Farm Support Integrity for Family Farms Act

I 116TH CONGRESS 1ST SESSION H. R. 4765 To amend the Food Security Act of 1985 to provide for certain payment limitations with respect to commodity programs, and for other purposes. IN THE HOUSE OF REPRESENTATIVES OCTOBER 18, 2019 Mr. MEADOWS introduced the following bill; which was referred to the Committee on Agriculture A BILL To amend the Food Security Act of 1985 to provide for certain payment limitations with respect to commodity programs, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Farm Support Integ- 4 rity for Family Farms Act’’. 5 SEC. 2. PAYMENT LIMITATIONS. 6 (a) IN GENERAL.—Section 1001 of the Food Security 7 Act of 1985 (7 U.S.C. 1308) is amended— 8 (1) in subsection (a), by striking paragraph (3) 9 and inserting the following: 10 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 4765 IH ‘‘(3) LEGAL ENTITY.—The term ‘legal entity’ 1 means— 2 ‘‘(A) an organization that (subject to the 3 requirements of this section and section 1001A) 4 is eligible to receive a payment under a provi- 5 sion of law referred to in subsection (b) or (d); 6 and 7 ‘‘(B) an association, charitable organiza- 8 tion, corporation, estate, general partnership, 9 irrevocable trust or grantor of a revocable trust, 10 joint stock company, limited partnership, lim- 11 ited liability company, limited liability partner- 12 ship, or other similar entity (as determined by 13 the Secretary).’’; 14 (2) by striking subsections (b) and (c) and in- 15 serting the following: 16 ‘‘(b) LIMITATION ON PAYMENTS FOR COVERED COM- 17 MODITIES AND PEANUTS.—The total amount of payments 18 received, directly or indirectly, by a person or legal entity 19 for any crop year for 1 or more covered commodities and 20 peanuts under title I of the Agricultural Act of 2014 may 21 not exceed $125,000, of which not more than $50,000 22 may consist of payments made under sections 1116 and 23 1117 of such Act. 24 ‘‘(c) SPOUSAL EQUITY.— 25 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 4765 IH ‘‘(1) IN GENERAL.—Notwithstanding subsection 1 (b), except as provided in paragraph (2), if a person 2 and the spouse of the person are covered by para- 3 graph (2) and receive, directly or indirectly, any pay- 4 ment or gain covered by this section, the total 5 amount of payments or gains (as applicable) covered 6 by this section that the person and spouse may 7 jointly receive during any crop year may not exceed 8 an amount equal to twice the applicable dollar 9 amounts specified in subsection (b). 10 ‘‘(2) EXCEPTIONS.— 11 ‘‘(A) SEPARATE FARMING OPERATIONS.— 12 In the case of a married couple in which each 13 spouse, before the marriage, was separately en- 14 gaged in an unrelated farming operation, each 15 spouse shall be treated as a separate person 16 with respect to a farming operation brought 17 into the marriage by a spouse, subject to the 18 condition that the farming operation shall re- 19 main a separate farming operation, as deter- 20 mined by the Secretary. 21 ‘‘(B) ELECTION TO RECEIVE SEPARATE 22 PAYMENTS.—A married couple may elect to re- 23 ceive payments separately in the name of each 24 spouse if the total amount of payments and 25 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 4765 IH benefits described in subsection (b) that the 1 married couple receives, directly or indirectly, 2 does not exceed an amount equal to twice the 3 applicable dollar amounts specified in such sub- 4 section.’’; 5 (3) in subsection (e)(3)— 6 (A) by striking ‘‘(A) IN GENERAL.—’’; and 7 (B) by striking subparagraph (B); 8 (4) in subsection (f)— 9 (A) in paragraph (3)(B), by adding at the 10 end the following new clause: 11 ‘‘(iii) LEGITIMATE ENTITIES.—In pro- 12 mulgating regulations to define the term 13 ‘legal entity’ as the term applies to irrev- 14 ocable trusts, the Secretary shall ensure 15 that irrevocable trusts are legitimate enti- 16 ties that have not been created for the pur- 17 pose of avoiding a payment limitation.’’; 18 and 19 (B) by striking paragraph (4) and redesig- 20 nating paragraphs (5), (6), (7), and (8) as 21 paragraphs (4), (5), (6), and (7), respectively; 22 and 23 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 4765 IH (5) in subsection (h), in the second sentence, by 1 striking ‘‘or other entity’’ and inserting ‘‘or legal en- 2 tity’’. 3 (b) CONFORMING AMENDMENTS.— 4 (1) Section 1001 of the Food Security Act of 5 1985 (7 U.S.C. 1308) is amended— 6 (A) in subsection (e)(1), by striking ‘‘sub- 7 sections (b) and (c)’’ and inserting ‘‘subsection 8 (b)’’; 9 (B) in subsection (f)(2), by striking ‘‘Sub- 10 sections (b) and (c)’’ and inserting ‘‘Subsection 11 (b)’’; and 12 (C) in subsection (g)— 13 (i) in paragraph (1), by striking ‘‘sub- 14 section (b) or (c)’’ and inserting ‘‘sub- 15 section (b)’’; and 16 (ii) in paragraph (2)(A), by striking 17 ‘‘subsections (b) and (c)’’ and inserting 18 ‘‘subsection (b)’’. 19 (2) Section 1001A of the Food Security Act of 20 1985 (7 U.S.C. 1308–1) is amended— 21 (A) in subsection (a), by striking ‘‘sub- 22 sections (b) and (c) of section 1001’’ and in- 23 serting ‘‘section 1001(b)’’; and 24 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 4765 IH (B) in subsection (b)(1), by striking ‘‘sub- 1 section (b) or (c) of section 1001’’ and inserting 2 ‘‘section 1001(b)’’. 3 (3) Section 1001B(a) of the Food Security Act 4 of 1985 (7 U.S.C. 1308–2(a)) is amended in the 5 matter preceding paragraph (1) by striking ‘‘sub- 6 sections (b) and (c) of section 1001’’ and inserting 7 ‘‘section 1001(b)’’. 8 (c) APPLICATION.—The amendments made by this 9 section shall apply beginning with the 2020 crop year. 10 SEC. 3. PAYMENTS LIMITED TO ACTIVE FARMERS. 11 Section 1001A of the Food Security Act of 1985 (7 12 U.S.C. 1308–1) is amended— 13 (1) in subsection (b)(2)— 14 (A) in subparagraph (A), by striking ‘‘(in- 15 cluding a person participating in a farming op- 16 eration as a partner in a general partnership, a 17 participant in a joint venture, a grantor of a 18 revocable trust, or a participant in a similar en- 19 tity, as determined by the Secretary)’’; 20 (B) in subparagraph (A)(i)(II), by striking 21 ‘‘or active personal management’’; 22 (C) in subparagraph (B)— 23 (i) in clause (ii), by striking ‘‘or active 24 personal management’’; and 25 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 4765 IH (ii) in clause (iii), by inserting ‘‘and’’ 1 after the semicolon; and 2 (D) by striking subparagraph (C) and re- 3 designating subparagraph (D) as subparagraph 4 (C); and 5 (2) in subsection (c)— 6 (A) in paragraph (1)— 7 (i) by striking subparagraph (A) and 8 inserting the following: 9 ‘‘(A) the landowner share-rents the land at 10 a rate that is usual and customary or receives 11 rent or income based on the operating results of 12 the operation;’’; 13 (ii) in subparagraph (B), by striking 14 the period at the end and inserting ‘‘; 15 and’’; and 16 (iii) by adding at the end the fol- 17 lowing: 18 ‘‘(C) the share of the payments received by 19 the landowner is commensurate with the share 20 of the crop or income received as rent.’’; 21 (B) in paragraph (2)(A), by striking ‘‘ac- 22 tive personal management or’’; 23 (C) in paragraph (5)— 24 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 4765 IH (i) by striking ‘‘(5)’’ and all that fol- 1 lows through ‘‘(A) IN GENERAL.—A per- 2 son’’ and inserting the following: 3 ‘‘(5) CUSTOM FARMING SERVICES.—A person’’; 4 (ii) by inserting ‘‘under usual and 5 customary terms’’ after ‘‘services’’; and 6 (iii) by striking subparagraph (B); 7 and 8 (D) by adding at the end the following: 9 ‘‘(7) FARM MANAGERS.—A person who other- 10 wise meets the requirements of this subsection other 11 than (b)(2)(A)(i)(II) shall be considered to be ac- 12 tively engaged in farming, as determined by the Sec- 13 retary, with respect to the farming operation, includ- 14 ing a farming operation that is a sole proprietorship, 15 a legal entity such as a joint venture or general 16 partnership, or a legal entity such as a corporation 17 or limited partnership, if the person— 18 ‘‘(A) makes a significant contribution of 19 management to the farming operation that— 20 ‘‘(i) is critical to the profitability of 21 the farming operation; 22 ‘‘(ii) is performed on a regular, con- 23 tinuous, and substantial basis; and 24 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 4765 IH ‘‘(iii) equals at least 520 hours annu- 1 ally, or at least 25 percent of the total 2 management hours required for the farm- 3 ing operation on an annual basis, as deter- 4 mined by the Secretary; 5 ‘‘(B)(i) is the only person in the farming 6 operation qualifying as actively engaged in 7 farming by using the farm manager special 8 class designation under this paragraph; and 9 ‘‘(ii) together with any other persons in the 10 farming operation qualifying as actively en- 11 gaged in farming under subsection (b)(2) or as 12 part of a special class under this subsection, 13 does not collectively receive, directly or indi- 14 rectly, an amount equal to more than the appli- 15 cable limits under section 1001(b); 16 ‘‘(C) does not use the management con- 17 tribution under this paragraph to qualify as ac- 18 tively engaged in more than 1 farming oper- 19 ation; and 20 ‘‘(D) manages a farm operation that does 21 not substantially share equipment, labor, or 22 management with persons or legal entities that 23 with the person collectively receive, directly or 24 VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 4765 IH indirectly, an amount equal to more than the 1 applicable limits under section 1001(b).’’. 2 SEC. 4. REPEAL OF CERTAIN REGULATIONS. 3 (a) IN GENERAL.—Section 1604 of the Agricultural 4 Act of 2014 (7 U.S.C. 1308–1 note) is repealed. 5 (b) REGULATIONS.—The Secretary of Agriculture 6 shall issue or revise such regulations as may be necessary 7 to implement the amendments made by sections 2 and 3. 8 Æ VerDate Sep 11 2014 20:51 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H4765.IH H4765 pamtmann on DSKBC07HB2PROD with BILLS