7 U.S.C. § 1523 — Pilot programs

Page 861 TITLE 7—AGRICULTURE § 1523 ‘‘(2) RESUBMISSION OF DENIED REQUEST.—An applicant that was denied all or a portion of a reimbursement re- quest under paragraph (1) of section 522(b) of the Fed- eral Crop Insurance Act (7 U.S.C. 1522(b)) during the pe- riod between October 1, 2016, and the date of the enact- ment of this Act [Dec. 20, 2018] shall be given an oppor- tunity to resubmit such request.’’ EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as other- wise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. Pub. L. 110–234, title VII, § 7511(c), May 22, 2008, 122 Stat. 1267, and Pub. L. 110–246, § 4(a), title VII, § 7511(c), June 18, 2008, 122 Stat. 1664, 2028, provided that the amendments made by section 7511(c) are effective Oct. 1, 2009. [Pub. L. 110–234 and Pub. L. 110–246 enacted identical provisions. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246, set out as a note under section 8701 of this title.] EFFECTIVE DATE Section effective Oct. 1, 2000, see section 171(b)(1)(A) of Pub. L. 106–224, set out as an Effective Date of 2000 Amendment note under section 1501 of this title. REIMBURSEMENT REGULATIONS Pub. L. 107–20, title II, § 2103, July 24, 2001, 115 Stat. 165, provided that: ‘‘(a) Not later than August 1, 2001, the Federal Crop Insurance Corporation shall promulgate final regula- tions to carry out section 522(b) of the Federal Crop In- surance Act (7 U.S.C. 522(b) [1522(b)]), without regard to— ‘‘(1) the notice and comment provisions of section 553 of title 5, United States Code; ‘‘(2) the Statement of Policy of the Secretary of Ag- riculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and ‘‘(3) chapter 35 of title 44, United States Code (com- monly known as the ‘Paperwork Reduction Act’). ‘‘(b) In carrying out this section, the Corporation shall use the authority provided under section 808 of title 5, United States Code. ‘‘(c) The final regulations promulgated under sub- section (a) shall take effect on the date of publication of the final regulations.’’ § 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 sub- mitted to and approved by the Board under section 1508(h) of this title, or that is devel- oped under subsection (b) or section 1522 of this title, 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 agricul- tural commodities. (2) Private coverage Under this section, the Corporation shall not conduct any pilot program that provides in- surance protection against a risk if insurance protection against the risk is generally avail- able from private companies. (3) Covered activities The pilot programs described in paragraph (1) may include pilot programs providing in- surance 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 gen- eral, aquacultural species, and forest indus- try needs (including appreciation); (E) after October 1, 2001, wild salmon, ex- cept that— (i) any pilot program with regard to wild salmon may be carried out without regard to the limitations of this subchapter; and (ii) the Corporation shall conduct all wild salmon programs under this sub- chapter so that, to the maximum extent practicable, all costs associated with con- ducting 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 sec- tion 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 deter- mined appropriate by the Corporation; and (D) provide pilot programs that would allow producers— (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’’ in- cludes, 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 poli- cies and plans of insurance that protect the in- terests of livestock producers and that pro- vide— (A) livestock producers with reasonable protection from the financial risks of price or income fluctuations inherent in the pro- duction 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 num- ber and variety of pilot programs described in paragraph (2) to determine which of the of- fered risk management tools are best suited to protect livestock producers from the financial risks associated with the production and mar- keting of livestock. Page 862 TITLE 7—AGRICULTURE § 1523 1 See References in Text note below. (4) Timing The Corporation shall begin conducting live- stock 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 subchapter. (6) Assistance As part of a pilot program under this sub- section, the Corporation may provide reinsur- ance for policies or plans of insurance and sub- sidize the purchase of futures and options con- tracts or policies and plans of insurance of- fered under the pilot program. (7) Private insurance No action may be undertaken with respect to a risk under this subsection if the Corpora- tion determines that insurance protection for livestock producers against the risk is gen- erally available from private companies. (8) Location The Corporation shall conduct the livestock pilot programs under this subsection in a num- ber of counties that is determined by the Cor- poration to be adequate to provide a com- prehensive evaluation of the feasibility, effec- tiveness, 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. (c) Revenue insurance pilot program (1) In general Subject to section 1522(e)(4) of this title,1 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 Sec- retary considers appropriate may elect to re- ceive insurance against loss of revenue, as de- termined by the Secretary. (2) Administration Revenue insurance under this subsection shall— (A) be offered through reinsurance ar- rangements with private insurance compa- nies; (B) offer at least a minimum level of cov- erage 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 re- duced 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 pro- gram. (2) Establishment (A) In general Beginning with the 2002 crop year, the Cor- poration shall establish a pilot program under which approved insurance providers may propose for approval by the Board poli- cies or plans of insurance with reduced rates of premium— (i) for one or more agricultural commod- ities; and (ii) within a limited geographic area, as proposed by the approved insurance pro- vider 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 ade- quately protected within the pilot area; (ii) rates of premium are actuarially ap- propriate, as determined by the Board; (iii) the size of the proposed pilot area is adequate; (iv) the proposed policy or plan of insur- ance would not unfairly discriminate among producers within the proposed pilot area; (v) if the proposed policy or plan of in- surance 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 im- pact on the crop insurance delivery sys- tem; (II) not result in a reduction of pro- gram 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 insur- ance meets other requirements of this sub- chapter determined appropriate by the Board. (C) Time limitations and procedures The time limitations and procedures of the Board established under section 1508(h) of this title shall apply to a proposal submitted under this subsection. (e) Adjusted gross revenue insurance pilot pro- gram (1) In general The Corporation shall carry out, through at least the 2004 reinsurance year, the adjusted gross revenue insurance pilot program in ef- fect for the 2002 reinsurance year. (2) Additional counties (A) In general In addition to counties otherwise included in the pilot program, the Corporation shall Page 863 TITLE 7—AGRICULTURE § 1523 include in the pilot program for the 2003 re- insurance 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 Cor- poration shall work with the respective State Departments of Agriculture to estab- lish criteria to determine which counties to include in the pilot program. (f) Camelina pilot program (1) In general The Corporation shall establish a pilot pro- gram 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 1508(h) of this title. (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 sub- chapter. (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 con- tract may elect to obtain multiperil crop in- surance, as determined by the Corporation. (2) Terms and conditions The multiperil crop insurance offered under the sesame insurance pilot program shall— (A) be offered through reinsurance ar- rangements with private insurance compa- nies; (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 sub- section. (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 pe- rennial rye grass under contract may elect to obtain multiperil crop insurance, as deter- mined 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 ar- rangements with private insurance compa- nies; (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 prac- ticable after the date of the enactment of this subsection. (i) Underserved crops and regions pilot pro- grams (1) Definition of livestock commodity In this subsection, the term ‘‘livestock com- modity’’ 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 Cor- poration may conduct 2 or more pilot pro- grams to provide producers of underserved spe- cialty 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 pro- posed policies or plans of insurance from ap- proved insurance providers if the Board de- termines that the policies or plans provide coverage as specified in paragraph (2), and meet the conditions described in this para- graph. (B) Requirements To be eligible for approval under this sub- section, the approved insurance provider shall have— (i) adequate experience underwriting and administering policies or plans of insur- ance that are comparable to the proposed policy or plan of insurance; (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 ac- cordance with Board procedures; and (iii) applicable authority and approval from each State in which the approved in- surance provider intends to sell the insur- ance product. (C) Review requirements In reviewing applications under this sub- section, the Board shall conduct the review Page 864 TITLE 7—AGRICULTURE § 1523 in a manner consistent with the standards, rules, and procedures for policies or plans of insurance submitted under section 1508(h) of this title and the actuarial soundness re- quirements applied to other policies and plans of insurance made available under this subchapter. (D) Prioritization The Board shall prioritize applications that provide a new kind of coverage for spe- cialty crops and livestock commodities that previously had no available crop insurance, or has demonstrated a low level of participa- tion 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 pol- icy or plan of insurance approved pursuant to this subsection. (B) Amount The premium subsidy shall provide a simi- lar dollar amount of premium subsidy per acre that the Corporation pays for com- parable policies or plans of insurance rein- sured under this subchapter, 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 deter- mined 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 man- ner 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 ad- ministrative expense payments may be made for policies and plans of insurance approved under this subsection in an amount that is commensurate with simi- lar policies and plans of insurance rein- sured under this subchapter, on the condi- tion 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 mainte- nance fees shall not be provided or col- lected 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 sub- mits 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 pro- vider, on the condition that the fees or payments shall be reasonable and appro- priate to ensure that the policies or plans of insurance may be made available by ad- ditional approved insurance providers; and (ii) meets the eligibility criteria of para- graph (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 pro- vider to report sales, acreage and claim data, and any other data that the Corpora- tion determines to be appropriate, to allow the Corporation to evaluate sales and per- formance 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 im- pact on the crop insurance delivery sys- tem; (ii) are in the best interests of producers; and (iii) do not result in a reduction of pro- gram 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 in- formation for the purposes of section 552(b)(4) of title 5. (B) Standard If information concerning a proposal could be withheld by the Secretary under the standard for privileged or confidential infor- mation pertaining to trade secrets and com- mercial or financial information under sec- tion 552(b)(4) of title 5, 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 (A) Limitation on expenditures Notwithstanding any other provision in this subsection, of the funds of the Corpora- tion, the Corporation shall use to carry out Page 865 TITLE 7—AGRICULTURE § 1524 1 So in original. Probably should be followed by ‘‘and’’. this section not more than $12,500,000 for each of fiscal years 2015 through 2018, to re- main 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 subchapter, including amounts made available under subsection (b). (Feb. 16, 1938, ch. 30, title V, § 523, as added Pub. L. 106–224, title I, § 132(a), June 20, 2000, 114 Stat. 383; amended Pub. L. 107–171, title X, § 10004, May 13, 2002, 116 Stat. 487; Pub. L. 110–234, title XII, §§ 12025(a), 12033(c)(2)(B), May 22, 2008, 122 Stat. 1389, 1405; Pub. L. 110–246, § 4(a), title XII, §§ 12025(a), 12033(c)(2)(B), June 18, 2008, 122 Stat. 1664, 2151, 2167; Pub. L. 113–79, title XI, §§ 11025, 11026, Feb. 7, 2014, 128 Stat. 974; Pub. L. 115–123, div. F, § 60101(c)(1), Feb. 9, 2018, 132 Stat. 312; Pub. L. 115–334, title XI, § 11124, Dec. 20, 2018, 132 Stat. 4935.) Editorial Notes REFERENCES IN TEXT Section 1522(e)(4) of this title, referred to in subsec. (c)(1), was repealed by Pub. L. 113–79, title XI, § 11022(b)(3), Feb. 7, 2014, 128 Stat. 973. The date of enactment of this subsection, referred to in subsecs. (f)(3), (g)(4), and (h)(4), is the date of enact- ment of Pub. L. 110–246, which was approved June 18, 2008. CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2018—Subsec. (b)(10). Pub. L. 115–123 struck out par. (10) which related to limitation on expenditures. Subsec. (i)(3)(A). Pub. L. 115–334 inserted period at end. 2014—Subsec. (a)(1). Pub. L. 113–79, § 11025(1), inserted ‘‘, at the sole discretion of the Corporation,’’ after ‘‘the Corporation may’’. Subsec. (a)(5). Pub. L. 113–79, § 11025(2), struck out par. (5) which related to evaluation of the pilot program. Subsec. (i). Pub. L. 113–79, § 11026, added subsec. (i). 2008—Subsecs. (a), (b), (d). Pub. L. 110–246, § 12033(c)(2)(B), substituted ‘‘this subchapter’’ for ‘‘this chapter’’ wherever appearing. Subsec. (f). Pub. L. 110–246, § 12033(c)(2)(B), substituted ‘‘this subchapter’’ for ‘‘this chapter’’. Pub. L. 110–246, § 12025(a), added subsec. (f). Subsecs. (g), (h). Pub. L. 110–246, § 12025(a), added sub- secs. (g) and (h). 2002—Subsec. (e). Pub. L. 107–171 added subsec. (e). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. EFFECTIVE DATE Section effective Oct. 1, 2000, see section 171(b)(1)(A) of Pub. L. 106–224, set out as an Effective Date of 2000 Amendment note under section 1501 of this title. § 1524. Education and risk management assist- ance (a) Education assistance (1) In general Subject to the amounts made available under paragraph (4), the Secretary, acting through the National Institute of Food and Agriculture, shall carry out the program es- tablished under paragraph (2). (2) Partnerships for risk management edu- cation (A) Authority The Secretary, acting through the Na- tional Institute of Food and Agriculture, shall establish a program under which com- petitive 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 and providing tech- nical assistance to agricultural producers on a full range of farm viability and risk man- agement activities, including futures, op- tions, agricultural trade options, crop insur- ance, business planning, enterprise analysis, transfer and succession planning, manage- ment coaching, market assessment, cash flow analysis, cash forward contracting, debt reduction, production diversification, farm resources risk reduction, farm financial benchmarking, conservation activities, 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 obli- gation 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 administra- tive costs incurred by the Secretary in car- rying out this paragraph. (3) Requirements In carrying out the program established under paragraph (2), the Secretary shall place special emphasis on farm viability and risk management strategies (including farm finan- cial benchmarking, business planning and technical assistance, market assessment, transfer and succession planning, and crop in- surance participation), education, and out- reach 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; (ii) are using transition strategies to help new farmers or ranchers get started; 1