[Congressional Record Volume 151, Number 16 (Tuesday, February 15, 2005)]
[Senate]
[Pages S1425-S1426]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Dorgan, Mr. Hagel, and Mr. 
        Johnson):
  S. 385. A bill to amend the Food Security Act of 1985 to restore 
integrity to and strengthen payment limitation rules for commodity 
payments and benefits; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mr. GRASSLEY. Mr. President, the American people recognize the 
importance of the family farmer to our Nation, and the need to provide 
an adequate safety net for family farmers. In recent years, however, 
assistance to farmers has come under increasing scrutiny.
  Critics of farm payments have argued that the largest corporate farms 
reap most program benefits. The reality is over 72 percent of the 
payments have gone to only 10 percent of our Nation's farmers. There is 
good reason to be critical of our farm programs.
  What's more, farm payments that were originally designed to benefit 
small- and medium-sized family farmers have contributed to their own 
demise. Unlimited farm payments have placed upward pressure on land 
prices

[[Page S1426]]

and have contributed to overproduction and lower commodity prices, 
driving many family farmers off the farm.
  The Senate has agreed, by an overwhelming bipartisan vote during the 
2002 farm bill debate and two Senate Budget Committee markups that 
targeting Federal assistance to small- and medium-sized family farmers 
is the right thing to do.
  It has been my hope since the 2002 farm bill conference committee 
dropped the payment limit amendment that Congress would establish 
legitimate, reasonable payment limits similar to S. 667, the payment 
limits bill we introduced last session.
  While we have not yet achieved our ultimate goal, no one can question 
that the votes have been there for payment limits. Unfortunately, a 
two-thirds majority in the Senate hasn't been enough to protect this 
issue in conference. But times are clearly changing thanks to the 
President's support for payment limits in his budget proposal.
  The legislation we are introducing today adopts the President's 
proposed cap of $250,000, while maintaining other concepts from S. 667 
that the President has embraced like limiting the subterfuge 
surrounding the three-entity rule, curtailing the use of generic 
certificates, and developing a measurable standard to determine who 
should and should not be receiving farm subsidies.
  I look forward to working with Senator Dorgan again on this issue. 
With the President's support I believe we will have success.
  I ask unanimous consent, that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 385

       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''.

     SEC. 2. PAYMENT LIMITATIONS.

       Section 1001 of the Food Security of 1985 (7 U.S.C. 1308) 
     is amended--
       (1) in subsection (b)(1), by striking ``$40,000'' and 
     inserting ``$20,000'';
       (2) in subsection (c)(1), by striking ``$65,000'' and 
     inserting ``$30,000'';
       (3) in subsection (d), by striking ``(d)'' and all that 
     follows through the end of paragraph (1) and inserting the 
     following:
       ``(d) Limitations on Marketing Loan Gains, Loan Deficiency 
     Payments, and Commodity Certificate Transactions.--
       ``(1) Loan commodities.--The total amount of the following 
     gains and payments that a person may receive during any crop 
     year may not exceed $75,000:
       ``(A)(i) 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.
       ``(ii) 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.
       ``(B) Any loan deficiency payments received for 1 or more 
     loan commodities under that subtitle.
       ``(C) 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, with the 
     gain reported annually to the Internal Revenue Service and to 
     the taxpayer in the same manner as gains under subparagraphs 
     (A) and (B).'';
       (4) by adding at the end the following:
       ``(h) Single Farming Operation.--
       ``(1) In general.--Notwithstanding subsections (b) through 
     (d), subject to paragraph (2), if a person 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 
     person may receive during any crop year may be up to but not 
     exceed 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 
     person may receive during any crop year may not exceed 
     $250,000.
       ``(i) Spouse Equity.--Notwithstanding subsections (b) 
     through (d), except as provided in subsection (e)(2)(C)(i), 
     if an individual and spouse are covered by subsection 
     (e)(2)(C) 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 twice the applicable dollar amounts 
     specified in subsections (b), (c), and (d).
       ``(j) Regulations.--
       ``(1) In general.--Not later than 270 days after the date 
     of enactment of this subsection, the Secretary shall 
     promulgate regulations--
       ``(A) to ensure that total payments and gains described in 
     this section made to or through joint operations or multiple 
     entities under the primary control of a person, in 
     combination with the payments and gains received directly by 
     the person, shall not exceed twice the applicable dollar 
     amounts specified in subsections (b), (c), and (d);
       ``(B) in the case of a person that in the aggregate owns, 
     conducts farming operations, or provides custom farming 
     services on land with respect to which the aggregate payments 
     exceed the applicable dollar amounts specified in subsections 
     (b), (c), and (d), to attribute all payments and gains made 
     on crops produced on the land to--
       ``(i) a person that rents land as lessee or lessor through 
     a crop share lease and receives a share of the payments that 
     is less than the usual and customary share of the crop 
     received by the lessee or lessor, as determined by the 
     Secretary;
       ``(ii) a person that provides custom farming services 
     through arrangements under which--

       ``(I) all or part of the compensation for the services is 
     at risk;
       ``(II) farm management services are provided by--

       ``(aa) the same person;
       ``(bb) an immediate family member; or
       ``(cc) an entity or individual that has a business 
     relationship that is not an arm's length relationship, as 
     determined by the Secretary; or

       ``(III) more than \2/3\ of the farming operations are 
     conducted as custom farming services provided by--

       ``(aa) the same person;
       ``(bb) an immediate family member; or
       ``(cc) an entity or individual that has a business 
     relationship that is not an arm's length relationship, as 
     determined by the Secretary; or
       ``(iii) a person under such other arrangements as the 
     Secretary determines are established to transfer payments 
     from persons that would otherwise exceed the applicable 
     dollar amounts specified in subsections (b), (c), and (d); 
     and
       ``(C) to ensure that payments attributed under this section 
     to a person other than the direct recipient shall also count 
     toward the limit of the direct recipient.
       ``(2) Primary control.--The regulations under paragraph (1) 
     shall define `primary control' to include a joint operation 
     or multiple entity in which a person owns an interest that is 
     equal to or greater than the interest of any other 1 or more 
     persons that materially participate on a regular, 
     substantial, and continuous basis in the management of the 
     operation or entity.''.

     SEC. 3. 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''; and
       (2) by adding at the end the following:
       ``(b) Fraud.--If fraud is committed by a person in 
     connection with a scheme or device to evade, or that has the 
     purpose of evading, section 1001, 1001A, or 1001C, the person 
     shall be ineligible to receive farm program payments (as 
     described in subsections (b), (c), and (d) of section 1001 as 
     being subject to limitation) applicable to the crop year for 
     which the scheme or device is adopted and the succeeding 5 
     crop years.''.

     SEC. 4. 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.
                                 ______