§1308–3a. Adjusted gross income limitation

(a) Definition of average adjusted gross income

(1) In general

In this section, the term "average adjusted gross income", with respect to an individual or entity (for purposes of this section, as defined in section 1308(e)(2)(A)(ii) of this title), means the 3-year average of the adjusted gross income or comparable measure of the individual or entity over the 3 preceding tax years, as determined by the Secretary.

(2) Special rules for certain individuals and entities

In the case of an entity that is not required to file a Federal income tax return or an individual or entity that did not have taxable income in 1 or more of the tax years used to determine the average under paragraph (1), the Secretary shall provide, by regulation, a method for determining the average adjusted gross income of the individual or entity for purposes of this section.

(b) Limitation

(1) In general

Notwithstanding any other provision of law, an individual or entity shall not be eligible to receive any benefit described in paragraph (2) during a crop year if the average adjusted gross income of the individual or entity exceeds $2,500,000, unless not less than 75 percent of the average adjusted gross income of the individual or entity is derived from farming, ranching, or forestry operations, as determined by the Secretary.

(2) Covered benefits

Paragraph (1) applies with respect to the following:

(A) A direct payment or counter-cyclical payment under subtitle A or C of title I of the Farm Security and Rural Investment Act of 2002 [7 U.S.C. 7911 et seq., 7951 et seq.].

(B) A marketing loan gain or payment described in section 1308(d) of this title.

(C) A payment under any program under title XII of this Act [16 U.S.C. 3801 et seq.] or title II of the Farm Security and Rural Investment Act of 2002.

(c) Certification

To comply with the limitation under subsection (b) of this section, an individual or entity shall provide to the Secretary-

(1) a certification by a certified public accountant or another third party that is acceptable to the Secretary that the average adjusted gross income of the individual or entity does not exceed the limitation specified in that subsection; or

(2) information and documentation regarding the adjusted gross income of the individual or entity through other procedures established by the Secretary.

(d) Commensurate reduction

In the case of a benefit described in subsection (b)(2) of this section made in a crop year to an entity, general partnership, or joint venture, the amount of the benefit shall be reduced by an amount that is commensurate with the direct and indirect ownership interest in the entity, general partnership, or joint venture of each individual who has an average adjusted gross income in excess of the limitation specified in subsection (b) of this section for the average of the 3 preceding crop years.

(e) Effective period

This section shall apply only during the 2003 through 2007 crop years.

(Pub. L. 99–198, title X, §1001D, as added Pub. L. 107–171, title I, §1604(2), May 13, 2002, 116 Stat. 215 .)

References in Text

The Farm Security and Rural Investment Act of 2002, referred to in subsecs. (b)(2)(A), (C), is Pub. L. 107–171, May 13, 2002, 116 Stat. 134 . Subtitles A and C of title I of the Act are classified generally to subchapters I (§7911 et seq.) and III (§7951 et seq.), respectively, of chapter 106 of this title. Title II of the Act made numerous amendments to Title 16, Conservation. For complete classification of this Act to the Code, see Short Title note set out under section 7901 of this title and Tables.

The Food Security Act of 1985, referred to in subsec. (b)(2)(C), is Pub. L. 99–198, Dec. 23, 1985, 99 Stat. 1354 , as amended. Title XII of the Act, popularly known as the "Sodbuster Law", is classified principally to chapter 58 (§3801 et seq.) of Title 16, Conservation. For complete classification of this Act to the Code, see Short Title of 1985 Amendment note set out under section 1281 of this title and Tables.

Codification

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.

Prior Provisions

A prior section 1001D of Pub. L. 99–198 was renumbered section 1001E and is classified to section 1308–4 of this title.