USC - Research and development

View all text of Subchapter I [§ 1501 - § 1524]

§ 1522. Research and development

(a) Definition of policy

(b) Reimbursement of research, development, and maintenance costs

(1) Research and development payment

(A) In general

(B) Reimbursement

(i) In general

(ii) Reasonable costsFor the purpose of reimbursing research and development and maintenance costs under this section, costs of the applicant shall be considered reasonable costs if the costs are based on—(I) for any employees or contracted personnel, wage rates equal to not more than 2 times the hourly wage rate plus benefits, as provided by the Bureau of Labor Statistics for the year in which such costs are incurred, calculated using the formula applied to an applicant by the Corporation in reviewing proposed project budgets under this section on October 1, 2016; and(II) other actual documented costs incurred by the applicant.

(2) Advance payments

(A) In general

(B) Procedures

(C) Concept proposalAs a condition of eligibility for advance payments, an applicant shall submit a concept proposal for the policy that the applicant plans to submit to the Board under section 1508(h) of this title, consistent with procedures established by the Board for submissions under subparagraph (B), including—

(i) a summary of the qualifications of the applicant, including any prior concept proposals and submissions to the Board under

(ii) a projection of total research and development costs that the applicant expects to incur;

(iii) a description of the need for the policy, the marketability of and expected demand for the policy among affected producers, and the potential impact of the policy on producers and the crop insurance delivery system;

(iv) a summary of data sources available to demonstrate that the policy can reasonably be developed and actuarially appropriate rates established; and

(v) an identification of the risks the proposed policy will cover and an explanation of how the identified risks are insurable under this subchapter.

(D) Review

(i) Experts

(ii) Timing

(E) Approval

(i) In generalThe Board may approve up to 50 percent of the projected total research and development costs to be paid in advance to an applicant, in accordance with the procedures developed by the Board for the making of the payments, if, after consideration of the reviewer reports described in subparagraph (D) and such other information as the Board determines appropriate, the Board determines that—(I) the concept, in good faith, will likely result in a viable and marketable policy consistent with section 1508(h) of this title;(II) at the sole discretion of the Board, the concept, if developed into a policy and approved by the Board, would provide crop insurance coverage—(aa) in a significantly improved form;(bb) to a crop or region not traditionally served by the Federal crop insurance program; or(cc) in a form that addresses a recognized flaw or problem in the program;(III) the applicant agrees to provide such reports as the Corporation determines are necessary to monitor the development effort;(IV) the proposed budget and timetable are reasonable, as determined by the Board; and(V) the concept proposal meets any other requirements that the Board determines appropriate.

(ii) WaiverThe Board may waive the 50-percent limitation and, upon request of the submitter after the submitter has begun research and development activities, the Board may approve an additional 25 percent advance payment to the submitter for research and development costs, if, at the sole discretion of the Board, the Board determines that—(I) the intended policy or plan of insurance developed by the submitter will provide coverage for a region or crop that is underserved by the Federal crop insurance program, including specialty crops; and(II) the submitter is making satisfactory progress towards developing a viable and marketable policy or plan of insurance consistent with section 1508(h) of this title.

(F) Submission of policy

(G) Final payment

(i) Approved policies

(ii) Policies not approvedIf a policy is submitted under subparagraph (F) and is not approved by the Board under section 1508(h) of this title, the Corporation shall—(I) not seek a refund of any payments made in accordance with this paragraph; and(II) not make any further research and development cost payments associated with the submission of the policy under this paragraph.

(H) Policy not submitted

(I) Repeated submissionsThe 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

(K) Waiver for hemp

(3) Marketability

(A) In general

(B) Waiver for hemp

(4) Maintenance payments

(A) Requirement

(B) Duration

(C) Options for maintenanceOn the expiration of the 4-year period described in subparagraph (B), the applicant responsible for maintenance of the policy may—

(i) maintain the policy and charge a fee to approved insurance providers that elect to sell the policy under this subsection; or

(ii) transfer responsibility for maintenance of the policy to the Corporation.

(D) Fee

(i) Amount

(ii) ApprovalThe Board shall approve the amount of a fee determined under clause (i) for maintenance of the policy unless the Board determines that the amount of the fee—(I) is unreasonable in relation to the maintenance costs associated with the policy; or(II) unnecessarily inhibits the use of the policy.

(iii) ReviewAfter the Board approves the amount of a fee under clause (ii), the fee shall remain in effect and not be reviewed by the Board unless—(I) the applicant petitions the Board for reconsideration of the fee;(II) a substantial change is made to the policy, as determined by the Board; or(III) there is substantial evidence that the fee is inhibiting sales or use of the policy, as determined by the Board.

(5) Treatment of payment

(6) Reimbursement amount

(1) AuthorityThe Corporation may conduct activities or enter into contracts to carry out research and development to maintain or improve existing policies or develop new policies to—

(A) increase participation in States in which the Corporation determines that—

(i) there is traditionally, and continues to be, a low level of Federal crop insurance participation and availability; and

(ii) the State is underserved by the Federal crop insurance program;

(B) increase participation in areas that are underserved by the Federal crop insurance program; and

(2) Underserved agricultural commodities and areas

(A) Authority

(B) Consultation

(3) Qualified persons

(4) Types of contracts

(5) Use of resulting policies

(6) Research and development priorities

(7) Whole farm diversified risk management insurance plan

(A) In general

(B) Eligible producers

(C) DiversificationThe 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

(E) Review of modifications to improve effectiveness

(i) In generalNot later than 18 months after December 20, 2018—(I) the Corporation shall hold stakeholder meetings to solicit producer and agent feedback; and(II) the Board shall—(aa) review procedures and paperwork requirements on agents and producers; and(bb) modify procedures and requirements, as appropriate, to decrease burdens and increase flexibility and effectiveness.

(ii) FactorsIn carrying out items (aa) and (bb) of subclause (i)(II), the Board shall consider—(I) removing caps on nursery and livestock production;(II) allowing a waiver to expand operations, especially for small and beginning farmers;(III) minimizing paperwork for producers and agents;(IV) implementing an option for producers with less than $1,000,000 in gross revenue that requires significantly less paperwork and recordkeeping;(V) developing and using alternative records such as time-stamped photographs or technology applications to document planting and production history;(VI) treating the different growth stages of aquaculture species as separate crops to recognize the difference in perils at different phases of growth;(VII) moderating the impacts of disaster years on historic revenue, such as—(aa) using an average of the historic and projected revenue;(bb) counting indemnities as historic revenue for loss years;(cc) counting payments under section 7333 of this title as historic revenue for loss years; or(dd) using an assigned yield floor similar to the limitation described in section 1508(g)(6)(A)(i) of this title, as determined by the Secretary;(VIII) improving agent training and outreach to underserved regions and sectors such as small dairy farms; and(IX) providing coverage and indemnification of insurable losses—(aa) after the losses exceed the deductible; and(bb) up to the maximum amount of total coverage.

(F) Beginning farmer or rancher defined

(8) Relation to limitationsA policy developed under this subsection may be prepared without regard to the limitations of this subchapter, including—

(A) the requirement concerning the levels of coverage and rates; and

(B) the requirement that the price level for each insured agricultural commodity must equal the expected market price for the agricultural commodity, as established by the Board.

(9) Tropical storm or hurricane insurance

(A) In general

(B) Research and developmentResearch and development under subparagraph (A) shall—

(i) evaluate the effectiveness of risk management tools for a low frequency and catastrophic loss weather event; and

(ii) result in a policy that provides protection for at least 1 of the following:(I) Production loss.(II) Revenue loss.

(C) ReportNot later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—

(i) the results of the research and development carried out under this paragraph; and

(ii) any recommendations with respect to those results.

(10) Quality loss

(A) In generalThe Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding the establishment of each of the following alternative methods of adjusting for quality losses:

(i) A method that does not impact the actual production history of a producer.

(ii) A method that provides that, in circumstances in which a producer has suffered a quality loss to the insured crop of the producer that is insufficient to trigger an indemnity payment, the producer may elect to exclude that quality loss from the actual production history of the producer.

(iii) 1 or more methods that combine the methods described in clauses (i) and (ii).

(B) RequirementsNotwithstanding subsections (g) and (m) of section 1508 of this title, any method developed under subparagraph (A) that is used by the Corporation shall be—

(i) optional for a producer to use; and

(ii) offered at an actuarially sound premium rate.

(i) the results of the research and development carried out under subparagraph (A); and

(ii) any recommendations with respect to those results.

(11) Citrus

(A) In generalThe Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding the insurance of citrus fruit commodities and commodity types, including research and development of—

(i) improvements to 1 or more existing policies, including the whole-farm revenue protection pilot policy;

(ii) alternative methods of insuring revenue for citrus fruit commodities and commodity types; and

(iii) the development of new, or expansion of existing, revenue policies for citrus fruit commodities and commodity types.

(B) ReportNot later than 1 year after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—

(i) the results of the research and development carried out under subparagraph (A); and

(ii) any recommendations with respect to those results.

(12) Hops

(A) In general

(i) the results of the research and development carried out under subparagraph (A); and

(ii) any recommendations with respect to those results.

(13) Subsurface irrigation practices

(A) In general

(B) ReportNot later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—

(i) the results of the research and development carried out under subparagraph (A); and

(ii) any recommendations with respect to those results.

(14) Grain sorghum

(A) In generalThe Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development—

(i) regarding improvements to 1 or more policies to insure irrigated grain sorghum;

(ii) regarding alternative methods for producers with not more than 4 years of production history to insure irrigated grain sorghum; and

(iii) to assess, by county, the difference in the rate, average yield, and coverage level of grain sorghum policies compared to policies for other feed grains in that county.

(i) the results of the research and development carried out under subparagraph (A); and

(ii) any recommendations with respect to those results.

(15) Limited irrigation practices

(A) AuthorityThe Corporation shall—

(i) consider expanding the availability of the limited irrigation insurance program to neighboring and similarly situated States (such as the States of Colorado and Nebraska), as determined by the Secretary;

(ii) carry out research, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research, on the marketability of the existing limited irrigation insurance program; and

(iii) make recommendations on how to improve participation in that program.

(B) ResearchIn carrying out research under subparagraph (A), a qualified person shall—

(i) collaborate with researchers on the subjects of—(I) reduced irrigation practices or limited irrigation practices; and(II) expected yield reductions following the application of reduced irrigation;

(ii) collaborate with State and Federal officials responsible for the collection of water and the regulation of water use for the purpose of irrigation;

(iii) provide recommendations to encourage producers to carry out limited irrigation practices or reduced irrigation and water conservation practices; and

(iv) develop web-based applications that will streamline access to coverage for producers electing to conserve water use on irrigated crops.

(C) ReportNot later than 18 months after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—

(i) the results of the research carried out under subparagraphs (A) and (B);

(ii) any recommendations to encourage producers to carry out limited irrigation practices or reduced irrigation and water conservation practices; and

(iii) the actions taken by the Corporation to carry out the recommendations described in clause (ii).

(16) Insurable irrigation practices for rice

(A) In generalThe Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, to include new and innovative irrigation practices under the current rice policy or the development of a distinct policy endorsement rated for rice produced using—

(i) alternate wetting and drying practices (also referred to as “intermittent flooding”); and

(ii) furrow irrigation practices.

(i) the results of the research and development carried out under paragraph (1); and

(ii) any recommendations with respect to those results.

(17) Greenhouse policy

(A) In general

(i) Research and developmentThe Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure in a controlled environment such as a greenhouse—(I) the production of floriculture, nursery, and bedding plants;(II) the establishment of cuttings or tissue culture in a growing medium; or(III) other similar production, as determined by the Secretary.

(ii) Availability of policy

(B) Research and development describedResearch and development described in subparagraph (A)(i) shall evaluate the effectiveness of policies for the production of plants in a controlled environment, including policies that—

(i) are based on the risk of—(I) plant diseases introduced from the environment;(II) contaminated cuttings, seedlings, or tissue culture; or(III) Federal or State quarantine or destruction orders associated with the contaminated items described in subclause (II);

(ii) consider other causes of loss applicable to a controlled environment, such as a loss of electricity due to weather;

(iii) consider appropriate best practices to minimize the risk of loss;

(iv) consider whether to provide coverage for various types of plants under 1 policy or to provide coverage for 1 species or type of plant per policy;

(v) have streamlined reporting and paperwork requirements that take into account short propagation schedules, variable crop years, and the variety of plants that may be produced in a single facility; and

(vi) provide protection for revenue losses.

(C) ReportNot later than 2 years after December 20, 2018, the Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—

(i) the results of the research and development carried out under subparagraphs (A)(i) and (B); and

(ii) any recommendations with respect to those results.

(18) Local foods

(A) In general

(i) Feasibility studyThe Corporation shall carry out a study to determine the feasibility of, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out a study to determine the feasibility of, a policy to insure production—(I) of floriculture, fruits, vegetables, poultry, livestock, or the products of floriculture, fruits, vegetables, poultry, or livestock; and(II) that is targeted toward local consumers and markets.

(ii) Availability of policyNotwithstanding the last sentence of section 1508(a)(1) of this title, and section 1508(a)(2) of this title, the Corporation shall make available a policy described in clause (i) if—(I) the results of the feasibility study under clause (i) are viable; and(II) the requirements of section 1508(h) of this title are met.

(B) Feasibility study describedThe feasibility study described in subparagraph (A)(i) shall evaluate the effectiveness of policies for production targeted toward local consumers and markets, including policies that—

(i) consider small-scale production in various areas, including urban, suburban, and rural areas;

(ii) consider a variety of marketing strategies;

(iii) allow for production in soil and in alternative systems such as vertical systems, greenhouses, rooftops, or hydroponic systems;

(iv) consider the price premium when accounting for production or revenue losses;

(v) consider whether to provide coverage—(I) for various types of production under 1 policy; and(II) for 1 species or type of plant per policy; and

(vi) have streamlined reporting and paperwork requirements.

(i) examines whether a version of existing policies such as the whole-farm revenue protection insurance plan may be tailored to provide improved coverage for producers of local foods;

(ii) describes the results of the feasibility study carried out under subparagraph (A)(i); and

(iii) includes any recommendations with respect to those results.

(19) High-risk, highly productive batture land policy

(A) In general

(i) Research and developmentThe Corporation shall carry out research and development, or offer to enter into 1 or more contracts with 1 or more qualified persons to carry out research and development, regarding a policy to insure producers of corn, cotton, and soybeans—(I) with operations on highly productive batture land within the Lower Mississippi River Valley;(II) that have a history of production of not less than 5 years; and(III) that have been impacted by more frequent flooding over the past 10 years due to sedimentation or federally constructed engineering improvements.

(ii) Availability of policy

(B) Research and development describedResearch and development described in subparagraph (A)(i) shall evaluate the feasibility of less cost-prohibitive policies for batture-land producers in high risk areas, including policies that—

(i) consider premium rate adjustments;

(ii) consider automatic yield exclusion for consecutive-year losses; and

(iii) allow for flexibility of final plant dates and prevent plant regulations.

(i) examines whether a version of existing policies may be tailored to provide improved coverage for batture-land producers;

(ii) describes the results of the research and development carried out under subparagraphs (A) and (B); and

(iii) includes any recommendations with respect to those results.

(d) Partnerships for risk management development and implementation

(1) PurposeThe purpose of this subsection is to authorize the Corporation to enter into partnerships with public and private entities for the purpose of either—

(A) increasing the availability of loss mitigation, financial, and other risk management tools for producers, with a priority given to risk management tools for producers of agricultural commodities covered by section 7333 of this title, specialty crops, and underserved agricultural commodities; or

(B) improving analysis tools and technology regarding compliance or identifying and using innovative compliance strategies.

(2) Authority

(3) ObjectivesThe Corporation may enter into a partnership under paragraph (2)—

(A) to enhance the notice and timeliness of notice of weather conditions that could negatively affect crop yields, quality, and final product use in order to allow producers to take preventive actions to increase end product profitability and marketability and to reduce the possibility of crop insurance claims;

(B) to develop a multifaceted approach to pest management and fertilization to decrease inputs, decrease environmental exposure, and increase application efficiency;

(C) to develop or improve techniques for planning, breeding, planting, growing, maintaining, harvesting, storing, shipping, and marketing that will address quality and quantity challenges associated with year-to-year and regional variations;

(D) to clarify labor requirements and assist producers in complying with requirements to better meet the physically intense and time-compressed planting, tending, and harvesting requirements associated with the production of specialty crops and underserved agricultural commodities;

(E) to provide assistance to State foresters or equivalent officials for the prescribed use of burning on private forest land for the prevention, control, and suppression of fire;

(F) to provide producers with training and informational opportunities so that the producers will be better able to use financial management, farm financial benchmarking, crop insurance, marketing contracts, and other existing and emerging risk management tools;

(G) to improve analysis tools and technology regarding compliance or identifying and using innovative compliance strategies; and

(H) to develop other risk management tools to further increase economic and production stability.

(e) Funding

(1) Reimbursements

(2) Contracting

(A) Conducting and contracting for research and developmentOf the amounts made available from the insurance fund established under section 1516(c) of this title, the Corporation may use to conduct research and development and carry out contracting and partnerships under subsections (c) and (d) not more than—

(i) $12,500,000 for each of fiscal years 2008 through 2018; and

(ii) $8,000,000 for fiscal year 2019 and each fiscal year thereafter.

(B) Underserved States

(3) Unused fundingIf the Corporation determines that the amount available under this section for a fiscal year is not needed for such purposes, the Corporation may use—

(A) not more than $5,000,000 for each fiscal year to improve program integrity, including by—

(i) increasing compliance-related training;

(ii) improving analysis tools and technology regarding compliance;

(iii) use of information technology, as determined by the Corporation; and

(iv) identifying and using innovative compliance strategies; and

(B) any excess amounts to carry out other activities authorized under this section.

(Feb. 16, 1938, ch. 30, title V, § 522, as added Pub. L. 106–224, title I, § 131, June 20, 2000, 114 Stat. 379; amended Pub. L. 110–234, title VII, § 7511(c)(1), title XII, §§ 12022–12024, 12033(c)(2)(B), May 22, 2008, 122 Stat. 1267, 1382–1388, 1405; Pub. L. 110–246, § 4(a) title VII, § 7511(c)(1), title XII, §§ 12022–12024, 12033(c)(2)(B), June 18, 2008, 122 Stat. 1664, 2028, 2144–2150, 2167; Pub. L. 113–79, title XI, §§ 11010(b), 11022, 11023(b), 11024, 11027(b), 11028(b), Feb. 7, 2014, 128 Stat. 959, 969, 973, 974, 977; Pub. L. 115–334, title XI, §§ 11120(a), 11121–11123, Dec. 20, 2018, 132 Stat. 4926–4935.)