Title 7 — AgricultureRelease 119-73
§1308–1 Notification of interests; payments limited to active farmers
Title 7 › Chapter CHAPTER 35— - AGRICULTURAL ADJUSTMENT ACT OF 1938 › Subchapter SUBCHAPTER II— - LOANS, PARITY PAYMENTS, CONSUMER SAFEGUARDS, MARKETING QUOTAS, AND MARKETING CERTIFICATES › Part Part A— - Definitions, Loans, Parity Payments, and Consumer Safeguards › § 1308–1
Summary
People or companies that get the payments must tell the Secretary who owns them and what companies they own. They must give the name and Social Security number for each person owner, or the name and taxpayer ID number for each company owner. They must also give the name and taxpayer ID number of any company they own. The Secretary will tell them when and how to send this information. To get a payment, a person or company must be actively engaged in the farming operation. That usually means making a significant contribution of capital, equipment, or land and also providing personal work or active management. The share of profits or losses must match those contributions, and the contributions must be at risk. Corporations or other legal entities must separately supply capital and have their owners collectively provide labor or management. Partners in pass-through entities count if they make the required contributions. Landowners count if their rent or income is based on production or operating results and they meet the labor/management and profit/at-risk rules. If most participants are family, an adult family member who makes a significant management or labor contribution counts. Sharecroppers who provide significant labor count. Hybrid seed contracts do not affect the test. People using custom farming services can be separately eligible if they meet the rules; no other custom-farming rules apply. If one spouse is found active, the other spouse is treated as meeting the personal labor part. A landlord who only gets cash rent or a fixed crop-share is not considered actively engaged. The Secretary can decide if others do not meet these standards.
Full Legal Text
Title 7, §1308–1
Agriculture — Source: USLM XML via OLRC
(a)To facilitate administration of section 1308 of this title and this section, each person or legal entity receiving payments described in subsections (b) and (c) of section 1308 of this title as a separate person or legal entity shall separately provide to the Secretary, at such times and in such manner as prescribed by the Secretary—
(1)the name and social security number of each person, or the name and taxpayer identification number of each legal entity, that holds or acquires an ownership interest in the separate person or legal entity; and
(2)the name and taxpayer identification number of each legal entity in which the person or legal entity holds an ownership interest.
(b)(1)To be eligible to receive a payment described in subsection (b) or (c) of section 1308 of this title, a person or legal entity shall be actively engaged in farming with respect to a farming operation as provided in this subsection or subsection (c).
(2)Except as provided in subsections (c) and (d)—
(A)a person (including a person 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) shall be considered to be actively engaged in farming with respect to a farming operation if—
(i)the person 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’s share of the profits or losses from the farming operation is commensurate with the contributions of the person to the farming operation; and
(iii)the contributions of the person are at risk;
(B)a legal entity that is a corporation, joint stock company, association, limited partnership, charitable organization, or other similar entity determined by the Secretary (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) 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) and (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, 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) and (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 shall take into consideration the equipment and personal labor normally and customarily provided by farm operators in the area involved to produce program crops.
(c)(1)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 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 or legal entity meets the standards provided in clauses (ii) and (iii) of subsection (b)(2)(A).
(2)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—
(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) and (iii) of subsection (b)(2)(A).
(3)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) and (iii) of subsection (b)(2)(A).
(4)In determining whether a person or legal entity growing hybrid seed under contract shall be considered to be actively engaged in farming, the Secretary shall not take into consideration the existence of a hybrid seed contract.
(5)(A)A person or legal entity receiving custom farming services shall be considered separately eligible for payment limitation purposes if the person or legal entity is actively engaged in farming based on subsection (b)(2) or paragraphs (1) through (4) of this subsection.
(B)No other rules with respect to custom farming shall apply.
(6)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).
(d)(1)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 to be paid in rent, for the use of the land.
(2)Any other person or legal entity that the Secretary determines does not meet the standards described in subsections (b)(2) and (c) shall not be considered to be actively engaged in farming with respect to a farming operation.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification Pub. L. 110–234 and Pub. L. 110–246 made identical
Amendments
to this section. The
Amendments
by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. Section was enacted as part of the Food Security Act of 1985, and not as part of the Agricultural Adjustment Act of 1938 which comprises this chapter.
Amendments
2025—Subsec. (b)(2)(A), (B). Pub. L. 119–21, § 10306(c)(1), substituted “a qualified pass-through entity” for “a general partnership, a participant in a joint venture” in introductory provisions. Subsec. (b)(2)(C). Pub. L. 119–21, § 10306(c)(2), substituted “a qualified pass-through entity or a similar entity” for “a general partnership, joint venture, or similar entity”. 2008—Pub. L. 110–246, § 1603(c)(1), substituted “Notification of interests” for “Prevention of creation of entities to qualify as separate persons” in section catchline. Subsec. (a). Pub. L. 110–246, § 1603(c)(2), added subsec. (a) and struck out former subsec. (a) which related to prevention of use of multiple legal entities to avoid effective application of payment limitations under section 1308 of this title. Subsecs. (b) to (d). Pub. L. 110–246, § 1603(d), added subsecs. (b) to (d) and struck out former subsec. (b) which related to requirement that a person be an individual or entity described in former section 1308(e)(2)(A) of this title and actively engaged in farming with respect to a particular farming operation to be separately eligible for farm program payments with respect to that operation. 2002—Subsec. (a)(1). Pub. L. 107–171, § 1603(c)(1), substituted “section 1308(e)(2)(A) of this title” for “section 1308(5)(B)(i) of this title” and “section 1308(e)(2)(A)(ii) of this title” for “section 1308(5)(B)(i)(II) of this title”. Subsec. (b)(1). Pub. L. 107–171, § 1603(c)(1)(B), substituted “section 1308(e)(2)(A) of this title” for “section 1308(5)(B)(i) of this title”. Subsec. (b)(2)(B). Pub. L. 107–171, § 1603(c)(1)(A), substituted “section 1308(e)(2)(A)(ii) of this title” for “section 1308(5)(B)(i)(II) of this title”. 1996—Subsec. (a)(1). Pub. L. 104–127, § 115(c)(1)(A), struck out “under the Agricultural Act of 1949 (7 U.S.C. 1421 et seq.)” before “may not also hold”. Subsec. (b)(1). Pub. L. 104–127, § 115(c)(1)(B), struck out “under the Agricultural Act of 1949” before “with respect to a particular”. 1991—Subsec. (a)(2). Pub. L. 102–237 struck out “0 to” after “less than”. 1990—Subsec. (a)(2). Pub. L. 101–624, § 1111(f), substituted “0 to 10 percent” for “10 percent”. Subsec. (b)(6). Pub. L. 101–624, § 1111(d), added par. (6). 1987—Subsec. (b). Pub. L. 100–203, § 1302, added subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date
of 2008 AmendmentAmendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an
Effective Date
note under section 8701 of this title.
Effective Date
of 1990 AmendmentAmendment by Pub. L. 101–624 effective beginning with 1991 crop of an agricultural commodity, with provision for prior crops, see section 1171 of Pub. L. 101–624, set out as a note under section 1421 of this title.
Effective Date
of 1987 Amendment Pub. L. 100–203, title I, § 1302, Dec. 22, 1987, 101 Stat. 1330–14, provided that the amendment made by that section is effective beginning with the 1989 crops.
Effective Date
Pub. L. 100–203, title I, § 1301(a), Dec. 22, 1987, 101 Stat. 1330–12, provided that this section is effective beginning with the 1989 crops. Transition Provisions Section, as in effect on Sept. 30, 2007, to continue to apply with respect to the 2007 and 2008 crops of any covered commodity or peanuts, see section 1603(h) of Pub. L. 110–246, set out as a note under section 1308 of this title. Rulemaking Related to Significant Contribution for Active Personal Management Pub. L. 113–79, title I, § 1604, Feb. 7, 2014, 128 Stat. 706, provided that: “(a)
Regulations
Required.—Within 180 days after the date of the enactment of this Act [Feb. 7, 2014], the Secretary shall promulgate, with an opportunity for notice and comment,
Regulations
—“(1) to define the term ‘significant contribution of active personal management’ for purposes of section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308–1); and “(2) if the Secretary determines it is appropriate, to establish limits for varying types of farming operations on the number of individuals who may be considered to be actively engaged in farming with respect to the farming operation when a significant contribution of active personal management is the basis used to meet the requirement of being actively engaged in farming under section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308–1) by an individual or entity. “(b) Considerations.—In promulgating the
Regulations
required under subsection (a), the Secretary shall consider—“(1) the size, nature, and management requirements of each type of farming operation; “(2) the changing nature of active personal management due to advancements of farming operations; and “(3) the degree to which the
Regulations
promulgated pursuant to subsection (a) will adversely impact the long-term viability of the farming operation. “(c) Family Farms.—The Secretary shall not apply the
Regulations
promulgated pursuant to subsection (a) to individuals or entities comprised solely of family members (as that term is defined in section 1001(a)(2) of the Food Security Act of 1985 (7 U.S.C. 1308(a)(2))). “(d) Monitoring.—The
Regulations
promulgated pursuant to subsection (a) shall include a plan for monitoring the status of compliance reviews for whether a person or entity is in compliance with the
Regulations
. “(e) Paperwork Reduction.—In order to conserve Federal resources and prevent unnecessary paperwork burdens, the Secretary shall ensure that any additional paperwork required as a result of the
Regulations
promulgated pursuant to subsection (a) be limited to those persons who are subject to such
Regulations
. “(f) Relation to Other Requirements.—Nothing in this section may be construed to authorize the Secretary to alter, directly or indirectly, existing
Regulations
for other requirements in section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308–1). “(g)
Effective Date
.—The requirements of any regulation promulgated pursuant to this section shall apply beginning with the 2015 crop year.”
Reference
Citations & Metadata
Citation
7 U.S.C. § 1308–1
Title 7 — Agriculture
Last Updated
Apr 6, 2026
Release point: 119-73