---
kind: "section"
citation: "7 U.S.C. § 1523"
title: "7"
title_heading: "Agriculture"
number: "1523"
heading: "Pilot programs"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/1523"
units:
  - "Chapter 36 — Crop Insurance"
  - "Subchapter I — Federal Crop Insurance"
---

# §1523. Pilot programs

- (a) **General provisions—**
  - (1) **Authority—** Except as otherwise provided in this section, the [Corporation](/usc/7/1502.md?p=b-5) may, at the sole discretion of the [Corporation](/usc/7/1502.md?p=b-5), conduct a pilot program submitted to and approved by the [Board](/usc/7/1502.md?p=b-4) under [section 1508(h) of this title](/usc/7/1508.md?p=h), or that is developed under [subsection (b)](#b) or [section 1522 of this title](/usc/7/1522.md), 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](/usc/7/1502.md?p=b-5) 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)](#a-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 subchapter; and
      - (ii) the [Corporation](/usc/7/1502.md?p=b-5) shall conduct all wild salmon programs under this subchapter 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](/usc/7/1502.md?p=b-5) may—
    - (A) approve a pilot program under this section to be conducted on a regional, [State](/usc/7/198.md?p=5), or national basis after considering the interests of affected producers and the interests of, and risks to, the [Corporation](/usc/7/1502.md?p=b-5);
    - (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](/usc/7/1502.md?p=b-5); 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](/usc/7/198.md?p=5) 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](/usc/7/198.md?p=6), goats, and poultry.
  - (2) **Programs required—** Subject to [paragraph (7)](#b-7), the [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5) shall evaluate the greatest number and variety of pilot programs described in [paragraph (2)](#b-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](/usc/7/1502.md?p=b-5) 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 subchapter.
  - (6) **Assistance—** As part of a pilot program under this subsection, the [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5) determines that insurance protection for livestock producers against the risk is generally available from private companies.
  - (8) **Location—** The [Corporation](/usc/7/1502.md?p=b-5) shall conduct the livestock pilot programs under this subsection in a number of counties that is determined by the [Corporation](/usc/7/1502.md?p=b-5) 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.
- (c) **Revenue insurance pilot program—**
  - (1) **In general—** Subject to [section 1522(e)(4) of this title](/usc/7/1522.md),[^1] the [Secretary](/usc/7/1502.md?p=b-12) shall carry out a pilot program in a limited number of counties, as determined by the [Secretary](/usc/7/1502.md?p=b-12), for crop years 1997 through 2001, under which a producer of wheat, feed grains, soybeans, or such other commodity as the [Secretary](/usc/7/1502.md?p=b-12) considers appropriate may elect to receive insurance against loss of revenue, as determined by the [Secretary](/usc/7/1502.md?p=b-12).
  - (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](/usc/7/1502.md?p=b-2) will compete to [market](/usc/7/198.md?p=1) policies or plans of insurance with reduced rates of premium, in a manner that maintains the financial soundness of [approved insurance providers](/usc/7/1502.md?p=b-2) 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](/usc/7/1502.md?p=b-5) shall establish a pilot program under which [approved insurance providers](/usc/7/1502.md?p=b-2) may propose for approval by the [Board](/usc/7/1502.md?p=b-4) 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](/usc/7/1502.md?p=b-2) and approved by the [Board](/usc/7/1502.md?p=b-4).
    - (B) **Determination by Board—** The [Board](/usc/7/1502.md?p=b-4) shall approve a policy or plan of insurance proposed under this subsection that involves a premium reduction if the [Board](/usc/7/1502.md?p=b-4) 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](/usc/7/1502.md?p=b-4);
      - (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;
      - (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 subchapter determined appropriate by the [Board](/usc/7/1502.md?p=b-4).
    - (C) **Time limitations and procedures—** The time limitations and procedures of the [Board](/usc/7/1502.md?p=b-4) established under [section 1508(h) of this title](/usc/7/1508.md?p=h) shall apply to a proposal submitted under this subsection.
- (e) **Adjusted gross revenue insurance pilot program—**
  - (1) **In general—** The [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5) shall include in the pilot program for the 2003 reinsurance year at least 8 counties in the [State](/usc/7/198.md?p=5) of California and at least 8 counties in the [State](/usc/7/198.md?p=5) of Pennsylvania.
    - (B) **Selection criteria—** In carrying out [subparagraph (A)](#e-2-A), the [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5) shall establish a pilot program under which producers or processors of camelina may propose for approval by the [Board](/usc/7/1502.md?p=b-4) policies or plans of insurance for camelina, in accordance with [section 1508(h) of this title](/usc/7/1508.md?p=h).
  - (2) **Determination by Board—** The [Board](/usc/7/1502.md?p=b-4) shall approve a policy or plan of insurance proposed under [paragraph (1)](#f-1) if, as determined by the [Board](/usc/7/1502.md?p=b-4), the policy or plan of insurance—
    - (A) protects the interests of producers;
    - (B) is actuarially sound; and
    - (C) meets the requirements of this subchapter.
  - (3) **Timeframe—** The [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5), the [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5).
  - (2) **Terms and conditions—** The multiperil crop insurance offered under the sesame 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 sesame insurance pilot program shall be carried out only in the [State](/usc/7/198.md?p=5) of Texas.
  - (4) **Duration—** The [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5), the [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5).
  - (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](/usc/7/198.md?p=5) of Minnesota and North Dakota.
  - (4) **Duration—** The [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/198.md?p=6), goats, and poultry, including pasture, rangeland, and forage as a source of feed for that livestock.
  - (2) **Authorization—** Notwithstanding [subsection (a)(2)](#a-2), the [Corporation](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-4) shall approve 2 or more proposed policies or plans of insurance from [approved insurance providers](/usc/7/1502.md?p=b-2) if the [Board](/usc/7/1502.md?p=b-4) determines that the policies or plans provide coverage as specified in [paragraph (2)](#i-2), and meet the conditions described in this paragraph.
    - (B) **Requirements—** To be eligible for approval under this subsection, the [approved insurance provider](/usc/7/1502.md?p=b-2) shall have—
      - (i) adequate experience underwriting and administering policies or plans of insurance 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](/usc/7/1502.md?p=b-2), and possess a sufficient insurance credit rating from an appropriate credit rating bureau, in accordance with [Board](/usc/7/1502.md?p=b-4) procedures; and
      - (iii) applicable authority and approval from each [State](/usc/7/198.md?p=5) in which the [approved insurance provider](/usc/7/1502.md?p=b-2) intends to sell the insurance product.
    - (C) **Review requirements—** In reviewing applications under this subsection, the [Board](/usc/7/1502.md?p=b-4) shall conduct the review in a manner consistent with the standards, rules, and procedures for policies or plans of insurance submitted under [section 1508(h) of this title](/usc/7/1508.md?p=h) and the actuarial soundness requirements applied to other policies and plans of insurance made available under this subchapter.
    - (D) **Prioritization—** The [Board](/usc/7/1502.md?p=b-4) 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](/usc/7/1502.md?p=b-5) 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](/usc/7/1502.md?p=b-5) pays for comparable policies or plans of insurance reinsured under this subchapter, except that in no case shall the premium subsidy exceed 60 percent of total premium, as determined by the [Corporation](/usc/7/1502.md?p=b-5).
    - (C) **Calculation—** The premium subsidy, as determined by the [Corporation](/usc/7/1502.md?p=b-5), 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)](#i-4-B) and [(C)](#i-4-C), the premium subsidy under this subsection shall be paid by the [Corporation](/usc/7/1502.md?p=b-5) 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)](#i-4-E-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 subchapter, on the condition that the operating and administrative expenses are not included in premiums.
      - (ii) **Limitation—** Subject to [subparagraph (F)(i)](#i-4-F-i), Federal reinsurance, research and development costs, other reimbursements, or maintenance fees shall not 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](/usc/7/1502.md?p=b-2) that submits the application and by any additional [approved insurance provider](/usc/7/1502.md?p=b-2) that—
      - (i) agrees to pay maintenance fees or other payments to the [approved insurance provider](/usc/7/1502.md?p=b-2) that submitted the application in an amount agreed to by the applicant and the additional [approved insurance provider](/usc/7/1502.md?p=b-2), 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](/usc/7/1502.md?p=b-2); and
      - (ii) meets the eligibility criteria of [paragraph (3)(B)](#i-3-B), as determined by the [Board](/usc/7/1502.md?p=b-4).
    - (G) **Relationship to other provisions—** The requirements of this paragraph shall apply notwithstanding [paragraph (6)](#i-6).
  - (5) **Oversight—** The [Corporation](/usc/7/1502.md?p=b-5) shall develop and publish procedures to administer policies or plans of insurance approved under this subsection that—
    - (A) require each [approved insurance provider](/usc/7/1502.md?p=b-2) to report sales, acreage and claim data, and any other data that the [Corporation](/usc/7/1502.md?p=b-5) determines to be appropriate, to allow the [Corporation](/usc/7/1502.md?p=b-5) to evaluate sales and performance of the product; and
    - (B) contain such other requirements as the [Corporation](/usc/7/1502.md?p=b-5) 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)](#i-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](/usc/5/552.md?p=b-4).
    - (B) **Standard—** If information concerning a proposal could be withheld by the [Secretary](/usc/7/1502.md?p=b-12) 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](/usc/5/552.md?p=b-4), 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 [Corporation](/usc/7/1502.md?p=b-5), the [Corporation](/usc/7/1502.md?p=b-5) 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 subchapter, including amounts made available under [subsection (b)](#b).
- (j) **Poultry Insurance Pilot Program—**
  - (1) **In general—** Notwithstanding [subsection (a)(2)](#a-2), the [Corporation](/usc/7/1502.md?p=b-5) shall establish a pilot program under which contract poultry growers, including growers of broilers and laying hens, may elect to receive index-based insurance from extreme weather-related risk resulting in increased utility costs (including costs of natural gas, propane, electricity, water, and other appropriate costs, as determined by the [Corporation](/usc/7/1502.md?p=b-5)) associated with poultry production.
  - (2) **Stakeholder engagement—** The [Corporation](/usc/7/1502.md?p=b-5) shall engage with poultry industry stakeholders in establishing the pilot program under [paragraph (1)](#j-1).
  - (3) **Location—** The pilot program established under [paragraph (1)](#j-1) shall be conducted in a sufficient number of counties to provide a comprehensive evaluation of the feasibility, effectiveness, and demand among producers in the top poultry producing [States](/usc/7/198.md?p=5), as determined by the [Corporation](/usc/7/1502.md?p=b-5).
  - (4) **Approval of policy or plan—** Notwithstanding [section 1508(l)](/usc/7/1508.md?p=l) of this title, the [Board](/usc/7/1502.md?p=b-4) shall approve a policy or plan of insurance based on the pilot program under [paragraph (1)](#j-1)—
    - (A) in accordance with [section 1508(h) of this title](/usc/7/1508.md?p=h); and
    - (B) not later than 2 years after July 4, 2025.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(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; Pub. L. 119–21, title I, § 10507, July 4, 2025, 139 Stat. 106.)

## Notes

### 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 enactment 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

2025—Subsec. (j). Pub. L. 119–21 added subsec. (j).

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 subsecs. (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.