverage under this subtitle to new and specialty
crops.
(C) ADDITION OF DIRECT SALE PERISHABLE CROPS.—Not
later than 1 year after the date of enactment of this paragraph, the Corporation shall report to Congress on the feasibility of offering a crop insurance program designed to
meet the needs of specialized producers of vegetables and
other perishable crops who market through direct marketing channels.
(D) ADDITION OF NURSERY CROPS.—Not later than 2
years after the date of enactment of this subparagraph, the
Corporation shall conduct a study and limited pilot program on the feasibility of insuring nursery crops.
(7) ADEQUATE COVERAGE FOR STATES.—
(A) DEFINITION OF ADEQUATELY SERVED.—In this paragraph, the term ‘‘adequately served’’ means having a participation rate that is at least 50 percent of the national
average participation rate.
(B) REVIEW.—The Board shall review the policies and
plans of insurance that are offered by approved insurance
providers under this subtitle 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), the
Board shall submit to Congress a report on the results
of the review.
(ii) RECOMMENDATIONS.—The report shall include
recommendations to increase participation in States
that are not adequately served by the policies and
plans of insurance.
(8) SPECIAL PROVISIONS FOR COTTON AND RICE.—Notwithstanding any other provision of this subtitle, 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 subtitle 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.
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(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, fatherin-law, mother-in-law, brother-in-law, sister-in-law, son-inlaw, 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 subtitle 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
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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 subtitle 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 subtitle 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 515(h) 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.
(b) CATASTROPHIC RISK PROTECTION.—
(1) COVERAGE AVAILABILITY.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), 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.
(B) EXCEPTION.—Coverage described in subparagraph
(A) shall not be available for crops and grasses used for
grazing.
(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
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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
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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 the date of enactment of this subparagraph, 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 $300 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
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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 516(c), to be available
for the programs and activities of the Corporation.
(ii) LIMITATION.—No funds deposited in the crop
insurance fund under this subparagraph may be used
to compensate an approved insurance provider or
agent for the delivery of services under this subsection.
(E) WAIVER OF FEE.—The Corporation shall waive the
amounts required under this paragraph for limited resource farmers and beginning farmers or ranchers, as defined by the Corporation.
(6) PARTICIPATION REQUIREMENT.—A producer may obtain
catastrophic risk coverage for a crop of the producer on land
in the county only if the producer obtains the coverage for the
crop on all insurable land of the producer in the county.
(7) 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 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 subtitle
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
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catastrophic risk protection plan under this subtitle, 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 subtitle
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;
(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
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(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 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 14 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) 86 percent; and
(II) the coverage level selected by the producer for the underlying policy or plan of insurance.
(iv) INELIGIBLE CROPS AND ACRES.—Crops for
which the producer has elected under section 1116 of
the Agricultural Act of 2014 to receive agriculture risk
coverage and acres that are enrolled in the stacked income protection plan under section 508B 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 subtitle, the Corporation shall establish or approve
the price level (referred to in this subtitle as the ‘‘expected
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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
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(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 revenuebased 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.
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(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
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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—
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(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) 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.
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(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) 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.
(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) 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.
(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) 48 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) 38 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.
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(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) 65 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 subtitle 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.
(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
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(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
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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, 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 FARMERS OR RANCHERS.—Notwithstanding any other provision of this subsection regarding
payment of a portion of premiums, a beginning 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.
(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 subtitle,
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.
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(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
subtitle 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 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
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obtained by the beginning 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.—
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(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,
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 acFebruary 7, 2014

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tual 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 102 of the
Department of Agriculture Organic Act of 1944 (7
U.S.C. 147a)).
(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.
(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.—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.
(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 subtitle, including the requirements concerning the levels of coverage and
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modity 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; and
(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.
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(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, United
States Code.
(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, United States Code, 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
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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 subtitle, 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 522, or conducted under section 523
(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
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or section 522, or conducted under section 523 (other than
a policy or plan of insurance applicable to livestock), and
first approved by the Board after the date of the enactment of this subparagraph, 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 the date of the enactment of
this subparagraph).
(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 subtitle consistent with section 507(c)(2).
(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.—
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(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 subtitle, 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
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trative 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 1⁄2 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
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section (c)(4)(C) or section 508B 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 the
date of enactment of this paragraph.
(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, United States
Code.
(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).
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(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 Act 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
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that Agreement were extended over the same peFebruary 7, 2014

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riod of time, as estimated on the date of enactment of the Agricultural Act of 2014; and
(III) in no event significantly depart from
budget neutrality unless otherwise required by
this Act.
(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
subtitle on—
(A) for the 2011 reinsurance year, October 1, 2012;
and
(B) for each reinsurance year thereafter, October 1 of
the following calendar year.
(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 subtitle 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.
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(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 subtitle.
(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 subtitle, 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 the
date of enactment of this paragraph, 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.
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(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
subtitle 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.—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 after the date of enactment of the Agricultural Act of
2014 shall be subject to a reduction in benefits under this
subtitle as described in this paragraph.
(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 subtitle, 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.
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(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.
SEC. 508A. ø7 U.S.C. 1508a¿ DOUBLE INSURANCE AND PREVENTED
PLANTING.
(a) DEFINITIONS.—In this section:
(1) FIRST CROP.—The term ‘‘first crop’’ means the first crop

of the first agricultural commodity planted for harvest, or prevented from being planted, on specific acreage during a crop
year and insured under this subtitle.
(2) SECOND CROP.—The term ‘‘second crop’’ means a second
crop of the same agricultural commodity as the first crop, or
a crop of a different agricultural commodity following the first
crop, planted on the same acreage as the first crop for harvest
in the same crop year, except the term does not include a replanted crop.
(3) REPLANTED CROP.—The term ‘‘replanted crop’’ means
any agricultural commodity replanted on the same acreage as
the first crop for harvest in the same crop year if the replanting is required by the terms of the policy of insurance covering
the first crop.
(b) DOUBLE INSURANCE.—
(1) OPTIONS ON LOSS TO FIRST CROP.—Except as provided
in subsections (d) and (e), if a first crop insured under this subtitle in a crop year has a total or partial insurable loss, the
producer of the first crop may elect one of the following options:
(A) NO SECOND CROP PLANTED.—The producer may—
(i) elect to not plant a second crop on the same
acreage for harvest in the same crop year; and
(ii) collect an indemnity payment that is equal to
100 percent of the insurable loss for the first crop.
(B) SECOND CROP PLANTED.—The producer may—
(i) plant a second crop on the same acreage for
harvest in the same crop year; and
(ii) collect an indemnity payment established by
the Corporation for the first crop, but not to exceed 35
percent of the insurable loss for the first crop.
(2) EFFECT OF NO LOSS TO SECOND CROP.—If a producer
makes an election under paragraph (1)(B) and the producer
does not suffer an insurable loss to the second crop, the producer may collect an indemnity payment for the first crop that
is equal to—
(A) 100 percent of the insurable loss for the first crop;
less
(B) the amount previously collected under paragraph
(1)(B)(ii).
(3) PREMIUM FOR FIRST CROP IF SECOND CROP PLANTED.—
(A) INITIAL PREMIUM.—If a producer makes an election
under paragraph (1)(B), the producer shall be responsible
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for a premium for the first crop that is commensurate with
the indemnity paid under paragraph (1)(B)(ii). The Corporation shall adjust the total premium for the first crop
to reflect the reduced indemnity.
(B) EFFECT OF NO LOSS TO SECOND CROP.—If the producer makes an election under paragraph (1)(B) and the
producer does not suffer an insurable loss to the second
crop, the producer shall be responsible for a premium for
the first crop that is equal to—
(i) the full premium owed by the producer for the
first crop; less
(ii) the amount of premium previously paid under
subparagraph (A).
(c) PREVENTED PLANTING COVERAGE.—
(1) OPTIONS ON LOSS TO FIRST CROP.—Except as provided
in subsections (d) and (e), if a first crop insured under this subtitle in a crop year is prevented from being planted, the producer of the first crop may elect one of the following options:
(A) NO SECOND CROP PLANTED.—The producer may—
(i) elect to not plant a second crop on the same
acreage for harvest in the same crop year; and
(ii) subject to paragraph (4), collect an indemnity
payment that is equal to 100 percent of the prevented
planting guarantee for the acreage for the first crop.
(B) SECOND CROP PLANTED.—The producer may—
(i) plant a second crop on the same acreage for
harvest in the same crop year; and
(ii) subject to paragraphs (4) and (5), collect an indemnity payment established by the Corporation for
the first crop, but not to exceed 35 percent of the prevented planting guarantee for the acreage for the first
crop.
(2) PREMIUM FOR FIRST CROP IF SECOND PLANTED.—If the
producer makes an election under paragraph (1)(B), the producer shall pay a premium for the first crop that is commensurate with the indemnity paid under paragraph (1)(B)(ii). The
Corporation shall adjust the total premium for the first crop to
reflect the reduced indemnity.
(3) EFFECT ON ACTUAL PRODUCTION HISTORY.—Except in
the case of double cropping described in subsection (d), if a producer make an election under paragraph (1)(B) for a crop year,
the Corporation shall assign the producer a recorded yield for
that crop year for the first crop equal to 60 percent of the producer’s actual production history for the agricultural commodity involved, for purposes of determining the producer’s actual production history for subsequent crop years.
(4) AREA CONDITIONS REQUIRED FOR PAYMENT.—The Corporation shall limit prevented planting payments for producers
to those situations in which other producers, in the area where
a first crop is prevented from being planted is located, are also
generally affected by the conditions that prevented the first
crop from being planted.
(5) PLANTING DATE.—If a producer plants the second crop
before the latest planting date established by the Corporation
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for the first crop, the Corporation shall not make a prevented
planting payment with regard to the first crop.
(d) EXCEPTION FOR ESTABLISHED DOUBLE CROPPING PRACTICES.—A producer may receive full indemnity payments on two or
more crops planted for harvest in the same crop year and insured
under this subtitle if each of the following conditions are met:
(1) There is an established practice of planting two or more
crops for harvest in the same crop year in the area, as determined by the Corporation.
(2) An additional coverage policy or plan of insurance is offered with respect to the agricultural commodities planted on
the same acreage for harvest in the same crop year in the area.
(3) The producer has a history of planting two or more
crops for harvest in the same crop year or the applicable acreage has historically had two or more crops planted for harvest
in the same crop year.
(4) The second or more crops are customarily planted after
the first crop for harvest on the same acreage in the same year
in the area.
(e) SUBSEQUENT CROPS.—Except in the case of double cropping
described in subsection (d), if a producer elects to plant a crop
(other than a replanted crop) subsequent to a second crop on the
same acreage as the first crop and second crop for harvest in the
same crop year, the producer shall not be eligible for insurance
under this subtitle, or noninsured crop assistance under section
196 of the Agricultural Market Transition Act (7 U.S.C. 7333), for
the subsequent crop.
SEC. 508B. ø7 U.S.C. 1508b¿ STACKED INCOME PROTECTION PLAN FOR
PRODUCERS OF UPLAND COTTON.
(a) AVAILABILITY.—Beginning not later than the 2015 crop of

upland cotton, the Corporation shall make available to producers
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 2011 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) Provide coverage for revenue loss of not less than 10
percent and not more than 30 percent of expected county revenue, specified in increments of 5 percent. The deductible shall
be 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.
(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.
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(3) Be purchased in addition to any other individual or
area coverage in effect on the producer’s acreage or as a standalone 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) 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) 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 Service (or both) or, 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 less
than the higher of the level established on a program wide
basis or 120 percent.
(6) 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. Indemnities
under the Stacked Income Protection Plan shall not include or
overlap the amount of the deductible selected under paragraph
(1).
(7) In all counties for which data are available, establish
separate coverage levels for irrigated and nonirrigated practices.
(c) PREMIUM.—Notwithstanding section 508(d), the premium
for the Stacked Income Protection Plan shall—
(1) be sufficient to cover anticipated losses and a reasonable reserve; and
(2) include an amount for operating and administrative expenses established in accordance with section 508(k)(4)(F).
(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 (c) for the coverage level selected; and
(2) the amount determined under subsection (c)(2), subject
to section 508(k)(4)(F), for the coverage to cover administrative
and operating expenses.
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(e) RELATION TO OTHER COVERAGES.—The Stacked Income Protection Plan is in addition to all other coverages available to producers of upland cotton.
SEC. 508C. ø7 U.S.C. 1508c¿ PEANUT REVENUE CROP INSURANCE.
(a) IN GENERAL.—Effective beginning with the 2015 crop

year,
the Risk Management Agency and the Corporation shall make
available to producers of peanuts a revenue crop insurance program for peanuts.
(b) EFFECTIVE PRICE.—Subject to subsection (c), for purposes of
the revenue crop insurance program and the multiperil crop insurance program under this Act, the effective price for peanuts shall
be equal to the Rotterdam price index for peanuts or other appropriate price as determined by the Secretary, as adjusted to reflect
the farmer stock price of peanuts in the United States.
(c) ADJUSTMENTS.—
(1) IN GENERAL.—The effective price for peanuts established under subsection (b) may be adjusted by the Risk Management Agency and the Corporation to correct distortions.
(2) ADMINISTRATION.—If an adjustment is made under
paragraph (1), the Risk Management Agency and the Corporation shall—
(A) make the adjustment in an open and transparent
manner; and
(B) 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 the reasons for the adjustment.
INDEMNITIES EXEMPT FROM LEVY

SEC. 509. ø7 U.S.C. 1509¿ Claims for indemnities under this
subtitle shall not be liable to attachment, levy, garnishment, or any
other legal process before payment to the insured or to deduction
on account of the indebtedness of the insured or the estate of the
insured to the United States except claims of the United States or
the Corporation arising under this subtitle.
DEPOSIT OF FUNDS

SEC. 510. ø7 U.S.C. 1510¿ All money of the Corporation not
otherwise employed may be deposited with the Treasurer of the
United States or in any bank approved by the Secretary of the
Treasury, subject to withdrawal by the Corporation at any time, or
with the approval of the Secretary of the Treasury may be invested
in obligations of the United States or in obligations guaranteed as
to principal and interest by the United States. Subject to the approval of the Secretary of the Treasury, the Federal Reserve banks
are hereby authorized and directed to act as depositories,
custodians, and fiscal agents for the Corporation in the performance of its powers conferred by this subtitle.
TAX EXEMPTION

SEC. 511. ø7 U.S.C. 1511¿ The Corporation, including its franchise, its capital, reserves, and surplus, and its income and propFebruary 7, 2014

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erty, shall be exempt from all taxation now or hereafter imposed
by the United States or by any Territory, dependency, or possession
thereof, or by any State, county, municipality or local taxing authority. A contract of insurance of the Corporation, and a contract
of insurance reinsured by the Corporation, shall be exempt from
taxation imposed by any State, municipality, or local taxing authority.
FISCAL AGENCY OF GOVERNMENT

SEC. 512. ø7 U.S.C. 1512¿ When designated for that purpose
by the Secretary of the Treasury, the Corporation shall be a depository of public money, except receipts from customs, under such regulations as may be prescribed by said Secretary; and it may also
be employed as a financial agent of the Government; and it shall
perform all such reasonable duties, as a depository of public money
and financial agent of the Government, as may be required of it.
ACCOUNTING BY CORPORATION

SEC. 513. ø7 U.S.C. 1513¿ The Corporation shall at all times
maintain complete and accurate books of account and shall file annually with the Secretary a complete report as to the business of
the Corporation.
CRIMES AND OFFENSES

SEC. 514. ø7 U.S.C. 1514¿ øSubsections (a) through (e) repealed by 62 Stat. 859. See criminal provisions at the end of this
Act.¿
(f) The provisions of section 22 of title 41 shall not apply to any
crop insurance agreements made under this subtitle.
SEC. 515. ø7 U.S.C. 1515¿ PROGRAM COMPLIANCE AND INTEGRITY.
(a) PURPOSE.—
(1) IN GENERAL.—The purpose of this section is to improve

compliance with, and the integrity of, the Federal crop insurance program.
(2) ROLE OF INSURANCE PROVIDERS.—The Corporation shall
work actively with approved insurance providers to address
program compliance and integrity issues as such issues develop.
(b) NOTIFICATION OF COMPLIANCE PROBLEMS.—
(1) NOTIFICATION OF ERRORS, OMISSIONS, AND FAILURES.—
The Corporation shall notify in writing an approved insurance
provider of any error, omission, or failure to follow Corporation
regulations or procedures for which the approved insurance
provider may be responsible and which may result in a debt
owed the Corporation.
(2) TIME FOR NOTIFICATION.—Notice under paragraph (1)
shall be given within 3 years after the end of the insurance period during which the error, omission, or failure is alleged to
have occurred, except that this time limitation shall not apply
with respect to an error, omission, or procedural violation that
is willful or intentional.
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(3) EFFECT OF FAILURE TO TIMELY NOTIFY.—Except as provided in paragraph (2), the failure to timely provide the notice
required under this subsection shall relieve the approved insurance provider from the debt owed the Corporation.
(c) RECONCILING PRODUCER INFORMATION.—
(1) IN GENERAL.—The Secretary shall develop and implement a coordinated plan for the Corporation and the Farm
Service Agency to reconcile all relevant information received by
the Corporation or the Farm Service Agency from a producer
who obtains crop insurance coverage under this subtitle.
(2) FREQUENCY.—Beginning with the 2001 crop year, the
Secretary shall require that the Corporation and the Farm
Service Agency reconcile such producer-derived information on
at least an annual basis in order to identify and address any
discrepancies.
(3) CORRECTIONS.—
(A) IN GENERAL.—In addition to the corrections permitted by the Corporation as of the day before the date of
enactment of the Agricultural Act of 2014, the Corporation
shall establish procedures that allow an agent or an approved insurance provider, subject to subparagraph (B)—
(i) within a reasonable amount of time following
the applicable sales closing date, to correct errors in
information 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 correct and consistent with information reported by the producer for
other programs administered by the Secretary;
(ii) within a reasonable amount of time following—
(I) the acreage reporting date, to reconcile errors in the information reported by the producer
with correct information determined from any
other program administered by the Secretary; or
(II) the date of any subsequent correction of
data by the Farm Service Agency made as a result
of the verification of information, to make conforming corrections; and
(iii) at any time, to correct electronic transmission
errors that were made by an agent or approved insurance provider, or such errors made by the Farm Service Agency or any other agency of the Department of
Agriculture in transmitting the information provided
by the producer for purposes of other programs of the
Department to the extent an agent or approved insurance provider relied upon the erroneous information
for crop insurance purposes.
(B) LIMITATION.—In accordance with the procedures of
the Corporation, correction to the information described in
clauses (i) and (ii) of subparagraph (A) may only be made
if the corrections do not allow the producer—
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surance program or any related program administered
by the Secretary;
(ii) to obtain, enhance, or increase an insurance
guarantee or indemnity if a cause of loss exists or has
occurred before any correction has been made, or avoid
premium owed if no loss is likely to occur; or
(iii) to avoid an obligation or requirement under
any Federal or State law.
(C) EXCEPTION TO LATE FILING SANCTIONS.—Any corrections made within a reasonable amount of time, in accordance with established procedures, pursuant to this
paragraph shall not be subject to any late filing sanctions
authorized in the reinsurance agreement with the Corporation.
(D) LATE PAYMENT OF DEBT.—In the case of a producer
that has inadvertently failed to pay a debt due as specified
by regulations of the Corporation and has been determined
to be ineligible for crop insurance pursuant to the terms of
the policy as a result of that failure, the Corporation may
determine to allow the producer to pay the debt and purchase the crop insurance after the sales closing date, in accordance with procedures and limitations established by
the Corporation.
(d) IDENTIFICATION AND ELIMINATION OF FRAUD, WASTE, AND
ABUSE.—
(1) FSA MONITORING PROGRAM.—The Secretary shall develop and implement a coordinated plan for the Farm Service
Agency to assist the Corporation in the ongoing monitoring of
programs carried out under this subtitle, including—
(A) at the request of the Corporation or, subject to
paragraph (2), on its own initiative if the Farm Service
Agency has reason to suspect the existence of program
fraud, waste, or abuse, conducting fact finding relative to
allegations of program fraud, waste, or abuse;
(B) reporting to the Corporation, in writing in a timely
manner, the results of any fact finding conducted pursuant
to subparagraph (A), any allegation of fraud, waste, or
abuse, and any identified program vulnerabilities; and
(C) assisting the Corporation and approved insurance
providers in auditing a statistically appropriate number of
claims made under any policy or plan of insurance under
this subtitle.
(2) FSA INQUIRY.—If, within five calendar days after receiving a report submitted under paragraph (1)(B), the Corporation does not provide a written response that describes the
intended actions of the Corporation, the Farm Service Agency
may conduct its own inquiry into the alleged program fraud,
waste, or abuse on approval from the State director of the
Farm Service Agency of the State in which the alleged fraud,
waste, or abuse occurred. If as a result of the inquiry, the
Farm Service Agency concludes further investigation is warranted, but the Corporation declines to proceed with the investigation, the Farm Service Agency may refer the matter to the
Inspector General of the Department of Agriculture.
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(3) USE OF FIELD INFRASTRUCTURE.—The plan required by
paragraph (1) shall provide for the use of the field infrastructure of the Farm Service Agency. The Secretary shall ensure
that relevant Farm Service Agency personnel are appropriately
trained for any responsibilities assigned to the personnel under
the plan. At a minimum, the personnel shall receive the same
level of training and pass the same basic competency tests as
required of loss adjusters of approved insurance providers.
(4) MAINTENANCE OF PROVIDER EFFORT.—
(A) IN GENERAL.—The activities of the Farm Service
Agency under this subsection do not affect the responsibility of approved insurance providers to conduct any audits of claims or other program reviews required by the
Corporation.
(B) NOTIFICATION OF PROVIDERS.—The Corporation
shall notify the appropriate approved insurance provider of
a report from the Farm Service Agency regarding alleged
program fraud, waste, or abuse, unless the provider is suspected to be included in, or a party to, the alleged fraud,
waste, or abuse.
(C) RESPONSE.—An approved insurance provider that
receives a notice under subparagraph (B) shall submit a
report to the Corporation, within an appropriate time period determined by the Secretary, describing the actions
taken by the provider to investigate the allegations of program fraud, waste, or abuse contained in the notice.
(5) CORPORATION RESPONSE TO PROVIDER REPORTS.—
(A) PROMPT RESPONSE.—If an approved insurance provider reports to the Corporation that the approved insurance provider suspects intentional misrepresentation,
fraud, waste, or abuse, the Corporation shall make a determination and provide, within 90 calendar days after receiving the report, a written response that describes the
intended actions of the Corporation.
(B) COOPERATIVE EFFORT.—The approved insurance
provider and the Corporation shall take coordinated action
in any case where misrepresentation, fraud, waste, or
abuse is alleged.
(C) FAILURE TO TIMELY RESPOND.—If the Corporation
fails to respond as required by subparagraph (A), an approved insurance provider may request the Farm Service
Agency to assist the provider in an inquiry into the alleged
program fraud, waste, or abuse.
(e) CONSULTATION WITH STATE FSA COMMITTEES.—The Secretary shall establish procedures under which the Corporation
shall consult with the State committee of the Farm Service Agency
for a State with respect to policies, plans of insurance, and material related to such policies or plans of insurance (including applicable sales closing dates, assigned yields, and transitional yields)
offered in that State under this subtitle.
(f) DETECTION OF DISPARATE PERFORMANCE.—
(1) COVERED ACTIVITIES.—The Secretary shall establish
procedures under which the Corporation will be able to identify
the following:
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(A) Any agent engaged in the sale of coverage offered
under this subtitle where the loss claims associated with
such sales by the agent are equal to or greater than 150
percent (or an appropriate percentage specified by the Corporation) of the mean for all loss claims associated with
such sales by all other agents operating in the same area,
as determined by the Corporation.
(B) Any person performing loss adjustment services
relative to coverage offered under this subtitle where such
loss adjustments performed by the person result in accepted or denied claims equal to or greater than 150 percent
(or an appropriate percentage specified by the Corporation)
of the mean for accepted or denied claims (as applicable)
for all other persons performing loss adjustment services
in the same area, as determined by the Corporation.
(2) REVIEW.—
(A) REVIEW REQUIRED.—The Corporation shall conduct
a review of any agent identified pursuant to paragraph
(1)(A), and any person identified pursuant to paragraph
(1)(B), to determine whether the higher loss claims associated with the agent or the higher number of accepted or
denied claims (as applicable) associated with the person
are the result of fraud, waste, or abuse.
(B) REMEDIAL ACTION.—The Corporation shall take appropriate remedial action with respect to any occurrence of
fraud, waste, or abuse identified in a review conducted
under this paragraph.
(3) OVERSIGHT OF AGENTS AND LOSS ADJUSTERS.—The Corporation shall develop procedures to require an annual review
by an approved insurance provider of the performance of each
agent and loss adjuster used by the approved insurance provider. The Corporation shall oversee the conduct of annual reviews and may consult with an approved insurance provider
regarding any remedial action that is determined to be necessary as a result of the annual review of an agent or loss adjuster.
(g) SUBMISSION OF INFORMATION TO CORPORATION TO SUPPORT
COMPLIANCE EFFORTS.—
(1) TYPES OF INFORMATION REQUIRED.—The Secretary shall
establish procedures under which approved insurance providers shall submit to the Corporation the following information with respect to each policy or plan of insurance offered
under this subtitle:
(A) The name and identification number of the insured.
(B) The agricultural commodity to be insured.
(C) The elected coverage level, including the price election, of the insured.
(2) TIME FOR SUBMISSION.—The information required by
paragraph (1) with respect to a policy or plan of insurance
shall be submitted so as to ensure receipt by the Corporation
not later than the Saturday of the week containing the calendar day that is 30 days after the applicable sales closing
date for the crop to be insured.
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(h) SANCTIONS FOR PROGRAM NONCOMPLIANCE AND FRAUD.—
(1) FALSE INFORMATION.—A producer, agent, loss adjuster,
approved insurance provider, or other person that willfully and
intentionally provides any false or inaccurate information to
the Corporation or to an approved insurance provider with respect to a policy or plan of insurance under this subtitle may,
after notice and an opportunity for a hearing on the record, be
subject to one or more of the sanctions described in paragraph
(3).
(2) COMPLIANCE.—A person may, after notice and an opportunity for a hearing on the record, be subject to one or more
of the sanctions described in paragraph (3) if the person is a
producer, agent, loss adjuster, approved insurance provider, or
other person that willfully and intentionally fails to comply
with a requirement of the Corporation.
(3) AUTHORIZED SANCTIONS.—If the Secretary determines
that a person covered by this subsection has committed a material violation under paragraph (1) or (2), the following sanctions may be imposed:
(A) CIVIL FINES.—A civil fine may be imposed for each
violation in an amount not to exceed the greater of—
(i) the amount of the pecuniary gain obtained as
a result of the false or inaccurate information provided
or the noncompliance with a requirement of this subtitle; or
(ii) $10,000.
(B) PRODUCER DISQUALIFICATION.—In the case of a violation committed by a producer, the producer may be disqualified for a period of up to 5 years from receiving any
monetary or nonmonetary benefit provided under each of
the following:
(i) This subtitle.
(ii) The Agricultural Market Transition Act (7
U.S.C. 7201 et seq.), including the noninsured crop
disaster assistance program under section 196 of that
Act (7 U.S.C. 7333).
(iii) The Agricultural Act of 1949 (7 U.S.C. 1421 et
seq.).
(iv) The Commodity Credit Corporation Charter
Act (15 U.S.C. 714 et seq.).
(v) The Agricultural Adjustment Act of 1938 (7
U.S.C. 1281 et seq.).
(vi) Title XII of the Food Security Act of 1985 (16
U.S.C. 3801 et seq.).
(vii) The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.).
(viii) Any law that provides assistance to a producer of an agricultural commodity affected by a crop
loss or a decline in the prices of agricultural commodities.
(C) DISQUALIFICATION OF OTHER PERSONS.—In the case
of a violation committed by an agent, loss adjuster, approved insurance provider, or other person (other than a
producer), the violator may be disqualified for a period of
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up to 5 years from participating in any program, or receiving any benefit, under this subtitle.
(4) ASSESSMENT OF SANCTION.—The Secretary shall consider the gravity of the violation of the person covered by this
subsection in determining—
(A) whether to impose a sanction under this subsection; and
(B) the type and amount of the sanction to be imposed.
(5) DISCLOSURE OF SANCTIONS.—Each policy or plan of insurance under this subtitle shall provide notice describing the
sanctions prescribed under paragraph (3) for willfully and intentionally—
(A) providing false or inaccurate information to the
Corporation or to an approved insurance provider; or
(B) failing to comply with a requirement of the Corporation.
(6) INSURANCE FUND.—Any funds collected under this subsection shall be deposited into the insurance fund established
under section 516(c).
(i) ANNUAL REPORT ON PROGRAM COMPLIANCE AND INTEGRITY
EFFORTS.—
(1) REPORT REQUIRED.—The Secretary 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 describing the operation of this section during the preceding year and efforts undertaken by the
Secretary and the Corporation to carry out this section.
(2) INFORMATION REGARDING FRAUD, WASTE, AND ABUSE.—
The report shall identify specific occurrences of waste, fraud, or
abuse and contain an outline of actions that have been or are
being taken to eliminate the identified waste, fraud, or abuse.
(j) INFORMATION MANAGEMENT.—
(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.
(2) USE OF AVAILABLE INFORMATION TECHNOLOGIES.—The
Secretary shall use the information technologies known as data
mining and data warehousing and other available information
technologies to administer and enforce this subtitle.
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(3) USE OF PRIVATE SECTOR.—The Secretary may enter into
contracts to use private sector expertise and technological resources in implementing this subsection, which shall be subject
to competition on a periodic basis, as determined by the Secretary.
(k) FUNDING.—
(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, $14,000,000; and
(II) for each of fiscal years 2015 through 2018,
$9,000,000; or
(ii) if the Acreage Crop Reporting Streamlining
Initiative (ACRSI) project is substantially completed
by September 30, 2015, not more than $14,000,000 for
each of the fiscal years 2015 through 2018.
(B) NOTIFICATION.—The Secretary shall notify the
Committee on Agriculture of the House of Representatives
and the Committee on Agriculture, Nutrition, and Forestry
of the Senate of the substantial completion of the Acreage
Crop Reporting Streamlining Initiative (ACRSI) project not
later than July 1, 2015.
(2) DATA MINING.—To carry out subsection (j)(2), the Corporation may use, from amounts made available from the insurance fund established under section 516(c), not more than
$4,000,000 for fiscal year 2009 and each subsequent fiscal year.
SEC. 516. ø7 U.S.C. 1516¿ FUNDING.
(a) AUTHORIZATION OF APPROPRIATIONS.—
(1) DISCRETIONARY EXPENSES.—There

are authorized to be
appropriated for fiscal year 1999 and each subsequent fiscal
year such sums as are necessary to cover the salaries and expenses of the Corporation.
(2) MANDATORY EXPENSES.—There are authorized to be appropriated such sums as are necessary to cover for each of the
1999 and subsequent reinsurance years the following:
(A) The administrative and operating expenses of the
Corporation for the sales commissions of agents.
(B) Premium subsidies, including the administrative
and operating expenses of an approved insurance provider
for the delivery of policies with additional coverage.
(C) Costs associated with the conduct of livestock and
wild salmon pilot programs carried out under section 523,
subject to the limitations in subsections (a)(3)(E)(ii) and
(b)(10) of section 523.
(D) Costs associated with the reimbursement, contracting, and partnerships for research and development
under section 522.
(b) PAYMENT OF CORPORATION EXPENSES FROM INSURANCE
FUND.—
(1) EXPENSES GENERALLY.—For each of the 1999 and subsequent reinsurance years, the Corporation may pay from the
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insurance fund established under subsection (c) all expenses of
the Corporation (other than expenses covered by subsection
(a)(1) and expenses covered by paragraph (2)(A)), including the
following:
(A) Premium subsidies and indemnities.
(B) Administrative and operating expenses of the Corporation necessary to pay the sales commissions of agents.
(C) All administrative and operating expense reimbursements due under a reinsurance agreement with an
approved insurance provider.
(D) Costs associated with the conduct of livestock and
wild salmon pilot programs carried out under section 523,
subject to the limitations in subsections (a)(3)(E)(ii) and
(b)(10) of section 523.
(E) Costs associated with the reimbursement, contracting, and partnerships for research and development
under section 522.
(2) POLICY CONSIDERATION AND IMPLEMENTATION.—
(A) IN GENERAL.—For each of the 1999 and subsequent
reinsurance years, the Corporation may use the insurance
fund established under subsection (c), but not to exceed
$3,500,000 for each fiscal year, to pay the following:
(i) Costs associated with the consideration and implementation of policies, plans of insurance, and related materials submitted under section 508(h) or developed under section 522 or 523.
(ii) Costs to contract for the review of policies,
plans of insurance, and related materials under section 505(e) and to contract for other assistance in considering policies, plans of insurance, and related materials.
(B) DAIRY OPTIONS PILOT PROGRAM.—Amounts necessary to carry out the dairy options pilot program shall
not be counted toward the limitation on expenses specified
in subparagraph (A).
(C) REVIEWS, COMPLIANCE, AND INTEGRITY.—
(i) IN GENERAL.—For each of the 2014 and subsequent reinsurance years, the Corporation may use the
insurance fund established under subsection (c), but
not to exceed $9,000,000 for each fiscal year, to pay
costs—
(I) to reimburse expenses incurred for the operations and review of policies, plans of insurance,
and related materials (including actuarial and related information); and
(II) to assist the Corporation in maintaining
program actuarial soundness and financial integrity.
(ii) SECRETARIAL ACTION.—For the purposes described in clause (i), the Secretary may, without further appropriation—
(I) merge some or all of the funds made available under this subparagraph into the accounts of
the Risk Management Agency; and
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(II) obligate those funds.
(iii) MAINTENANCE OF FUNDING.—Funds made
available under this subparagraph shall be in addition
to other funds made available for costs incurred by the
Corporation or the Risk Management Agency.
(c) INSURANCE FUND.—
(1) IN GENERAL.—There is established an insurance fund,
for the deposit of premium income, amounts made available
under subsection (a)(2), and civil fines collected under section
515(h), to be available without fiscal year limitation.
(2) COMMODITY CREDIT CORPORATION FUNDS.—If at any
time the amounts in the insurance fund are insufficient to enable the Corporation to carry out subsection (b), to the extent
the funds of the Commodity Credit Corporation are available—
(A) the Corporation may request the Secretary to use
the funds of the Commodity Credit Corporation to carry
out subsection (b); and
(B) the Secretary may use the funds of the Commodity
Credit Corporation to carry out subsection (b).
SEPARABILITY

SEC. 517. ø7 U.S.C. 1517¿ The sections of this subtitle and
subdivisions of sections are hereby declared to be separable, and in
the event any one or more sections or parts of the same of this subtitle be held to be unconstitutional, the same shall not affect the
validity of other sections or parts of sections of this subtitle.
AGRICULTURAL COMMODITY

SEC. 518. ø7 U.S.C. 1518¿ ‘‘Agricultural commodity’’, as used
in this subtitle, means wheat, cotton, flax, corn, dry beans, oats,
barley, rye, tobacco, rice, peanuts, soybeans, sugar beets, sugar
cane, tomatoes, grain sorghum, sunflowers, raisins, oranges, sweet
corn, dry peas, freezing and canning peas, forage, apples, grapes,
potatoes, timber and forests, nursery crops, citrus, and other fruits
and vegetables, nuts, tame hay, native grass, aquacultural species
(including, but not limited to, any species of finfish, mollusk, crustacean, or other aquatic invertebrate, amphibian, reptile, or aquatic
plant propagated or reared in a controlled or selected environment),
or any other agricultural commodity, excluding stored grain, determined by the Board, or any one or more of such commodities, as
the context may indicate.
SEC. 519. NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

øRepealed by P.L. 104–127, §196(j), Apr. 4, 1996, 110 Stat.
950.¿
SEC. 520. ø7 U.S.C. 1520¿ PRODUCER ELIGIBILITY.

Except as otherwise provided in this subtitle, a producer shall
not be denied insurance under this subtitle if—
(1) for purposes of catastrophic risk protection coverage,
the producer is a ‘‘person’’ (as defined by the Secretary); and
(2) for purposes of any other plan of insurance, the producer is 18 years of age and has a bona fide insurable interest
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in a crop as an owner-operator, landlord, tenant, or sharecropper.
SEC. 521. ø7 U.S.C. 1521¿ INELIGIBILITY FOR CATASTROPHIC RISK AND
NONINSURED ASSISTANCE PAYMENTS.

If the Secretary determines that a person has knowingly adopted a material scheme or device to obtain catastrophic risk, additional coverage, or noninsured assistance benefits under this subtitle to which the person is not entitled, has evaded this subtitle,
or has acted with the purposes of evading this subtitle, the person
shall be ineligible to receive all benefits applicable to the crop year
for which the scheme or device was adopted.
SEC. 522. ø7 U.S.C. 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.—An applicant who submits a
policy under section 508(h) shall be eligible for the reimbursement of reasonable research and development costs
directly related to the policy if the policy is approved by
the Board for sale to producers.
(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 508(h).
(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 508(h), 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 508(h) 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;
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(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 subtitle.
(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 508(h)(4) 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 508(h);
(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
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search 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 508(h).
(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 508(h) (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 508(h) 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 508(h), 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)), 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).
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(3) MARKETABILITY.—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.
(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 approved insurance provider 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 approved insurance provider 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.
(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
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(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 505(e).
(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) STUDY OF MULTIYEAR COVERAGE.—
(A) IN GENERAL.—The Corporation shall contract with
a qualified person to conduct a study to determine whether
offering policies that provide coverage for multiple years
would reduce fraud, waste, and abuse by persons that participate in the Federal crop insurance program.
(B) REPORT.—Not later than 1 year after the date of
the enactment of this section, 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 the results of the study conducted under subparagraph (A).
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(8) CONTRACT FOR REVENUE COVERAGE PLANS.—The Corporation shall enter into a contract for research and development regarding one or more revenue coverage plans that are
designed to enable producers to take maximum advantage of
fluctuations in market prices and thereby maximize revenue
realized from the sale of an agricultural commodity. A revenue
coverage plan may include the use of existing market instruments or the development of new market instruments. Not
later than 15 months after the date of the enactment of this
section, 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 the results of the contract entered into under
this paragraph.
(9) CONTRACT FOR COST OF PRODUCTION POLICY.—
(A) AUTHORITY.—The Corporation shall enter into a
contract for research and development regarding a cost of
production policy.
(B) RESEARCH AND DEVELOPMENT.—The research and
development shall—
(i) take into consideration the differences in the
cost of production on a county-by-county basis; and
(ii) cover as many commodities as is practicable.
(10) ENERGY CROP INSURANCE POLICY.—
(A) DEFINITION OF DEDICATED ENERGY CROP.—In this
subsection, the term ‘‘dedicated energy crop’’ means an annual or perennial crop that—
(i) is grown expressly for the purpose of producing
a feedstock for renewable biofuel, renewable electricity, or biobased products; and
(ii) is not typically used for food, feed, or fiber.
(B) AUTHORITY.—The Corporation shall offer to enter
into 1 or more contracts with qualified entities to carry out
research and development regarding a policy to insure
dedicated energy crops.
(C) RESEARCH AND DEVELOPMENT.—Research and development described in subparagraph (B) shall evaluate
the effectiveness of risk management tools for the production of dedicated energy crops, 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,
evaluate the policies and plans of insurance based on
the use of weather or rainfall indices to protect the interests of crop producers; and
(iii) provide protection for production or revenue
losses, or both.
(11) AQUACULTURE INSURANCE POLICY.—
(A) DEFINITION OF AQUACULTURE.—In this subsection:
(i) IN GENERAL.—The term ‘‘aquaculture’’ means
the propagation and rearing of aquatic species in controlled or selected environments, including shellfish
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cultivation on grants or leased bottom and ocean
ranching.
(ii) EXCLUSION.—The term ‘‘aquaculture’’ does not
include the private ocean ranching of Pacific salmon
for profit in any State in which private ocean ranching
of Pacific salmon is prohibited by any law (including
regulations).
(B) AUTHORITY.—
(i) IN GENERAL.—As soon as practicable after the
date of enactment of the Food, Conservation, and Energy Act of 2008, the Corporation shall offer to enter
into 3 or more contracts with qualified entities to
carry out research and development regarding a policy
to insure the production of aquacultural species in
aquaculture operations.
(ii) BIVALVE SPECIES.—At least 1 of the contracts
described in clause (i) shall address insurance of bivalve species, including—
(I) American oysters (crassostrea virginica);
(II) hard clams (mercenaria mercenaria);
(III) Pacific oysters (crassostrea gigas);
(IV) Manila clams (tapes phillipinnarium); or
(V) blue mussels (mytilus edulis).
(iii) FRESHWATER SPECIES.—At least 1 of the contracts described in clause (i) shall address insurance of
freshwater species, including—
(I) catfish (icataluridae);
(II) rainbow trout (oncorhynchus mykiss);
(III) largemouth bass (micropterus salmoides);
(IV) striped bass (morone saxatilis);
(V) bream (abramis brama);
(VI) shrimp (penaeus); or
(VII) tilapia (oreochromis niloticus).
(iv) SALTWATER SPECIES.—At least 1 of the contracts described in clause (i) shall address insurance of
saltwater species, including—
(I) Atlantic salmon (salmo salar); or
(II) shrimp (penaeus).
(C) RESEARCH AND DEVELOPMENT.—Research and development described in subparagraph (B) shall evaluate
the effectiveness of policies and plans of insurance for the
production of aquacultural species in aquaculture operations, 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,
evaluate how best to incorporate insuring of production of aquacultural species in aquaculture operations
into existing policies covering adjusted gross revenue;
and
(iii) provide protection for production or revenue
losses, or both.
(12) POULTRY INSURANCE POLICY.—
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(A) DEFINITION OF POULTRY.—In this paragraph, the
term ‘‘poultry’’ has the meaning given the term in section
2(a) of the Packers and Stockyards Act, 1921 (7 U.S.C.
182(a)).
(B) AUTHORITY.—The Corporation shall offer to enter
into 1 or more contracts with qualified entities to carry out
research and development regarding a policy to insure
commercial poultry production.
(C) RESEARCH AND DEVELOPMENT.—Research and development described in subparagraph (B) shall evaluate
the effectiveness of risk management tools for the production of poultry, including policies and plans of insurance
that provide protection for production or revenue losses, or
both, while the poultry is in production.
(13) APIARY POLICIES.—The Corporation shall offer to enter
into a contract with a qualified entity to carry out research and
development regarding insurance policies that cover loss of
bees.
(14) ADJUSTED GROSS REVENUE POLICIES FOR BEGINNING
PRODUCERS.—The Corporation shall offer to enter into a contract with a qualified entity to carry out research and development into needed modifications of adjusted gross revenue insurance policies, consistent with principles of actuarial sufficiency, to permit coverage for beginning producers with no previous production history, including permitting those producers
to have production and premium rates based on information
with similar farming operations.
(15) SKIPROW CROPPING PRACTICES.—
(A) IN GENERAL.—The Corporation shall offer to enter
into a contract with a qualified entity to carry out research
into needed modifications of policies to insure corn and
sorghum produced in the Central Great Plains (as determined by the Agricultural Research Service) through use
of skiprow cropping practices.
(B) RESEARCH.—Research described in subparagraph
(A) shall—
(i) review existing research on skiprow cropping
practices and actual production history of producers
using skiprow cropping practices; and
(ii) evaluate the effectiveness of risk management
tools for producers using skiprow cropping practices,
including—
(I) the appropriateness of rules in existence as
of the date of enactment of this paragraph relating to the determination of acreage planted in
skiprow patterns; and
(II) whether policies for crops produced
through skiprow cropping practices reflect actual
production capabilities.
(16) MARGIN COVERAGE FOR CATFISH.—
(A) IN GENERAL.—The Corporation shall offer to enter
into a contract with a qualified entity to conduct research
and development regarding a policy to insure producers
against reduction in the margin between the market value
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of catfish and selected costs incurred in the production of
catfish.
(B) ELIGIBILITY.—Eligibility for the policy described in
subparagraph (A) shall be limited to freshwater species of
catfish that are propagated and reared in controlled or selected environments.
(C) IMPLEMENTATION.—The Board shall review the
policy described in subparagraph (B) under section 508(h)
and approve the policy if the Board finds that the policy—
(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;
(iii) adequately protects the interests of producers;
and
(iv) meets other requirements of this subtitle determined appropriate by the Board.
(17) BIOMASS AND SWEET SORGHUM ENERGY CROP INSURANCE POLICIES.—
(A) IN GENERAL.—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,
evaluate the policies and plans of insurance based on
the use of weather indices, including excessive or inadequate rainfall, to protect the interest of crop producers; and
(iii) provide protection for production or revenue
losses, or both.
(18) STUDY ON SWINE CATASTROPHIC DISEASE PROGRAM.—
(A) IN GENERAL.—The Corporation shall contract with
1 or more qualified entities to conduct a study to determine the feasibility of insuring swine producers for a catastrophic event.
(B) REPORT.—Not later than 1 year after the date of
the enactment of this paragraph, 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 the
results of the study conducted under subparagraph (A).
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(19) 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 identitypreserved 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 subtitle.
(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.
(20) STUDY ON POULTRY CATASTROPHIC DISEASE PROGRAM.—
(A) IN GENERAL.—The Corporation shall contract with
a qualified person to conduct a study to determine the feasibility of insuring poultry producers for a catastrophic
event.
(B) REPORT.—Not later than 1 year after the date of
the enactment of this paragraph, 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 the
results of the study conducted under subparagraph (A).
(21) POULTRY BUSINESS INTERRUPTION INSURANCE POLICY.—
(A) DEFINITIONS.—In this paragraph, the terms ‘‘poultry’’ and ‘‘poultry grower’’ have the meanings given those
terms in section 2(a) of the Packers and Stockyards Act,
1921 (7 U.S.C. 182(a)).
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(B) AUTHORITY.—The Corporation shall offer to enter
into a contract or cooperative agreement with an institution of higher education or other legal entity to carry out
research and development regarding a policy to insure the
commercial production of poultry against business interruptions caused by integrator bankruptcy.
(C) RESEARCH AND DEVELOPMENT.—As part of the research and development conducted pursuant to a contract
or cooperative agreement entered into under subparagraph
(B), the entity shall—
(i) evaluate the market place for business interruption insurance that is available to poultry growers;
(ii) determine what statutory authority would be
necessary to implement a business interruption insurance through the Corporation;
(iii) assess the feasibility of a policy or plan of insurance offered under this subtitle to insure against a
portion of losses due to business interruption or to the
bankruptcy of an business integrator; and
(iv) analyze the costs to the Federal Government
of a Federal business interruption insurance program
for poultry growers or producers.
(D) DEADLINE FOR CONTRACT OR COOPERATIVE AGREEMENT.—Not later than 180 days after the date of enactment of this paragraph, the Corporation shall offer to
enter into the contract or cooperative agreement required
by subparagraph (B).
(E) DEADLINE FOR COMPLETION OF RESEARCH AND DEVELOPMENT.—Not later than 1 year after the date of enactment of this paragraph, 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 the results
of the research and development conducted pursuant to
the contract or cooperative agreement entered into under
subparagraph (B).]
(22) STUDY OF FOOD SAFETY INSURANCE.—
(A) IN GENERAL.—The Corporation shall offer to enter
into a contract with 1 or more qualified entities to conduct
a study to determine whether offering policies that provide
coverage for specialty crops from food safety and contamination issues would benefit agricultural producers.
(B) SUBJECT.—The study described in subparagraph
(A) shall evaluate policies and plans of insurance coverage
that provide protection for production or revenue impacted
by food safety concerns including, at a minimum, government, retail, or national consumer group announcements
of a health advisory, removal, or recall related to a contamination concern.
(C) REPORT.—Not later than 1 year after the date of
enactment of this paragraph, the Corporation shall submit
to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition,
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and Forestry of the Senate a report that describes the results of the study conducted under subparagraph (A).
(23) ALFALFA CROP INSURANCE POLICY.—
(A) IN GENERAL.—The Corporation shall offer to enter
into 1 or more contracts with qualified entities to carry out
research and development regarding a policy to insure alfalfa.
(B) REPORT.—Not later than 1 year after the date of
enactment of this paragraph, 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 the results of the study conducted under subparagraph (A).
(24) RELATION TO LIMITATIONS.—A policy developed under
this subsection may be prepared without regard to the limitations of this subtitle, 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.
(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 196 of the Agricultural Market Transition Act (7 U.S.C. 7333), 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;
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(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 516(c), 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 516(c), the Corporation may use to conduct research and development
and carry out contracting and partnerships under subsections (c) and (d) not more than $12,500,000 for fiscal
year 2008 and each subsequent fiscal year.
(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;
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(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.
SEC. 523. ø7 U.S.C. 1523¿ PILOT PROGRAMS.
(a) GENERAL PROVISIONS.—
(1) AUTHORITY.—Except as otherwise

provided in this section, the Corporation may, at the sole discretion of the Corporation, conduct a pilot program submitted to and approved
by the Board under section 508(h), or that is developed under
subsection (b) or section 522, to evaluate whether a proposal or
new risk management tool tested by the pilot program is suitable for the marketplace and addresses the needs of producers
of agricultural commodities.
(2) PRIVATE COVERAGE.—Under this section, the Corporation shall not conduct any pilot program that provides insurance protection against a risk if insurance protection against
the risk is generally available from private companies.
(3) COVERED ACTIVITIES.—The pilot programs described in
paragraph (1) may include pilot programs providing insurance
protection against losses involving—
(A) reduced forage on rangeland caused by drought or
insect infestation;
(B) livestock poisoning and disease;
(C) destruction of bees due to the use of pesticides;
(D) unique special risks related to fruits, nuts, vegetables, and specialty crops in general, aquacultural species,
and forest industry needs (including appreciation);
(E) after October 1, 2001, wild salmon, except that—
(i) any pilot program with regard to wild salmon
may be carried out without regard to the limitations
of this subtitle; and
(ii) the Corporation shall conduct all wild salmon
programs under this subtitle so that, to the maximum
extent practicable, all costs associated with conducting
the programs are not expected to exceed $1,000,000 for
fiscal year 2002 and each subsequent fiscal year.
(4) SCOPE OF PILOT PROGRAMS.—The Corporation may—
(A) approve a pilot program under this section to be
conducted on a regional, State, or national basis after considering the interests of affected producers and the interests of, and risks to, the Corporation;
(B) operate the pilot program, including any modifications of the pilot program, for a period of up to 4 years;
(C) extend the time period for the pilot program for
additional periods, as determined appropriate by the Corporation; and
(D) provide pilot programs that would allow producers—

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(i) to receive a reduced premium for using whole
farm units or single crop units of insurance; and
(ii) to cross State and county boundaries to form
insurable units.
(b) LIVESTOCK PILOT PROGRAMS.—
(1) DEFINITION OF LIVESTOCK.—In this subsection, the
term ‘‘livestock’’ includes, but is not limited to, cattle, sheep,
swine, goats, and poultry.
(2) PROGRAMS REQUIRED.—Subject to paragraph (7), the
Corporation shall conduct two or more pilot programs to evaluate the effectiveness of risk management tools for livestock
producers, including the use of futures and options contracts
and policies and plans of insurance that protect the interests
of livestock producers and that provide—
(A) livestock producers with reasonable protection
from the financial risks of price or income fluctuations inherent in the production and marketing of livestock; or
(B) protection for production losses.
(3) PURPOSE OF PROGRAMS.—To the maximum extent practicable, the Corporation shall evaluate the greatest number
and variety of pilot programs described in paragraph (2) to determine which of the offered risk management tools are best
suited to protect livestock producers from the financial risks
associated with the production and marketing of livestock.
(4) TIMING.—The Corporation shall begin conducting livestock pilot programs under this subsection during fiscal year
2001.
(5) RELATION TO OTHER LIMITATIONS.—Any policy or plan
of insurance offered under this subsection may be prepared
without regard to the limitations of this subtitle.
(6) ASSISTANCE.—As part of a pilot program under this
subsection, the Corporation may provide reinsurance for policies or plans of insurance and subsidize the purchase of futures
and options contracts or policies and plans of insurance offered
under the pilot program.
(7) PRIVATE INSURANCE.—No action may be undertaken
with respect to a risk under this subsection if the Corporation
determines that insurance protection for livestock producers
against the risk is generally available from private companies.
(8) LOCATION.—The Corporation shall conduct the livestock
pilot programs under this subsection in a number of counties
that is determined by the Corporation to be adequate to provide a comprehensive evaluation of the feasibility, effectiveness, and demand among producers for the risk management
tools evaluated in the pilot programs.
(9) ELIGIBLE PRODUCERS.—Any producer of a type of livestock covered by a pilot program under this subsection that
owns or operates a farm or ranch in a county selected as a location for that pilot program shall be eligible to participate in
that pilot program.
(10) LIMITATION ON EXPENDITURES.—The Corporation shall
conduct all livestock programs under this subtitle so that, to
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opment costs covered by section 522) are not expected to exceed
the following:
(A) $10,000,000 for each of fiscal years 2001 and 2002.
(B) $15,000,000 for fiscal year 2003.
(C) $20,000,000 for fiscal year 2004 and each subsequent fiscal year.
(c) REVENUE INSURANCE PILOT PROGRAM.—
(1) IN GENERAL.—Subject to section 522(e)(4), the Secretary shall carry out a pilot program in a limited number of
counties, as determined by the Secretary, for crop years 1997
through 2001, under which a producer of wheat, feed grains,
soybeans, or such other commodity as the Secretary considers
appropriate may elect to receive insurance against loss of revenue, as determined by the Secretary.
(2) ADMINISTRATION.—Revenue insurance under this subsection shall—
(A) be offered through reinsurance arrangements with
private insurance companies;
(B) offer at least a minimum level of coverage that is
an alternative to catastrophic crop insurance;
(C) be actuarially sound; and
(D) require the payment of premiums and administrative fees by an insured producer.
(d) PREMIUM RATE REDUCTION PILOT PROGRAM.—
(1) PURPOSE.—The purpose of the pilot program established under this subsection is to determine whether approved
insurance providers will compete to market policies or plans of
insurance with reduced rates of premium, in a manner that
maintains the financial soundness of approved insurance providers and is consistent with the integrity of the Federal crop
insurance program.
(2) ESTABLISHMENT.—
(A) IN GENERAL.—Beginning with the 2002 crop year,
the Corporation shall establish a pilot program under
which approved insurance providers may propose for approval by the Board policies or plans of insurance with reduced rates of premium—
(i) for one or more agricultural commodities; and
(ii) within a limited geographic area, as proposed
by the approved insurance provider and approved by
the Board.
(B) DETERMINATION BY BOARD.—The Board shall approve a policy or plan of insurance proposed under this
subsection that involves a premium reduction if the Board
determines that—
(i) the interests of producers are adequately protected within the pilot area;
(ii) rates of premium are actuarially appropriate,
as determined by the Board;
(iii) the size of the proposed pilot area is adequate;
(iv) the proposed policy or plan of insurance would
not unfairly discriminate among producers within the
proposed pilot area;
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(v) if the proposed policy or plan of insurance were
available in a geographic area larger than the proposed pilot area, the proposed policy or plan of insurance would—
(I) not have a significant adverse impact on
the crop insurance delivery system;
(II) not result in a reduction of program integrity;
(III) be actuarially appropriate; and
(IV) not place an additional financial burden
on the Federal Government; and
(vi) the proposed policy or plan of insurance meets
other requirements of this subtitle determined appropriate by the Board.
(C) TIME LIMITATIONS AND PROCEDURES.—The time
limitations and procedures of the Board established under
section 508(h) shall apply to a proposal submitted under
this subsection.
(e) ADJUSTED GROSS REVENUE INSURANCE PILOT PROGRAM.—
(1) IN GENERAL.—The Corporation shall carry out, through
at least the 2004 reinsurance year, the adjusted gross revenue
insurance pilot program in effect for the 2002 reinsurance year.
(2) ADDITIONAL COUNTIES.—
(A) IN GENERAL.—In addition to counties otherwise included in the pilot program, the Corporation shall include
in the pilot program for the 2003 reinsurance year at least
8 counties in the State of California and at least 8 counties
in the State of Pennsylvania.
(B) SELECTION CRITERIA.—In carrying out subparagraph (A), the Corporation shall work with the respective
State Departments of Agriculture to establish criteria to
determine which counties to include in the pilot program.
(f) CAMELINA PILOT PROGRAM.—
(1) IN GENERAL.—The Corporation shall establish a pilot
program under which producers or processors of camelina may
propose for approval by the Board policies or plans of insurance for camelina, in accordance with section 508(h).
(2) DETERMINATION BY BOARD.—The Board shall approve a
policy or plan of insurance proposed under paragraph (1) if, as
determined by the Board, the policy or plan of insurance—
(A) protects the interests of producers;
(B) is actuarially sound; and
(C) meets the requirements of this subtitle.
(3) TIMEFRAME.—The Corporation shall commence the
camelina insurance pilot program as soon as practicable after
the date of enactment of this subsection.
(g) SESAME INSURANCE PILOT PROGRAM.—
(1) IN GENERAL.—In addition to any other authority of the
Corporation, the Corporation shall establish and carry out a
pilot program under which a producer of nondehiscent sesame
under contract may elect to obtain multiperil crop insurance,
as determined by the Corporation.
(2) TERMS AND CONDITIONS.—The multiperil crop insurance offered under the sesame insurance pilot program shall—
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(A) be offered through reinsurance arrangements with
private insurance companies;
(B) be actuarially sound; and
(C) require the payment of premiums and administrative fees by a producer obtaining the insurance.
(3) LOCATION.—The sesame insurance pilot program shall
be carried out only in the State of Texas.
(4) DURATION.—The Corporation shall commence the sesame insurance pilot program as soon as practicable after the
date of the enactment of this subsection.
(h) GRASS SEED INSURANCE PILOT PROGRAM.—
(1) IN GENERAL.—In addition to any other authority of the
Corporation, the Corporation shall establish and carry out a
grass seed pilot program under which a producer of Kentucky
bluegrass or perennial rye grass under contract may elect to
obtain multiperil crop insurance, as determined by the Corporation.
(2) TERMS AND CONDITIONS.—The multiperil crop insurance offered under the grass seed insurance pilot program
shall—
(A) be offered through reinsurance arrangements with
private insurance companies;
(B) be actuarially sound; and
(C) require the payment of premiums and administrative fees by a producer obtaining the insurance.
(3) LOCATION.—The grass seed insurance pilot program
shall be carried out only in each of the States of Minnesota and
North Dakota.
(4) DURATION.—The Corporation shall commence the grass
seed insurance pilot program as soon as practicable after the
date of the enactment of this subsection.
(i) UNDERSERVED CROPS AND REGIONS PILOT PROGRAMS.—
(1) DEFINITION OF LIVESTOCK COMMODITY.—In this subsection, the term ‘‘livestock commodity’’ includes cattle, sheep,
swine, goats, and poultry, including pasture, rangeland, and
forage as a source of feed for that livestock.
(2) AUTHORIZATION.—Notwithstanding subsection (a)(2),
the Corporation may conduct 2 or more pilot programs to provide producers of underserved specialty crops and livestock
commodities with index-based weather insurance, subject to
the requirements of this section.
(3) REVIEW AND APPROVAL OF SUBMISSIONS.—
(A) IN GENERAL.—The Board shall approve 2 or more
proposed policies or plans of insurance from approved insurance providers if the Board determines that the policies
or plans provide coverage as specified in paragraph (2),
and meet the conditions described in this paragraph
(B) REQUIREMENTS.—To be eligible for approval under
this subsection, the approved insurance provider shall
have—
(i) adequate experience underwriting and administering policies or plans of insurance that are comparable to the proposed policy or plan of insurance;
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(ii) sufficient assets or reinsurance to satisfy the
underwriting obligations of the approved insurance
provider, and possess a sufficient insurance credit rating from an appropriate credit rating bureau, in accordance with Board procedures; and
(iii) applicable authority and approval from each
State in which the approved insurance provider intends to sell the insurance product.
(C) REVIEW REQUIREMENTS.—In reviewing applications
under this subsection, the Board shall conduct the review
in a manner consistent with the standards, rules, and procedures for policies or plans of insurance submitted under
section 508(h) and the actuarial soundness requirements
applied to other policies and plans of insurance made
available under this subtitle.
(D) PRIORITIZATION.—The Board shall prioritize applications that provide a new kind of coverage for specialty
crops and livestock commodities that previously had no
available crop insurance, or has demonstrated a low level
of participation under existing coverage.
(4) PAYMENT OF PREMIUM SUPPORT.—
(A) IN GENERAL.—The Corporation shall pay a portion
of the premium for producers that purchase a policy or
plan of insurance approved pursuant to this subsection.
(B) AMOUNT.—The premium subsidy shall provide a
similar dollar amount of premium subsidy per acre that
the Corporation pays for comparable policies or plans of insurance reinsured under this subtitle, except that in no
case shall the premium subsidy exceed 60 percent of total
premium, as determined by the Corporation.
(C) CALCULATION.—The premium subsidy, as determined by the Corporation, shall be calculated as—
(i) a percentage of premium;
(ii) a percentage of expected loss determined pursuant to a reasonable actuarial methodology; or
(iii) a fixed dollar amount per acre.
(D) PAYMENT.—Subject to subparagraphs (B) and (C),
the premium subsidy under this subsection shall be paid
by the Corporation in the same manner and under the
same terms and conditions as premium subsidy for other
policies and plans of insurance.
(E) OPERATING AND ADMINISTRATIVE EXPENSE PAYMENTS.—
(i) IN GENERAL.—Subject to clause (ii), operating
and administrative expense payments may be made
for policies and plans of insurance approved under this
subsection in an amount that is commensurate with
similar policies and plans of insurance reinsured
under this subtitle, on the condition that the operating
and administrative expenses are not included in premiums.
(ii) LIMITATION.—Subject to subparagraph (F)(i),
Federal reinsurance, research and development costs,
other reimbursements, or maintenance fees shall not
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be provided or collected for policies and plans of insurance approved under this subsection.
(F) APPROVED INSURANCE PROVIDERS.—Any policy or
plan of insurance approved under this subsection may be
sold only by the approved insurance provider that submits
the application and by any additional approved insurance
provider that—
(i) agrees to pay maintenance fees or other payments to the approved insurance provider that submitted the application in an amount agreed to by the
applicant and the additional approved insurance provider, on the condition that the fees or payments shall
be reasonable and appropriate to ensure that the policies or plans of insurance may be made available by
additional approved insurance providers; and
(ii) meets the eligibility criteria of paragraph
(3)(B), as determined by the Board.
(G) RELATIONSHIP TO OTHER PROVISIONS.—The requirements of this paragraph shall apply notwithstanding
paragraph (6).
(5) OVERSIGHT.—The Corporation shall develop and publish procedures to administer policies or plans of insurance approved under this subsection that—
(A) require each approved insurance provider to report
sales, acreage and claim data, and any other data that the
Corporation determines to be appropriate, to allow the
Corporation to evaluate sales and performance of the product; and
(B) contain such other requirements as the Corporation determines necessary to ensure that the products—
(i) do not have a significant adverse impact on the
crop insurance delivery system;
(ii) are in the best interests of producers; and
(iii) do not result in a reduction of program integrity.
(6) CONFIDENTIALITY.—
(A) IN GENERAL.—All reports required under paragraph (5) and all other proprietary information and data
generated or derived from applicants under this subsection
shall be considered to be confidential commercial or financial information for the purposes of section 552(b)(4) of
title 5, United States Code.
(B) STANDARD.—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, United States Code, the information shall not be released to the public.
(7) INELIGIBLE PURPOSES.—In no case shall a policy or plan
of insurance made available under this subsection provide coverage substantially similar to privately available hail insurance.
(8) FUNDING.—
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(A) LIMITATION ON EXPENDITURES.—Notwithstanding
any other provision in this subsection, of the funds of the
Corporation, the Corporation shall use to carry out this
section not more than $12,500,000 for each of fiscal years
2015 through 2018, to remain available until expended.
(B) RELATION TO OTHER PROGRAMS.—The amount of
funds made available under this section shall be in addition to amounts made available under other provisions of
this subtitle, including amounts made available under subsection (b).
SEC. 524. ø7 U.S.C. 1524¿ EDUCATION AND RISK MANAGEMENT ASSISTANCE.
(a) EDUCATION ASSISTANCE.—
(1) IN GENERAL.—Subject to the amounts made available

under paragraph (5)—
(A) the Corporation shall carry out the program established under paragraph (2); and
(B) the Secretary, acting through the National Institute of Food and Agriculture, shall carry out the program
established under paragraph (3).
(2) EDUCATION AND INFORMATION.—The Corporation shall
establish a program under which crop insurance education and
information is provided to producers in States in which (as determined by the Secretary)—
(A) there is traditionally, and continues to be, a low
level of Federal crop insurance participation and availability; and
(B) producers are underserved by the Federal crop insurance program.
(3) PARTNERSHIPS FOR RISK MANAGEMENT EDUCATION.—
(A) AUTHORITY.—The Secretary, acting through the
National Institute of Food and Agriculture, shall establish
a program under which competitive grants are made to
qualified public and private entities (including land grant
colleges, cooperative extension services, and colleges or
universities), as determined by the Secretary, for the purpose of educating agricultural producers about the full
range of risk management activities, including futures, options, agricultural trade options, crop insurance, cash forward contracting, debt reduction, production diversification, farm resources risk reduction, farm financial
benchmarking, and other risk management strategies.
(B) BASIS FOR GRANTS.—A grant under this paragraph
shall be awarded on the basis of merit and shall be subject
to peer or merit review.
(C) OBLIGATION PERIOD.—Funds for a grant under this
paragraph shall be available to the Secretary for obligation
for a 2-year period.
(D) ADMINISTRATIVE COSTS.—The Secretary may use
not more than 4 percent of the funds made available for
grants under this paragraph for administrative costs incurred by the Secretary in carrying out this paragraph.
(4) REQUIREMENTS.—In carrying out the programs established under paragraphs (2) and (3), the Secretary shall place
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special emphasis on risk management strategies (including
farm financial benchmarking), education, and outreach specifically targeted at—
(A) beginning farmers or ranchers;
(B) legal immigrant farmers or ranchers that are attempting to become established producers in the United
States;
(C) socially disadvantaged farmers or ranchers;
(D) farmers or ranchers that—
(i) are preparing to retire; and
(ii) are using transition strategies to help new
farmers or ranchers get started; and
(E) new or established farmers or ranchers that are
converting production and marketing systems to pursue
new markets.
(5) FUNDING.—From the insurance fund established under
section 516(c), there is transferred—
(A) for the education and information program established under paragraph (2), $5,000,000 for fiscal year 2001
and each subsequent fiscal year; and
(B) for the partnerships for risk management education program established under paragraph (3),
$5,000,000 for fiscal year 2001 and each subsequent fiscal
year.
(b) AGRICULTURAL MANAGEMENT ASSISTANCE.—
(1) AUTHORITY.—The Secretary shall provide financial assistance to producers in the States of Connecticut, Delaware,
Hawaii, Maryland, Massachusetts, Maine, Nevada, New
Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming.
(2) USES.—A producer may use financial assistance provided under this subsection to—
(A) construct or improve—
(i) watershed management structures; or
(ii) irrigation structures;
(B) plant trees to form windbreaks or to improve water
quality;
(C) mitigate financial risk through production or marketing diversification or resource conservation practices,
including—
(i) soil erosion control;
(ii) integrated pest management;
(iii) organic farming; or
(iv) to develop and implement a plan to create
marketing opportunities for the producer, including
through value-added processing;
(D) enter into futures, hedging, or options contracts in
a manner designed to help reduce production, price, or revenue risk;
(E) enter into agricultural trade options as a hedging
transaction to reduce production, price, or revenue risk; or
(F) conduct any other activity relating to an activity
described in subparagraphs (A) through (E), as determined
by the Secretary.
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(3) PAYMENT LIMITATION.—The total amount of payments
made to a person (as defined in section 1001(5) of the Food Security Act (7 U.S.C. 1308(5))) (before the amendment made by
section 1703(a) of the Food, Conservation, and Energy Act of
2008) under this subsection for any year may not exceed
$50,000.
(4) COMMODITY CREDIT CORPORATION.—
(A) IN GENERAL.—The Secretary shall carry out this
subsection through the Commodity Credit Corporation.
(B) FUNDING.—
(i) IN GENERAL.—Except as provided in clause (ii),
the Commodity Credit Corporation shall make available to carry out this subsection not less than
$10,000,000 for each fiscal year.
(ii) EXCEPTION FOR CERTAIN FISCAL YEARS.—For
each of fiscal years 2008 through 2014, the Commodity
Credit Corporation shall make available to carry out
this subsection $15,000,000.
(C) CERTAIN USES.—Of the amounts made available to
carry out this subsection for a fiscal year, the Commodity
Credit Corporation shall use not less than—
(i) 50 percent to carry out subparagraphs (A), (B),
and (C) of paragraph (2) through the Natural Resources Conservation Service;
(ii) 10 percent to provide organic certification cost
share assistance through the Agricultural Marketing
Service; and
(iii) 40 percent to conduct activities to carry out
subparagraph (F) of paragraph (2) through the Risk
Management Agency.

Subtitle B—Supplemental Agricultural
Disaster Assistance
SEC. 531. ø7 U.S.C. 1531¿ SUPPLEMENTAL AGRICULTURAL DISASTER
ASSISTANCE.
(a) DEFINITIONS.—In this section:
(1) ACTUAL PRODUCTION HISTORY YIELD.—The term ‘‘actual

production history yield’’ means the weighted average of the
actual production history for each insurable commodity or noninsurable commodity, as calculated under subtitle A or the
noninsured crop disaster assistance program, respectively.
(2) ACTUAL PRODUCTION ON THE FARM.—The term ‘‘actual
production on the farm’’ means the sum of the value of all
crops produced on the farm, as determined under subsection
(b)(6)(B).
(3) ADJUSTED ACTUAL PRODUCTION HISTORY YIELD.—The
term ‘‘adjusted actual production history yield’’ means—
(A) in the case of an eligible producer on a farm that
has at least 4 years of actual production history yields for
an insurable commodity that are established other than
pursuant to section 508(g)(4)(B), the actual production hisFebruary 7, 2014

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tory for the eligible producer without regard to any yields
established under that section;
(B) in the case of an eligible producer on a farm that
has less than 4 years of actual production history yields for
an insurable commodity, of which 1 or more were established pursuant to section 508(g)(4)(B), the actual production history for the eligible producer as calculated without
including the lowest of the yields established pursuant to
section 508(g)(4)(B); and
(C) in all other cases, the actual production history of
the eligible producer on a farm.
(4) ADJUSTED NONINSURED CROP DISASTER ASSISTANCE PROGRAM YIELD.—The term ‘‘adjusted noninsured crop disaster assistance program yield’’ means—
(A) in the case of an eligible producer on a farm that
has at least 4 years of production history under the noninsured crop disaster assistance program that are not replacement yields, the noninsured crop disaster assistance
program yield without regard to any replacement yields;
(B) in the case of an eligible producer on a farm that
has less than 4 years of production history under the noninsured crop disaster assistance program that are not replacement yields, the noninsured crop disaster assistance
program yield as calculated without including the lowest of
the replacement yields; and
(C) in all other cases, the production history of the eligible producer on the farm under the noninsured crop disaster assistance program.
(5) COUNTER-CYCLICAL PROGRAM PAYMENT YIELD.—The
term ‘‘counter-cyclical program payment yield’’ means the
weighted average payment yield established under—
(A) section 1102 or 1302 of the Farm Security and
Rural Investment Act of 2002 (7 U.S.C. 7912, 7952);
(B) section 1102 or 1301(6) of the Food, Conservation,
and Energy Act of 2008 (7 U.S.C. 8712, 8751(6)); or
(C) a successor section.
(6) CROP OF ECONOMIC SIGNIFICANCE.—The term ‘‘crop of
economic significance’’ shall have the uniform meaning given
the term by the Secretary for purposes of subsections (b)(1)(B)
and (g)(6).
(7) DISASTER COUNTY.—
(A) IN GENERAL.—The term ‘‘disaster county’’ means a
county included in the geographic area covered by a qualifying natural disaster declaration.
(B) INCLUSION.—The term ‘‘disaster county’’ includes—
(i) a county contiguous to a county described in
subparagraph (A); and
(ii) any farm in which, during a calendar year the
actual production on the farm is less than 50 percent
of the normal production on the farm.
(8) ELIGIBLE PRODUCER ON A FARM.—
(A) IN GENERAL.—The term ‘‘eligible producer on a
farm’’ means an individual or entity described in subparagraph (B) that, as determined by the Secretary, assumes
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the production and market risks associated with the agricultural production of crops or livestock.
(B) DESCRIPTION.—An individual or entity referred to
in subparagraph (A) is—
(i) a citizen of the United States;
(ii) a resident alien;
(iii) a partnership of citizens of the United States;
or
(iv) a corporation, limited liability corporation, or
other farm organizational structure organized under
State law.
(9) FARM.—
(A) IN GENERAL.—The term ‘‘farm’’ means, in relation
to an eligible producer on a farm, the sum of all crop acreage in all counties that is planted or intended to be planted for harvest for sale or on-farm livestock feeding (including native grassland intended for haying) by the eligible
producer.
(B) AQUACULTURE.—In the case of aquaculture, the
term ‘‘farm’’ means, in relation to an eligible producer on
a farm, all fish being produced in all counties that are intended to be harvested for sale by the eligible producer.
(C) HONEY.—In the case of honey, the term ‘‘farm’’
means, in relation to an eligible producer on a farm, all
bees and beehives in all counties that are intended to be
harvested for a honey crop for sale by the eligible producer.
(10) FARM-RAISED FISH.—The term ‘‘farm-raised fish’’
means any aquatic species that is propagated and reared in a
controlled environment.
(11) INSURABLE COMMODITY.—The term ‘‘insurable commodity’’ means an agricultural commodity (excluding livestock)
for which the producer on a farm is eligible to obtain a policy
or plan of insurance under subtitle A.
(12) LIVESTOCK.—The term ‘‘livestock’’ includes—
(A) cattle (including dairy cattle);
(B) bison;
(C) poultry;
(D) sheep;
(E) swine;
(F) horses; and
(G) other livestock, as determined by the Secretary.
(13) NONINSURABLE COMMODITY.—The term ‘‘noninsurable
commodity’’ means a crop for which the eligible producers on
a farm are eligible to obtain assistance under the noninsured
crop assistance program.
(14) NONINSURED CROP ASSISTANCE PROGRAM.—The term
‘‘noninsured crop assistance program’’ means the program carried out under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).
(15) NORMAL PRODUCTION ON THE FARM.—The term ‘‘normal production on the farm’’ means the sum of the expected
revenue for all crops on the farm, as determined under subsection (b)(6)(A).
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(16) QUALIFYING NATURAL DISASTER DECLARATION.—The
term ‘‘qualifying natural disaster declaration’’ means a natural
disaster declared by the Secretary for production losses under
section 321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)).
(17) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture.
(18) SOCIALLY DISADVANTAGED FARMER OR RANCHER.—The
term ‘‘socially disadvantaged farmer or rancher’’ has the meaning given the term in section 2501(e) of the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)).
(19) STATE.—The term ‘‘State’’ means—
(A) a State;
(B) the District of Columbia;
(C) the Commonwealth of Puerto Rico; and
(D) any other territory or possession of the United
States.
(20) TRUST FUND.—The term ‘‘Trust Fund’’ means the Agricultural Disaster Relief Trust Fund established under section
902 of the Trade Act of 1974.
(21) UNITED STATES.—The term ‘‘United States’’ when used
in a geographical sense, means all of the States.
(b) SUPPLEMENTAL REVENUE ASSISTANCE PAYMENTS.—
(1) PAYMENTS.—
(A) IN GENERAL.—The Secretary shall use such sums
as are necessary from the Trust Fund to make crop disaster assistance payments to eligible producers on farms in
disaster counties that have incurred crop production losses
or crop quality losses, or both, during the crop year.
(B) CROP LOSS.—To be eligible for crop loss assistance
under this subsection, the actual production on the farm
for at least 1 crop of economic significance shall be reduced
by at least 10 percent due to disaster, adverse weather, or
disaster-related conditions.
(2) AMOUNT.—
(A) IN GENERAL.—Subject to subparagraph (B), the
Secretary shall provide crop disaster assistance payments
under this section to an eligible producer on a farm in an
amount equal to 60 percent of the difference between—
(i) the disaster assistance program guarantee, as
described in paragraph (3); and
(ii) the total farm revenue for a farm, as described
in paragraph (4).
(B) LIMITATION.—The disaster assistance program
guarantee for a crop used to calculate the payments for a
farm under subparagraph (A)(i) may not be greater than
90 percent of the sum of the expected revenue, as described in paragraph (5) for each of the crops on a farm,
as determined by the Secretary.
(C) EXCLUSION OF SUBSEQUENTLY PLANTED CROPS.—In
calculating the disaster assistance program guarantee
under paragraph (3) and the total farm revenue under
paragraph (4), the Secretary shall not consider the value
of any crop that—
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(i) is produced on land that is not eligible for a
policy or plan of insurance under subtitle A or assistance under the noninsured crop assistance program; or
(ii) is subsequently planted on the same land during the same crop year as the crop for which disaster
assistance is provided under this subsection, except in
areas in which double-cropping is a normal practice,
as determined by the Secretary.
(3) SUPPLEMENTAL REVENUE ASSISTANCE PROGRAM GUARANTEE.—
(A) IN GENERAL.—Except as otherwise provided in this
paragraph, the supplemental assistance program guarantee shall be the sum obtained by adding—
(i) for each insurable commodity on the farm, 115
percent of the product obtained by multiplying—
(I) a payment rate for the commodity that is
equal to the price election for the commodity elected by the eligible producer;
(II) the payment acres for the commodity that
is equal to the number of acres planted, or prevented from being planted, to the commodity;
(III) the payment yield for the commodity that
is equal to the percentage of the crop insurance
yield elected by the producer of the higher of—
(aa) the adjusted actual production history yield; or
(bb) the counter-cyclical program payment
yield for each crop; and
(ii) for each noninsurable commodity on a farm,
120 percent of the product obtained by multiplying—
(I) a payment rate for the commodity that is
equal to 100 percent of the noninsured crop assistance program established price for the commodity;
(II) the payment acres for the commodity that
is equal to the number of acres planted, or prevented from being planted, to the commodity; and
(III) the payment yield for the commodity that
is equal to 50 percent of the higher of—
(aa) the adjusted noninsured crop assistance program yield; or
(bb) the counter-cyclical program payment
yield for each crop.
(B) ADJUSTMENT INSURANCE GUARANTEE.—Notwithstanding subparagraph (A), in the case of an insurable
commodity for which a plan of insurance provides for an
adjustment in the guarantee, such as in the case of prevented planting, the adjusted insurance guarantee shall be
the basis for determining the disaster assistance program
guarantee for the insurable commodity.
(C) ADJUSTED ASSISTANCE LEVEL.—Notwithstanding
subparagraph (A), in the case of a noninsurable commodity
for which the noninsured crop assistance program provides
for an adjustment in the level of assistance, such as in the
case of unharvested crops, the adjusted assistance level
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shall be the basis for determining the disaster assistance
program guarantee for the noninsurable commodity.
(D) EQUITABLE TREATMENT FOR NON-YIELD BASED POLICIES.—The Secretary shall establish equitable treatment
for non-yield based policies and plans of insurance, such as
the Adjusted Gross Revenue Lite insurance program.
(4) FARM REVENUE.—
(A) IN GENERAL.—For purposes of this subsection, the
total farm revenue for a farm, shall equal the sum obtained by adding—
(i) the estimated actual value for each crop produced on a farm by using the product obtained by multiplying—
(I) the actual production by crop on a farm for
purposes of determining losses under subtitle A or
the noninsured crop assistance program; and
(II) subject to subparagraphs (B) and (C), to
the extent practicable, the national average market price received for the marketing year, as determined by the Secretary;
(ii) 15 percent of amount of any direct payments
made to the producer under sections 1103 and 1303 of
the Food, Conservation, and Energy Act of 2008 or
successor sections;
(iii) the total amount of any counter-cyclical payments made to the producer under sections 1104 and
1304 of the Food, Conservation, and Energy Act of
2008 or successor sections or of any average crop revenue election payments made to the producer under
section 1105 of that Act;
(iv) the total amount of any loan deficiency payments, marketing loan gains, and marketing certificate gains made to the producer under subtitles B and
C of the Food, Conservation, and Energy Act of 2008
or successor subtitles;
(v) the amount of payments for prevented planting
on a farm;
(vi) the amount of crop insurance indemnities received by an eligible producer on a farm for each crop
on a farm;
(vii) the amount of payments an eligible producer
on a farm received under the noninsured crop assistance program for each crop on a farm; and
(viii) the value of any other natural disaster assistance payments provided by the Federal Government to an eligible producer on a farm for each crop
on a farm for the same loss for which the eligible producer is seeking assistance.
(B) ADJUSTMENT.—The Secretary shall adjust the average market price received by the eligible producer on a
farm—
(i) to reflect the average quality discounts applied
to the local or regional market price of a crop or mechanically harvested forage due to a reduction in the
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intrinsic characteristics of the production resulting
from adverse weather, as determined annually by the
State office of the Farm Service Agency;
(ii) to account for a crop the value of which is reduced due to excess moisture resulting from a disaster-related condition; and
(iii) as the Secretary determines appropriate, to
reflect regional variations in a manner consistent with
the operation of the crop insurance program under
subtitle A and the noninsured crop assistance program.
(C) MAXIMUM AMOUNT FOR CERTAIN CROPS.—With respect to a crop for which an eligible producer on a farm receives assistance under the noninsured crop assistance
program, the national average market price received during the marketing year shall be an amount not more than
100 percent of the price of the crop established under the
noninsured crop assistance program.
(5) EXPECTED REVENUE.—The expected revenue for each
crop on a farm shall equal—
(A) for each insurable commodity, the product obtained by multiplying—
(i) the greater of—
(I) the adjusted actual production history
yield of the eligible producer on a farm; and
(II) the counter-cyclical program payment
yield;
(ii) the acreage planted or prevented from being
planted for each crop; and
(iii) 100 percent of the price election for the commodity used to calculate an indemnity for an applicable policy of insurance if an indemnity is triggered;
and
(B) for each noninsurable crop, the product obtained
by multiplying—
(i) 100 percent of the adjusted noninsured crop assistance program yield;
(ii) the acreage planted or prevented from being
planted for each crop; and
(iii) 100 percent of the noninsured crop assistance
program price for each of the crops on a farm.
(6) PRODUCTION ON THE FARM.—
(A) NORMAL PRODUCTION ON THE FARM.—The normal
production on the farm shall equal the sum of the expected
revenue for each crop on a farm as determined under paragraph (5).
(B) ACTUAL PRODUCTION ON THE FARM.—The actual
production on the farm shall equal the sum obtained by
adding—
(i) for each insurable commodity on the farm, the
product obtained by multiplying—
(I) 100 percent of the price election for the
commodity used to calculate an indemnity for an
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applicable policy of insurance if an indemnity is
triggered; and
(II) the quantity of the commodity produced
on the farm, adjusted for quality losses; and
(ii) for each noninsurable commodity on a farm,
the product obtained by multiplying—
(I) 100 percent of the noninsured crop assistance program established price for the commodity;
and
(II) the quantity of the commodity produced
on the farm, adjusted for quality losses.
(c) LIVESTOCK INDEMNITY PAYMENTS.—
(1) PAYMENTS.—The Secretary shall make livestock indemnity payments to eligible producers on farms that have incurred livestock death losses in excess of the normal mortality
due to adverse weather, as determined by the Secretary, during the calendar year, including losses due to hurricanes,
floods, blizzards, disease, wildfires, extreme heat, and extreme
cold.
(2) PAYMENT RATES.—Indemnity payments to an eligible
producer on a farm under paragraph (1) shall be made at a
rate of 75 percent of the market value of the applicable livestock on the day before the date of death of the livestock, as
determined by the Secretary.
(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $80,000,000
for each of fiscal years 2012 and 2013.
(d) LIVESTOCK FORAGE DISASTER PROGRAM.—
(1) DEFINITIONS.—In this subsection:
(A) COVERED LIVESTOCK.—
(i) IN GENERAL.—Except as provided in clause (ii),
the term ‘‘covered livestock’’ means livestock of an eligible livestock producer that, during the 60 days prior
to the beginning date of a qualifying drought or fire
condition, as determined by the Secretary, the eligible
livestock producer—
(I) owned;
(II) leased;
(III) purchased;
(IV) entered into a contract to purchase;
(V) is a contract grower; or
(VI) sold or otherwise disposed of due to qualifying drought conditions during—
(aa) the current production year; or
(bb) subject to paragraph (3)(B)(ii), 1 or
both of the 2 production years immediately
preceding the current production year.
(ii) EXCLUSION.—The term ‘‘covered livestock’’ does
not include livestock that were or would have been in
a feedlot, on the beginning date of the qualifying
drought or fire condition, as a part of the normal business operation of the eligible livestock producer, as determined by the Secretary.
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(B) DROUGHT MONITOR.—The term ‘‘drought monitor’’
means a system for classifying drought severity according
to a range of abnormally dry to exceptional drought, as defined by the Secretary.
(C) ELIGIBLE LIVESTOCK PRODUCER.—
(i) IN GENERAL.—The term ‘‘eligible livestock producer’’ means an eligible producer on a farm that—
(I) is an owner, cash or share lessee, or contract grower of covered livestock that provides the
pastureland or grazing land, including cash-leased
pastureland or grazing land, for the livestock;
(II) provides the pastureland or grazing land
for covered livestock, including cash-leased
pastureland or grazing land that is physically located in a county affected by drought;
(III) certifies grazing loss; and
(IV) meets all other eligibility requirements
established under this subsection.
(ii) EXCLUSION.—The term ‘‘eligible livestock producer’’ does not include an owner, cash or share lessee,
or contract grower of livestock that rents or leases
pastureland or grazing land owned by another person
on a rate-of-gain basis.
(D) NORMAL CARRYING CAPACITY.—The term ‘‘normal
carrying capacity’’, with respect to each type of grazing
land or pastureland in a county, means the normal carrying capacity, as determined under paragraph (3)(D)(i),
that would be expected from the grazing land or
pastureland for livestock during the normal grazing period, in the absence of a drought or fire that diminishes
the production of the grazing land or pastureland.
(E) NORMAL GRAZING PERIOD.—The term ‘‘normal grazing period’’, with respect to a county, means the normal
grazing period during the calendar year for the county, as
determined under paragraph (3)(D)(i).
(2) PROGRAM.—The Secretary shall provide compensation
for losses to eligible livestock producers due to grazing losses
for covered livestock due to—
(A) a drought condition, as described in paragraph (3);
or
(B) fire, as described in paragraph (4).
(3) ASSISTANCE FOR LOSSES DUE TO DROUGHT CONDITIONS.—
(A) ELIGIBLE LOSSES.—An eligible livestock producer
may receive assistance under this subsection only for grazing losses for covered livestock that occur on land that—
(i) is native or improved pastureland with permanent vegetative cover; or
(ii) is planted to a crop planted specifically for the
purpose of providing grazing for covered livestock.
(B) MONTHLY PAYMENT RATE.—
(i) IN GENERAL.—Except as provided in clause (ii),
the payment rate for assistance under this paragraph
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for 1 month shall, in the case of drought, be equal to
60 percent of the lesser of—
(I) the monthly feed cost for all covered livestock owned or leased by the eligible livestock producer, as determined under subparagraph (C); or
(II) the monthly feed cost calculated by using
the normal carrying capacity of the eligible grazing land of the eligible livestock producer.
(ii) PARTIAL COMPENSATION.—In the case of an eligible livestock producer that sold or otherwise disposed of covered livestock due to drought conditions in
1 or both of the 2 production years immediately preceding the current production year, as determined by
the Secretary, the payment rate shall be 80 percent of
the payment rate otherwise calculated in accordance
with clause (i).
(C) MONTHLY FEED COST.—
(i) IN GENERAL.—The monthly feed cost shall
equal the product obtained by multiplying—
(I) 30 days;
(II) a payment quantity that is equal to the
feed grain equivalent, as determined under clause
(ii); and
(III) a payment rate that is equal to the corn
price per pound, as determined under clause (iii).
(ii) FEED GRAIN EQUIVALENT.—For purposes of
clause (i)(I), the feed grain equivalent shall equal—
(I) in the case of an adult beef cow, 15.7
pounds of corn per day; or
(II) in the case of any other type of weight of
livestock, an amount determined by the Secretary
that represents the average number of pounds of
corn per day necessary to feed the livestock.
(iii) CORN PRICE PER POUND.—For purposes of
clause (i)(II), the corn price per pound shall equal the
quotient obtained by dividing—
(I) the higher of—
(aa) the national average corn price per
bushel for the 12-month period immediately
preceding March 1 of the year for which the
disaster assistance is calculated; or
(bb) the national average corn price per
bushel for the 24-month period immediately
preceding that March 1; by
(II) 56.
(D) NORMAL GRAZING PERIOD AND DROUGHT MONITOR
INTENSITY.—
(i) FSA COUNTY COMMITTEE DETERMINATIONS.—
(I) IN GENERAL.—The Secretary shall determine the normal carrying capacity and normal
grazing period for each type of grazing land or
pastureland in the county served by the applicable
committee.
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(II) CHANGES.—No change to the normal carrying capacity or normal grazing period established for a county under subclause (I) shall be
made unless the change is requested by the appropriate State and county Farm Service Agency
committees.
(ii) DROUGHT INTENSITY.—
(I) D2.—An eligible livestock producer that
owns or leases grazing land or pastureland that is
physically located in a county that is rated by the
U.S. Drought Monitor as having a D2 (severe
drought) intensity in any area of the county for at
least 8 consecutive weeks during the normal grazing period for the county, as determined by the
Secretary, shall be eligible to receive assistance
under this paragraph in an amount equal to 1
monthly payment using the monthly payment rate
determined under subparagraph (B).
(II) D3.—An eligible livestock producer that
owns or leases grazing land or pastureland that is
physically located in a county that is rated by the
U.S. Drought Monitor as having at least a D3 (extreme drought) intensity in any area of the county
at any time during the normal grazing period for
the county, as determined by the Secretary, shall
be eligible to receive assistance under this paragraph—
(aa) in an amount equal to 2 monthly
payments using the monthly payment rate determined under subparagraph (B); or
(bb) if the county is rated as having a D3
(extreme drought) intensity in any area of the
county for at least 4 weeks during the normal
grazing period for the county, or is rated as
having a D4 (exceptional drought) intensity in
any area of the county at any time during the
normal grazing period, in an amount equal to
3 monthly payments using the monthly payment rate determined under subparagraph
(B).
(4) ASSISTANCE FOR LOSSES DUE TO FIRE ON PUBLIC MANAGED LAND.—
(A) IN GENERAL.—An eligible livestock producer may
receive assistance under this paragraph only if—
(i) the grazing losses occur on rangeland that is
managed by a Federal agency; and
(ii) the eligible livestock producer is prohibited by
the Federal agency from grazing the normal permitted
livestock on the managed rangeland due to a fire.
(B) PAYMENT RATE.—The payment rate for assistance
under this paragraph shall be equal to 50 percent of the
monthly feed cost for the total number of livestock covered
by the Federal lease of the eligible livestock producer, as
determined under paragraph (3)(C).
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(C) PAYMENT DURATION.—
(i) IN GENERAL.—Subject to clause (ii), an eligible
livestock producer shall be eligible to receive assistance under this paragraph for the period—
(I) beginning on the date on which the Federal agency excludes the eligible livestock producer from using the managed rangeland for grazing; and
(II) ending on the last day of the Federal
lease of the eligible livestock producer.
(ii) LIMITATION.—An eligible livestock producer
may only receive assistance under this paragraph for
losses that occur on not more than 180 days per year.
(5) MINIMUM RISK MANAGEMENT PURCHASE REQUIREMENTS.—
(A) IN GENERAL.—Except as otherwise provided in this
paragraph, a livestock producer shall only be eligible for
assistance under this subsection if the livestock producer—
(i) obtained a policy or plan of insurance under
subtitle A for the grazing land incurring the losses for
which assistance is being requested; or
(ii) filed the required paperwork, and paid the administrative fee by the applicable State filing deadline,
for the noninsured crop assistance program for the
grazing land incurring the losses for which assistance
is being requested.
(B) WAIVER FOR SOCIALLY DISADVANTAGED, LIMITED RESOURCE, OR BEGINNING FARMER OR RANCHER.—In the case
of an eligible livestock producer that is a socially disadvantaged farmer or rancher or limited resource or beginning
farmer or rancher, as determined by the Secretary, the
Secretary may—
(i) waive subparagraph (A); and
(ii) provide disaster assistance under this subsection at a level that the Secretary determines to be
equitable and appropriate.
(C) WAIVER FOR 2008 CALENDAR YEAR.—In the case of
an eligible livestock producer that suffered losses on grazing land during the 2008 calendar year but does not meet
the requirements of subparagraph (A), the Secretary shall
waive subparagraph (A) if the eligible livestock producer
pays a fee in an amount equal to the applicable noninsured crop assistance program fee or catastrophic risk
protection plan fee required under subparagraph (A) to the
Secretary not later than 90 days after the date of enactment of this subtitle.
(D) EQUITABLE RELIEF.—
(i) IN GENERAL.—The Secretary may provide equitable relief to an eligible livestock producer that is otherwise ineligible or unintentionally fails to meet the
requirements of subparagraph (A) for the grazing land
incurring the loss on a case-by-case basis, as determined by the Secretary.
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(ii) 2008 CALENDAR YEAR.—In the case of an eligible livestock producer that suffered losses on grazing
land during the 2008 calendar year, the Secretary
shall take special consideration to provide equitable
relief in cases in which the eligible livestock producer
failed to meet the requirements of subparagraph (A)
due to the enactment of this subtitle after the closing
date of sales periods for crop insurance under subtitle
A and the noninsured crop assistance program.
(6) NO DUPLICATIVE PAYMENTS.—
(A) IN GENERAL.—An eligible livestock producer may
elect to receive assistance for grazing or pasture feed
losses due to drought conditions under paragraph (3) or
fire under paragraph (4), but not both for the same loss,
as determined by the Secretary.
(B) RELATIONSHIP TO SUPPLEMENTAL REVENUE ASSISTANCE.—An eligible livestock producer that receives assistance under this subsection may not also receive assistance
for losses to crops on the same land with the same intended use under subsection (b).
(7) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection
$400,000,000 for each of fiscal years 2012 and 2013.
(e) EMERGENCY ASSISTANCE FOR LIVESTOCK, HONEY BEES, AND
FARM-RAISED FISH.—
(1) IN GENERAL.—The Secretary shall provide emergency
relief to eligible producers of livestock, honey bees, and farmraised fish to aid in the reduction of losses due to disease, adverse weather, or other conditions, such as blizzards and
wildfires, as determined by the Secretary, that are not covered
under subsection (b), (c), or (d).
(2) USE OF FUNDS.—Funds made available under this subsection shall be used to reduce losses caused by feed or water
shortages, disease, or other factors as determined by the Secretary.
(3) AVAILABILITY OF FUNDS.—Any funds made available
under this subsection shall remain available until expended.
(4) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $50,000,000
for each of fiscal years 2012 and 2013.
(f) TREE ASSISTANCE PROGRAM.—
(1) DEFINITIONS.—In this subsection:
(A) ELIGIBLE ORCHARDIST.—The term ‘‘eligible orchardist’’ means a person that produces annual crops from trees
for commercial purposes.
(B) NATURAL DISASTER.—The term ‘‘natural disaster’’
means plant disease, insect infestation, drought, fire,
freeze, flood, earthquake, lightning, or other occurrence, as
determined by the Secretary.
(C) NURSERY TREE GROWER.—The term ‘‘nursery tree
grower’’ means a person who produces nursery, ornamental, fruit, nut, or Christmas trees for commercial sale,
as determined by the Secretary.
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(D) TREE.—The term ‘‘tree’’ includes a tree, bush, and
vine.
(2) ELIGIBILITY.—
(A) LOSS.—Subject to subparagraph (B), the Secretary
shall provide assistance—
(i) under paragraph (3) to eligible orchardists and
nursery tree growers that planted trees for commercial
purposes but lost the trees as a result of a natural disaster, as determined by the Secretary; and
(ii) under paragraph (3)(B) to eligible orchardists
and nursery tree growers that have a production history for commercial purposes on planted or existing
trees but lost the trees as a result of a natural disaster, as determined by the Secretary.
(B) LIMITATION.—An eligible orchardist or nursery tree
grower shall qualify for assistance under subparagraph (A)
only if the tree mortality of the eligible orchardist or nursery tree grower, as a result of damaging weather or related
condition, exceeds 15 percent (adjusted for normal mortality).
(3) ASSISTANCE.—Subject to paragraph (4), the assistance
provided by the Secretary to eligible orchardists and nursery
tree growers for losses described in paragraph (2) shall consist
of—
(A)(i) reimbursement of 70 percent of the cost of replanting trees lost due to a natural disaster, as determined
by the Secretary, in excess of 15 percent mortality (adjusted for normal mortality); or
(ii) at the option of the Secretary, sufficient seedlings
to reestablish a stand; and
(B) reimbursement of 50 percent of the cost of pruning, removal, and other costs incurred by an eligible orchardist or nursery tree grower to salvage existing trees
or, in the case of tree mortality, to prepare the land to replant trees as a result of damage or tree mortality due to
a natural disaster, as determined by the Secretary, in excess of 15 percent damage or mortality (adjusted for normal tree damage and mortality).
(4) LIMITATIONS ON ASSISTANCE.—
(A) DEFINITIONS OF LEGAL ENTITY AND PERSON.—In
this paragraph, the terms ‘‘legal entity’’ and ‘‘person’’ have
the meaning given those terms in section 1001(a) of the
Food Security Act of 1985 (7 U.S.C. 1308(a) (as amended
by section 1603 of the Food, Conservation, and Energy Act
of 2008).
(B) AMOUNT.—The total amount of payments received,
directly or indirectly, by a person or legal entity (excluding
a joint venture or general partnership) under this subsection may not exceed $100,000 for any crop year, or an
equivalent value in tree seedlings.
(C) ACRES.—The total quantity of acres planted to
trees or tree seedlings for which a person or legal entity
shall be entitled to receive payments under this subsection
may not exceed 500 acres.
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(5) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $20,000,000
for each of fiscal years 2012 and 2013.
(g) RISK MANAGEMENT PURCHASE REQUIREMENT.—
(1) IN GENERAL.—Except as otherwise provided in this section, the eligible producers on a farm shall not be eligible for
assistance under this section (other than subsections (c) and
(d)) if the eligible producers on the farm—
(A) in the case of each insurable commodity of the eligible producers on the farm, excluding grazing land, did
not obtain a policy or plan of insurance under subtitle A
(excluding a crop insurance pilot program under that subtitle); or
(B) in the case of each noninsurable commodity of the
eligible producers on the farm, did not file the required paperwork, and pay the administrative fee by the applicable
State filing deadline, for the noninsured crop assistance
program.
(2) MINIMUM.—To be considered to have obtained insurance under paragraph (1)(A), an eligible producer on a farm
shall have obtained a policy or plan of insurance with not less
than 50 percent yield coverage at 55 percent of the insurable
price for each crop planted or intended to be planted for harvest on a whole farm.
(3) WAIVER FOR SOCIALLY DISADVANTAGED, LIMITED RESOURCE, OR BEGINNING FARMER OR RANCHER.—With respect to
eligible producers that are socially disadvantaged farmers or
ranchers or limited resource or beginning farmers or ranchers,
as determined by the Secretary, the Secretary may—
(A) waive paragraph (1); and
(B) provide disaster assistance under this section at a
level that the Secretary determines to be equitable and appropriate.
(4) WAIVERS FOR CERTAIN CROP YEARS.—
(A) 2008 CROP YEAR.—In the case of an eligible producer that suffered losses in an insurable commodity or
noninsurable commodity during the 2008 crop year but
does not meet the requirements of paragraph (1), the Secretary shall waive paragraph (1) if the eligible producer
pays a fee in an amount equal to the applicable noninsured crop assistance program fee or catastrophic risk
protection plan fee required under paragraph (1) to the
Secretary not later than 90 days after the date of enactment of this subtitle.
(B) 2009 CROP YEAR.—In the case of an insurable commodity or noninsurable commodity for the 2009 crop year
that does not meet the requirements of paragraph (1) and
the relevant crop insurance program sales closing date or
noninsured crop assistance program fee payment date was
prior to August 14, 2008, the Secretary shall waive paragraph (1) if the eligible producer of the insurable commodity or noninsurable commodity pays a fee in an
amount equal to the applicable noninsured crop assistance
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quired under paragraph (1) to the Secretary not later than
90 days after the date of enactment of this subparagraph.
(5) EQUITABLE RELIEF.—
(A) IN GENERAL.—The Secretary may provide equitable
relief to eligible producers on a farm that are otherwise ineligible or unintentionally fail to meet the requirements of
paragraph (1) for 1 or more crops on a farm on a case-bycase basis, as determined by the Secretary.
(B) 2008 CROP YEAR.—In the case of eligible producers
on a farm that suffered losses in an insurable commodity
or noninsurable commodity during the 2008 crop year, the
Secretary shall take special consideration to provide equitable relief in cases in which the eligible producers failed
to meet the requirements of paragraph (1) due to the enactment of this subtitle after the closing date of sales periods for crop insurance under subtitle A and the noninsured
crop assistance program.
(6) DE MINIMIS EXCEPTION.—
(A) IN GENERAL.—For purposes of assistance under
subsection (b), at the option of an eligible producer on a
farm, the Secretary shall waive paragraph (1)—
(i) in the case of a portion of the total acreage of
a farm of the eligible producer that is not of economic
significance on the farm, as established by the Secretary; or
(ii) in the case of a crop for which the administrative fee required for the purchase of noninsured crop
disaster assistance coverage exceeds 10 percent of the
value of that coverage.
(B) TREATMENT OF ACREAGE.—The Secretary shall not
consider the value of any crop exempted under subparagraph (A) in calculating the supplemental revenue assistance program guarantee under subsection (b)(3) and the
total farm revenue under subsection (b)(4).
(7) 2008 TRANSITION ASSISTANCE.—
(A) IN GENERAL.—Eligible producers on a farm described in subparagraph (A) of paragraph (4) that failed to
timely pay the appropriate fee described in that subparagraph shall be eligible for assistance under this section in
accordance with subparagraph (B) if the eligible producers
on the farm—
(i) pay the appropriate fee described in paragraph
(4)(A) not later than 90 days after the date of enactment of this paragraph; and
(ii)(I) in the case of each insurable commodity of
the eligible producers on the farm, excluding grazing
land, agree to obtain a policy or plan of insurance
under subtitle A (excluding a crop insurance pilot program under that subtitle) for the next insurance year
for which crop insurance is available to the eligible
producers on the farm at a level of coverage equal to
70 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected
market price, or an equivalent coverage; and
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(II) in the case of each noninsurable commodity of
the eligible producers on the farm, agree to file the required paperwork, and pay the administrative fee by
the applicable State filing deadline, for the noninsured
crop assistance program for the next year for which a
policy is available.
(B) AMOUNT OF ASSISTANCE.—Eligible producers on a
farm that meet the requirements of subparagraph (A) shall
be eligible to receive assistance under this section as if the
eligible producers on the farm—
(i) in the case of each insurable commodity of the
eligible producers on the farm, had obtained a policy
or plan of insurance for the 2008 crop year at a level
of coverage not to exceed 70 percent or more of the recorded or appraised average yield indemnified at 100
percent of the expected market price, or an equivalent
coverage; and
(ii) in the case of each noninsurable commodity of
the eligible producers on the farm, had filed the required paperwork, and paid the administrative fee by
the applicable State filing deadline, for the noninsured
crop assistance program for the 2008 crop year, except
that in determining the level of coverage, the Secretary shall use 70 percent of the applicable yield.
(C) EQUITABLE RELIEF.—Except as provided in subparagraph (D), eligible producers on a farm that met the
requirements of paragraph (1) before the deadline described in paragraph (4)(A) and are eligible to receive, a
disaster assistance payment under this section for a production loss during the 2008 crop year shall be eligible to
receive an amount equal to the greater of—
(i) the amount that would have been calculated
under subparagraph (B) if the eligible producers on
the farm had paid the appropriate fee under that subparagraph; or
(ii) the amount that would have been calculated
under subparagraph (A) of subsection (b)(3) if—
(I) in clause (i) of that subparagraph, ‘‘120
percent’’ is substituted for ‘‘115 percent’’; and
(II) in clause (ii) of that subparagraph, ‘‘125’’
is substituted for ‘‘120 percent’’.
(D) LIMITATION.—For amounts made available under
this paragraph, the Secretary may make such adjustments
as are necessary to ensure that no producer receives a payment under this paragraph for an amount in excess of the
assistance received by a similarly situated producer that
had purchased the same or higher level of crop insurance
prior to the date of enactment of this paragraph.
(E) AUTHORITY OF THE SECRETARY.—The Secretary
may provide such additional assistance as the Secretary
considers appropriate to provide equitable treatment for eligible producers on a farm that suffered production losses
in the 2008 crop year that result in multiyear production
losses, as determined by the Secretary.
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(F) LACK OF ACCESS.—Notwithstanding any other provision of this section, the Secretary may provide assistance
(including multiyear assistance) under this section to eligible producers on a farm that—
(i) suffered a production loss or multiyear production losses due to a natural cause during the 2008 crop
year; and
(ii) as determined by the Secretary—
(I)(aa) except as provided in item (bb), lack access to a policy or plan of insurance under subtitle
A; or
(bb) do not qualify for a written agreement because 1 or more farming practices, which the Secretary has determined are good farming practices,
of the eligible producers on the farm differ significantly from the farming practices used by producers of the same crop in other regions of the
United States; and
(II) are not eligible for the noninsured crop
disaster assistance program established by section
196 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7333).
(h) PAYMENT LIMITATIONS.—
(1) DEFINITIONS OF LEGAL ENTITY AND PERSON.—In this
subsection, the terms ‘‘legal entity’’ and ‘‘person’’ have the
meaning given those terms in section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 1308(a) (as amended by section 1603
of the Food, Conservation, and Energy Act of 2008).
(2) AMOUNT.—The total amount of disaster assistance payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) under this
section (excluding payments received under subsection (f)) may
not exceed $100,000 for any crop year.
(3) AGI LIMITATION.—Section 1001D of the Food Security
Act of 1985 (7 U.S.C. 1308–3a) or any successor provision shall
apply with respect to assistance provided under this section.
(4) DIRECT ATTRIBUTION.—Subsections (e) and (f) of section
1001 of the Food Security Act of 1985 (7 U.S.C. 1308) or any
successor provisions relating to direct attribution shall apply
with respect to assistance provided under this section.
(5) TRANSITION RULE.—Sections 1001, 1001A, 1001B, and
1001D of the Food Security Act of 1985 (7 U.S.C. 1308 et seq.)
as in effect on September 30, 2007, shall continue to apply
with respect to 2008 crops.
(i) PERIOD OF EFFECTIVENESS.—This section shall be effective
only for losses that are incurred as the result of a disaster, adverse
weather, or other environmental condition that occurs on or before
September 30, 2011, or, in the case of subsections (c) through (f),
September 30, 2013 as determined by the Secretary.
(j) NO DUPLICATIVE PAYMENTS.—In implementing any other
program which makes disaster assistance payments (except for indemnities made under subtitle A and section 196 of the Federal
Agriculture Improvement and Reform Act of 1996), the Secretary
shall prevent duplicative payments with respect to the same loss
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for which a person receives a payment under subsections (b), (c),
(d), (e), or (f).
(k) APPLICATION.—
(1) IN GENERAL.—Subject to paragraph (2) and notwithstanding any provision of subtitle A, subtitle A shall not apply
to this subtitle.
(2) CROSS REFERENCES.—Paragraph (1) shall not apply to
a specific reference in this subtitle to a provision of subtitle A.

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