I 

110TH CONGRESS 

1ST SESSION H. R. 124 

To require the prompt issuance by the Secretary of Agriculture of regulations 

to restore integrity to the payment limitation requirements applicable 

to commodity payments and benefits, to reduce waste, fraud, and abuse 

related to the receipt of commodity payments and benefits, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 4, 2007 

Mr. FORTENBERRY (for himself and Ms. HERSETH) introduced the following 

bill; which was referred to the Committee on Agriculture 

A BILL 

To require the prompt issuance by the Secretary of Agriculture of regulations to restore integrity to the payment 

limitation requirements applicable to commodity payments and benefits, to reduce waste, fraud, and abuse 

related to the receipt of commodity payments and benefits, and for other purposes. 

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 Programs Pay5 ment Limitation Integrity Act’’. 


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1 SEC. 2. ISSUANCE OF REGULATIONS TO ESTABLISH MEAS2 URABLE STANDARDS TO PREVENT USE OF 

3 SEPARATE ENTITIES TO EXCEED PAYMENT 

4 LIMITATIONS APPLICABLE TO COMMODITY 

5 PAYMENTS AND TO LIMIT PAYMENTS TO AC6 TIVE FARMERS. 

7 (a) STANDARDS REGARDING ACTIVE PERSONAL

8 MANAGEMENT AND EVASION SCHEMES AND DEVICES.— 

9 The Secretary of Agriculture (in this section referred to 

10 as the ‘‘Secretary’’) shall promulgate regulations to estab11 lish measurable standards of— 

12 (1) what constitutes a significant contribution 

13 of active personal management with respect to a 

14 farm operation for purposes of applying the payment 

15 limitations specified in section 1001 of the Food Se16 curity of 1985 (7 U.S.C. 1308); and 

17 (2) what constitutes a scheme or device to ef18 fectively evade such payment limits or to evade sec19 tion 1001A or 1001C of such Act (7 U.S.C. 1308– 

20 1, 1308–3). 

21 (b) ENFORCEMENT OF MULTIPLE ENTITY LIMITA22 TIONS.—The Secretary shall promulgate regulations to en23 sure that total payments and gains described in section 

24 1001 of the Food Security of 1985 made to or through 

25 joint operations or multiple entities under the primary 

26 control of a person, in combination with the payments and 


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1 gains received directly by the person, do not exceed twice 

2 the applicable dollar amounts specified in subsections (b), 

3 (c), and (d) of such section. 

4 (c) ATTRIBUTION OF PAYMENTS AND GAINS DE5 RIVED FROM CERTAIN FARMING OPERATIONS.—In the 

6 case of a person that in the aggregate owns, conducts 

7 farming operations, or provides custom farming services 

8 on land with respect to which the aggregate commodity 

9 payments exceed the applicable dollar amounts specified 

10 in subsections (b), (c), and (d) of section 1001 of the Food 

11 Security of 1985, the Secretary shall promulgate regula12 tions to ensure that all payments and gains made on crops 

13 produced on the land are attributed as follows: 

14 (1) To a person that rents land as lessee or les15 sor through a crop share lease and receives a share 

16 of the payments that is less than the usual and cus17 tomary share of the crop received by the lessee or 

18 lessor, as determined by the Secretary. 

19 (2) To a person that provides custom farming 

20 services through arrangements under which— 

21 (A) all or part of the compensation for the 

22 services is at risk; 

23 (B) farm management services are pro24 vided by— 

25 (i) the same person; 


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1 (ii) an immediate family member; or 

2 (iii) an entity or individual that has a 

3 business relationship that is not an arm’s 

4 length relationship, as determined by the 

5 Secretary; or 

6 (C) more than 2/3 of the farming oper7 ations are conducted as custom farming services 

8 provided by— 

9 (i) the same person; 

10 (ii) an immediate family member; or 

11 (iii) an entity or individual that has a 

12 business relationship that is not an arm’s 

13 length relationship, as determined by the 

14 Secretary. 

15 (3) To a person under such other arrangements 

16 as the Secretary determines are established to trans17 fer payments from persons that would otherwise ex18 ceed the applicable dollar amounts specified in sub19 sections (b), (c), and (d) of such section. 

20 (4) To the direct recipient of the commodity 

21 payments as well as to the person to whom the pay22 ments are attributed under paragraph (1), (2), or 

23 (3). 

24 (d) PRIMARY CONTROL.—In the regulations required 

25 by this section, the Secretary shall define ‘‘primary conVerDate Aug 31 2005 19:14 Jan 10, 2007 Jkt 059196 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H124.IH H124

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1 trol’’ to include a joint operation or multiple entity in 

2 which a person owns an interest that is equal to or greater 

3 than the interest of any other one or more persons that 

4 materially participate on a regular, substantial, and con5 tinuous basis in the management of the operation or enti6 ty. 

7 (e) MATERIAL PARTICIPATION.—In the regulations 

8 required by this section, the Secretary shall ensure that 

9 the standards for active personal management require no 

10 less involvement than the standard for materially partici11 pating on a regular, substantial, and continuous basis in 

12 the management of the operation or entity as defined by 

13 Treasury regulation section 1.469–5T(a)(1), as in effect 

14 on the date of the enactment of this Act. 

15 (f) TIME FOR ISSUANCE; PROCEDURE.—The regula16 tions required by this section shall be issued in final form 

17 not later than 270 days after the date of the enactment 

18 of this Act. To ensure compliance with this deadline, the 

19 Secretary shall issue the regulations without regard to— 

20 (1) the notice and comment provisions of sec21 tion 553 of title 5, United States Code; 

22 (2) the Statement of Policy of the Secretary of 

23 Agriculture effective July 24, 1971 (36 Fed. Reg. 

24 13804), relating to notices of proposed rulemaking 

25 and public participation in rulemaking; and 


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1 (3) chapter 35 of title 44, United States Code 

2 (commonly known as the Paperwork Reduction Act). 

3 (g) CONGRESSIONAL REVIEW OF AGENCY RULE4 MAKING.—In carrying out this section, the Secretary shall 

5 use the authority provided under section 808 of title 5, 

6 United States Code. 

7 SEC. 3. PREVENTION OF SCHEMES OR DEVICES TO EVADE 

8 PAYMENT LIMITATIONS. 

9 Section 1001B of the Food Security Act of 1985 (7 

10 U.S.C. 1308–2) is amended— 

11 (1) by striking ‘‘If’’ and inserting ‘‘(a) BASIC

12 PENALTY FOR EVASION OF PAYMENT LIMITA13 TIONS.—Subject to subsection (b), if’’; and 

14 (2) by adding at the end the following new sub15 section: 

16 ‘‘(b) EFFECT OF FRAUD.—If the Secretary deter17 mines that a person has committed fraud in connection 

18 with the adoption of a scheme or device to evade, or that 

19 has the purpose of evading, section 1001, 1001A, or 

20 1001C, the person shall be ineligible to receive farm pro21 gram payments (as described in subsections (b), (c), and 

22 (d) of section 1001 as being subject to limitation) applica23 ble to the crop year for which the scheme or device was 

24 adopted and the succeeding five crop years.’’. 

Æ 


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