ACRE Act of 2023

I 118TH CONGRESS 1ST SESSION H. R. 3139 To amend the Internal Revenue Code of 1986 to exclude from gross income interest received on certain loans secured by rural or agricultural real property. IN THE HOUSE OF REPRESENTATIVES MAY 9, 2023 Mr. FEENSTRA (for himself and Mr. NICKEL) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to exclude from gross income interest received on certain loans se- cured by rural or agricultural real property. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Access to Credit for 4 our Rural Economy Act of 2023’’ or as the ‘‘ACRE Act 5 of 2023’’. 6 VerDate Sep 11 2014 01:55 May 20, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3139.IH H3139 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 3139 IH SEC. 2. EXCLUSION OF INTEREST ON LOANS SECURED BY 1 RURAL OR AGRICULTURAL REAL PROPERTY. 2 (a) IN GENERAL.—Part III of subchapter B of chap- 3 ter 1 of the Internal Revenue Code of 1986 is amended 4 by inserting after section 139I the following new section: 5 ‘‘SEC. 139J. INTEREST ON LOANS SECURED BY RURAL OR 6 AGRICULTURAL REAL PROPERTY. 7 ‘‘(a) IN GENERAL.—Gross income shall not include 8 interest received by a qualified lender on any qualified real 9 estate loan. 10 ‘‘(b) QUALIFIED LENDER.—For purposes of this sec- 11 tion, the term ‘qualified lender’ means— 12 ‘‘(1) any bank or savings association the depos- 13 its of which are insured under the Federal Deposit 14 Insurance Act (12 U.S.C. 1811 et seq.), and 15 ‘‘(2) any entity wholly owned, directly or indi- 16 rectly, by a company that is treated as a bank hold- 17 ing company for purposes of section 8 of the Inter- 18 national Banking Act of 1978 (12 U.S.C. 3106) if— 19 ‘‘(A) such entity is organized, incor- 20 porated, or established under the laws of the 21 United States or any State of the United 22 States, and 23 ‘‘(B) the principal place of business of 24 such entity is in the United States. 25 VerDate Sep 11 2014 01:55 May 20, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3139.IH H3139 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 3139 IH ‘‘(c) QUALIFIED REAL ESTATE LOAN.—For purposes 1 of this section— 2 ‘‘(1) IN GENERAL.—The term ‘qualified real es- 3 tate loan’ means any loan— 4 ‘‘(A) secured by rural or agricultural real 5 estate or by a leasehold mortgage (with a status 6 as a lien) on rural or agricultural real estate, 7 and 8 ‘‘(B) in the case of any loan with respect 9 to single family residence described in para- 10 graph (2)(B)— 11 ‘‘(i) the proceeds of which are used to 12 purchase or improve such residence, and 13 ‘‘(ii) the principal of which (when 14 added to the principal of all other such 15 loans with respect to such residence) does 16 not (as of the time the interest income on 17 such loan is accrued) exceed $750,000. 18 For purposes of the preceding sentence, the deter- 19 mination of whether property securing such loan is 20 rural or agricultural real estate shall be made as of 21 the time the interest income on such loan is accrued. 22 ‘‘(2) RURAL OR AGRICULTURAL REAL ES- 23 TATE.—The term ‘rural or agricultural real estate’ 24 means— 25 VerDate Sep 11 2014 01:55 May 20, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3139.IH H3139 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 3139 IH ‘‘(A) any real property which is substan- 1 tially used for the production of one or more 2 agricultural products, 3 ‘‘(B) any single family residence— 4 ‘‘(i) which is the principal residence 5 (within the meaning of section 121) of its 6 occupant, and 7 ‘‘(ii) which is located in a rural area 8 within the meaning of section 1.11(b)(3) of 9 the Agricultural Credit Act of 1987 (12 10 U.S.C. 2019(b)(3)), and 11 ‘‘(C) any aquaculture facility. 12 ‘‘(3) AQUACULTURE FACILITY.—The term 13 ‘aquaculture facility’ means any land, structure, or 14 other appurtenance that is used for aquaculture (in- 15 cluding any hatchery, rearing pond, raceway, pen, or 16 incubator) that is located in any State. 17 ‘‘(d) COORDINATION WITH SECTION 265.—Qualified 18 real estate loans shall be treated as obligations described 19 in section 265(a)(2) the interest on which is wholly exempt 20 from the taxes imposed by this subtitle.’’. 21 (b) CLERICAL AMENDMENT.—The table of sections 22 for such subpart III is amended by inserting after the item 23 relating to section 139I the following new item: 24 ‘‘Sec. 139J. Interest on loans secured by rural or agricultural real property.’’. VerDate Sep 11 2014 01:55 May 20, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6211 E:\BILLS\H3139.IH H3139 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 3139 IH (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 the date of the enactment of this Act. 3 Æ VerDate Sep 11 2014 01:55 May 20, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H3139.IH H3139 kjohnson on DSK79L0C42PROD with BILLS