[Federal Register Volume 85, Number 224 (Thursday, November 19, 2020)]
[Rules and Regulations]
[Pages 73601-73603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25456]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1400

[Docket ID CCC-2019-0007]
RIN 0560-AI49


Payment Limitation and Payment Eligibility

AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.

ACTION: Correcting amendments.

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[[Page 73602]]

SUMMARY: The Farm Service Agency (FSA) on behalf of the Commodity 
Credit Corporation (CCC) amended its regulations concerning payment 
limitation and eligibility through a final rule published in the 
Federal Register on August 21, 2020. This correction restores the 
previous definitions of ``active personal management,'' ``significant 
contribution,'' ``significant contribution of active personal 
management,'' and ``significant contribution of the combination of 
active personal labor and active personal management.''

DATES: Effective: November 19, 2020.

FOR FURTHER INFORMATION CONTACT: Paul Hanson; telephone: (202) 720-
4189; email: [email protected]. Persons with disabilities who 
require alternative means for communication should contact the USDA 
Target Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION: This document corrects certain sections of 
the regulations in 7 CFR part 1400, which were implemented in the final 
rule that was published in the Federal Register on August 24, 2020 (85 
FR 52033-52041).
    The final rule amended the definitions in 7 CFR 1400.3 for ``active 
personal management'' and ``significant contribution,'' which apply 
throughout part 1400. It also removed and reserved Sec.  1400.601, 
which contained definitions of ``active personal management,'' 
``significant contribution of active personal management,'' and 
``significant contribution of the combination of active personal labor 
and active personal management'' that applied only to Subpart G, which 
provides additional payment eligibility provisions for joint operations 
and legal entities comprised of non-family members or partners, 
stockholders, or persons with an ownership interest in the farming 
operation. The changes were intended to provide consistency in the 
definitions of the terms used throughout part 1400.
    After publication of the rule, stakeholders notified FSA of 
concerns regarding potential non-intended, adverse effects to farming 
operations comprised solely of family members. In streamlining the 
definitions for consistency, these revised definitions were 
inadvertently made applicable to farming operations solely owned by 
family members. This was not the intent of this rule change, and as 
revised, the definitions were more restrictive than they needed to be 
in order to provide intended consistency in the rule. Those more 
restrictive definitions were not intended to apply to farm operations 
comprised or owned solely of family members. Therefore, this document 
restores Sec.  400.601 and the previous the definitions of ``active 
personal management'' and ``significant contribution'' in Sec.  1400.3 
that were applicable prior to publication of the final rule on August 
24, 2020. The more restrictive definitions described in Sec.  1400.601 
apply only to farming operations comprised of non-family members that 
are subject to a limit in the number of farm managers seeking to 
qualify for actively engaged in farming based on a contribution of 
active personal management alone.

List of Subjects in 7 CFR Part 1400

    Agriculture, Grant programs-agriculture, Loan programs-agriculture, 
Natural resources, Price support programs.

    Accordingly, 7 CFR part 1400 is corrected by making the following 
correcting amendments:

PART 1400--PAYMENT LIMITATION AND PAYMENT ELIGIBILITY

0
1. The authority citation for part 1400 continues to read as follows:

    Authority: 7 U.S.C. 1308, 1308-1, 1308-2, 1308-3, 1308-3a, 1308-
4, and 1308-5; and Title I, Pub. L. 115-123.

Subpart A--General Provisions

0
2. Amend Sec.  1400.3 in paragraph (b) as follows:
0
a. Remove the first occurrence of the definition of ``Active personal 
management''; and
0
b. Revise the definition of ``Significant contribution''.
    The revision reads as follows.


Sec.  1400.3  Definitions.

* * * * *
    (b) * * *
    Significant contribution means the provision of the following to a 
farming operation:
    (i)(A) For land, capital, or equipment contributed independently by 
a person or legal entity, a contribution that has a value at least 
equal to 50 percent of the person's or legal entity's commensurate 
share of the total:
    (1) Value of the capital necessary to conduct the farming 
operation;
    (2) Rental value of the land necessary to conduct the farming 
operation; or
    (3) Rental value of the equipment necessary to conduct the farming 
operation; or
    (B) If the contribution by a person or legal entity consists of any 
combination of land, capital, and equipment, such combined contribution 
must have a value at least equal to 30 percent of the person's or legal 
entity's commensurate share of the total value of the farming 
operation;
    (ii) For active personal labor, an amount contributed by a person 
to the farming operation that is described by the smaller of the 
following:
    (A) 1,000 hours per calendar year; or
    (B) 50 percent of the total hours that would be necessary to 
conduct a farming operation that is comparable in size to such person's 
or legal entity's commensurate share in the farming operation;
    (iii) With respect to active personal management, activities that 
are critical to the profitability of the farming operation, taking into 
consideration the person's or legal entity's commensurate share in the 
farming operation; and
    (iv) With respect to a combination of active personal labor and 
active personal management, when neither contribution by itself meets 
the requirement of paragraphs (ii) and (iii) of this definition, a 
combination of active personal labor and active personal management 
that, when made together, results in a critical impact on the 
profitability of the farming operation in an amount at least equal to 
either the significant contribution of active personal labor or active 
personal management as defined in paragraphs (ii) and (iii) of this 
definition.
* * * * *

Subpart G--Additional Payment Eligibility Provisions for Joint 
Operations and Legal Entities Comprised of Non-Family Members or 
Partners, Stockholders, or Persons With an Ownership Interest in 
the Farming Operation

0
3. Add Sec.  1400.601 to read as follows.


Sec.  1400.601  Definitions.

    (a) The terms defined in Sec.  1400.3 are applicable to this 
subpart and all documents issued in accordance with this part, except 
as otherwise provided in this section.
    (b) The following definitions are also applicable to this subpart:
    Active personal management means personally providing and 
participating in management activities considered critical to the 
profitability of the farming operation and performed under one or more 
of the following categories:
    (i) Capital, which includes:
    (A) Arranging financing and managing capital;
    (B) Acquiring equipment;
    (C) Acquiring land and negotiating leases;
    (D) Managing insurance; and

[[Page 73603]]

    (E) Managing participation in USDA programs;
    (ii) Labor, which includes hiring and managing of hired labor; and
    (iii) Agronomics and marketing, which includes:
    (A) Selecting crops and making planting decisions;
    (B) Acquiring and purchasing crop inputs;
    (C) Managing crops (that is, whatever managerial decisions are 
needed with respect to keeping the growing crops living and healthy--
soil fertility and fertilization, weed control, insect control, 
irrigation if applicable) and making harvest decisions; and
    (D) Pricing and marketing of crop production.
    Significant contribution of active personal management means active 
personal management activities performed by a person, with a direct or 
indirect ownership interest in the farming operation, on a regular, 
continuous, and substantial basis to the farming operation, and meets 
at least one of the following to be considered significant:
    (i) Performs at least 25 percent of the total management hours 
required for the farming operation on an annual basis; or
    (ii) Performs at least 500 hours of management annually for the 
farming operation.
    Significant contribution of the combination of active personal 
labor and active personal management means a contribution of a 
combination of active personal labor and active personal management 
that:
    (i) Is critical to the profitability of the farming operation;
    (ii) Is performed on a regular, continuous, and substantial basis; 
and
    (iii) Meets the following required number of hours:

Table 1 to Paragraph (iii) of the Definition of Significant Contribution
     of the Combination of Active Personal Labor and Active Personal
                               Management
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   Combination of active personal labor and active personal management
           minimum requirement for a significant contribution
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                                                      Meets the minimum
                                                        threshold for
  Management contribution in     Labor contribution      significant
             hours                    in hours         contribution, in
                                                            hours
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475...........................                   75                  550
450...........................                  100                  550
425...........................                  225                  650
400...........................                  250                  650
375...........................                  375                  750
350...........................                  400                  750
325...........................                  425                  750
300...........................                  550                  850
275...........................                  575                  850
250...........................                  600                  850
225...........................                  625                  850
200...........................                  650                  850
175...........................                  675                  850
150...........................                  800                  950
125...........................                  825                  950
100...........................                  850                  950
75............................                  875                  950
50............................                  900                  950
25............................                  925                  950
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Richard Fordyce,
Administrator, Farm Service Agency.
Robert Stephenson,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2020-25456 Filed 11-18-20; 8:45 am]
BILLING CODE 3410-05-P