View all text of Part A [§ 1301 - § 1310a]

§ 1308. Payment limitations
(a) Definitions
In this section through section 1308–5 of this title:
(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).

(2) Family member

The term “family member” means a person 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 law and that—
(A) owns land or an agricultural commodity; or
(B) produces an agricultural commodity.
(4) Person

The term “person” means a natural person, and does not include a legal entity.

(5) Secretary

The term “Secretary” means the Secretary of Agriculture.

(b) Limitation on payments for covered commodities (other than peanuts)

The total amount of payments received, directly or indirectly, by a person or legal entity (except a joint venture or general partnership) for any crop year under sections 1116 and 1117 of the Agricultural Act of 2014 (7 U.S.C. 9016, 9017) (other than for peanuts) may not exceed $125,000.

(c) Limitation on payments for peanuts

The total amount of payments received, directly or indirectly, by a person or legal entity (except a joint venture or general partnership) for any crop year under sections 1116 and 1117 of the Agricultural Act of 2014 (7 U.S.C. 9016, 9017) for peanuts may not exceed $125,000.

(d) Limitation on applicability

Nothing in this section authorizes any limitation on any benefit associated with the forfeiture of a commodity pledged as collateral for a loan made available under subtitle B of title I of the Agricultural Act of 2014 [7 U.S.C. 9031 et seq.] or title I of the Agricultural Act of 2014 [7 U.S.C. 9001 et seq.].

(e) Attribution of payments
(1) In general

In implementing subsections (b) and (c) and a program described in paragraphs (1)(C) and (2)(B) of section 1308–3a(b) 1

1 See References in Text note below.
of this title, the Secretary shall issue such regulations as are necessary to ensure that the total amount of payments are attributed to a person by taking into account the direct and indirect ownership interests of the person in a legal entity that is eligible to receive the payments.

(2) Payments to a person

Each payment made directly to a person shall be combined with the pro rata interest of the person in payments received by a legal entity in which the person has a direct or indirect ownership interest unless the payments of the legal entity have been reduced by the pro rata share of the person.

(3) Payments to a legal entity
(A) In general

Each payment made to a legal entity shall be attributed to those persons who have a direct or indirect ownership interest in the legal entity unless the payment to the legal entity has been reduced by the pro rata share of the person.

(B) Attribution of payments
(i) Payment limits

Except as provided in clause (ii), payments made to a legal entity shall not exceed the amounts specified in subsections (b) and (c).

(ii) Exception for joint ventures and general partnerships

Payments made to a joint venture or a general partnership shall not exceed, for each payment specified in subsections (b) and (c), the amount determined by multiplying the maximum payment amount specified in subsections (b) and (c) by the number of persons and legal entities (other than joint ventures and general partnerships) that comprise the ownership of the joint venture or general partnership.

(iii) Reduction

Payments made to a legal entity shall be reduced proportionately by an amount that represents the direct or indirect ownership in the legal entity by any person or legal entity 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 shall be traced through 4 levels of ownership in legal entities.

(B) First level

Any payments made to a legal entity (a first-tier legal entity) that is owned in whole or in part by a person shall be attributed to the person in an amount that represents the direct ownership in the first-tier legal entity by the person.

(C) Second level
(i) In general

Any payments made to a first-tier legal entity that is owned (in whole or in part) by another legal entity (a second-tier legal entity) shall be attributed to the second-tier legal entity in proportion to the ownership of the second-tier legal entity in the first-tier legal entity.

(ii) Ownership by a person

If the second-tier legal entity is owned (in whole or in part) by a person, the amount of the payment made to the first-tier legal entity shall be attributed to the person in the amount that represents the indirect ownership in the first-tier legal entity by the person.

(D) Third and fourth levels
(i) In general

Except as provided in clause (ii), the Secretary shall attribute payments at the third and fourth tiers of ownership in the same manner as specified in subparagraph (C).

(ii) Fourth-tier ownership

If the fourth-tier of ownership is that of a fourth-tier legal entity and not that of a person, the Secretary shall reduce the amount of the payment to be made to the first-tier legal entity in the amount that represents the indirect ownership in the first-tier legal entity by the fourth-tier legal entity.

(f) Special rules
(1) Minor children
(A) In general

Except as provided in subparagraph (B), payments received by a child under the age of 18 shall be attributed to the parents of the child.

(B) Regulations

The Secretary 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) and (c) shall not apply to a cooperative association of producers with respect to commodities 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 as persons.

(3) Trusts and estates
(A) In general

With respect to irrevocable trusts and estates, the Secretary shall administer this section through section 1308–5 of this title in such manner as the Secretary determines will ensure the fair and equitable treatment of the beneficiaries of the trusts and estates.

(B) Irrevocable trust
(i) In general
In order 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), 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) 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, a revocable trust shall be considered to be the same person as the grantor of the trust.

(4) Cash rent tenants
(A) Definition
In this paragraph, the term “cash rent tenant” means a person or legal entity that rents land—
(i) for cash; or
(ii) for a crop share guaranteed as to the amount of the commodity to be paid in rent.
(B) Restriction

A cash rent tenant 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) or (c) only if the tenant makes a significant contribution of equipment to the farming operation.

(5) Federal agencies
(A) In general

Notwithstanding subsection (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 et seq.], title I of the Agricultural Act of 2014 [7 U.S.C. 9001 et seq.], or title XII of this Act [16 U.S.C. 3801 et seq.].

(B) Land rental

A lessee of land owned by a Federal agency may receive a payment described in subsection (b), (c), or (d) if the lessee otherwise meets all applicable criteria.

(6) State and local governments
(A) In general

Notwithstanding subsection (d), except as provided in subsection (g), a State 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 et seq.], title I of the Agricultural Act of 2014 [7 U.S.C. 9001 et seq.], or title XII of this Act [16 U.S.C. 3801 et seq.].

(B) Tenants

A lessee of land owned by a State or local government, or political subdivision or agency of the government, may receive payments described in subsections (b), (c), and (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, the Secretary may not approve any change in a farming operation that otherwise will increase the number of persons to which the limitations under this section are applied unless the Secretary determines that the change is bona fide and substantive.

(B) Family members

The addition of a family member to a farming operation under the criteria set out in section 1308–1 of this title 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 is transferred as the result of the death of a program participant, the new owner of the land or commodity may, if the person is otherwise eligible to participate in the applicable program, succeed to the contract 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 at the time of the death of the prior owner.

(9) Administration of reduction

The Secretary shall apply any order described in section 1614(d)(1) of the Agricultural Act of 2014 (7 U.S.C. 9097(d)(1)) to payments under sections 1116 and 1117 of that Act (7 U.S.C. 9016, 9017) prior to applying payment limitations under this section.

(g) Public schools
(1) In general

Notwithstanding subsection (f)(6)(A), a State or local government, or political subdivision or agency of the government, shall be eligible, subject to the limitation in paragraph (2), to receive a payment described in subsection (b) or (c) for land owned by the State 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, the total amount of payments described in subsections (b) and (c) that are received collectively by the State and local government and all political subdivisions or agencies of those governments shall not exceed $500,000.

(B) Exception

The limitation in subparagraph (A) shall not apply to States with a population of less than 1,500,000.

(h) Time limits; reliance

Regulations of the Secretary shall establish time limits for the various steps involved with notice, hearing, decision, and the appeals procedure in order 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 may be accepted as meeting the requirement under this section or section 1308–1 of this title, to the extent the Secretary deems it desirable in order to provide fair and equitable treatment.

(Pub. L. 99–198, title X, § 1001, Dec. 23, 1985, 99 Stat. 1444; Pub. L. 99–500, § 108(a), Oct. 18, 1986, 100 Stat. 1783–346, and Pub. L. 99–591, § 108(a), Oct. 30, 1986, 100 Stat. 3341–346; Pub. L. 100–71, title I, July 11, 1987, 101 Stat. 428; Pub. L. 100–203, title I, §§ 1301(a)(1), (2), 1303, 1305(c), 1307, Dec. 22, 1987, 101 Stat. 1330–12, 1330–16, 1330–18, 1330–19; Pub. L. 101–217, §§ 1, 2, Dec. 11, 1989, 103 Stat. 1857; Pub. L. 101–624, title XI, § 1111(a), (c), (e), Nov. 28, 1990, 104 Stat. 3497–3499; Pub. L. 102–237, title I, § 118(b), Dec. 13, 1991, 105 Stat. 1841; Pub. L. 103–66, title I, § 1101(b)(3)(A), Aug. 10, 1993, 107 Stat. 314; Pub. L. 104–127, title I, § 115(b), Apr. 4, 1996, 110 Stat. 902; Pub. L. 107–171, title I, § 1603(a), (b), May 13, 2002, 116 Stat. 213, 214; Pub. L. 110–234, title I, § 1603(a), (b), May 22, 2008, 122 Stat. 1002; Pub. L. 110–246, § 4(a), title I, § 1603(a), (b), June 18, 2008, 122 Stat. 1664, 1730; Pub. L. 113–79, title I, §§ 1603(a)–(b)(2), 1605(f), Feb. 7, 2014, 128 Stat. 705, 706, 708; Pub. L. 115–334, title I, § 1703(a), Dec. 20, 2018, 132 Stat. 4525.)