1.This Act may be cited as
the Rural America Preservation Act of
2007
.
2.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)
(A)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)The
term entity does not include a general partnership or joint
venture.
(2)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 paymentsThe 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 paymentsThe 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
transactionsThe 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 entityAny 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)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)
(1)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)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)
(1)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)
(A)Separate
farming operationsIn 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 paymentsA 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.
.
3.Substantive
change; payments limited to active farmersSection 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:
1001A.Substantive
change; payments limited to active farmers
(a)
(1)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)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)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)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)In
this paragraph:
(i)Active personal
managementThe 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)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)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)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)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)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 entitiesAny 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 managementNo 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)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.
.
4.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)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.
.
5.Foreign
individuals and entities made ineligible for program benefitsSection 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
.
6.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.
7.
(a)The Secretary of Agriculture may promulgate such
regulations as are necessary to implement this Act and the amendments made by
this Act.
(b)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 rulemakingIn carrying out this section, the
Secretary shall use the authority provided under section 808 of title 5, United
States Code.