140 
‘‘(1) LANDOWNER.—A person or legal entity that 
is a landowner contributing the owned land to a 
farming operation shall be considered to be actively 
engaged in farming with respect to the farming oper-
ation if the landowner receives rent or income for 
such use of the land based on the land’s production 
or the operation’s operating results, and the person or 
legal entity meets the standard provided in clauses 
(ii) and (iii) of subsection (b)(2)(A). 
‘‘(2) ADULT FAMILY MEMBER.—With respect to a 
farming operation when a majority of the partici-
pants are family members, an adult family member 
shall be considered to be actively engaged in farming 
with respect to the farming operation if the person— 
‘‘(A) makes a significant contribution, 
based on the total value of the farming operation, 
of active personal management or personal labor; 
and 
‘‘(B) such contribution meets the standards 
provided in clauses (ii) and (iii) of subsection 
(b)(2)(A). 
‘‘(3) 
SHARECROPPER.—A 
sharecropper 
who 
makes a significant contribution of personal labor to 
a farming operation shall be considered to be actively 
engaged in farming with respect to the farming oper-
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141 
ation if such contribution meets the standards pro-
vided in clauses (ii) and (iii) of subsection (b)(2)(A). 
‘‘(4) GROWERS
OF
HYBRID
SEED.—In deter-
mining whether a person or legal entity growing hy-
brid seed under contract shall be considered to be ac-
tively engaged in farming, the Secretary shall not 
take into consideration the existence of a hybrid seed 
contract. 
‘‘(5) CUSTOM FARMING SERVICES.—A person or 
legal entity receiving custom farming services will be 
considered separately eligible for payment limitation 
purposes if such person or legal entity is actively en-
gaged in farming based on subsection (b)(2) or para-
graphs (1) through (5) of this subsection. No other 
rules with respect to custom farming shall apply in 
making a determination under this section. 
‘‘(6) SPOUSE.—Where one spouse is determined 
to be actively engaged, the other spouse shall be deter-
mined to have met the requirements of subclause (II) 
of subsection (b)(2)(A)(i) of this section. 
‘‘(d) CLASSES NOT ACTIVELY ENGAGED.— 
‘‘(1) CASH RENT LANDLORD.—A landlord con-
tributing land to a farming operation shall not be 
considered to be actively engaged in farming with re-
spect to the farming operation if the landlord receives 
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142 
cash rent, or a crop share guaranteed as to the 
amount of the commodity to be paid in rent, for such 
use of the land. 
‘‘(2) OTHER PERSONS.—Any other person deter-
mined by the Secretary as failing to meet the stand-
ards set out in subsections (b)(2) and (c) shall not be 
considered to be actively engaged in farming with re-
spect to a farming operation.’’. 
(e) TRANSITION.—Section 1001 of the Food Security 
Act of 1985 (7 U.S.C. 1308), as in effect on the day before 
the date of the enactment of this Act, shall continue to apply 
with respect to the 2007 crop of any covered commodity. 
SEC. 1504. ADJUSTED GROSS INCOME LIMITATION. 
(a) EXTENSION OF ADJUSTED GROSS INCOME LIMITA-
TION.—Section 1001D of the Food Security Act of 1985 (7 
U.S.C. 1308–3a) is amended— 
(1) in subsection (b)(2), by striking ‘‘Farm Secu-
rity and Rural Investment Act of 2002’’ each place it 
appears and inserting ‘‘Farm, Nutrition, and Bio-
energy Act of 2007’’; and 
(2) in subsection (e), by striking ‘‘2007’’ and in-
serting ‘‘2012’’. 
(b) MODIFICATION OF LIMITATION.—Section 1001D(b) 
of the Food Security Act of 1985 (7 U.S.C. 1308–3a(b)) is 
amended— 
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143 
(1) by striking paragraph (1) and inserting the 
following new paragraph: 
‘‘(1) CAPS.— 
‘‘(A) UPPER LIMIT.—Notwithstanding any 
other provision of law, an individual or entity 
shall not be eligible to receive any benefit de-
scribed in paragraph (2) during a crop year if 
the average adjusted gross income of the indi-
vidual or entity exceeds $1,000,000. 
‘‘(B) 
PRODUCER
EXEMPTION.—Notwith-
standing any other provision of law, an indi-
vidual or entity shall not be eligible to receive 
any benefit described in paragraph (2) during a 
crop year if the average adjusted gross income of 
the individual or entity exceeds $500,000, unless 
not less than 66.66 percent of the average ad-
justed gross income of the individual or entity is 
derived from farming, ranching, or forestry oper-
ations, as determined by the Secretary.’’; 
(2) in paragraph (2)(A), by striking ‘‘or C’’; and 
(3) by adding at the end the following new para-
graph: 
‘‘(3) INCOME DERIVED FROM FARMING, RANCH-
ING
OR
FORESTRY
OPERATIONS.—In determining 
what portion of the average adjusted gross income of 
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144 
an individual or entity is derived from farming, 
ranching, or forestry operations, the Secretary shall 
include income derived from the following: 
‘‘(A) The production of crops, livestock, or 
unfinished raw forestry products. 
‘‘(B) The sale, including the sale of ease-
ments and development rights, of farm, ranch, or 
forestry land or water rights. 
‘‘(C) The sale, but not as a dealer, of equip-
ment purchased to conduct farm, ranch, or for-
estry operations when the equipment is otherwise 
subject to depreciation expense. 
‘‘(D) The rental of land used for farming, 
ranching, or forestry operations. 
‘‘(E) The provision of production inputs 
and services to farmers, ranchers, and foresters. 
‘‘(F) The processing, storing, and trans-
porting of farm, ranch, and forestry commod-
ities. 
‘‘(G) The sale of land that has been used for 
agriculture.’’. 
SEC. 1505. ADJUSTMENTS OF LOANS. 
Section 162 of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 7282) is amended— 
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145 
(1) in subsection (a), by inserting ‘‘(except for 
cotton and long grain, medium grain, and short 
grain rice)’’ after ‘‘commodity’’; 
(2) in subsection (b), by striking ‘‘Farm Security 
and Rural Investment Act of 2002’’ and inserting 
‘‘Farm, Nutrition, and Bioenergy Act of 2007’’; and 
(3) by adding at the end the following new sub-
sections: 
‘‘(d) ADJUSTMENT IN LOAN RATE FOR COTTON.— 
‘‘(1) ADJUSTMENT AUTHORITY.—The Secretary 
may make appropriate adjustments in the loan rate 
for cotton for differences in quality factors. 
‘‘(2) REVISIONS TO QUALITY ADJUSTMENTS FOR 
UPLAND COTTON.— 
‘‘(A) REVISION.—Within 180 days after the 
date of the enactment of the Farm, Nutrition, 
and Bioenergy Act of 2007, the Secretary, after 
consultation with the private sector as provided 
in paragraph (3), shall implement revisions in 
the administration of the marketing assistance 
loan program for upland cotton to more accu-
rately and efficiently reflect market values for 
upland cotton. 
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