Payment Limitation and Payment Eligibility

Published date19 November 2020
Citation85 FR 73601
Record Number2020-25456
SectionRules and Regulations
CourtCommodity Credit Corporation
Federal Register, Volume 85 Issue 224 (Thursday, November 19, 2020)
[Federal Register Volume 85, Number 224 (Thursday, November 19, 2020)]
                [Rules and Regulations]
                [Pages 73601-73603]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-25456]
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                DEPARTMENT OF AGRICULTURE
                Commodity Credit Corporation
                7 CFR Part 1400
                [Docket ID CCC-2019-0007]
                RIN 0560-AI49
                Payment Limitation and Payment Eligibility
                AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.
                ACTION: Correcting amendments.
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                [[Page 73602]]
                SUMMARY: The Farm Service Agency (FSA) on behalf of the Commodity
                Credit Corporation (CCC) amended its regulations concerning payment
                limitation and eligibility through a final rule published in the
                Federal Register on August 21, 2020. This correction restores the
                previous definitions of ``active personal management,'' ``significant
                contribution,'' ``significant contribution of active personal
                management,'' and ``significant contribution of the combination of
                active personal labor and active personal management.''
                DATES: Effective: November 19, 2020.
                FOR FURTHER INFORMATION CONTACT: Paul Hanson; telephone: (202) 720-
                4189; email: [email protected]. Persons with disabilities who
                require alternative means for communication should contact the USDA
                Target Center at (202) 720-2600 (voice).
                SUPPLEMENTARY INFORMATION: This document corrects certain sections of
                the regulations in 7 CFR part 1400, which were implemented in the final
                rule that was published in the Federal Register on August 24, 2020 (85
                FR 52033-52041).
                 The final rule amended the definitions in 7 CFR 1400.3 for ``active
                personal management'' and ``significant contribution,'' which apply
                throughout part 1400. It also removed and reserved Sec. 1400.601,
                which contained definitions of ``active personal management,''
                ``significant contribution of active personal management,'' and
                ``significant contribution of the combination of active personal labor
                and active personal management'' that applied only to Subpart G, which
                provides additional payment eligibility provisions for joint operations
                and legal entities comprised of non-family members or partners,
                stockholders, or persons with an ownership interest in the farming
                operation. The changes were intended to provide consistency in the
                definitions of the terms used throughout part 1400.
                 After publication of the rule, stakeholders notified FSA of
                concerns regarding potential non-intended, adverse effects to farming
                operations comprised solely of family members. In streamlining the
                definitions for consistency, these revised definitions were
                inadvertently made applicable to farming operations solely owned by
                family members. This was not the intent of this rule change, and as
                revised, the definitions were more restrictive than they needed to be
                in order to provide intended consistency in the rule. Those more
                restrictive definitions were not intended to apply to farm operations
                comprised or owned solely of family members. Therefore, this document
                restores Sec. 400.601 and the previous the definitions of ``active
                personal management'' and ``significant contribution'' in Sec. 1400.3
                that were applicable prior to publication of the final rule on August
                24, 2020. The more restrictive definitions described in Sec. 1400.601
                apply only to farming operations comprised of non-family members that
                are subject to a limit in the number of farm managers seeking to
                qualify for actively engaged in farming based on a contribution of
                active personal management alone.
                List of Subjects in 7 CFR Part 1400
                 Agriculture, Grant programs-agriculture, Loan programs-agriculture,
                Natural resources, Price support programs.
                 Accordingly, 7 CFR part 1400 is corrected by making the following
                correcting amendments:
                PART 1400--PAYMENT LIMITATION AND PAYMENT ELIGIBILITY
                0
                1. The authority citation for part 1400 continues to read as follows:
                 Authority: 7 U.S.C. 1308, 1308-1, 1308-2, 1308-3, 1308-3a, 1308-
                4, and 1308-5; and Title I, Pub. L. 115-123.
                Subpart A--General Provisions
                0
                2. Amend Sec. 1400.3 in paragraph (b) as follows:
                0
                a. Remove the first occurrence of the definition of ``Active personal
                management''; and
                0
                b. Revise the definition of ``Significant contribution''.
                 The revision reads as follows.
                Sec. 1400.3 Definitions.
                * * * * *
                 (b) * * *
                 Significant contribution means the provision of the following to a
                farming operation:
                 (i)(A) For land, capital, or equipment contributed independently by
                a person or legal entity, a contribution that has a value at least
                equal to 50 percent of the person's or legal entity's commensurate
                share of the total:
                 (1) Value of the capital necessary to conduct the farming
                operation;
                 (2) Rental value of the land necessary to conduct the farming
                operation; or
                 (3) Rental value of the equipment necessary to conduct the farming
                operation; or
                 (B) If the contribution by a person or legal entity consists of any
                combination of land, capital, and equipment, such combined contribution
                must have a value at least equal to 30 percent of the person's or legal
                entity's commensurate share of the total value of the farming
                operation;
                 (ii) For active personal labor, an amount contributed by a person
                to the farming operation that is described by the smaller of the
                following:
                 (A) 1,000 hours per calendar year; or
                 (B) 50 percent of the total hours that would be necessary to
                conduct a farming operation that is comparable in size to such person's
                or legal entity's commensurate share in the farming operation;
                 (iii) With respect to active personal management, activities that
                are critical to the profitability of the farming operation, taking into
                consideration the person's or legal entity's commensurate share in the
                farming operation; and
                 (iv) With respect to a combination of active personal labor and
                active personal management, when neither contribution by itself meets
                the requirement of paragraphs (ii) and (iii) of this definition, a
                combination of active personal labor and active personal management
                that, when made together, results in a critical impact on the
                profitability of the farming operation in an amount at least equal to
                either the significant contribution of active personal labor or active
                personal management as defined in paragraphs (ii) and (iii) of this
                definition.
                * * * * *
                Subpart G--Additional Payment Eligibility Provisions for Joint
                Operations and Legal Entities Comprised of Non-Family Members or
                Partners, Stockholders, or Persons With an Ownership Interest in
                the Farming Operation
                0
                3. Add Sec. 1400.601 to read as follows.
                Sec. 1400.601 Definitions.
                 (a) The terms defined in Sec. 1400.3 are applicable to this
                subpart and all documents issued in accordance with this part, except
                as otherwise provided in this section.
                 (b) The following definitions are also applicable to this subpart:
                 Active personal management means personally providing and
                participating in management activities considered critical to the
                profitability of the farming operation and performed under one or more
                of the following categories:
                 (i) Capital, which includes:
                 (A) Arranging financing and managing capital;
                 (B) Acquiring equipment;
                 (C) Acquiring land and negotiating leases;
                 (D) Managing insurance; and
                [[Page 73603]]
                 (E) Managing participation in USDA programs;
                 (ii) Labor, which includes hiring and managing of hired labor; and
                 (iii) Agronomics and marketing, which includes:
                 (A) Selecting crops and making planting decisions;
                 (B) Acquiring and purchasing crop inputs;
                 (C) Managing crops (that is, whatever managerial decisions are
                needed with respect to keeping the growing crops living and healthy--
                soil fertility and fertilization, weed control, insect control,
                irrigation if applicable) and making harvest decisions; and
                 (D) Pricing and marketing of crop production.
                 Significant contribution of active personal management means active
                personal management activities performed by a person, with a direct or
                indirect ownership interest in the farming operation, on a regular,
                continuous, and substantial basis to the farming operation, and meets
                at least one of the following to be considered significant:
                 (i) Performs at least 25 percent of the total management hours
                required for the farming operation on an annual basis; or
                 (ii) Performs at least 500 hours of management annually for the
                farming operation.
                 Significant contribution of the combination of active personal
                labor and active personal management means a contribution of a
                combination of active personal labor and active personal management
                that:
                 (i) Is critical to the profitability of the farming operation;
                 (ii) Is performed on a regular, continuous, and substantial basis;
                and
                 (iii) Meets the following required number of hours:
                Table 1 to Paragraph (iii) of the Definition of Significant Contribution
                 of the Combination of Active Personal Labor and Active Personal
                 Management
                ------------------------------------------------------------------------
                 Combination of active personal labor and active personal management
                 minimum requirement for a significant contribution
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                 Meets the minimum
                 threshold for
                 Management contribution in Labor contribution significant
                 hours in hours contribution, in
                 hours
                ------------------------------------------------------------------------
                475........................... 75 550
                450........................... 100 550
                425........................... 225 650
                400........................... 250 650
                375........................... 375 750
                350........................... 400 750
                325........................... 425 750
                300........................... 550 850
                275........................... 575 850
                250........................... 600 850
                225........................... 625 850
                200........................... 650 850
                175........................... 675 850
                150........................... 800 950
                125........................... 825 950
                100........................... 850 950
                75............................ 875 950
                50............................ 900 950
                25............................ 925 950
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                Richard Fordyce,
                Administrator, Farm Service Agency.
                Robert Stephenson,
                Executive Vice President, Commodity Credit Corporation.
                [FR Doc. 2020-25456 Filed 11-18-20; 8:45 am]
                BILLING CODE 3410-05-P
                

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