HB2156 amends Section 1001D(b) of the Food Security Act of 1985 to add an exception to existing payment limitations: a person or legal entity whose average adjusted gross income (AGI) is at least 75% derived from farming, ranching, or silviculture activities would be exempt from those limits for certain disaster-related payments and benefits. The bill explicitly lists activities (agri‑tourism, direct‑to‑consumer marketing, sale of agricultural equipment owned by the person/entity) as qualifying farm income and gives the Secretary of Agriculture authority to identify other agricultural‑related activities.
Why this matters: the change removes a statutory cap designed to limit subsidy concentration for a subset of agriculturally dependent households and entities, potentially enlarging disaster‑assistance outlays and increasing USDA’s duty to verify income origins. The provision alters who can access exception payments under two cited authorities (7 U.S.C. 9081 et seq. and 7 U.S.C. 7333), creating practical, budgetary, and compliance implications for producers, tax reporting, and program integrity systems.
At a Glance
What It Does
The bill inserts a new paragraph into 7 U.S.C. 1308–3a(b) exempting persons or entities from a statutory payment limitation when at least 75% of their average adjusted gross income comes from farming, ranching, or silviculture‑related activities, as defined and expanded by the Secretary. The exemption applies to payments identified in the bill’s statutory cross‑references.
Who It Affects
Directly affects producers and farm entities whose livelihoods are primarily agricultural (including those with agri‑tourism or direct‑to‑consumer sales), USDA program administrators who verify income eligibility, and federal budgets that fund the cited disaster‑assistance programs. Tax professionals and compliance officers will be involved in income verification.
Why It Matters
The bill shifts the line between 'farm' and 'nonfarm' income for program eligibility, increasing access to capped disaster benefits for agriculturally dependent households while imposing new verification burdens on USDA and raising questions about program cost and integrity.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
HB2156 adds a targeted exception to an existing payment‑limitation rule in the Food Security Act of 1985. Instead of a blanket cap applying to certain disaster‑related payments, the bill says the cap does not apply during the relevant crop, fiscal, or program year when a person’s or entity’s average adjusted gross income (AGI) is at least 75% agricultural in origin.
The text lists concrete examples — agri‑tourism, direct‑to‑consumer agricultural sales, and sales of agricultural equipment owned by the producer — and also allows the Secretary of Agriculture to designate additional qualifying activities.
The exception is limited in scope to payments and benefits defined in the bill by cross‑reference: payments under the subtitle referenced at 7 U.S.C. 9081 et seq. and payments under 7 U.S.C. 7333. The bill therefore does not rewrite all payment‑limit rules across the Farm Code, only those tied to those statutory authorities.
It applies to both natural persons and legal entities and is triggered on a per‑year basis (crop, fiscal, or program year as appropriate), so eligibility can change year to year with income mixes.Practically, implementation turns on two operational tasks. USDA will need a clear methodology for calculating 'average adjusted gross income' for individuals and entities and for assigning income to qualifying agricultural activities; the agency will also need to update enrollment, verification, and payment systems to accept these exceptions.
Because the Secretary can expand the list of qualifying activities, administrative guidance and rulemaking will determine how broadly the exemption applies in practice. The bill does not include a separate enforcement or recapture mechanism specific to the new exception; it integrates into existing payment‑limitation and program integrity frameworks.
The Five Things You Need to Know
The bill creates a statutory exception when ≥75% of a person’s or entity’s average adjusted gross income is derived from farming, ranching, or silviculture activities.
Qualifying agricultural income expressly includes agri‑tourism, direct‑to‑consumer marketing of agricultural products, and sale of agricultural equipment owned by the person or entity, plus other activities the Secretary may designate.
The exception applies 'during a crop, fiscal, or program year, as appropriate,' meaning eligibility is evaluated on a per‑year basis.
Covered payments are limited to those defined in the bill: payments or benefits under 7 U.S.C. 9081 et seq. and under 7 U.S.C. 7333 (the statutes cited in the text).
The amendment inserts a new paragraph into 7 U.S.C. 1308–3a(b), explicitly expanding the list of exceptions to the existing payment limitation statute.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title
Provides the Act's name: 'Fair Access to Agriculture Disaster Programs Act.' This is purely a caption but signals the bill’s focus on disaster‑related program access and will appear in statutory citations if enacted.
Technical amendment to cross‑references in 7 U.S.C. 1308–3a(b)
Adjusts internal paragraph numbering in the existing statute so that the new exception can be added without disrupting the statute's structure. This is a housekeeping change that allows the bill to append the new exception as a discrete paragraph.
Eligibility trigger—75% AGI from agriculture
Establishes the substantive test: a person or legal entity is exempt from the specified payment limitation when equal to or greater than 75% of their average adjusted gross income is derived from defined agricultural activities. The provision ties eligibility to 'average adjusted gross income' (an IRS measure) and applies across the appropriate annual cadence (crop, fiscal, or program year), which will require USDA to adopt a calculation and verification protocol.
Scope of qualifying activities and covered payments
Defines 'excepted payment or benefit' by statute cross‑reference and lists illustrative qualifying activities (agri‑tourism, direct‑to‑consumer marketing, sale of owned agricultural equipment). The Secretary retains discretion to add other agricultural‑related activities, meaning the practical reach of the exemption will depend on forthcoming USDA guidance or regulation and on how broadly 'agricultural activity' is interpreted in administration.
This bill is one of many.
Codify tracks hundreds of bills on Agriculture across all five countries.
Explore Agriculture in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Producers and farm entities with predominantly farm income: Households and legal entities where at least 75% of average AGI comes from farming, ranching, or silviculture will gain access to capped disaster payments previously unavailable because of payment limits.
- Small family farms that diversify with agri‑tourism or direct‑to‑consumer sales: Operators who supplement traditional receipts with on‑farm retail or tourism activities stand to qualify under the bill’s explicit inclusions.
- Entities selling owned agricultural equipment: The bill’s express inclusion of equipment sales allows some farm businesses that sell used equipment to count that revenue toward the 75% threshold.
- Tax and compliance advisors for agricultural clients: Professionals who prepare AGI calculations and program applications will see increased demand for structuring and documenting qualifying income streams.
Who Bears the Cost
- USDA and program administrators: The department must develop methodologies to compute 'average adjusted gross income,' verify income origins, update enrollment systems, and manage appeals or audits—none of which the bill funds directly.
- Federal budget/taxpayers: Expanding exceptions to payment limits will likely increase outlays for the specified disaster programs unless offsetting cuts or caps are introduced elsewhere.
- Non‑farm and mixed‑income households: Individuals who previously benefited from payment limits intended to prevent concentration may face reduced program funds or access if more resources go to agriculturally dependent claimants.
- Program integrity systems: Enforcement teams and auditors face higher verification burdens and potential new categories of disputed income classification, increasing operational costs.
Key Issues
The Core Tension
The central dilemma is straightforward: ensure disaster assistance reaches households whose livelihoods are overwhelmingly agricultural versus preserve payment limits designed to prevent subsidy concentration and gaming. Expanding eligibility on an income‑share basis helps true farm‑dependent producers but increases verification complexity, budget risk, and opportunities to reclassify nonfarm receipts as farm income—trade‑offs the bill delegates to USDA to resolve.
Measurement and verification are the immediate operational problems the bill passes to USDA. 'Average adjusted gross income' suggests reliance on IRS‑reported AGI, but the bill does not specify the averaging period, whether certain deductions are excluded, or how to treat multi‑member entities and pass‑through income. Those gaps create room for inconsistent application across producers and legal forms.
The Secretary’s authority to classify additional 'agricultural related activities' is practical for flexibility but creates legal and administrative uncertainty: a broad definition expands program reach but raises program‑integrity risks; a narrow definition leaves some modern farm enterprises (e.g., on‑farm processing, subscription CSAs) in doubt.
The bill explicitly counts sale of agricultural equipment owned by the person or entity as qualifying income; that clause is administrable but also susceptible to strategic behavior—transferring equipment between entities or timing sales to coincide with disaster years could be used to elevate agricultural income on paper. The text contains no new audit standard or penalty specific to misclassification, so enforcement would rely on existing USDA and IRS authorities.
Finally, the bill enlarges potential program costs without identifying offsets, which creates a trade‑off between increasing access for agriculturally dependent parties and preserving limits meant to control subsidy concentration and fiscal exposure.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.