§ 1522. — Research and development.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1522]
TITLE 7--AGRICULTURE
CHAPTER 36--CROP INSURANCE
Sec. 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 reimbursement
The Corporation shall provide a payment to reimburse an
applicant for research and development costs directly related to a
policy that is--
(A) submitted to the Board and approved by the Board under
section 1508(h) of this title for reinsurance; and
(B) if applicable, offered for sale to producers.
(2) Existing plans
The Corporation shall reimburse costs associated with research
and development costs directly related to a policy that was approved
by the Board prior to June 20, 2000.
(3) Marketability
The Corporation shall approve a reimbursement under paragraph
(1) or (2) 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
paragraphs (1) and (2).
(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 contracting authority
(1) Authority
The Corporation may enter into contracts to carry out research
and development to--
(A) increase participation in States in which the
Corporation determines that--
(i) there is traditionally, and continues to be, a low
level of Federal crop insurance participation and
availability; and
(ii) the State is underserved by the Federal crop
insurance program;
(B) increase participation in areas that are underserved by
the Federal crop insurance program; and
(C) increase participation by producers of underserved
agricultural commodities, including specialty crops.
(2) Underserved agricultural commodities and areas
(A) Authority
The Corporation may 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 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.
(6) Research and development priorities
The Corporation shall establish as one of the highest research
and development priorities of the Corporation the development of a
pasture, range, and forage program.
(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 June 20, 2000, 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).
(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 June 20, 2000, 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) Relation to limitations
A policy developed under this subsection may be prepared without
regard to the limitations of this chapter, 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 increasing the availability of loss mitigation,
financial, and other risk management tools for producers, with a
priority given to risk management tools for producers of
agricultural commodities covered by section 7333 of this title,
specialty crops, and underserved agricultural commodities.
(2) Authority
The Corporation may enter into partnerships with the Cooperative
State Research, Education, and Extension Service, the Agricultural
Research Service, the National Oceanic Atmospheric Administration,
and other appropriate public and private entities with demonstrated
capabilities in developing and implementing risk management and
marketing options for producers of specialty crops and underserved
agricultural commodities.
(3) Objectives
The Corporation may enter into a partnership under paragraph
(2)--
(A) to enhance the notice and timeliness of notice of
weather conditions that could negatively affect crop yields,
quality, and final product use in order to allow producers to
take preventive actions to increase end product profitability
and marketability and to reduce the possibility of crop
insurance claims;
(B) to develop a multifaceted approach to pest management
and fertilization to decrease inputs, decrease environmental
exposure, and increase application efficiency;
(C) to develop or improve techniques for planning, breeding,
planting, growing, maintaining, harvesting, storing, shipping,
and marketing that will address quality and quantity challenges
associated with year-to-year and regional variations;
(D) to clarify labor requirements and assist producers in
complying with requirements to better meet the physically
intense and time-compressed planting, tending, and harvesting
requirements associated with the production of specialty crops
and underserved agricultural commodities;
(E) to provide assistance to State foresters or equivalent
officials for the prescribed use of burning on private forest
land for the prevention, control, and suppression of fire;
(F) to provide producers with training and informational
opportunities so that the producers will be better able to use
financial management, crop insurance, marketing contracts, and
other existing and emerging risk management tools; and
(G) to develop other risk management tools to further
increase economic and production stability.
(e) Funding
(1) Reimbursements
Of the amounts made available from the insurance fund
established under section 1516(c) of this title, the Corporation may
use to provide reimbursements under subsection (b) of this section
not more than $10,000,000 for each of fiscal years 2001 and 2002 and
not more than $15,000,000 for fiscal year 2003 and each subsequent
fiscal year.
(2) Contracting
(A) Authority
Of the amounts made available from the insurance fund
established under section 1516(c) of this title, the Corporation
may use to carry out contracting and partnerships under
subsections (c) and (d) of this section not more than
$20,000,000 for each of fiscal years 2001 through 2003 and not
more than $25,000,000 for fiscal year 2004 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 carry out contracting for research and
development to carry out the purpose described in subsection
(c)(1)(A) of this section.
(3) Unused funding
If the Corporation determines that the amount available to
provide either reimbursement payments or contract payments under
this section for a fiscal year is not needed for such purposes, the
Corporation may use the excess amount to carry out another function
authorized under this section.
(4) Prohibited research and development by Corporation
(A) New policies
Notwithstanding subsection (d) of this section, on and after
October 1, 2000, the Corporation shall not conduct research and
development for any new policy for an agricultural commodity
offered under this chapter.
(B) Existing policies
Any policy developed by the Corporation under this chapter
before that date may continue to be offered for sale to
producers.
(Feb. 16, 1938, ch. 30, title V, Sec. 522, as added Pub. L. 106-224,
title I, Sec. 131, June 20, 2000, 114 Stat. 379.)
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, Sec. 2103, July 24, 2001, 115 Stat. 165,
provided that:
``(a) Not later than August 1, 2001, the Federal Crop Insurance
Corporation shall promulgate final regulations to carry out section
522(b) of the Federal Crop Insurance 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 Agriculture
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 (commonly 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 subsection (a) shall
take effect on the date of publication of the final regulations.''
Section Referred to in Other Sections
This section is referred to in sections 1508, 1516, 1523 of this
title.
