“To ban new corporate ownership of agricultural land, and for other purposes.”
No CRS summary available for this bill.
This section states congressional findings on the importance of the family farm system of agriculture to U.S. social, economic, and national security interests; the critical value of agricultural land as a limited resource for food, fiber, and generational wealth; and the threats posed by increasing corporate and institutional ownership of farmland, including a more than threefold rise in institutionally-owned farm properties and an increase in their market value from less than $2 billion to more than $16 billion from 2005 to 2025, nearly doubled farmland prices since 2005 that favor well-capitalized corporate interests, and the interstate economic impacts on rural communities necessitating regulation of such ownership.
This section defines 17 terms used throughout the Act, including "actively engaged in farming" (regular management decisions or significant physical work contributing to farm or forest operations, excluding solely providing capital); "agricultural land" (cropland, grassland, rangeland, pasture, forestland, or recently idle land used for agricultural or forest products or livestock); "authorized legal entity" (no more than 25 natural person owners who are actively engaged in farming, with no ownership by or subsidiary status under a multilayer subsidiary entity); "authorized farmer or rancher cooperative" (farmer- or rancher-controlled with equitable benefits, one vote per actively engaged member, and no multilayer subsidiary ownership); and "multilayer subsidiary entity" (legal entity with two or more subsidiary levels, a management or holding company parent or subsidiary, or using special purpose vehicles for intramarket transfers).
This section prohibits an unauthorized legal entity from directly or indirectly acquiring or holding an ownership interest in agricultural land, subject to exceptions. Exceptions include (1) bona fide encumbrances for security purposes; (2) land acquired for research or experimental purposes (i.e., where commercial sales are incidental and less than 25% of gross sales of the primary research product, or used primarily for public seed varieties with other sales similarly limited to less than 25%); (3) acquisitions by or for public higher education institutions or supporting nonprofits for research, experimental, demonstration, or test purposes; (4) immediate non-agricultural use (provided the use continues); (5) acquisitions by process of law, contract for deed predating enactment, or lien enforcement (provided disposal within 5 years, as a covenant running with the land, and no farming except leased to authorized entities); (6) municipal corporations; (7) state-organized nonprofits qualifying under IRC §501; (8) fiduciary capacities; (9) entities formed by heirs' property owners; (10) authorized farmer or rancher cooperatives; and (11) pre-enactment ownership (provided continuously held thereafter).
This section establishes compliance requirements for legal entities owning agricultural land. Specifically, it (1) requires a legal entity acquiring such an ownership interest after enactment to submit an affidavit to the Secretary certifying compliance under penalty of perjury; (2) requires any legal entity with such an ownership interest to submit a similar affidavit with its federal tax return beginning with the first taxable year after enactment; (3) conditions eligibility for USDA programs or Farm Credit System (FCS) participation after enactment on submission of compliance documentation; (4) renders unauthorized legal entities owning agricultural land described in section 4(b)(1)(K) ineligible for such programs after enactment; and (5) directs the Secretary to submit annual reports to Congress, and publish on the USDA website, on violations discovered through these mechanisms.
This section establishes enforcement procedures for violations of the Act prohibiting certain legal entities from acquiring or holding title to or interest in agricultural land. Specifically, it (1) requires the Secretary to refer violations to the Attorney General, who must investigate and may seek court-ordered divestiture within one year (with public sale if not completed), enjoin violations, and pursue civil penalties assessed by the Secretary of up to two times the land's fair market value per violation or criminal penalties of up to five years imprisonment and fines for knowing individual violators; and (2) authorizes state attorneys general to bring civil actions for injunctions, divestiture, damages, or penalties of up to $3,000 per day out of compliance (not to exceed the greater of $1 million or the fair market value of the interest).
This section authorizes states to regulate legal entities permitted to own agricultural land within the state at least as restrictively as this Act, pursuant to Congress's authority under the Commerce Clause. Such regulation may include more stringent requirements, including stricter definitions of "actively engaged in farming," even if more burdensome for out-of-state owners.