II 

113TH CONGRESS 

1ST SESSION S. 281 

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 

FEBRUARY 12, 2013 

Mr. GRASSLEY (for himself, Mr. JOHNSON of South Dakota, Mr. ENZI, and 

Mr. BROWN) 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Farm Program Integ5 rity Act of 2013’’. 

6 SEC. 2. PAYMENT LIMITATIONS. 

7 (a) IN GENERAL.—Section 1001 of the Food Security 

8 Act of 1985 (7 U.S.C. 1308) is amended— 


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1 (1) in subsection (a), by striking paragraph (3) 

2 and inserting the following: 

3 ‘‘(3) LEGAL ENTITY.— 

4 ‘‘(A) IN GENERAL.—The term ‘legal entity’ 

5 means— 

6 ‘‘(i) an organization that (subject to 

7 the requirements of this section and sec8 tion 1001A) is eligible to receive a pay9 ment under a provision of law referred to 

10 in subsection (b), (c), or (d); 

11 ‘‘(ii) a corporation, joint stock com12 pany, association, limited partnership, lim13 ited liability company, limited liability 

14 partnership, charitable organization, es15 tate, irrevocable trust, grantor of a rev16 ocable trust, or other similar entity (as de17 termined by the Secretary); and 

18 ‘‘(iii) an organization that is partici19 pating in a farming operation as a partner 

20 in a general partnership or as a participant 

21 in a joint venture. 

22 ‘‘(B) EXCLUSION.—The term ‘legal entity’ 

23 does not include a general partnership or joint 

24 venture.’’; 


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1 (2) by striking subsections (b) through (d) and 

2 inserting the following: 

3 ‘‘(b) LIMITATION ON PAYMENTS FOR COVERED COM4 MODITIES AND PEANUTS.—The total amount of payments 

5 received, directly or indirectly, by a person or legal entity 

6 for any crop year for 1 or more covered commodities and 

7 peanuts under title I of the Food, Conservation, and En8 ergy Act of 2008 (7 U.S.C. 8701 et seq.) (or a successor 

9 provision) may not exceed $125,000, of which— 

10 ‘‘(1) not more than $75,000 may consist of 

11 marketing loan gains and loan deficiency payments 

12 under subtitle B or C of title I of the Food, Con13 servation, and Energy Act of 2008 (7 U.S.C. 8731 

14 et seq.) (or a successor provision); and 

15 ‘‘(2) not more than $50,000 may consist of any 

16 other payments made for covered commodities and 

17 peanuts under title I of the Food, Conservation, and 

18 Energy Act of 2008 (7 U.S.C. 8702 et seq.) (or a 

19 successor provision). 

20 ‘‘(c) SPOUSAL EQUITY.— 

21 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

22 (b), except as provided in paragraph (2), if a person 

23 and the spouse of the person are covered by para24 graph (2) and receive, directly or indirectly, any pay25 ment or gain covered by this section, the total 


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1 amount of payments or gains (as applicable) covered 

2 by this section that the person and spouse may 

3 jointly receive during any crop year may not exceed 

4 an amount equal to twice the applicable dollar 

5 amounts specified in subsection (b). 

6 ‘‘(2) EXCEPTIONS.— 

7 ‘‘(A) SEPARATE FARMING OPERATIONS.— 

8 In the case of a married couple in which each 

9 spouse, before the marriage, was separately en10 gaged in an unrelated farming operation, each 

11 spouse shall be treated as a separate person 

12 with respect to a farming operation brought 

13 into the marriage by a spouse, subject to the 

14 condition that the farming operation shall re15 main a separate farming operation, as deter16 mined by the Secretary. 

17 ‘‘(B) ELECTION TO RECEIVE SEPARATE

18 PAYMENTS.—A married couple may elect to re19 ceive payments separately in the name of each 

20 spouse if the total amount of payments and 

21 benefits described in subsection (b) that the 

22 married couple receives, directly or indirectly, 

23 does not exceed an amount equal to twice the 

24 applicable dollar amounts specified in those 

25 subsections.’’; 


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1 (3) in paragraph (3)(B) of subsection (f), by 

2 adding at the end the following: 

3 ‘‘(iii) IRREVOCABLE TRUSTS.—In pro4 mulgating regulations to define the term 

5 ‘legal entity’ as the term applies to irrev6 ocable trusts, the Secretary shall ensure 

7 that irrevocable trusts are legitimate enti8 ties that have not been created for the pur9 pose of avoiding a payment limitation.’’; 

10 and 

11 (4) in subsection (h), in the second sentence, by 

12 striking ‘‘or other entity’’ and inserting ‘‘or legal en13 tity’’. 

14 (b) CONFORMING AMENDMENTS.— 

15 (1) Section 1001 of the Food Security Act of 

16 1985 (7 U.S.C. 1308) is amended— 

17 (A) in subsection (e), by striking ‘‘sub18 sections (b) and (c)’’ each place it appears in 

19 paragraphs (1) and (3)(B) and inserting ‘‘sub20 section (b)’’; 

21 (B) in subsection (f)— 

22 (i) in paragraph (2), by striking 

23 ‘‘Subsections (b) and (c)’’ and inserting 

24 ‘‘Subsection (b)’’; 


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1 (ii) in paragraph (4)(B), by striking 

2 ‘‘subsection (b) or (c)’’ and inserting ‘‘sub3 section (b)’’; 

4 (iii) in paragraph (5)— 

5 (I) in subparagraph (A), by strik6 ing ‘‘subsection (d)’’; and 

7 (II) in subparagraph (B), by 

8 striking ‘‘subsection (b), (c), or (d)’’ 

9 and inserting ‘‘subsection (b)’’; and 

10 (iv) in paragraph (6)— 

11 (I) in subparagraph (A), by strik12 ing ‘‘Notwithstanding subsection (d), 

13 except as provided in subsection (g)’’ 

14 and inserting ‘‘Except as provided in 

15 subsection (f)’’; and 

16 (II) in subparagraph (B), by 

17 striking ‘‘subsections (b), (c), and 

18 (d)’’ and inserting ‘‘subsection (b)’’; 

19 (C) in subsection (g)— 

20 (i) in paragraph (1)— 

21 (I) by striking ‘‘subsection 

22 (f)(6)(A)’’ and inserting ‘‘subsection 

23 (e)(6)(A)’’; and 


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1 (II) by striking ‘‘subsection (b) 

2 or (c)’’ and inserting ‘‘subsection (b)’’; 

3 and 

4 (ii) in paragraph (2)(A), by striking 

5 ‘‘subsections (b) and (c)’’ and inserting 

6 ‘‘subsection (b)’’; and 

7 (D) by redesignating subsections (e) 

8 through (h) as subsections (d) through (g), re9 spectively. 

10 (2) Section 1001A of the Food Security Act of 

11 1985 (7 U.S.C. 1308–1) is amended— 

12 (A) in subsection (a), by striking ‘‘sub13 sections (b) and (c) of section 1001’’ and in14 serting ‘‘section 1001(b)’’; and 

15 (B) in subsection (b)(1), by striking ‘‘sub16 section (b) or (c) of section 1001’’ and inserting 

17 ‘‘section 1001(b)’’. 

18 (3) Section 1001B(a) of the Food Security Act 

19 of 1985 (7 U.S.C. 1308–2(a)) is amended in the 

20 matter preceding paragraph (1) by striking ‘‘sub21 sections (b) and (c) of section 1001’’ and inserting 

22 ‘‘section 1001(b)’’. 

23 (c) APPLICATION.—The amendments made by this 

24 section shall apply beginning with the 2014 crop year. 


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1 SEC. 3. PAYMENTS LIMITED TO ACTIVE FARMERS. 

2 Section 1001A of the Food Security Act of 1985 (7 

3 U.S.C. 1308–1) is amended— 

4 (1) in subsection (b)(2)— 

5 (A) by striking ‘‘or active personal man6 agement’’ each place it appears in subpara7 graphs (A)(i)(II) and (B)(ii); and 

8 (B) in subparagraph (C), by striking ‘‘, as 

9 applied to the legal entity, are met by the legal 

10 entity, the partners or members making a sig11 nificant contribution of personal labor or active 

12 personal management’’ and inserting ‘‘are met 

13 by partners or members making a significant 

14 contribution of personal labor, those partners or 

15 members’’; and 

16 (2) in subsection (c)— 

17 (A) in paragraph (1)— 

18 (i) by striking subparagraph (A) and 

19 inserting the following: 

20 ‘‘(A) the landowner share-rents the land at 

21 a rate that is usual and customary;’’; 

22 (ii) in subparagraph (B), by striking 

23 the period at the end and inserting ‘‘; 

24 and’’; and 

25 (iii) by adding at the end the fol26 lowing: 


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1 ‘‘(C) the share of the payments received by 

2 the landowner is commensurate with the share 

3 of the crop or income received as rent.’’; 

4 (B) in paragraph (2)(A), by striking ‘‘ac5 tive personal management or’’; 

6 (C) in paragraph (5)— 

7 (i) by striking ‘‘(5)’’ and all that fol8 lows through ‘‘(A) IN GENERAL.—A per9 son’’ and inserting the following: 

10 ‘‘(5) CUSTOM FARMING SERVICES.—A person’’; 

11 (ii) by inserting ‘‘under usual and 

12 customary terms’’ after ‘‘services’’; and 

13 (iii) by striking subparagraph (B); 

14 and 

15 (D) by adding at the end the following: 

16 ‘‘(7) FARM MANAGERS.—A person who other17 wise meets the requirements of this subsection other 

18 than (b)(2)(A)(i)(II) shall be considered to be ac19 tively engaged in farming, as determined by the Sec20 retary, with respect to the farming operation, includ21 ing a farming operation that is a sole proprietorship, 

22 a legal entity such as a joint venture or general 

23 partnership, or a legal entity such as a corporation 

24 or limited partnership, if the person— 


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1 ‘‘(A) makes a significant contribution of 

2 management to the farming operation necessary 

3 for the farming operation, taking into ac4 count— 

5 ‘‘(i) the size and complexity of the 

6 farming operation; and 

7 ‘‘(ii) the management requirements 

8 normally and customarily required by simi9 lar farming operations; 

10 ‘‘(B)(i) is the only person in the farming 

11 operation qualifying as actively engaged in 

12 farming by using the farm manager special 

13 class designation under this paragraph; and 

14 ‘‘(ii) together with any other persons in the 

15 farming operation qualifying as actively en16 gaged in farming under subsection (b)(2) or as 

17 part of a special class under this subsection, 

18 does not collectively receive, directly or indi19 rectly, an amount equal to more than the appli20 cable limits under section 1001(b); 

21 ‘‘(C) does not use the management con22 tribution under this paragraph to qualify as ac23 tively engaged in more than 1 farming oper24 ation; and 


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1 ‘‘(D) manages a farm operation that does 

2 not substantially share equipment, labor, or 

3 management with persons or legal entities that 

4 with the person collectively receive, directly or 

5 indirectly, an amount equal to more than the 

6 applicable limits under section 1001(b).’’. 

Æ 


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