§ 1308–3a — Adjusted Gross Income Limitation

(1) In this section, the term “average adjusted gross income”, with respect to a person or legal entity, means the average of the adjusted gross income or comparable measure of the person or legal entity over the 3 taxable years preceding the most immediately preceding complete taxable year, as determined by the Secretary. (2) In the case of a legal entity that is not required to file a Federal income tax return or a person 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), the Secretary shall provide, by regulation, a method for determining the average adjusted gross income of the person or legal entity for purposes of this section. (3) On the request of any person filing a joint tax return, the Secretary shall provide for the allocation of average adjusted gross income among the persons filing the return if— (A) the person provides a certified statement by a certified public accountant or attorney that specifies the method by which the average adjusted gross income would have been declared and reported had the persons filed 2 separate returns; and (B) the Secretary determines that the method described in the statement is consistent with the information supporting the filed joint tax return. (1) Notwithstanding any other provision of law, subject to paragraphs (3) and (4), a person or legal entity shall not be eligible to receive any benefit described in paragraph (2) during a crop, fiscal, or program year, as appropriate, if the average adjusted gross income of the person or legal entity exceeds $900,000. (2) Paragraph (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 et seq., 9081]. (B) A marketing loan gain or loan deficiency payment under subtitle B of title I of the Agricultural Act of 2014 [7 U.S.C. 9031 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 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 et seq.]. (D) A payment or benefit under section 1524(b) of this title. (E) A payment or benefit under section 7333 of this title. (3) The Secretary may waive the limitation established by paragraph (1) with respect to a payment pursuant to a covered benefit described in paragraph (2)(C), on a case-by-case basis, if the Secretary determines that environmentally sensitive land of special significance would be protected as a result of such waiver. (A) In this paragraph: (i) 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 et seq.); (II) a payment or benefit under section 7333 of this title; and (III) a payment or benefit described in paragraph (2)(C) received on or after October 1, 2024. (ii) The term “farming, ranching, or silviculture activities” includes agri-tourism, direct-to-consumer marketing of agricultural products, the sale of agricultural equipment owned by the person or legal entity, and other agriculture-related activities, as determined by the Secretary. (B) In the case of an excepted payment or benefit, the limitation established by paragraph (1) shall not apply to a person 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 or legal entity derives from farming, ranching, or silviculture activities. (1) To comply with subsection (b), at least once every 3 years a person or legal entity shall provide to the Secretary— (A) 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 person or legal entity does not exceed the applicable limitation specified in that subsection; or (B) information and documentation regarding the average adjusted gross income of the person or legal entity through other procedures established by the Secretary. (2) If the Secretary determines that a person or legal entity has failed to comply with this section, the Secretary shall deny the issuance of applicable payments and benefits specified in subsection (b)(2) to the person or legal entity, under similar terms and conditions as described in section 1308–2 of this title. (3) The Secretary shall establish statistically valid procedures under which the Secretary shall conduct targeted audits of such persons or legal entities as the Secretary determines are most likely to exceed the limitations under subsection (b). (d) In the case of a payment or benefit described in subsection (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 who has an average adjusted gross income in excess of the applicable limitation specified in subsection (b).