To amend the Internal Revenue Code of 1986 to impose a tax on the acquisition of United States agricultural interests by disqualified persons.

I 118TH CONGRESS 1ST SESSION H. R. 3996 To amend the Internal Revenue Code of 1986 to impose a tax on the acquisition of United States agricultural interests by disqualified persons. IN THE HOUSE OF REPRESENTATIVES JUNE 9, 2023 Ms. VAN DUYNE (for herself, Mr. BUCHANAN, Mr. CAREY, Mr. KUSTOFF, Ms. MALLIOTAKIS, and Mr. ARRINGTON) 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 impose a tax on the acquisition of United States agricultural interests by disqualified persons. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. IMPOSITION OF TAX ON THE ACQUISITION OF 3 UNITED STATES AGRICULTURAL INTERESTS 4 BY DISQUALIFIED PERSONS. 5 (a) IN GENERAL.—Subtitle D of the Internal Rev- 6 enue Code of 1986 is amended by inserting after chapter 7 50A the following new chapter: 8 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 3996 IH ‘‘CHAPTER 50B—ACQUISITION OF UNITED 1 STATES AGRICULTURAL INTERESTS 2 BY DISQUALIFIED PERSONS 3 ‘‘Sec. 5000E. Imposition of tax on acquisition of United States agricultural in- terests by disqualified persons. ‘‘SEC. 5000E. IMPOSITION OF TAX ON ACQUISITION OF 4 UNITED STATES AGRICULTURAL INTERESTS 5 BY DISQUALIFIED PERSONS. 6 ‘‘(a) IN GENERAL.—In the case of any acquisition of 7 any United States agricultural interest by any disqualified 8 person, there is hereby imposed on such person a tax equal 9 to 60 percent of the amount paid for such interest. 10 ‘‘(b) DISQUALIFIED PERSON.—For purposes of this 11 section— 12 ‘‘(1) IN GENERAL.—The term ‘disqualified per- 13 son’ means— 14 ‘‘(A) any citizen of a country of concern 15 (other than a citizen, or lawful permanent resi- 16 dent, of the United States and other than an 17 individual domiciled in Taiwan possessing a 18 valid identification card or number issued by 19 the government of Taiwan), 20 ‘‘(B) any entity domiciled in a country of 21 concern (other than an entity domiciled in Tai- 22 wan), 23 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 3996 IH ‘‘(C) any country of concern and any polit- 1 ical subdivision, agency, or instrumentality 2 thereof, and 3 ‘‘(D) except as provided in paragraph (3), 4 any entity if persons described in subparagraph 5 (A), (B), or (C) (in the aggregate) 10-percent 6 control such entity. 7 ‘‘(2) COUNTRY OF CONCERN.—The term ‘coun- 8 try of concern’ means any country the government 9 of which is engaged in a long-term pattern or seri- 10 ous instances of conduct significantly adverse to the 11 national security of the United States or the security 12 and safety of United States persons, including the 13 People’s Republic of China, the Russian Federation, 14 Iran, North Korea, Cuba, and the regime of Nicolas 15 Maduro in Venezuela. 16 ‘‘(3) EXCEPTION FOR CERTAIN PUBLICLY 17 TRADED CORPORATIONS.— 18 ‘‘(A) IN GENERAL.—An entity shall not be 19 treated as described in paragraph (1)(D) if— 20 ‘‘(i) such entity is a specified publicly 21 traded corporation, or 22 ‘‘(ii) specified publicly traded corpora- 23 tions (in the aggregate) control such enti- 24 ty. 25 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 3996 IH ‘‘(B) SPECIFIED PUBLICLY TRADED COR- 1 PORATION.— 2 ‘‘(i) IN GENERAL.—The term ‘speci- 3 fied publicly traded corporation’ means any 4 corporation if— 5 ‘‘(I) the stock of such corporation 6 is regularly traded on an established 7 securities market located in the 8 United States, and 9 ‘‘(II) specified disqualified per- 10 sons do not (in the aggregate) control 11 such corporation. 12 ‘‘(ii) SPECIFIED DISQUALIFIED PER- 13 SONS.—The term ‘specified disqualified 14 persons’ means, with respect to any cor- 15 poration referred to in clause (i), any per- 16 son which— 17 ‘‘(I) is described in subparagraph 18 (A), (B), or (C) of paragraph (1), and 19 ‘‘(II) has 10-percent control such 20 entity. 21 ‘‘(c) PRORATED TAX ON ACQUISITIONS BY ENTITIES 22 NOT MORE THAN 50 PERCENT CONTROLLED BY DIS- 23 QUALIFIED PERSONS.— 24 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 3996 IH ‘‘(1) IN GENERAL.—In the case of any disquali- 1 fied person described in subsection (b)(1)(D) with 2 respect to which persons described in subparagraph 3 (A), (B), or (C) of subsection (b)(1) do not (in the 4 aggregate) control such disqualified person, sub- 5 section (a) shall be applied by substituting ‘the ap- 6 plicable percentage of the amount’ for ‘the amount’. 7 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 8 of this section, the term ‘applicable percentage’ 9 means, with respect to any disqualified person to 10 which paragraph (1) applies, the highest percentage 11 which could be substituted for ‘50 percent’ both 12 places it appears in section 954(d)(3) without caus- 13 ing persons described in subparagraph (A), (B), or 14 (C) of subsection (b)(1) (in the aggregate) to control 15 (determined by taking into account such substi- 16 tution) such disqualified person. 17 ‘‘(d) CONTROL.—For purposes of this section— 18 ‘‘(1) IN GENERAL.—The term ‘control’ has the 19 meaning given such term under section 954(d)(3), 20 determined by treating the rules of section 958(a)(2) 21 as applying to both foreign and domestic corpora- 22 tions, partnerships, trusts, and estates. 23 ‘‘(2) 10-PERCENT CONTROL.—The term ‘10- 24 percent control’ means control (as defined in para- 25 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 3996 IH graph (1)), determined by substituting ‘10 percent’ 1 for ‘50 percent’ both places it appears in section 2 954(d)(3). 3 ‘‘(e) UNITED STATES AGRICULTURAL INTEREST.— 4 For purposes of this section— 5 ‘‘(1) IN GENERAL.—The term ‘United States 6 agricultural interest’ has the meaning which would 7 be given the term ‘United States real property inter- 8 est’ by section 897(c) if— 9 ‘‘(A) paragraph (1)(A)(i) were applied by 10 substituting ‘an interest in agricultural land’ 11 for ‘an interest in real property’ and all that 12 follows, 13 ‘‘(B) paragraph (1)(A)(ii) were applied by 14 substituting ‘such corporation was not a United 15 States real property holding corporation at the 16 time of acquisition’ for ‘such corporation’ and 17 all that follows, 18 ‘‘(C) paragraph (1)(B) did not apply, and 19 ‘‘(D) paragraph (3) were applied by sub- 20 stituting ‘at the time of acquisition’ for ‘at 21 some time during the shorter of the periods de- 22 scribed in paragraph (1)(A)(ii)’. 23 ‘‘(2) AGRICULTURAL LAND.—For purposes of 24 paragraph (1), the term ‘agricultural land’ means— 25 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 3996 IH ‘‘(A) agricultural land as defined in section 1 9 of the Agricultural Foreign Investment Dis- 2 closure Act of 1978 (7 U.S.C. 3508), and 3 ‘‘(B) land located in one or more States 4 and used for livestock production purposes (de- 5 termined under rules similar to the rules that 6 apply under such section 9).’’. 7 (b) REPORTING REQUIREMENTS.— 8 (1) IN GENERAL.—Subpart B of part III of 9 subchapter A of chapter 61 of such Code is amended 10 by adding at the end the following new section: 11 ‘‘SEC. 6050AA. RETURNS RELATING TO ACQUISITION OF 12 UNITED STATES AGRICULTURAL INTERESTS 13 BY DISQUALIFIED PERSONS. 14 ‘‘(a) IN GENERAL.—The required reporting person, 15 with respect to any acquisition of any United States agri- 16 cultural interest by a presumptively disqualified person to 17 which section 5000E(a) applies, shall make a return at 18 such time as the Secretary may provide setting forth— 19 ‘‘(1) the name, address, and TIN of such pre- 20 sumptively disqualified person, 21 ‘‘(2) a description of such United States agri- 22 cultural interest (including the street address, if ap- 23 plicable), and 24 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 3996 IH ‘‘(3) the amount paid for such United States 1 agricultural interest. 2 ‘‘(b) STATEMENT TO BE FURNISHED TO PRESUMP- 3 TIVELY DISQUALIFIED PERSON.—Every person required 4 to make a return under subsection (a) shall furnish, at 5 such time as the Secretary may provide, to each presump- 6 tively disqualified person whose name is required to be set 7 forth in such return a written statement showing— 8 ‘‘(1) the name and address of the information 9 contact of the required reporting person, and 10 ‘‘(2) the information described in paragraphs 11 (1), (2), and (3) of subsection (a) which relates to 12 such disqualified person. 13 ‘‘(c) REQUIRED REPORTING PERSON.—For purposes 14 of this section, the term ‘required reporting person’ 15 means, with respect to any acquisition of any United 16 States agricultural interest— 17 ‘‘(1) the person (including any attorney or title 18 company) responsible for closing the transaction in 19 which such United States agricultural interest is ac- 20 quired, or 21 ‘‘(2) if no one is responsible for closing such 22 transaction (or in such other cases as the Secretary 23 may provide), the transferor of such United States 24 agricultural interest. 25 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 3996 IH ‘‘(d) PRESUMPTIVELY DISQUALIFIED PERSON.—For 1 purposes of this section, the term ‘presumptively disquali- 2 fied person’ means any person unless such person fur- 3 nishes to the required reporting person an affidavit by the 4 such person stating, under penalty of perjury, that such 5 person is not a disqualified person (as defined in section 6 5000E(b)). 7 ‘‘(e) REQUIREMENT TO REQUEST AFFIDAVIT.—If 8 the required reporting person, with respect to any acquisi- 9 tion of any United States agricultural interest, has not, 10 as of the time of such acquisition, been furnished the affi- 11 davit described in subsection (d) by the acquirer of such 12 interest, such required reporting person shall furnish to 13 such acquirer, at such time, a written statement informing 14 such acquirer of the required reporting person’s obligation 15 to make the return described in subsection (a) with respect 16 to such acquisition and including such other information 17 as the Secretary may require. 18 ‘‘(f) UNITED STATES AGRICULTURAL INTEREST.— 19 For purposes of this section, the term ‘United States agri- 20 cultural interest’ has the meaning given such term in sec- 21 tion 5000E.’’. 22 (2) PENALTIES.—Section 6724(d) of such Code 23 is amended— 24 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 3996 IH (A) in paragraph (1)(B), by striking ‘‘or’’ 1 at the end of clause (xxvii), by striking ‘‘and’’ 2 at the end of clause (xxviii) and inserting ‘‘or’’, 3 and by adding at the end the following new 4 clause: 5 ‘‘(xxix) section 6050AA(a) (relating to 6 returns relating to acquisition of United 7 States agricultural interests by disqualified 8 persons), and’’, and 9 (B) in paragraph (2), by striking ‘‘or’’ at 10 the end of subparagraph (KK), by striking the 11 period at the end of subparagraph (LL) and in- 12 serting ‘‘, or’’, and by inserting after subpara- 13 graph (LL) the following new subparagraph: 14 ‘‘(MM) subsection (b) or (e) of section 15 6055AA (relating to statements relating to ac- 16 quisition of United States agricultural interests 17 by disqualified persons).’’. 18 (c) CLERICAL AMENDMENTS.— 19 (1) The table of chapters for subtitle D of such 20 Code is amended by inserting after the item relating 21 to chapter 50A the following new item: 22 ‘‘CHAPTER 50B. ACQUISITION OF UNITED STATES AGRICULTURAL INTERESTS BY DISQUALIFIED PERSONS.’’. (2) The table of sections for subpart B of part 23 III of subchapter A of chapter 61 of such Code is 24 VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 3996 IH amended by adding at the end the following new 1 item: 2 ‘‘Sec. 6050AA. Returns relating to acquisition of United States agricultural in- terests by disqualified persons.’’. (d) EFFECTIVE DATE.—The amendments made by 3 this section shall apply to acquisitions after the date of 4 the enactment of this Act. 5 Æ VerDate Sep 11 2014 02:39 Jul 09, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H3996.IH H3996 kjohnson on DSK79L0C42PROD with BILLS