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107th CONGRESS
1st Session
S. 116
To amend the Reclamation Reform Act of 1982 to clarify the acreage
limitations and incorporate a means test for certain farm operations,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 22, 2001
Mr. Feingold introduced the following bill; which was read twice and
referred to the Committee on Energy and Natural Resources
_______________________________________________________________________
A BILL
To amend the Reclamation Reform Act of 1982 to clarify the acreage
limitations and incorporate a means test for certain farm operations,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Irrigation Subsidy Reduction Act of
2001''.
SEC. 2. FINDINGS.
Congress finds that--
(1) the Federal reclamation program has been in existence
for over 90 years, with an estimated taxpayer investment of
over $70,000,000,000;
(2) the program has had and continues to have an enormous
effect on the water resources and aquatic environments of the
western States;
(3) irrigation water made available from Federal water
projects in the West is a very valuable resource for which
there are increasing and competing demands;
(4) the justification for providing water at less than full
cost was to benefit and promote the development of small family
farms and exclude large corporate farms, but this purpose has
been frustrated over the years due to inadequate implementation
of subsidy and acreage limits;
(5) below-cost water prices tend to encourage excessive use
of scarce water supplies in the arid regions of the West, and
reasonable price increases to the wealthiest western farmers
would provide an economic incentive for greater water
conservation;
(6) the Federal Government has increasingly applied
eligibility tests based on income for Federal entitlement and
subsidy programs, measures that are consistent with the
historic approach of the reclamation program's acreage
limitations that seek to limit water subsidies to smaller
farms; and
(7) including a means test based on gross income in the
reclamation program will increase the effectiveness of carrying
out the family farm goals of the Federal reclamation laws.
SEC. 3. AMENDMENTS.
(a) Definitions.--Section 202 of the Reclamation Reform Act of 1982
(43 U.S.C. 390bb) is amended--
(1) by redesignating paragraphs (7), (8), (9), (10), and
(11) as paragraphs (9), (10), (11), (12), and (13),
respectively;
(2) in paragraph (6), by striking ``owned or operated under
a lease which'' and inserting ``that is owned, leased, or
operated by an individual or legal entity and that'';
(3) by inserting after paragraph (6) the following:
``(7) Legal entity.--The term `legal entity' includes a
corporation, association, partnership, trust, joint tenancy, or
tenancy in common, or any other entity that owns, leases, or
operates a farm operation for the benefit of more than 1
individual under any form of agreement or arrangement.
``(8) Operator.--
``(A) In general.--The term `operator'--
``(i) means an individual or legal entity
that operates a single farm operation on a
parcel (or parcel) of land that is owned or
leased by another person (or persons) under any
form of agreement or arrangement (or agreements
or arrangements); and
``(ii) if the individual or legal entity--
``(I) is an employee of an
individual or legal entity, includes
the individual or legal entity; or
``(II) is a legal entity that
controls, is controlled by, or is under
common control with another legal
entity, includes each such other legal
entity.
``(B) Operation of a farm operation.--For the
purposes of subparagraph (A), an individual or legal
entity shall be considered to operate a farm operation
if the individual or legal entity is the person that
performs the greatest proportion of the decisionmaking
for and supervision of the agricultural enterprise on
land served with irrigation water.''; and
(4) by adding at the end the following:
``(14) Single farm operation.--
``(A) In general.--The term `single farm operation'
means the total acreage of land served with irrigation
water for which an individual or legal entity is the
operator.
``(B) Rules for determining whether separate
parcels are operated as a single farm operation.--
``(i) Equipment- and labor-sharing
activities.--The conduct of equipment- and
labor-sharing activities on separate parcels of
land by separate individuals or legal entities
shall not by itself serve as a basis for
concluding that the farming operations of the
individuals or legal entities constitute a
single farm operation.
``(ii) Performance of certain services.--
The performance by an individual or legal
entity of an agricultural chemical application,
pruning, or harvesting for a farm operation on
a parcel of land shall not by itself serve as a
basis for concluding that the farm operation on
that parcel of land is part of a single farm
operation operated by the individual or entity
on other parcels of land.''.
(b) Identification of Owners, Lessees, and Operators and of Single
Farm Operations.--The Reclamation Reform Act of 1982 (43 U.S.C. 390aa
et seq.) is amended by inserting after section 201 the following:
``SEC. 201A. IDENTIFICATION OF OWNERS, LESSEES, AND OPERATORS AND OF
SINGLE FARM OPERATIONS.
``(a) In General.--Subject to subsection (b), for each parcel of
land to which irrigation water is delivered or proposed to be
delivered, the Secretary shall identify a single individual or legal
entity as the owner, lessee, or operator.
``(b) Shared Decisionmaking and Supervision.--If the Secretary
determines that no single individual or legal entity is the owner,
lessee, or other individual that performs the greatest proportion of
decisionmaking for and supervision of the agricultural enterprise on a
parcel of land--
``(1) all individuals and legal entities that own, lease,
or perform a proportion of decisionmaking and supervision that
is equal as among themselves but greater than the proportion
performed by any other individual or legal entity shall be
considered jointly to be the owner, lessee, or operator; and
``(2) all parcels of land of which any such individual or
legal entity is the owner, lessee, or operator shall be
considered to be part of the single farm operation of the
owner, lessee, or operator identified under subsection (1).''.
(c) Pricing.--Section 205 of the Reclamation Reform Act of 1982 (43
U.S.C. 390ee) is amended by adding at the end the following:
``(d) Single Farm Operations Generating More Than $500,000 in Gross
Farm Income.--
``(1) In general.--Notwithstanding subsections (a), (b),
and (c), in the case of--
``(A) a qualified recipient that reports gross farm
income from a single farm operation in excess of
$500,000 for a taxable year; or
``(B) a limited recipient that received irrigation
water on or before October 1, 1981, and that reports
gross farm income from a single farm operation in
excess of $500,000 for a taxable year;
irrigation water may be delivered to the single farm operation
of the qualified recipient or limited recipient at less than
full cost to a number of acres that does not exceed the number
of acres determined under paragraph (2).
``(2) Maximum number of acres to which irrigation water may
be delivered at less than full cost.--The number of acres
determined under this subparagraph is the number equal to the
number of acres of the single farm operation multiplied by a
fraction, the numerator of which is $500,000 and the
denominator of which is the amount of gross farm income
reported by the qualified recipient or limited recipient in the
most recent taxable year.
``(3) Inflation adjustment.--
``(A) In general.--The $500,000 amount under
paragraphs (1) and (2) for any taxable year beginning
in a calendar year after 2000 shall be equal to the
product of--
``(i) $500,000, multiplied by
``(ii) the inflation adjustment factor for
the taxable year.
``(B) Inflation adjustment factor.--The term
`inflation adjustment factor' means, with respect to
any calendar year, a fraction the numerator of which is
the GDP implicit price deflator for the preceding
calendar year and the denominator of which is the GDP
implicit price deflator for 2000. Not later than April
1 of any calendar year, the Secretary shall publish the
inflation adjustment factor for the preceding calendar
year.
``(C) GDP implicit price deflator.--For purposes of
subparagraph (B), the term `GDP implicit price
deflator' means the first revision of the implicit
price deflator for the gross domestic product as
computed and published by the Secretary of Commerce.
``(D) Rounding.--If any increase determined under
subparagraph (A) is not a multiple of $100, the
increase shall be rounded to the next lowest multiple
of $100.''.
(d) Certification of Compliance.--Section 206 of the Reclamation
Reform Act of 1982 (43 U.S.C. 390ff) is amended to read as follows:
``SEC. 206. CERTIFICATION OF COMPLIANCE.
``(a) In General.--As a condition to the receipt of irrigation
water for land in a district that has a contract described in section
203, each owner, lessee, or operator in the district shall furnish the
district, in a form prescribed by the Secretary, a certificate that the
owner, lessee, or operator is in compliance with this title, including
a statement of the number of acres owned, leased, or operated, the
terms of any lease or agreement pertaining to the operation of a farm
operation, and, in the case of a lessee or operator, a certification
that the rent or other fees paid reflect the reasonable value of the
irrigation water to the productivity of the land.
``(b) Documentation.--The Secretary may require a lessee or
operator to submit for the Secretary's examination--
``(1) a complete copy of any lease or other agreement
executed by each of the parties to the lease or other
agreement; and
``(2) a copy of the return of income tax imposed by chapter
1 of the Internal Revenue Code of 1986 for any taxable year in
which the single farm operation of the lessee or operator
received irrigation water at less than full cost.''.
(e) Trusts.--Section 214 of the Reclamation Reform Act of 1982 (43
U.S.C. 390nn) is repealed.
(f) Administrative Provisions.--
(1) Penalties.--Section 224(c) of the Reclamation Reform
Act of 1982 (43 U.S.C. 390ww(c)) is amended--
(A) by striking ``(c) The Secretary'' and inserting
the following:
``(c) Regulations; Data Collection; Penalties.--
``(1) Regulations; data collection.--The Secretary''; and
(B) by adding at the end the following:
``(2) Penalties.--Notwithstanding any other provision of
law, the Secretary shall establish appropriate and effective
penalties for failure to comply with any provision of this Act
or any regulation issued under this Act.''.
(2) Interest.--Section 224(i) of the Reclamation Reform Act
of 1982 (43 U.S.C. 390ww(i)) is amended by striking the last
sentence and inserting the following: ``The interest rate
applicable to underpayments shall be equal to the rate
applicable to expenditures under section 202(3)(C).''.
(g) Reporting.--Section 228 of the Reclamation Reform Act of 1982
(43 U.S.C. 390zz) is amended by inserting ``operator or'' before
``contracting entity'' each place it appears.
(h) Memorandum of Understanding.--The Reclamation Reform Act of
1982 (43 U.S.C. 390aa et seq.) is amended--
(1) by redesignating sections 229 and 230 as sections 230
and 231; and
(2) by inserting after section 228 the following:
``SEC. 229. MEMORANDUM OF UNDERSTANDING.
``The Secretary, the Secretary of the Treasury, and the Secretary
of Agriculture shall enter into a memorandum of understanding or other
appropriate instrument to permit the Secretary, notwithstanding section
6103 of the Internal Revenue Code of 1986, to have access to and use of
available information collected or maintained by the Department of the
Treasury and the Department of Agriculture that would aid enforcement
of the ownership and pricing limitations of Federal reclamation law.''.
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