SA 3695. Mr. DORGAN (for himself and Mr. Grassley) submitted an amendment intended to be proposed by him to the bill H.R. 2419, to provide for the continuation of agricultural programs through fiscal year 2012, and for other purposes; which was ordered to lie on the table; as follows:

Beginning on page 187, strike line 8 and all that follows through page 209, line 18, and insert the following:
SEC. 1703. PAYMENT LIMITATIONS.
(a) In General.--Section 1001 of the Food Security of 1985 (7 U.S.C. 1308) is amended--
(1) in subsection (a), by striking paragraphs (1) and (2) and inserting the following:
``(A) IN GENERAL.--The term `entity' means--
``(i) an organization that (subject to the requirements of this section and section 1001A) is eligible to receive a payment under a provision of law referred to in subsection (b) or (c);
``(ii) a corporation, joint stock company, association, limited partnership, limited liability company, limited liability partnership, charitable organization, estate, irrevocable trust, grantor of a revocable trust, or other similar entity (as determined by the Secretary); and
``(iii) an organization that is participating in a farming operation as a partner in a general partnership or as a participant in a joint venture.
``(B) EXCLUSION.--The term `entity' does not include a general partnership or joint venture.
``(C) ESTATES.--In promulgating regulations to define the term `entity' as the term applies to estates, the Secretary shall ensure that fair and equitable treatment is given to estates and the beneficiaries of estates.
``(D) IRREVOCABLE TRUSTS.--In promulgating regulations to define the term `entity' as the term applies to irrevocable trusts, the Secretary shall ensure that irrevocable trusts are legitimate entities that have not been created for the purpose of avoiding a payment limitation.
``(2) INDIVIDUAL.--The term `individual' means--
``(A) a natural person, and any minor child of the natural person (as determined by the Secretary), who, subject to the requirements of this section and section 1001A, is eligible to receive a payment under a provision of law referred to in subsection (b), (c), or (d); and
``(B) a natural person participating in a farming operation as a partner in a general partnership, a participant in a joint venture, a grantor of a revocable trust, or a participant in a similar entity (as determined by the Secretary).'';
(2) by striking subsection (b) and inserting the following:
``(b) Limitation on Direct Payments.--The total amount of direct payments that an individual or entity may receive, directly or indirectly, during any crop year under part I or III of subtitle A of title I of the Food and Energy Security Act of 2007 for 1 or more covered commodities and peanuts, or average crop revenue payments determined under section 1401(b)(2) of that Act, shall not exceed $20,000.'';
(3) by striking subsection (c) and inserting the following:
``(c) Limitation on Counter-Cyclical Payments.--The total amount of counter-cyclical payments that an individual or entity may receive, directly or indirectly, during any crop year under part I or III of subtitle A or C of title I of the Food and Energy Security Act of 2007 for 1 or more covered commodities and peanuts, or average crop revenue payments determined under section 1401(b)(3) of that Act, shall not exceed $30,000.'';
(4) by striking subsection (d) and inserting the following:
``(d) Limitations on Marketing Loan Gains, Loan Deficiency Payments, and Commodity Certificate Transactions.--The total amount of the following gains and payments that an individual or entity may receive during any crop year may not exceed $75,000:
``(1)(A) Any gain realized by a producer from repaying a marketing assistance loan for 1 or more loan commodities and peanuts under part II of subtitle A of title I of the Food and Energy Security Act of 2007 at a lower level than the original loan rate established for the loan commodity under that subtitle.
``(B) In the case of settlement of a marketing assistance loan for 1 or more loan commodities and peanuts under that subtitle by forfeiture, the amount by which the loan amount exceeds the repayment amount for the loan if the loan had been settled by repayment instead of forfeiture.
``(2) Any loan deficiency payments received for 1 or more loan commodities and peanuts under that subtitle.
``(3) Any gain realized from the use of a commodity certificate issued by the Commodity Credit Corporation for 1 or more loan commodities and peanuts, as determined by the Secretary, including the use of a certificate for the settlement of a marketing assistance loan made under that subtitle or section 1307 of that Act (7 U.S.C. 7957).'';
(5) by striking subsection (e);
(6) by redesignating subsections (f) and (g) as subsections (i) and (j), respectively;
(7) by inserting after subsection (d) the following:
``(e) Payments to Individuals and Entities.--Notwithstanding, subsections (b) through (d), an individual or entity may receive, directly or indirectly, through all ownership interests of the individual or entity, from all sources, payments or gains (as applicable) for a crop year that shall not exceed an amount equal to twice the applicable dollar amounts specified in subsections (b), (c), and (d).
``(f) Single Farming Operation.--Notwithstanding subsections (b) through (d), if an individual or entity participates only in a single farming operation and receives, directly or indirectly, any payment or gain covered by this section through the farming operation, the total amount of payments or gains (as applicable) covered by this section that the individual or entity may receive during any crop year shall not exceed an amount equal to twice the applicable dollar amounts specified
in subsections (b), (c), and (d).
``(g) Spousal Equity.--
``(1) IN GENERAL.--Notwithstanding subsections (b) through (f), except as provided in paragraph (2), if an individual and the spouse of the individual are covered by paragraph (2) and receive, directly or indirectly, any payment or gain covered by this section, the total amount of payments or gains (as applicable) covered by this section that the individual and spouse may jointly receive during any crop year may not exceed an amount equal to twice the applicable dollar amounts specified
in subsections (b), (c), and (d).
``(2) EXCEPTIONS.--
``(A) SEPARATE FARMING OPERATIONS.--In the case of a married couple in which each spouse, before the marriage, was separately engaged in an unrelated farming operation, each spouse shall be treated as a separate individual with respect to a farming operation brought into the marriage by a spouse, subject to the condition that the farming operation shall remain a separate farming operation, as determined by the Secretary.
``(B) ELECTION TO RECEIVE SEPARATE PAYMENTS.--A married couple may elect to receive payments separately in the name of each spouse if the total amount of payments and benefits described in subsections (b), (c), and (d) that the married couple receives, directly or indirectly, does not exceed an amount equal to twice the applicable dollar amounts specified in those subsections.
``(h) Attribution of Payments.--
``(1) IN GENERAL.--The Secretary shall issue such regulations as are necessary to ensure that all payments or gains (as applicable) are attributed to an individual by taking into account the direct and indirect ownership interests of the individual in an entity that is eligible to receive such payments or gains (as applicable).
``(2) PAYMENTS TO AN INDIVIDUAL.--Every payment made directly to an individual shall be combined with the individual's pro rata interest in payments received by an entity or entities in which the individual has a direct or indirect ownership interest.
``(3) PAYMENTS TO AN ENTITY.--
``(A) IN GENERAL.--Every payment or gain (as applicable) made to an entity shall be attributed to those individuals who have a direct or indirect ownership in the entity.
``(B) ATTRIBUTION OF PAYMENTS.--
``(i) PAYMENT LIMITS.--Except as provided by clause (ii), payments or gains (as applicable) made to an entity shall not exceed twice the amounts specified in subsections (b) through (d).
``(ii) EXCEPTION.--Payments or gains (as applicable) made to a joint venture or a general partnership shall not exceed, for each payment or gain (as applicable) specified in subsections (b) through (d), the amount determined by multiplying twice the maximum payment amount specified in subsections (b), (c), and (d) by the number of individuals and entities (other than joint ventures and general partnerships) that comprise the ownership of the joint venture or general partnership.
``(4) 4 LEVELS OF ATTRIBUTION FOR EMBEDDED ENTITIES.--
``(A) IN GENERAL.--Attribution of payments or gains (as applicable) made to entities shall be traced through 4 levels of ownership in entities.
``(B) FIRST LEVEL.--Any payments or gains (as applicable) made to an entity (a first-tier entity) that is owned in whole or in part by an individual shall be attributed to the individual in an amount that represents the direct ownership in the first-tier entity by the individual.
``(C) SECOND LEVEL.--
``(i) IN GENERAL.--Any payments or gains (as applicable) made to a first-tier entity that is owned in whole or in part by another entity (a second-tier entity) shall be attributed to the second-tier entity in proportion to the ownership interest of the second-tier entity in the first-tier entity.
``(ii) OWNERSHIP BY INDIVIDUAL.--If the second-tier entity is owned in whole or in part by an individual, the amount of the payment made to the first-tier entity shall be attributed to the individual in the amount the Secretary determines to represent the indirect ownership in the first-tier entity by the individual.
``(D) THIRD AND FOURTH LEVELS.--
``(i) IN GENERAL.--Except as provided in clause (ii), the Secretary shall attribute payments or gains (as applicable) at the third and fourth tiers of ownership in the same manner as specified in subparagraph (C).
``(ii) FOURTH-TIER OWNERSHIP BY ENTITY.--If the fourth-tier of ownership is that of a fourth-tier entity, the Secretary shall reduce the amount of the payment to be made to the first-tier entity in the amount that the Secretary determines to represent the indirect ownership in the first-tier entity by the fourth-tier entity.''; and
(8) in subsection (i) (as redesignated by paragraph (6)), by striking ``person'' and inserting ``individual or entity''.
(b) Substantive Change; Payments Limited to Active Farmers.--Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308-1) is amended--
(1) by striking the section designation and heading and all that follows through the end of subsection (a) and inserting the following:
``SEC. 1001A. SUBSTANTIVE CHANGE; PAYMENTS LIMITED TO ACTIVE FARMERS.
``(a) Substantive Change.--
``(1) IN GENERAL.--For purposes of the application of limitations under this section, the Secretary shall not approve any change in a farming operation that otherwise would increase the number of individuals or entities (as defined in section 1001(a)) to which the limitations under this section apply, unless the Secretary determines that the change is bona fide and substantive.
``(2) FAMILY MEMBERS.--For the purpose of paragraph (1), the addition of a family member (as defined in subsection (b)(2)(A)) to a farming operation under the criteria established under subsection (b)(3)(B) shall be considered to be a bona fide and substantive change in the farming operation.
``(3) PRIMARY CONTROL.--To prevent a farm from reorganizing in a manner that is inconsistent with the purposes of this Act, the Secretary shall promulgate such regulations as the Secretary determines to be necessary to simultaneously attribute payments for a farming operation to more than 1 individual or entity, including the individual or entity that exercises primary control over the farming operation, including to respond to--
``(A)(i) any instance in which ownership of a farming operation is transferred to an individual or entity under an arrangement that provides for the sale or exchange of any asset or ownership interest in 1 or more entities at less than fair market value; and
``(ii) the transferor is provided preferential rights to repurchase the asset or interest at less than fair market value; or
``(B) a sale or exchange of any asset or ownership interest in 1 or more entities under an arrangement under which rights to exercise control over the asset or interest are retained, directly or indirectly, by the transferor.'';
(2) in subsection (b)--
(A) by striking paragraph (1) and inserting the following:
``(1) IN GENERAL.--To be eligible to receive, directly or indirectly, payments or benefits described as being subject to limitation in subsection (b) through (d) of section 1001 with respect to a particular farming operation, an individual or entity (as defined in section 1001(a)) shall be actively engaged in farming with respect to the farming operation, in accordance with paragraphs (2), (3), and (4).'';
(B) in paragraph (2)--
(i) by striking subparagraphs (A) and (B) and inserting the following:
``(A) DEFINITIONS.--In this paragraph:
``(i) ACTIVE PERSONAL MANAGEMENT.--The term `active personal management' means, with respect to an individual, administrative duties carried out by the individual for a farming operation--
``(I) that are personally provided by the individual on a regular, substantial, and continuing basis; and
``(II) relating to the supervision and direction of--
``(aa) activities and labor involved in the farming operation; and
``(bb) onsite services directly related and necessary to the farming operation.
``(ii) FAMILY MEMBER.--The term `family member', with respect to an individual participating in a farming operation, means an individual who is related to the individual as a lineal ancestor, a lineal descendant, or a sibling (including a spouse of such an individual).
``(B) ACTIVE ENGAGEMENT.--Except as provided in paragraph (3), for purposes of paragraph (1), the following shall apply:
``(i) An individual shall be considered to be actively engaged in farming with respect to a farming operation if--
``(I) the individual makes a significant contribution, as determined under subparagraph (E) (based on the total value of the farming operation), to the farming operation of--
``(aa) capital, equipment, or land; and
``(bb) personal labor and active personal management;
``(II) the share of the individual of the profits or losses from the farming operation is commensurate with the contributions of the individual to the operation; and
``(III) a contribution of the individual is at risk.
``(ii) An entity shall be considered to be actively engaged in farming with respect to a farming operation if--
``(I) the entity makes a significant contribution, as determined under subparagraph (E) (based on the total value of the farming operation), to the farming operation of capital, equipment, or land;
``(II)(aa) the stockholders or members that collectively own at least 51 percent of the combined beneficial interest in the entity each make a significant contribution of personal labor and active personal management to the operation; or
``(bb) in the case of an entity in which all of the beneficial interests are held by family members, any stockholder or member (or household comprised of a stockholder or member and the spouse of the stockholder or member) who owns at least 10 percent of the beneficial interest in the entity makes a significant contribution of personal labor or active personal management; and
``(III) the entity meets the requirements of subclauses (II) and (III) of clause (i).'';
(ii) in subparagraph (C), by striking ``and the standards provided'' and all that follows through ``active personal management'' and inserting ``the partners or members making a significant contribution of personal labor or active personal management and meeting the standards provided in subclauses (II) and (III) of subparagraph (B)(i)''; and
(iii) by adding at the end the following:
``(E) SIGNIFICANT CONTRIBUTION OF PERSONAL LABOR OR ACTIVE PERSONAL MANAGEMENT.--
``(i) IN GENERAL.--Subject to clause (ii), for purposes of subparagraph (B), an individual shall be considered to be providing, on behalf of the individual or an entity, a significant contribution of personal labor or active personal management, if the total contribution of personal labor and active personal management is at least equal to the lesser of--
``(I) 1,000 hours; and
``(II) a period of time equal to--
``(aa) 50 percent of the commensurate share of the total number of hours of personal labor and active personal management required to conduct the farming operation; or
``(bb) in the case of a stockholder or member (or household comprised of a stockholder or member and the spouse of the stockholder or member) that owns at least 10 percent of the beneficial interest in an entity in which all of the beneficial interests are held by family members, 50 percent of the commensurate share of hours of the personal labor and active personal management of all family members required to conduct the farming operation.
``(ii) MINIMUM LABOR HOURS.--For the purpose of clause (i), the minimum number of labor hours required to produce a commodity shall be equal to the number of hours that would be necessary to conduct a farming operation for the production of each commodity that is comparable in size to the commensurate share of an individual or entity in the farming operation for the production of the commodity, based on the minimum number of hours per acre required to produce the commodity in the State
in which the farming operation is located, as determined by the Secretary.'';
(C) in paragraph (3)--
(i) by striking subparagraph (A) and inserting the following:
``(A) LANDOWNERS.--An individual or entity that is a landowner contributing owned land, and that meets the requirements of subclauses (II) and (III) of paragraph (2)(B)(i), if, as determined by the Secretary--
``(i) the landowner share-rents the land at a rate that is usual and customary; and
``(ii) the share received by the landowner is commensurate with the share of the crop or income received as rent.'';
(ii) in subparagraph (B)--
(I) in the first sentence--
(aa) by striking ``persons, a majority of whom are individuals who'' and inserting ``individuals who are family members, or an entity the majority of the stockholders or members of which''; and
(bb) by striking ``standards provided in clauses (ii) and (iii) of paragraph (2)(A)'' and inserting ``requirements of subclauses (II) and (III) of paragraph (2)(B)(i)''; and
(II) by striking the second sentence; and
(iii) in subparagraph (C), by striking ``standards provided in clauses (ii) and (iii) of paragraph (2)(A)'' and inserting ``requirements of subclauses (II) and (III) of paragraph (2)(B)(i), and who was receiving payments from the landowner as a sharecropper prior to the effective date of the Food and Energy Security Act of 2007'';
(D) in paragraph (4)--
(i) in the paragraph heading, by striking ``PERSONS'' and inserting ``INDIVIDUALS AND ENTITIES'';
(ii) in the matter preceding subparagraph (A), by striking ``persons'' and inserting ``individuals and entities''; and
(iii) by striking subparagraph (B) and inserting the following:
``(B) OTHER INDIVIDUALS AND ENTITIES.--Any other individual or entity, or class of individuals or entities, that fails to meet the requirements of paragraphs (2) and (3), as determined by the Secretary.'';
(E) by redesignating paragraphs (5) and (6) as paragraphs (6) and (7), respectively;
(F) by inserting after paragraph (4) the following:
``(5) PERSONAL LABOR AND ACTIVE PERSONAL MANAGEMENT.--No stockholder or member may provide personal labor or active personal management to meet the requirements of this subsection for individuals or entities that collectively receive, directly or indirectly, an amount equal to more than twice the applicable limits under subsections (b), (c), and (d) of section 1001.''; and
(G) in paragraph (6) (as redesignated by subparagraph (E))--
(i) in the first sentence--
(I) by striking ``A person'' and inserting ``An individual or entity''; and
(II) by striking ``such person'' and inserting ``the individual or entity''; and
(ii) by striking the second sentence; and
(3) by adding at the end the following:
``(c) Notification by Entities.--To facilitate the administration of this section, each entity that receives payments or benefits described as being subject to limitation in subsection (b), (c), or (d) of section 1001 with respect to a particular farming operation shall--
``(1) notify each individual or other entity that acquires or holds a beneficial interest in the farming operation of the requirements and limitations under this section; and
``(2) provide to the Secretary, at such times and in such manner as the Secretary may require, the name and social security number of each individual, or the name and taxpayer identification number of each entity, that holds or acquires such a beneficial interest.''.
(c) Schemes or Devices.--Section 1001B of the Food Security Act of 1985 (7 U.S.C. 1308-2) is amended--
(1) by inserting ``(a) In General.--'' before ``If'';
(2) in subsection (a) (as designated by paragraph (1)), by striking ``person'' each place it appears and inserting ``individual or entity''; and
(3) by adding at the end the following:
``(b) Extended Ineligibility.--If the Secretary determines that an individual or entity, for the benefit of the individual or entity or of any other individual or entity, has knowingly engaged in, or aided in the creation of fraudulent documents, failed to disclose material information relevant to the administration of this subtitle requested by the Secretary, or committed other equally serious actions as identified in regulations issued by the Secretary, the Secretary may for a period
not to exceed 5 crop years deny the issuance of payments to the individual or entity.
``(c) Fraud.--If fraud is committed by an individual or entity in connection with a scheme or device to evade, or that has the purpose of evading, section 1001, 1001A, or 1001C, the individual or entity shall be ineligible to receive farm program payments described as being subject to limitation in subsection (b), (c), or (d) of section 1001 for--
``(1) the crop year for which the scheme or device is adopted; and
``(2) the succeeding 5 crop years.
``(d) Joint and Several Liability.--Any individual or entity that participates in a scheme or device described in subsection (a) or (b) shall be jointly and severally liable for any and all overpayments resulting from the scheme or device, and subject to program ineligibility resulting from the scheme or device, regardless of whether a particular individual or entity was a payment recipient.
``(e) Waiver Authority.--
``(1) IN GENERAL.--The Secretary may fully or partially release an individual or entity from liability for repayment of program proceeds under subsection (d) if the individual or entity cooperates with the Department of Agriculture by disclosing a scheme or device to evade section 1001, 1001A, or 1001C or any other provision of law administered by the Secretary that imposes a payment limitation.
``(2) DISCRETION.--The decision of the Secretary under this subsection is vested in the sole discretion of the Secretary.''.
(d) Foreign Individuals and Entities Made Ineligible for Program Benefits.--Section 1001C of the Food Security Act of 1985 (7 U.S.C. 1308-3) is amended--
(1) in the section heading, by striking ``
PERSONS'' and inserting ``

INDIVIDUALS AND ENTITIES'';

(2) in subsection (a), by striking ``person'' each place it appears and inserting ``individual'';
(3) in subsection (b)--
(A) in the subsection heading, by striking ``Corporation or Other''; and
(B) in the first sentence--
(i) by striking ``a corporation or other entity shall be considered a person that'' and inserting ``an entity''; and
(ii) by striking ``persons'' both places it appears and inserting ``individuals''; and
(4) in subsection (c), by striking ``person'' and inserting ``entity or individual''.
(e) Treatment of Multiyear Program Contact Payments.--Section 1001F of the Food Security Act of 1985 (7 U.S.C. 1308-5) is repealed.
(f) Increased Funding for Certain Programs.--In addition to the amounts made available under other provisions of this Act and amendments made by this Act, of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out--
(1) the Farmers' Market Promotion Program established under section 6 of the Farmer-to-Consumer Direct Marketing Act of 1976 (7 U.S.C. 3005) (as amended by section 1812), an additional $5,000,000 for each of fiscal years 2009 through 2011;
(2) the national organic certification cost-share program established under section 10606 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 6523) (as amended by section 1823), an additional $3,000,000 for fiscal year 2012;
(3) the farmland protection program established under subchapter B of chapter 2 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3838h et seq.) (commonly known as the ``Farm and Ranch Lands Protection Program''), an additional--
(A) $17,000,000 for each of fiscal years 2009 and 2010; and
(B) $18,000,000 for fiscal year 2011;
(4) the grassland reserve program established under subchapter C of chapter 2 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3838n et seq.), an additional $45,000,000 for the period of fiscal years 2008 through 2012;
(5) the availability of commodities for the emergency food assistance program under section 27(a) of the Food and Nutrition Act of 2007 (7 U.S.C. 2036(a)) (as amended by section 4110(a)), an additional $63,000,000 for each of fiscal years 2013 through 2017;
(6) the emergency food assistance program under section 204(a)(1) of the Emergency Food Assistance Act of 1983 (7 U.S.C. 7508(a)(1)) (as amended by section 4802(a)), an additional--
(A) $13,000,000 for fiscal year 2009;
(B) $14,000,000 for each of fiscal years 2010 and 2011; and
(C) $15,000,000 for fiscal year 2012;
(7) the improvements to the food and nutrition program made by sections 4103, 4108, 4110(a)(2), 4208, and 4801(g) (and the amendments made by those sections) without regard to section 4908(b);
(8) the beginning farmer and rancher individual development accounts pilot program established under section 333B of the Consolidated Farm and Rural Development Act (as added by section 5201), an additional $5,000,000 for each of fiscal years 2009 through 2012;
(9) the determination on the merits of Pigford claims under section 5402, an additional $20,000,000 for fiscal year 2008 and $40,000,000 for each of fiscal years 2009 and 2010 (including by providing an increased maximum amount under subsection (c)(2) of that section of $200,000,000);
(10) the rural microenterprise assistance program established under section 366 of the Consolidated Farm and Rural Development Act (as added by section 6022), an additional $40,000,000 for fiscal year 2009; and
(11) the beginning farmer and rancher development program established under section 7405 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 3319f) (as amended by section 7309), an additional $15,000,000 for each of fiscal years 2009 through 2012.


(As printed in the Congressional Record for the Senate on Nov 15, 2007.)