---
kind: "range"
citation: "7 U.S.C. §§ 1308–1308–3a"
title: "7"
from: "1308"
to: "1308–3a"
count: 5
release: "119-102"
url: "https://uscodex.org/usc/7/1308..1308-3a"
---

# §1308. Payment limitations

- (a) **Definitions—** In this section through [section 1308–5 of this title](/usc/7/1308–5.md):
  - (1) **Covered commodity—** The term “covered commodity” has the meaning given that term in section 1111 of the Agricultural Act of 2014 ([7 U.S.C. 9011](/usc/7/9011.md)).
  - (2) **Family member—** The term “family member” means a [person](#a-4) to whom a member in the farming operation is related as lineal ancestor, lineal descendant, sibling, first cousin, niece, nephew, spouse, or otherwise by marriage.
  - (3) **Legal entity—** The term “legal entity” means an entity that is created under Federal or [State](/usc/7/1301.md?p=a-6) law and that—
    - (A) owns land or an [agricultural commodity](/usc/7/5602.md?p=1); or
    - (B) produces an [agricultural commodity](/usc/7/5602.md?p=1).
  - (4) **Person—** The term “person” means a natural person, and does not include a [legal entity](#a-3).
  - (5) **Qualified pass-through entity—** The term “qualified pass-through entity” means—
    - (A) a partnership (within the meaning of subchapter K of [chapter 1](/usc/7/ch1.md) of the Internal Revenue Code of 1986 [[26 U.S.C. 701](/usc/26/701.md) et seq.]);
    - (B) an S [corporation](/usc/7/1502.md?p=b-5) (as defined in [section 1361](/usc/7/1361.md) of that Code);
    - (C) a limited liability company that does not affirmatively elect to be treated as a [corporation](/usc/7/1502.md?p=b-5); and
    - (D) a joint venture or general partnership.
  - (6) **Secretary—** The term “Secretary” means the Secretary of Agriculture.
- (b) **Limitation on payments for covered commodities (other than peanuts)—** Subject to [subsection (i)](#i), the total amount of payments received, directly or indirectly, by a [person](#a-4) or [legal entity](#a-3) (except a [qualified pass-through entity](#a-5)) for any crop year under sections 1116 and 1117 of the Agricultural Act of 2014 ([7 U.S.C. 9016](/usc/7/9016.md), 9017) (other than for peanuts) may not exceed $155,000.
- (c) **Limitation on payments for peanuts—** Subject to [subsection (i)](#i), the total amount of payments received, directly or indirectly, by a [person](#a-4) or [legal entity](#a-3) (except a [qualified pass-through entity](#a-5)) for any crop year under sections 1116 and 1117 of the Agricultural Act of 2014 ([7 U.S.C. 9016](/usc/7/9016.md), 9017) for peanuts may not exceed $155,000.
- (d) **Limitation on applicability—** Nothing in this section authorizes any limitation on any benefit associated with the forfeiture of a [commodity](/usc/7/1a.md?p=9) pledged as collateral for a loan made available under title I of the Agricultural Act of 2014 [[7 U.S.C. 9001](/usc/7/9001.md) et seq.].
- (e) **Attribution of payments—**
  - (1) **In general—** In implementing subsections [(b)](#b) and [(c)](#c) and a program described in paragraphs [(1)(C)](/usc/7/1308–3a.md) and [(2)(B)](/usc/7/1308–3a.md?p=b-2-B) of section 1308–3a(b)[^1] of this title, the [Secretary](#a-6) shall issue such regulations as are necessary to ensure that the total amount of payments are attributed to a [person](#a-4) by taking into account the direct and indirect ownership interests of the [person](#a-4) in a [legal entity](#a-3) that is eligible to receive the payments.
  - (2) **Payments to a person—** Each payment made directly to a [person](#a-4) shall be combined with the pro rata interest of the [person](#a-4) in payments received by a [legal entity](#a-3) in which the [person](#a-4) has a direct or indirect ownership interest unless the payments of the [legal entity](#a-3) have been reduced by the pro rata share of the [person](#a-4).
  - (3) **Payments to a legal entity—**
    - (A) **In general—** Each payment made to a [legal entity](#a-3) shall be attributed to those [persons](#a-4) who have a direct or indirect ownership interest in the [legal entity](#a-3) unless the payment to the [legal entity](#a-3) has been reduced by the pro rata share of the [person](#a-4).
    - (B) **Attribution of payments—**
      - (i) **Payment limits—** Except as provided in [clause (ii)](#e-3-B-ii), payments made to a [legal entity](#a-3) shall not exceed the amounts specified in subsections [(b)](#b) and [(c)](#c).
      - (ii) **Exception for qualified pass-through entities—** Payments made to a [qualified pass-through entity](#a-5) shall not exceed, for each payment specified in subsections [(b)](#b) and [(c)](#c), the amount determined by multiplying the maximum payment amount specified in subsections [(b)](#b) and [(c)](#c) by the number of [persons](#a-4) and [legal entities](#a-3) (other than [qualified pass-through entities](#a-5)) that comprise the ownership of the [qualified pass-through entity](#a-5).
      - (iii) **Reduction—** Payments made to a [legal entity](#a-3) shall be reduced proportionately by an amount that represents the direct or indirect ownership in the [legal entity](#a-3) by any [person](#a-4) or [legal entity](#a-3) that has otherwise exceeded the applicable maximum payment limitation.
  - (4) **4 levels of attribution for embedded legal entities—**
    - (A) **In general—** Attribution of payments made to [legal entities](#a-3) shall be traced through 4 levels of ownership in [legal entities](#a-3).
    - (B) **First level—** Any payments made to a [legal entity](#a-3) (a first-tier [legal entity](#a-3)) that is owned in whole or in part by a [person](#a-4) shall be attributed to the [person](#a-4) in an amount that represents the direct ownership in the first-tier [legal entity](#a-3) by the [person](#a-4).
    - (C) **Second level—**
      - (i) **In general—** Any payments made to a first-tier [legal entity](#a-3) that is owned (in whole or in part) by another [legal entity](#a-3) (a second-tier [legal entity](#a-3)) shall be attributed to the second-tier [legal entity](#a-3) in proportion to the ownership of the second-tier [legal entity](#a-3) in the first-tier [legal entity](#a-3).
      - (ii) **Ownership by a person—** If the second-tier [legal entity](#a-3) is owned (in whole or in part) by a [person](#a-4), the amount of the payment made to the first-tier [legal entity](#a-3) shall be attributed to the [person](#a-4) in the amount that represents the indirect ownership in the first-tier [legal entity](#a-3) by the [person](#a-4).
    - (D) **Third and fourth levels—**
      - (i) **In general—** Except as provided in [clause (ii)](#e-4-D-ii), the [Secretary](#a-6) shall attribute payments at the third and fourth tiers of ownership in the same manner as specified in [subparagraph (C)](#e-4-C).
      - (ii) **Fourth-tier ownership—** If the fourth-tier of ownership is that of a fourth-tier [legal entity](#a-3) and not that of a [person](#a-4), the [Secretary](#a-6) shall reduce the amount of the payment to be made to the first-tier [legal entity](#a-3) in the amount that represents the indirect ownership in the first-tier [legal entity](#a-3) by the fourth-tier [legal entity](#a-3).
- (f) **Special rules—**
  - (1) **Minor children—**
    - (A) **In general—** Except as provided in [subparagraph (B)](#f-1-B), payments received by a child under the age of 18 shall be attributed to the parents of the child.
    - (B) **Regulations—** The [Secretary](#a-6) shall issue regulations specifying the conditions under which payments received by a child under the age of 18 will not be attributed to the parents of the child.
  - (2) **Marketing cooperatives—** Subsections [(b)](#b) and [(c)](#c) shall not apply to a cooperative [association of producers](/usc/7/2302.md?p=2-A) with respect to [commodities](/usc/7/1a.md?p=9) produced by the members of the association that are marketed by the association on behalf of the members of the association but shall apply to the [producers](/usc/7/6802.md?p=4-A-iii-III-bb) as [persons](#a-4).
  - (3) **Trusts and estates—**
    - (A) **In general—** With respect to irrevocable trusts and estates, the [Secretary](#a-6) shall administer this section through [section 1308–5 of this title](/usc/7/1308–5.md) in such manner as the [Secretary](#a-6) determines will ensure the fair and equitable treatment of the beneficiaries of the trusts and estates.
    - (B) **Irrevocable trust—**
      - (i) **In general—** In [order](/usc/7/2902.md?p=10) for a trust to be considered an irrevocable trust, the terms of the trust agreement shall not—
        - (I) allow for modification or termination of the trust by the grantor;
        - (II) allow for the grantor to have any future, contingent, or remainder interest in the corpus of the trust; or
        - (III) except as provided in [clause (ii)](#f-3-B-ii), provide for the transfer of the corpus of the trust to the remainder beneficiary in less than 20 years beginning on the date the trust is established.
      - (ii) **Exception—** [Clause (i)(III)](#f-3-B-i-III) shall not apply in a case in which the transfer is—
        - (I) contingent on the remainder beneficiary achieving at least the age of majority; or
        - (II) contingent on the death of the grantor or income beneficiary.
    - (C) **Revocable trust—** For the purposes of this section through [section 1308–5 of this title](/usc/7/1308–5.md), a revocable trust shall be considered to be the same [person](#a-4) as the grantor of the trust.
  - (4) **Cash rent tenants—**
    - (A) **Definition—** In this paragraph, the term “cash rent tenant” means a [person](#a-4) or [legal entity](#a-3) that rents land—
      - (i) for cash; or
      - (ii) for a crop share guaranteed as to the amount of the [commodity](/usc/7/1a.md?p=9) to be paid in rent.
    - (B) **Restriction—** A [cash rent tenant](#f-4-A) who makes a significant contribution of active personal management, but not of personal labor, with respect to a farming operation shall be eligible to receive a payment described in subsection [(b)](#b) or [(c)](#c) only if the tenant makes a significant contribution of equipment to the farming operation.
  - (5) **Federal agencies—**
    - (A) **In general—** Notwithstanding [subsection (d)](#d), a Federal agency shall not be eligible to receive any payment, benefit, or loan under title I of the Food, Conservation, and Energy Act of 2008 [[7 U.S.C. 8701](/usc/7/8701.md) et seq.], title I of the Agricultural Act of 2014 [[7 U.S.C. 9001](/usc/7/9001.md) et seq.], or title XII of this Act [[16 U.S.C. 3801](/usc/16/3801.md) et seq.].
    - (B) **Land rental—** A lessee of land owned by a Federal agency may receive a payment described in subsection [(b)](#b), [(c)](#c), or [(d)](#d) if the lessee otherwise meets all applicable criteria.
  - (6) **State and local governments—**
    - (A) **In general—** Notwithstanding [subsection (d)](#d), except as provided in [subsection (g)](#g), a [State](/usc/7/1301.md?p=a-6) or local government, or political subdivision or agency of the government, shall not be eligible to receive any payment, benefit, or loan under title I of the Food, Conservation, and Energy Act of 2008 [[7 U.S.C. 8701](/usc/7/8701.md) et seq.], title I of the Agricultural Act of 2014 [[7 U.S.C. 9001](/usc/7/9001.md) et seq.], or title XII of this Act [[16 U.S.C. 3801](/usc/16/3801.md) et seq.].
    - (B) **Tenants—** A lessee of land owned by a [State](/usc/7/1301.md?p=a-6) or local government, or political subdivision or agency of the government, may receive payments described in subsections [(b)](#b), [(c)](#c), and [(d)](#d) if the lessee otherwise meets all applicable criteria.
  - (7) **Changes in farming operations—**
    - (A) **In general—** In the administration of this section through [section 1308–5 of this title](/usc/7/1308–5.md), the [Secretary](#a-6) may not approve any change in a farming operation that otherwise will increase the number of [persons](#a-4) to which the limitations under this section are applied unless the [Secretary](#a-6) determines that the change is bona fide and substantive.
    - (B) **Family members—** The addition of a [family member](#a-2) to a farming operation under the criteria set out in [section 1308–1 of this title](/usc/7/1308–1.md) shall be considered a bona fide and substantive change in the farming operation.
  - (8) **Death of owner—**
    - (A) **In general—** If any ownership interest in land or a [commodity](/usc/7/1a.md?p=9) is transferred as the result of the death of a program participant, the new owner of the land or [commodity](/usc/7/1a.md?p=9) may, if the [person](#a-4) is otherwise eligible to participate in the applicable program, succeed to the [contract](/usc/7/518.md?p=4) of the prior owner and receive payments subject to this section without regard to the amount of payments received by the new owner.
    - (B) **Limitations on prior owner—** Payments made under this paragraph shall not exceed the amount to which the previous owner was entitled to receive under the terms of the [contract](/usc/7/518.md?p=4) at the time of the death of the prior owner.
  - (9) **Administration of reduction—** The [Secretary](#a-6) shall apply any [order](/usc/7/2902.md?p=10) described in section 1614(d)(1) of the Agricultural Act of 2014 ([7 U.S.C. 9097(d)(1)](/usc/7/9097.md?p=d-1)) to payments under sections 1116 and 1117 of that Act ([7 U.S.C. 9016](/usc/7/9016.md), 9017) prior to applying payment limitations under this section.
- (g) **Public schools—**
  - (1) **In general—** Notwithstanding [subsection (f)(6)(A)](#f-6-A), a [State](/usc/7/1301.md?p=a-6) or local government, or political subdivision or agency of the government, shall be eligible, subject to the limitation in [paragraph (2)](#g-2), to receive a payment described in subsection [(b)](#b) or [(c)](#c) for land owned by the [State](/usc/7/1301.md?p=a-6) or local government, or political subdivision or agency of the government, that is used to maintain a public school.
  - (2) **Limitation—**
    - (A) **In general—** For each [State](/usc/7/1301.md?p=a-6), the total amount of payments described in subsections [(b)](#b) and [(c)](#c) that are received collectively by the [State](/usc/7/1301.md?p=a-6) and local government and all political subdivisions or agencies of those governments shall not exceed $500,000.
    - (B) **Exception—** The limitation in [subparagraph (A)](#g-2-A) shall not apply to [States](/usc/7/1301.md?p=a-6) with a population of less than 1,500,000.
- (h) **Time limits; reliance—** Regulations of the [Secretary](#a-6) shall establish time limits for the various steps involved with notice, hearing, decision, and the appeals procedure in [order](/usc/7/2902.md?p=10) to ensure expeditious handling and settlement of payment limitation disputes. Notwithstanding any other provision of law, actions taken by an individual or other entity in good faith on action or advice of an authorized representative of the [Secretary](#a-6) may be accepted as meeting the requirement under this section or [section 1308–1 of this title](/usc/7/1308–1.md), to the extent the [Secretary](#a-6) deems it desirable in [order](/usc/7/2902.md?p=10) to provide fair and equitable treatment.
- (i) **Adjustment—** For the 2025 crop year and each crop year thereafter, the [Secretary](#a-6) shall annually adjust the amounts described in subsections [(b)](#b) and [(c)](#c) for inflation based on the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the [Department](/usc/7/1301.md?p=a-7) of Labor.

# §1308–1. Notification of interests; payments limited to active farmers

- (a) **Notification of interests—** To facilitate administration of [section 1308 of this title](/usc/7/1308.md) and this section, each [person](/usc/7/1301.md?p=a-8) or legal entity receiving payments described in subsections (b) and (c) of [section 1308 of this title](/usc/7/1308.md) as a separate [person](/usc/7/1301.md?p=a-8) or legal entity shall separately provide to the [Secretary](/usc/7/1301.md?p=a-7), at such times and in such manner as prescribed by the [Secretary](/usc/7/1301.md?p=a-7)—
  - (1) the name and social security number of each [person](/usc/7/1301.md?p=a-8), or the name and taxpayer identification number of each legal entity, that holds or acquires an ownership interest in the separate [person](/usc/7/1301.md?p=a-8) or legal entity; and
  - (2) the name and taxpayer identification number of each legal entity in which the [person](/usc/7/1301.md?p=a-8) or legal entity holds an ownership interest.
- (b) **Actively engaged—**
  - (1) **In general—** To be eligible to receive a payment described in subsection (b) or (c) of [section 1308 of this title](/usc/7/1308.md), a [person](/usc/7/1301.md?p=a-8) or legal entity shall be actively engaged in farming with respect to a farming operation as provided in this subsection or [subsection (c)](#c).
  - (2) **Classes actively engaged—** Except as provided in subsections [(c)](#c) and [(d)](#d)—
    - (A) a [person](/usc/7/1301.md?p=a-8) (including a [person](/usc/7/1301.md?p=a-8) participating in a farming operation as a partner in a qualified pass-through entity, a grantor of a revocable trust, or a participant in a similar entity, as determined by the [Secretary](/usc/7/1301.md?p=a-7)) shall be considered to be actively engaged in farming with respect to a farming operation if—
      - (i) the [person](/usc/7/1301.md?p=a-8) makes a significant contribution (based on the total value of the farming operation) to the farming operation of—
        - (I) capital, equipment, or land; and
        - (II) personal labor or active personal management;
      - (ii) the [person](/usc/7/1301.md?p=a-8)’s share of the profits or losses from the farming operation is commensurate with the contributions of the [person](/usc/7/1301.md?p=a-8) to the farming operation; and
      - (iii) the contributions of the [person](/usc/7/1301.md?p=a-8) are at risk;
    - (B) a legal entity that is a [corporation](/usc/7/1502.md?p=b-5), joint stock company, association, limited partnership, charitable organization, or other similar entity determined by the [Secretary](/usc/7/1301.md?p=a-7) (including any such legal entity participating in the farming operation as a partner in a qualified pass-through entity, a grantor of a revocable trust, or as a participant in a similar legal entity as determined by the [Secretary](/usc/7/1301.md?p=a-7)) shall be considered as actively engaged in farming with respect to a farming operation if—
      - (i) the legal entity separately makes a significant contribution (based on the total value of the farming operation) of capital, equipment, or land;
      - (ii) the stockholders or members collectively make a significant contribution of personal labor or active personal management to the operation; and
      - (iii) the standards provided in clauses [(ii)](#b-2-A-ii) and [(iii)](#b-2-A-iii) of subparagraph (A), as applied to the legal entity, are met by the legal entity;
    - (C) if a legal entity that is a qualified pass-through entity or a similar entity, as determined by the [Secretary](/usc/7/1301.md?p=a-7), separately makes a significant contribution (based on the total value of the farming operation involved) of capital, equipment, or land, and the standards provided in clauses [(ii)](#b-2-A-ii) and [(iii)](#b-2-A-iii) of subparagraph (A), as applied to the legal entity, are met by the legal entity, the partners or members making a significant contribution of personal labor or active personal management shall be considered to be actively engaged in farming with respect to the farming operation involved; and
    - (D) in making determinations under this subsection regarding equipment and personal labor, the [Secretary](/usc/7/1301.md?p=a-7) shall take into consideration the equipment and personal labor normally and customarily provided by farm operators in the [area](/usc/7/1471.md?p=5) involved to produce program crops.
- (c) **Special classes actively engaged—**
  - (1) **Landowner—** A [person](/usc/7/1301.md?p=a-8) 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 operation if—
    - (A) the landowner receives rent or income for the use of the land based on the production on the land or the operating results of the operation; and
    - (B) the [person](/usc/7/1301.md?p=a-8) or legal entity meets the standards provided in clauses [(ii)](#b-2-A-ii) and [(iii)](#b-2-A-iii) of subsection (b)(2)(A).
  - (2) **Adult family member—** If a majority of the participants in a farming operation 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](/usc/7/1301.md?p=a-8)—
    - (A) makes a significant contribution, based on the total value of the farming operation, of active personal management or personal labor; and
    - (B) with respect to such contribution, meets the standards provided in clauses [(ii)](#b-2-A-ii) and [(iii)](#b-2-A-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 operation if the contribution meets the standards provided in clauses [(ii)](#b-2-A-ii) and [(iii)](#b-2-A-iii) of subsection (b)(2)(A).
  - (4) **Growers of hybrid seed—** In determining whether a [person](/usc/7/1301.md?p=a-8) or legal entity growing hybrid seed under [contract](/usc/7/518.md?p=4) shall be considered to be actively engaged in farming, the [Secretary](/usc/7/1301.md?p=a-7) shall not take into consideration the existence of a hybrid seed [contract](/usc/7/518.md?p=4).
  - (5) **Custom farming services—**
    - (A) **In general—** A [person](/usc/7/1301.md?p=a-8) or legal entity receiving custom farming services shall be considered separately eligible for payment limitation purposes if the [person](/usc/7/1301.md?p=a-8) or legal entity is actively engaged in farming based on [subsection (b)(2)](#b-2) or [paragraphs (1) through (4)](#1..4) of this subsection.
    - (B) **Prohibition—** No other rules with respect to custom farming shall apply.
  - (6) **Spouse—** If 1 spouse (or estate of a deceased spouse) is determined to be actively engaged, the other spouse shall be determined to have met the requirements of [subsection (b)(2)(A)(i)(II)](#b-2-A-i-II).
- (d) **Classes not actively engaged—**
  - (1) **Cash rent landlord—** A landlord contributing land to a farming operation shall not be considered to be actively engaged in farming with respect to the farming operation if the landlord receives cash rent, or a crop share guaranteed as to the amount of the [commodity](/usc/7/1a.md?p=9) to be paid in rent, for the use of the land.
  - (2) **Other persons and legal entities—** Any other [person](/usc/7/1301.md?p=a-8) or legal entity that the [Secretary](/usc/7/1301.md?p=a-7) determines does not meet the standards described in subsections [(b)(2)](#b-2) and (c) shall not be considered to be actively engaged in farming with respect to a farming operation.

# §1308–2. Denial of program benefits

- (a) **2-year denial of program benefits—** A [person](/usc/7/1301.md?p=a-8) or legal entity shall be ineligible to receive payments specified in subsections (b) and (c) of [section 1308 of this title](/usc/7/1308.md) for the crop year, and the succeeding crop year, in which the [Secretary](/usc/7/1301.md?p=a-7) determines that the [person](/usc/7/1301.md?p=a-8) or legal entity—
  - (1) failed to comply with [section 1308–1(b) of this title](/usc/7/1308–1.md?p=b) and adopted or participated in adopting a scheme or device to evade the application of section [1308](/usc/7/1308.md), [1308–1](/usc/7/1308–1.md), or [1308–3](/usc/7/1308–3.md) of this title; or
  - (2) intentionally concealed the interest of the [person](/usc/7/1301.md?p=a-8) or legal entity in any farm or legal entity engaged in farming.
- (b) **Extended ineligibility—** If the [Secretary](/usc/7/1301.md?p=a-7) determines that a [person](/usc/7/1301.md?p=a-8) or legal entity, for the benefit of the [person](/usc/7/1301.md?p=a-8) or legal entity or the benefit of any other [person](/usc/7/1301.md?p=a-8) or legal entity, has knowingly engaged in, or aided in the creation of a fraudulent document, failed to disclose material information relevant to the administration of [sections 1308 through 1308–5](/usc/7/1308..1308–5.md) of this title, or committed other equally serious actions (as identified in regulations issued by the [Secretary](/usc/7/1301.md?p=a-7)), the [Secretary](/usc/7/1301.md?p=a-7) may for a period not to exceed 5 crop years deny the issuance of payments to the [person](/usc/7/1301.md?p=a-8) or legal entity.
- (c) **Pro rata denial—**
  - (1) **In general—** Payments otherwise owed to a [person](/usc/7/1301.md?p=a-8) or legal entity described in subsections [(a)](#a) or [(b)](#b) shall be denied in a pro rata manner based on the ownership interest of the [person](/usc/7/1301.md?p=a-8) or legal entity in a farm.
  - (2) **Cash rent tenant—** Payments otherwise payable to a [person](/usc/7/1301.md?p=a-8) or legal entity shall be denied in a pro rata manner if the [person](/usc/7/1301.md?p=a-8) or legal entity is a cash rent tenant on a farm owned or under the control of a [person](/usc/7/1301.md?p=a-8) or legal entity with respect to which a determination has been made under subsection [(a)](#a) or [(b)](#b).
- (d) **Joint and several liability—** Any legal entity (including qualified pass-through entities) and any member of any legal entity determined to have knowingly participated in a scheme or device to evade, or that has the purpose of evading, sections [1308](/usc/7/1308.md), [1308–1](/usc/7/1308–1.md), or [1308–3](/usc/7/1308–3.md) of this title shall be jointly and severally liable for any amounts that are payable to the [Secretary](/usc/7/1301.md?p=a-7) as the result of the scheme or device (including amounts necessary to recover those amounts).
- (e) **Release—** The [Secretary](/usc/7/1301.md?p=a-7) may partially or fully release from liability any [person](/usc/7/1301.md?p=a-8) or legal entity who cooperates with the [Secretary](/usc/7/1301.md?p=a-7) in enforcing sections [1308](/usc/7/1308.md), [1308–1](/usc/7/1308–1.md), and [1308–3](/usc/7/1308–3.md) of this title, and this section.

# §1308–3. Foreign persons made ineligible for program benefits


Notwithstanding any other provision of law:

- (a) **In general—** Any [person](/usc/7/1301.md?p=a-8) who is not a citizen of the [United States](/usc/7/1301.md?p=a-5) or an alien lawfully admitted into the [United States](/usc/7/1301.md?p=a-5) for permanent residence under the Immigration and Nationality Act ([8 U.S.C. 1101](/usc/8/1101.md) et seq.) shall be ineligible to receive any type of loans or payments made available under title I of the Food, Conservation, and Energy Act of 2008 [[7 U.S.C. 8701](/usc/7/8701.md) et seq.], title I of the Agricultural Act of 2014 [[7 U.S.C. 9001](/usc/7/9001.md) et seq.], the Agricultural [Market](/usc/7/1301.md?p=b-6-B) Transition Act [[7 U.S.C. 7201](/usc/7/7201.md) et seq.], the [Commodity](/usc/7/1a.md?p=9) Credit [Corporation](/usc/7/1502.md?p=b-5) Charter Act ([15 U.S.C. 714](/usc/15/714.md) et seq.), or subtitle D of title XII of the Food Security Act of 1985 ([16 U.S.C. 3831](/usc/16/3831.md) et seq.),[^1] or under any [contract](/usc/7/518.md?p=4) entered into under title XII [[16 U.S.C. 3801](/usc/16/3801.md) et seq.], with respect to any [commodity](/usc/7/1a.md?p=9) produced, or land set aside from production, on a farm that is owned or operated by such [person](/usc/7/1301.md?p=a-8), unless such [person](/usc/7/1301.md?p=a-8) is an individual who is providing land, capital, and a substantial amount of personal labor in the production of crops on such farm.
- (b) **Corporations or other entities—** For purposes of [subsection (a)](#a), a [corporation](/usc/7/1502.md?p=b-5) or other entity shall be considered a [person](/usc/7/1301.md?p=a-8) that is ineligible for production adjustment payments, [price support program](/usc/7/1428.md?p=k-2) loans, payments, or benefits if more than 10 percent of the beneficial ownership of the entity is held by [persons](/usc/7/1301.md?p=a-8) who are not citizens of the [United States](/usc/7/1301.md?p=a-5) or aliens lawfully admitted into the [United States](/usc/7/1301.md?p=a-5) for permanent residence under the Immigration and Nationality Act [[8 U.S.C. 1101](/usc/8/1101.md) et seq.], unless such [persons](/usc/7/1301.md?p=a-8) provide a substantial amount of personal labor in the production of crops on such farm. Notwithstanding the foregoing provisions of this subsection, with respect to an entity that is determined to be ineligible to receive such payments, loans, or other benefits, the [Secretary](/usc/7/1301.md?p=a-7) may make payments, loans, and other benefits in an amount determined by the [Secretary](/usc/7/1301.md?p=a-7) to be representative of the percentage interests of the entity that is owned by citizens of the [United States](/usc/7/1301.md?p=a-5) and aliens lawfully admitted into the [United States](/usc/7/1301.md?p=a-5) for permanent residence under the Immigration and Nationality Act.
- (c) **Prospective application—** No [person](/usc/7/1301.md?p=a-8) shall become ineligible under this section for production adjustment payments, [price support program](/usc/7/1428.md?p=k-2) loans, payments or benefits as the result of the production of a crop of an [agricultural commodity](/usc/7/5602.md?p=1) planted, or [commodity](/usc/7/1a.md?p=9) program or conservation reserve [contract](/usc/7/518.md?p=4) entered into, before December 22, 1987.

# §1308–3a. Adjusted gross income limitation

- (a) **Definitions—**
  - (1) **Average adjusted gross income—** In this section, the term “average adjusted gross income”, with respect to a [person](/usc/7/1301.md?p=a-8) or legal entity, means the average of the adjusted gross income or comparable measure of the [person](/usc/7/1301.md?p=a-8) or legal entity over the 3 taxable years preceding the most immediately preceding complete taxable year, as determined by the [Secretary](/usc/7/1301.md?p=a-7).
  - (2) **Special rules for certain persons and legal entities—** In the case of a legal entity that is not required to file a Federal income tax return or a [person](/usc/7/1301.md?p=a-8) or legal entity that did not have taxable income in 1 or more of the taxable years used to determine the average under [paragraph (1)](#a-1), the [Secretary](/usc/7/1301.md?p=a-7) shall provide, by regulation, a method for determining the [average adjusted gross income](#a-1) of the [person](/usc/7/1301.md?p=a-8) or legal entity for purposes of this section.
  - (3) **Allocation of income—** On the request of any [person](/usc/7/1301.md?p=a-8) filing a joint tax return, the [Secretary](/usc/7/1301.md?p=a-7) shall provide for the allocation of [average adjusted gross income](#a-1) among the [persons](/usc/7/1301.md?p=a-8) filing the return if—
    - (A) the [person](/usc/7/1301.md?p=a-8) provides a certified statement by a certified public accountant or attorney that specifies the method by which the [average adjusted gross income](#a-1) would have been declared and reported had the [persons](/usc/7/1301.md?p=a-8) filed 2 separate returns; and
    - (B) the [Secretary](/usc/7/1301.md?p=a-7) determines that the method described in the statement is consistent with the information supporting the filed joint tax return.
- (b) **Limitations on commodity and conservation programs—**
  - (1) **Limitation—** Notwithstanding any other provision of law, subject to paragraphs [(3)](#b-3) and [(4)](#b-4), a [person](/usc/7/1301.md?p=a-8) or legal entity shall not be eligible to receive any benefit described in [paragraph (2)](#b-2) during a crop, fiscal, or program year, as appropriate, if the [average adjusted gross income](#a-1) of the [person](/usc/7/1301.md?p=a-8) or legal entity exceeds $900,000.
  - (2) **Covered benefits—** [Paragraph (1)](#b-1) applies with respect to the following:
    - (A) A payment or benefit under subtitle A or E of title I of the Agricultural Act of 2014 [[7 U.S.C. 9011](/usc/7/9011.md) et seq., 9081].
    - (B) A [marketing](/usc/7/1301.md?p=b-6-B) loan gain or loan deficiency payment under subtitle B of title I of the Agricultural Act of 2014 [[7 U.S.C. 9031](/usc/7/9031.md) et seq.].
    - (C) Starting with fiscal year 2015, a payment or benefit under title II of the Agriculture Improvement Act of 2018, title II of the Agricultural Act of 2014, title II of the Farm Security and [Rural](/usc/7/1991.md?p=a-13-B) Investment Act of 2002, title II of the Food, Conservation, and Energy Act of 2008, or title XII of the Food Security Act of 1985 [[16 U.S.C. 3801](/usc/16/3801.md) et seq.].
    - (D) A payment or benefit under [section 1524(b) of this title](/usc/7/1524.md?p=b).
    - (E) A payment or benefit under [section 7333 of this title](/usc/7/7333.md).
  - (3) **Waiver—** The [Secretary](/usc/7/1301.md?p=a-7) may waive the limitation established by [paragraph (1)](#b-1) with respect to a payment pursuant to a covered benefit described in [paragraph (2)(C)](#b-2-C), on a case-by-case basis, if the [Secretary](/usc/7/1301.md?p=a-7) determines that environmentally sensitive land of special significance would be protected as a result of such waiver.
  - (4) **Exception for certain operations—**
    - (A) **Definitions—** In this paragraph:
      - (i) **Excepted payment or benefit—** The term “excepted payment or benefit” means—
        - (I) a payment or benefit under subtitle E of title I of the Agricultural Act of 2014 ([7 U.S.C. 9081](/usc/7/9081.md) et seq.);
        - (II) a payment or benefit under [section 7333 of this title](/usc/7/7333.md); and
        - (III) a payment or benefit described in [paragraph (2)(C)](#b-2-C) received on or after October 1, 2024.
      - (ii) **Farming, ranching, or silviculture activities—** The term “farming, ranching, or silviculture activities” includes agri-tourism, direct-to-consumer [marketing](/usc/7/1301.md?p=b-6-B) of agricultural products, the sale of agricultural equipment owned by the [person](/usc/7/1301.md?p=a-8) or legal entity, and other agriculture-related activities, as determined by the [Secretary](/usc/7/1301.md?p=a-7).
    - (B) **Exception—** In the case of an [excepted payment or benefit](#b-4-A-i), the limitation established by [paragraph (1)](#b-1) shall not apply to a [person](/usc/7/1301.md?p=a-8) or legal entity during a crop, fiscal, or program year, as appropriate, if greater than or equal to 75 percent of the average gross income of the [person](/usc/7/1301.md?p=a-8) or legal entity derives from [farming, ranching, or silviculture activities](#b-4-A-ii).
- (c) **Enforcement—**
  - (1) **In general—** To comply with [subsection (b)](#b), at least once every 3 years a [person](/usc/7/1301.md?p=a-8) or legal entity shall provide to the [Secretary](/usc/7/1301.md?p=a-7)—
    - (A) a certification by a certified public accountant or another third party that is acceptable to the [Secretary](/usc/7/1301.md?p=a-7) that the [average adjusted gross income](#a-1) of the [person](/usc/7/1301.md?p=a-8) or legal entity does not exceed the applicable limitation specified in that subsection; or
    - (B) information and documentation regarding the [average adjusted gross income](#a-1) of the [person](/usc/7/1301.md?p=a-8) or legal entity through other procedures established by the [Secretary](/usc/7/1301.md?p=a-7).
  - (2) **Denial of program benefits—** If the [Secretary](/usc/7/1301.md?p=a-7) determines that a [person](/usc/7/1301.md?p=a-8) or legal entity has failed to comply with this section, the [Secretary](/usc/7/1301.md?p=a-7) shall deny the issuance of applicable payments and benefits specified in [subsection (b)(2)](#b-2) to the [person](/usc/7/1301.md?p=a-8) or legal entity, under similar terms and conditions as described in [section 1308–2 of this title](/usc/7/1308–2.md).
  - (3) **Audit—** The [Secretary](/usc/7/1301.md?p=a-7) shall establish statistically valid procedures under which the [Secretary](/usc/7/1301.md?p=a-7) shall conduct targeted audits of such [persons](/usc/7/1301.md?p=a-8) or legal entities as the [Secretary](/usc/7/1301.md?p=a-7) determines are most likely to exceed the limitations under [subsection (b)](#b).
- (d) **Commensurate reduction—** In the case of a payment or benefit described in [subsection (b)(2)](#b-2) made in a crop, program, or fiscal year, as appropriate, to an entity, the amount of the payment or benefit shall be reduced by an amount that is commensurate with the direct and indirect ownership interest in the entity of each [person](/usc/7/1301.md?p=a-8) who has an [average adjusted gross income](#a-1) in excess of the applicable limitation specified in [subsection (b)](#b).