II 

109TH CONGRESS 

1ST SESSION S. 385 

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 15, 2005 

Mr. GRASSLEY (for himself, Mr. DORGAN, Mr. HAGEL, and Mr. JOHNSON) 

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 ‘‘Rural America Preser5 vation Act’’. 

6 SEC. 2. PAYMENT LIMITATIONS. 

7 Section 1001 of the Food Security of 1985 (7 U.S.C. 

8 1308) is amended— 
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1 (1) in subsection (b)(1), by striking ‘‘$40,000’’ 

2 and inserting ‘‘$20,000’’; 

3 (2) in subsection (c)(1), by striking ‘‘$65,000’’ 

4 and inserting ‘‘$30,000’’; 

5 (3) in subsection (d), by striking ‘‘(d)’’ and all 

6 that follows through the end of paragraph (1) and 

7 inserting the following: 

8 ‘‘(d) LIMITATIONS ON MARKETING LOAN GAINS, 

9 LOAN DEFICIENCY PAYMENTS, AND COMMODITY CER10 TIFICATE TRANSACTIONS.— 

11 ‘‘(1) LOAN COMMODITIES.—The total amount 

12 of the following gains and payments that a person 

13 may receive during any crop year may not exceed 

14 $75,000: 

15 ‘‘(A)(i) Any gain realized by a producer 

16 from repaying a marketing assistance loan for 

17 1 or more loan commodities under subtitle B of 

18 title I of the Farm Security and Rural Invest19 ment Act of 2002 (7 U.S.C. 7931 et seq.) at a 

20 lower level than the original loan rate estab21 lished for the loan commodity under that sub22 title. 

23 ‘‘(ii) In the case of settlement of a mar24 keting assistance loan for 1 or more loan com25 modities under that subtitle by forfeiture, the 
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1 amount by which the loan amount exceeds the 

2 repayment amount for the loan if the loan had 

3 been settled by repayment instead of forfeiture. 

4 ‘‘(B) Any loan deficiency payments re5 ceived for 1 or more loan commodities under 

6 that subtitle. 

7 ‘‘(C) Any gain realized from the use of a 

8 commodity certificate issued by the Commodity 

9 Credit Corporation for 1 or more loan commod10 ities, as determined by the Secretary, including 

11 the use of a certificate for the settlement of a 

12 marketing assistance loan made under that sub13 title, with the gain reported annually to the In14 ternal Revenue Service and to the taxpayer in 

15 the same manner as gains under subparagraphs 

16 (A) and (B).’’; 

17 (4) by adding at the end the following: 

18 ‘‘(h) SINGLE FARMING OPERATION.— 

19 ‘‘(1) IN GENERAL.—Notwithstanding sub20 sections (b) through (d), subject to paragraph (2), 

21 if a person participates only in a single farming op22 eration and receives, directly or indirectly, any pay23 ment or gain covered by this section through the 

24 farming operation, the total amount of payments or 

25 gains (as applicable) covered by this section that the 
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1 person may receive during any crop year may be up 

2 to but not exceed twice the applicable dollar 

3 amounts specified in subsections (b), (c), and (d). 

4 ‘‘(2) INDIVIDUALS.—The total amount of pay5 ments or gains (as applicable) covered by this sec6 tion that an individual person may receive during 

7 any crop year may not exceed $250,000. 

8 ‘‘(i) SPOUSE EQUITY.—Notwithstanding subsections 

9 (b) through (d), except as provided in subsection 

10 (e)(2)(C)(i), if an individual and spouse are covered by 

11 subsection (e)(2)(C) and receive, directly or indirectly, any 

12 payment or gain covered by this section, the total amount 

13 of payments or gains (as applicable) covered by this sec14 tion that the individual and spouse may jointly receive 

15 during any crop year may not exceed twice the applicable 

16 dollar amounts specified in subsections (b), (c), and (d). 

17 ‘‘(j) REGULATIONS.— 

18 ‘‘(1) IN GENERAL.—Not later than 270 days 

19 after the date of enactment of this subsection, the 

20 Secretary shall promulgate regulations— 

21 ‘‘(A) to ensure that total payments and 

22 gains described in this section made to or 

23 through joint operations or multiple entities 

24 under the primary control of a person, in com25 bination with the payments and gains received 
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1 directly by the person, shall not exceed twice 

2 the applicable dollar amounts specified in sub3 sections (b), (c), and (d); 

4 ‘‘(B) in the case of a person that in the ag5 gregate owns, conducts farming operations, or 

6 provides custom farming services on land with 

7 respect to which the aggregate payments exceed 

8 the applicable dollar amounts specified in sub9 sections (b), (c), and (d), to attribute all pay10 ments and gains made on crops produced on 

11 the land to— 

12 ‘‘(i) a person that rents land as lessee 

13 or lessor through a crop share lease and 

14 receives a share of the payments that is 

15 less than the usual and customary share of 

16 the crop received by the lessee or lessor, as 

17 determined by the Secretary; 

18 ‘‘(ii) a person that provides custom 

19 farming services through arrangements 

20 under which— 

21 ‘‘(I) all or part of the compensa22 tion for the services is at risk; 

23 ‘‘(II) farm management services 

24 are provided by— 

25 ‘‘(aa) the same person; 
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1 ‘‘(bb) an immediate family 

2 member; or 

3 ‘‘(cc) an entity or individual 

4 that has a business relationship 

5 that is not an arm’s length rela6 tionship, as determined by the 

7 Secretary; or 

‘‘(III) more than 2 8 ⁄3 of the farm9 ing operations are conducted as cus10 tom farming services provided by— 

11 ‘‘(aa) the same person; 

12 ‘‘(bb) an immediate family 

13 member; or 

14 ‘‘(cc) an entity or individual 

15 that has a business relationship 

16 that is not an arm’s length rela17 tionship, as determined by the 

18 Secretary; or 

19 ‘‘(iii) a person under such other ar20 rangements as the Secretary determines 

21 are established to transfer payments from 

22 persons that would otherwise exceed the 

23 applicable dollar amounts specified in sub24 sections (b), (c), and (d); and 
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1 ‘‘(C) to ensure that payments attributed 

2 under this section to a person other than the 

3 direct recipient shall also count toward the limit 

4 of the direct recipient. 

5 ‘‘(2) PRIMARY CONTROL.—The regulations 

6 under paragraph (1) shall define ‘primary control’ to 

7 include a joint operation or multiple entity in which 

8 a person owns an interest that is equal to or greater 

9 than the interest of any other 1 or more persons 

10 that materially participate on a regular, substantial, 

11 and continuous basis in the management of the op12 eration or entity.’’. 

13 SEC. 3. SCHEMES OR DEVICES. 

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

15 U.S.C. 1308–2) is amended— 

16 (1) by inserting ‘‘(a) IN GENERAL.—’’ before 

17 ‘‘If’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(b) FRAUD.—If fraud is committed by a person in 

20 connection with a scheme or device to evade, or that has 

21 the purpose of evading, section 1001, 1001A, or 1001C, 

22 the person shall be ineligible to receive farm program pay23 ments (as described in subsections (b), (c), and (d) of sec24 tion 1001 as being subject to limitation) applicable to the 
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1 crop year for which the scheme or device is adopted and 

2 the succeeding 5 crop years.’’. 

3 SEC. 4. REGULATIONS. 

4 (a) IN GENERAL.—The Secretary of Agriculture may 

5 promulgate such regulations as are necessary to imple6 ment this Act and the amendments made by this Act. 

7 (b) PROCEDURE.—The promulgation of the regula8 tions and administration of this Act and the amendments 

9 made by this Act shall be made without regard to— 

10 (1) the notice and comment provisions of sec11 tion 553 of title 5, United States Code; 

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

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

14 13804), relating to notices of proposed rulemaking 

15 and public participation in rulemaking; and 

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

17 (commonly known as the ‘‘Paperwork Reduction 

18 Act’’). 

19 (c) CONGRESSIONAL REVIEW OF AGENCY RULE20 MAKING.—In carrying out this section, the Secretary shall 

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

22 United States Code.

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