[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1400.301]

[Page 336-337]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1400_PAYMENT LIMITATION AND PAYMENT ELIGIBILITY--Table of Contents
 
                      Subpart D_Permitted Entities
 
Sec.  1400.301  Limitation on the number of entities through which an 


individual or entity may receive a payment and required notification.

    (a) An individual may receive a payment under a program specified in 
Sec.  1400.1(a) either directly or indirectly from no more than three 
permitted entities. An individual who receives such a payment shall 
notify the county committee in the county in which such individual 
maintains a farming operation whether or not the farming operation is to 
be considered a permitted entity. An individual may only receive such 
payments as a result of a farming operation conducted by:
    (1) The individual and by no more than two entities in which the 
individual holds a substantial beneficial interest; or
    (2) No more than three entities in which the individual holds a 
substantial beneficial interest.
    (b) Except for entities specified in paragraph (c) of this section, 
each entity entering into a contract or agreement under a program 
specified in Sec.  1400.1(a) shall, by the date the contract or 
agreement is submitted to the county committee, notify in writing:
    (1) Each individual or other entity that acquires or holds an 
interest in such entity of the requirements and limitations provided in 
this part; and
    (2) The county committee of the name and social security number of 
each individual and the name and taxpayer identification number of each 
entity that holds or acquires a substantial beneficial interest in such 
entity.
    (c) Entities shall not be subject to the provisions of paragraph (b) 
of this section if, as determined by the Deputy Administrator:
    (1) Because of the number of members of such entity no member is 
likely to have a substantial beneficial interest in such entity; and
    (2) Such provisions would cause undue financial hardship on such 
entity.
    (d)(1) An individual or entity that holds a substantial beneficial 
interest in more than the number of permitted entities specified in 
paragraph (a) of this section for which a contract or agreement has been 
submitted to the county committee shall notify the county committee in 
writing, in each county in which they conduct a farming operation, of 
those entities that shall be considered as permitted entities by a date 
as determined by the Deputy Administrator following the date the 
contract or agreement was submitted to the county committee.

[[Page 337]]

    (2) The remaining entities in which the individual or entity holds a 
substantial beneficial interest shall be notified that such entity is 
subject to reductions in the payments earned by the remaining entity. 
Such a reduction shall be made in an amount that bears the same 
relationship to the full payment that the individual's interest in the 
entity bears to all interests in the entity. The remaining entity's 
members shall have the opportunity to adjust among themselves their 
proportionate shares of the program benefits in the designated entity or 
entities before such reductions are made.
    (e) If an individual or entity fails to make such a notification as 
specified in paragraph (d) of this section, all entities in which the 
individual or entity holds a substantial beneficial interest shall be 
subject to a reduction in payments in the manner specified in paragraph 
(d)(2).