[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1486 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1486

  To amend the Food Security Act of 1985 to restore integrity to and 
    strengthen payment limitation rules for commodity payments and 
                               benefits.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 24, 2007

  Mr. Dorgan (for himself and Mr. Grassley) introduced the following 
      bill; which was read twice and referred to the Committee on 
                  Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
  To amend the Food Security Act of 1985 to restore integrity to and 
    strengthen payment limitation rules for commodity payments and 
                               benefits.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural America Preservation Act of 
2007''.

SEC. 2. PAYMENT LIMITATIONS.

    Section 1001 of the Food Security of 1985 (7 U.S.C. 1308) is 
amended--
            (1) in subsection (a)--
                    (A) by striking paragraphs (1) and (2) and 
                inserting the following:
            ``(1) Entity.--
                    ``(A) In general.--The term `entity' means--
                            ``(i) an organization that (subject to the 
                        requirements of this section and section 1001A) 
                        is eligible to receive a payment under a 
                        provision of law referred to in subsection (b) 
                        or (c);
                            ``(ii) a corporation, joint stock company, 
                        association, limited partnership, limited 
                        liability company, limited liability 
                        partnership, charitable organization, grantor 
                        of a revocable trust, or other similar entity 
                        (as determined by the Secretary); and
                            ``(iii) an organization that is 
                        participating in a farming operation as a 
                        partner in a general partnership or as a 
                        participant in a joint venture.
                    ``(B) Exclusion.--The term `entity' does not 
                include a general partnership or joint venture.
            ``(2) Individual.--The term `individual' means--
                    ``(A) a natural person, and any minor child of the 
                natural person (as determined by the Secretary), who, 
                subject to the requirements of this section and section 
                1001A, is eligible to receive a payment under a 
                provision of law referred to in subsection (b), (c), or 
                (d); and
                    ``(B) a natural person participating in a farming 
                operation as a partner in a general partnership, a 
                participant in a joint venture, a grantor of a 
                revocable trust, or a participant in a similar entity 
                (as determined by the Secretary).'';
            (2) by striking subsection (b) and inserting the following:
    ``(b) Limitation on Direct Payments.--The total amount of direct 
payments that an individual or entity may receive, directly or 
indirectly, during any crop year under subtitle A or C of title I of 
the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911 et 
seq.) for 1 or more covered commodities or peanuts shall not exceed 
$20,000.'';
            (3) by striking subsection (c) and inserting the following:
    ``(c) Limitation on Counter-Cyclical Payments.--The total amount of 
counter-cyclical payments that an individual or entity may receive, 
directly or indirectly, during any crop year under subtitle A or C of 
title I of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
7911 et seq.) for 1 or more covered commodities or peanuts shall not 
exceed $30,000.'';
            (4) by striking subsection (d) and inserting the following:
    ``(d) Limitations on Marketing Loan Gains, Loan Deficiency 
Payments, and Commodity Certificate Transactions.--The total amount of 
the following gains and payments that an individual or entity may 
receive during any crop year may not exceed $75,000:
            ``(1)(A) Any gain realized by a producer from repaying a 
        marketing assistance loan for 1 or more loan commodities under 
        subtitle B of title I of the Farm Security and Rural Investment 
        Act of 2002 (7 U.S.C. 7931 et seq.) at a lower level than the 
        original loan rate established for the loan commodity under 
        that subtitle.
            ``(B) In the case of settlement of a marketing assistance 
        loan for 1 or more loan commodities under that subtitle by 
        forfeiture, the amount by which the loan amount exceeds the 
        repayment amount for the loan if the loan had been settled by 
        repayment instead of forfeiture.
            ``(2) Any loan deficiency payments received for 1 or more 
        loan commodities under that subtitle.
            ``(3) Any gain realized from the use of a commodity 
        certificate issued by the Commodity Credit Corporation for 1 or 
        more loan commodities, as determined by the Secretary, 
        including the use of a certificate for the settlement of a 
        marketing assistance loan made under that subtitle or section 
        1307 of that Act (7 U.S.C. 7957).'';
            (5) by striking subsection (e);
            (6) by redesignating subsections (f) and (g) as subsections 
        (h) and (i), respectively; and
            (7) by inserting after subsection (d) the following:
    ``(e) Payments to Individuals and Entities.--
            ``(1) Interests within same entity.--Any individual or 
        entity that is an owner of an entity, including a shareholder, 
        may not collectively receive payments, directly or indirectly, 
        that are attributable to the ownership interest in the entity 
        for a crop year that exceed an amount equal to twice the 
        applicable dollar amounts specified in subsections (b), (c), 
        and (d).
            ``(2) All interests.--An individual or entity may not 
        receive, directly or indirectly, through all ownership 
        interests of the individual or entity, from all sources, 
        payments for a crop year that exceed an amount equal to the 
        twice the applicable dollar amounts specified in subsections 
        (b), (c), and (d).
    ``(f) Single Farming Operation.--
            ``(1) In general.--Notwithstanding subsections (b) through 
        (d), subject to paragraph (2), if an individual or entity 
        participates only in a single farming operation and receives, 
        directly or indirectly, any payment or gain covered by this 
        section through the farming operation, the total amount of 
        payments or gains (as applicable) covered by this section that 
        the individual or entity may receive during any crop year shall 
        not exceed an amount equal to twice the applicable dollar 
        amounts specified in subsections (b), (c), and (d).
            ``(2) Individuals.--The total amount of payments or gains 
        (as applicable) covered by this section that an individual may 
        receive during any crop year may not exceed $250,000.
    ``(g) Spousal Equity.--
            ``(1) In general.--Notwithstanding subsections (b) through 
        (d), except as provided in paragraph (2), if an individual and 
        the spouse of the individual are covered by paragraph (2) and 
        receive, directly or indirectly, any payment or gain covered by 
        this section, the total amount of payments or gains (as 
        applicable) covered by this section that the individual and 
        spouse may jointly receive during any crop year may not exceed 
        an amount equal to twice the applicable dollar amounts 
        specified in subsections (b), (c), and (d).
            ``(2) Exceptions.--
                    ``(A) Separate farming operations.--In the case of 
                a married couple in which each spouse, before the 
                marriage, was separately engaged in an unrelated 
                farming operation, each spouse shall be treated as a 
                separate individual with respect to a farming operation 
                brought into the marriage by a spouse, subject to the 
                condition that the farming operation shall remain a 
                separate farming operation, as determined by the 
                Secretary.
                    ``(B) Election to receive separate payments.--A 
                married couple may elect to receive payments separately 
                in the name of each spouse if the total amount of 
                payments and benefits described in subsections (b), 
                (c), and (d) that the married couple receives, directly 
                or indirectly, does not exceed an amount equal to twice 
                the applicable dollar amounts specified in those 
                subsections.''.

SEC. 3. SUBSTANTIVE CHANGE; PAYMENTS LIMITED TO ACTIVE FARMERS.

    Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308-1) is 
amended--
            (1) by striking the section designation and heading and all 
        that follows through the end of subsection (a) and inserting 
        the following:

``SEC. 1001A. SUBSTANTIVE CHANGE; PAYMENTS LIMITED TO ACTIVE FARMERS.

    ``(a) Substantive Change.--
            ``(1) In general.--For purposes of the application of 
        limitations under this section, the Secretary shall not approve 
        any change in a farming operation that otherwise would increase 
        the number of individuals or entities (as defined in section 
        1001(a)) to which the limitations under this section apply, 
        unless the Secretary determines that the change is bona fide 
        and substantive.
            ``(2) Family members.--For the purpose of paragraph (1), 
        the addition of a family member (as defined in subsection 
        (b)(2)(A)) to a farming operation under the criteria 
        established under subsection (b)(3)(B) shall be considered to 
        be a bona fide and substantive change in the farming operation.
            ``(3) Primary control.--To prevent a farm from reorganizing 
        in a manner that is inconsistent with the purposes of this Act, 
        the Secretary shall promulgate such regulations as the 
        Secretary determines to be necessary to attribute payments for 
        a farming operation to the individual or entity that exercises 
        primary control over the farming operation, including to 
        respond to--
                    ``(A)(i) any instance in which ownership of a 
                farming operation is transferred to an individual or 
                entity under an arrangement that provides for the sale 
                or exchange of any asset or ownership interest in 1 or 
                more entities at less than fair market value; and
                    ``(ii) the transferor is provided preferential 
                rights to repurchase the asset or interest at less than 
                fair market value; or
                    ``(B) a sale or exchange of any asset or ownership 
                interest in 1 or more entities under a financing 
                arrangement under which--
                            ``(i) financing is provided by the 
                        transferor; and
                            ``(ii) the right to exercise control over 
                        the asset or interest is conveyed, directly or 
                        indirectly.'';
            (2) in subsection (b)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) In general.--To be eligible to receive, directly or 
        indirectly, payments or benefits described as being subject to 
        limitation in subsection (b) or (c) of section 1001 with 
        respect to a particular farming operation, an individual or 
        entity (as defined in section 1001(a)) shall be actively 
        engaged in farming with respect to the farming operation, in 
        accordance with paragraphs (2), (3), and (4).'';
                    (B) in paragraph (2)--
                            (i) by striking subparagraphs (A) and (B) 
                        and inserting the following:
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Active personal management.--The term 
                        `active personal management' means, with 
                        respect to an individual, administrative duties 
                        carried out by the individual for a farming 
                        operation--
                                    ``(I) that are personally provided 
                                by the individual on a regular, 
                                substantial, and continuing basis; and
                                    ``(II) relating to the supervision 
                                and direction of--
                                            ``(aa) activities and labor 
                                        involved in the farming 
                                        operation; and
                                            ``(bb) onsite services 
                                        directly related and necessary 
                                        to the farming operation.
                            ``(ii) Family member.--The term `family 
                        member', with respect to an individual 
                        participating in a farming operation, means an 
                        individual who is related to the individual as 
                        a lineal ancestor, a lineal descendant, or a 
                        sibling (including a spouse of such an 
                        individual).
                    ``(B) Active engagement.--Except as provided in 
                paragraph (3), for purposes of paragraph (1), the 
                following shall apply:
                            ``(i) An individual shall be considered to 
                        be actively engaged in farming with respect to 
                        a farming operation if--
                                    ``(I) the individual makes a 
                                significant contribution, as determined 
                                under subparagraph (E) (based on the 
                                total value of the farming operation), 
                                to the farming operation of--
                                            ``(aa) capital, equipment, 
                                        or land; and
                                            ``(bb) personal labor and 
                                        active personal management;
                                    ``(II) the share of the individual 
                                of the profits or losses from the 
                                farming operation is commensurate with 
                                the contributions of the individual to 
                                the operation; and
                                    ``(III) a contribution of the 
                                individual is at risk.
                            ``(ii) An entity shall shall be considered 
                        to be actively engaged in farming with respect 
                        to a farming operation if--
                                    ``(I) the entity makes a 
                                significant contribution, as determined 
                                under subparagraph (E) (based on the 
                                total value of the farming operation), 
                                to the farming operation of capital, 
                                equipment, or land;
                                    ``(II)(aa) the stockholders or 
                                members that collectively own at least 
                                50 percent of the combined beneficial 
                                interest in the entity each make a 
                                significant contribution of personal 
                                labor and active personal management to 
                                the operation; or
                                    ``(bb) in the case of an entity in 
                                which all of the beneficial interests 
                                are held by family members, any 
                                stockholder or member (or household 
                                comprised of a stockholder or member 
                                and the spouse of the stockholder or 
                                member) who owns at least 10 percent of 
                                the beneficial interest in the entity 
                                makes a significant contribution of 
                                personal labor or active personal 
                                management; and
                                    ``(III) the entity meets the 
                                requirements of subclauses (II) and 
                                (III) of clause (i).'';
                            (ii) in subparagraph (C), by striking 
                        ``clauses (ii) and (iii) of paragraph (A)'' and 
                        inserting ``subclauses (II) and (III) of 
                        subparagraph (B)(i)''; and
                            (iii) by adding at the end the following:
                    ``(E) Significant contribution of personal labor or 
                active personal management.--
                            ``(i) In general.--Subject to clause (ii), 
                        for purposes of subparagraph (B), an individual 
                        shall be considered to be providing, on behalf 
                        of the individual or an entity, a significant 
                        contribution of personal labor or active 
                        personal management, if the total contribution 
                        of personal labor and active personal 
                        management is at least equal to the lesser of--
                                    ``(I) 1,000 hours; and
                                    ``(II) a period of time equal to--
                                            ``(aa) 50 percent of the 
                                        commensurate share of the total 
                                        number of hours of personal 
                                        labor and active personal 
                                        management required to conduct 
                                        the farming operation; or
                                            ``(bb) in the case of a 
                                        stockholder or member (or 
                                        household comprised of a 
                                        stockholder or member and the 
                                        spouse of the stockholder or 
                                        member) that owns at least 10 
                                        percent of the beneficial 
                                        interest in an entity in which 
                                        all of the beneficial interests 
                                        are held by family members, 50 
                                        percent of the commensurate 
                                        share of hours of the personal 
                                        labor and active personal 
                                        management of all family 
                                        members required to conduct the 
                                        farming operation.
                            ``(ii) Minimum labor hours.--For the 
                        purpose of clause (i), the minimum number of 
                        labor hours required to produce a commodity 
                        shall be equal to the number of hours that 
                        would be necessary to conduct a farming 
                        operation for the production of each commodity 
                        that is comparable in size to the commensurate 
                        share of an individual or entity in the farming 
                        operation for the production of the commodity, 
                        based on the minimum number of hours per acre 
                        required to produce the commodity in the State 
                        in which the farming operation is located, as 
                        determined by the Secretary.'';
                    (C) in paragraph (3)--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) Landowners.--An individual or entity that is 
                a landowner contributing owned land, and that meets the 
                requirements of subclauses (II) and (III) of paragraph 
                (2)(B)(i), if, as determined by the Secretary--
                            ``(i) the landowner share-rents the land at 
                        a rate that is usual and customary; and
                            ``(ii) the share received by the landowner 
                        is commensurate with the share of the crop or 
                        income received as rent.'';
                            (ii) in subparagraph (B)--
                                    (I) in the first sentence--
                                            (aa) by striking 
                                        ``persons'' and inserting ``an 
                                        individual or entity''; and
                                            (bb) by striking 
                                        ``standards provided in clauses 
                                        (ii) and (iii) of paragraph 
                                        (2)(A)'' and inserting 
                                        ``requirements of subclauses 
                                        (II) and (III) of paragraph 
                                        (2)(B)(i)''; and
                                    (II) by striking the second 
                                sentence; and
                            (iii) in subparagraph (C), by striking 
                        ``standards provided in clauses (ii) and (iii) 
                        of paragraph (2)(A)'' and inserting 
                        ``requirements of subclauses (II) and (III) of 
                        paragraph (2)(B)(i)'';
                    (D) in paragraph (4)--
                            (i) in the paragraph heading, by striking 
                        ``Persons'' and inserting ``Individuals and 
                        entities'';
                            (ii) in the matter preceding subparagraph 
                        (A), by striking ``persons'' and inserting 
                        ``individuals and entities''; and
                            (iii) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) Other individuals and entities.--Any other 
                individual or entity, or class of individuals or 
                entities, that fails to meet the requirements of 
                paragraphs (2) and (3), as determined by the 
                Secretary.'';
                    (E) by redesignating paragraphs (5) and (6) as 
                paragraphs (6) and (7), respectively;
                    (F) by inserting after paragraph (4) the following:
            ``(5) Personal labor and active personal management.--No 
        stockholder or member may provide personal labor or active 
        personal management to meet the requirements of this subsection 
        for any individual or entity that collectively receives, 
        directly or indirectly, an amount equal to more than twice the 
        applicable limits under subsections (b), (c), and (d) of 
        section 1001.''; and
                    (G) in paragraph (6) (as redesignated by 
                subparagraph (E))--
                            (i) in the first sentence--
                                    (I) by striking ``A person'' and 
                                inserting ``An individual or entity''; 
                                and
                                    (II) by striking ``such person'' 
                                and inserting ``the individual or 
                                entity''; and
                            (ii) by striking the second sentence; and
            (3) by adding at the end the following:
    ``(c) Notification by Entities.--To facilitate the administration 
of this section, each entity that receives payments or benefits 
described as being subject to limitation in subsection (b), (c), or (d) 
of section 1001 with respect to a particular farming operation shall--
            ``(1) notify each individual or other entity that acquires 
        or holds a beneficial interest in the farming operation of the 
        requirements and limitations under this section; and
            ``(2) provide to the Secretary, at such times and in such 
        manner as may the Secretary may require, the name and social 
        security number of each individual, or the name and taxpayer 
        identification number of each entity, that holds or acquires 
        such a beneficial interest.''.

SEC. 4. SCHEMES OR DEVICES.

    Section 1001B of the Food Security Act of 1985 (7 U.S.C. 1308-2) is 
amended--
            (1) by inserting ``(a) In General.--'' before ``If'';
            (2) in subsection (a) (as designated by paragraph (1)), by 
        striking ``person'' each place it appears and inserting 
        ``individual or entity''; and
            (3) by adding at the end the following:
    ``(b) Fraud.--If fraud is committed by an individual or entity in 
connection with a scheme or device to evade, or that has the purpose of 
evading, section 1001, 1001A, or 1001C, the individual or entity shall 
be ineligible to receive farm program payments described as being 
subject to limitation in subsection (b), (c), or (d) of section 1001 
for--
            ``(1) the crop year for which the scheme or device is 
        adopted; and
            ``(2) the succeeding 5 crop years.''.

SEC. 5. FOREIGN INDIVIDUALS AND ENTITIES MADE INELIGIBLE FOR PROGRAM 
              BENEFITS.

    Section 1001C of the Food Security Act of 1985 (7 U.S.C. 1308-3) is 
amended--
            (1) in the section heading, by striking ``persons'' and 
        inserting ``individuals and entities'';
            (2) in subsection (a), by striking ``person'' each place it 
        appears and inserting ``individual''; and
            (3) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Corporation or Other''; and
                    (B) by striking ``a corporation or other entity'' 
                and inserting ``an entity''.

SEC. 6. SENSE OF THE SENATE.

    It is the sense of the Senate that any savings achieved as a result 
of the amendments made by this Act should be used to establish a 
permanent agricultural disaster relief program.

SEC. 7. REGULATIONS.

    (a) In General.--The Secretary of Agriculture may promulgate such 
regulations as are necessary to implement this Act and the amendments 
made by this Act.
    (b) Procedure.--The promulgation of the regulations and 
administration of this Act and the amendments made by this Act shall be 
made 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'').
    (c) Congressional Review of Agency Rulemaking.--In carrying out 
this section, the Secretary shall use the authority provided under 
section 808 of title 5, United States Code.
                                 <all>