[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3996 Introduced in House (IH)]

<DOC>






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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. IMPOSITION OF TAX ON THE ACQUISITION OF UNITED STATES 
              AGRICULTURAL INTERESTS BY DISQUALIFIED PERSONS.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986 is 
amended by inserting after chapter 50A the following new chapter:

 ``CHAPTER 50B--ACQUISITION OF UNITED STATES AGRICULTURAL INTERESTS BY 
                          DISQUALIFIED PERSONS

``Sec. 5000E. Imposition of tax on acquisition of United States 
                            agricultural interests by disqualified 
                            persons.

``SEC. 5000E. IMPOSITION OF TAX ON ACQUISITION OF UNITED STATES 
              AGRICULTURAL INTERESTS BY DISQUALIFIED PERSONS.

    ``(a) In General.--In the case of any acquisition of any United 
States agricultural interest by any disqualified person, there is 
hereby imposed on such person a tax equal to 60 percent of the amount 
paid for such interest.
    ``(b) Disqualified Person.--For purposes of this section--
            ``(1) In general.--The term `disqualified person' means--
                    ``(A) any citizen of a country of concern (other 
                than a citizen, or lawful permanent resident, of the 
                United States and other than an individual domiciled in 
                Taiwan possessing a valid identification card or number 
                issued by the government of Taiwan),
                    ``(B) any entity domiciled in a country of concern 
                (other than an entity domiciled in Taiwan),
                    ``(C) any country of concern and any political 
                subdivision, agency, or instrumentality thereof, and
                    ``(D) except as provided in paragraph (3), any 
                entity if persons described in subparagraph (A), (B), 
                or (C) (in the aggregate) 10-percent control such 
                entity.
            ``(2) Country of concern.--The term `country of concern' 
        means any country the government of which is engaged in a long-
        term pattern or serious instances of conduct significantly 
        adverse to the national security of the United States or the 
        security and safety of United States persons, including the 
        People's Republic of China, the Russian Federation, Iran, North 
        Korea, Cuba, and the regime of Nicolas Maduro in Venezuela.
            ``(3) Exception for certain publicly traded corporations.--
                    ``(A) In general.--An entity shall not be treated 
                as described in paragraph (1)(D) if--
                            ``(i) such entity is a specified publicly 
                        traded corporation, or
                            ``(ii) specified publicly traded 
                        corporations (in the aggregate) control such 
                        entity.
                    ``(B) Specified publicly traded corporation.--
                            ``(i) In general.--The term `specified 
                        publicly traded corporation' means any 
                        corporation if--
                                    ``(I) the stock of such corporation 
                                is regularly traded on an established 
                                securities market located in the United 
                                States, and
                                    ``(II) specified disqualified 
                                persons do not (in the aggregate) 
                                control such corporation.
                            ``(ii) Specified disqualified persons.--The 
                        term `specified disqualified persons' means, 
                        with respect to any corporation referred to in 
                        clause (i), any person which--
                                    ``(I) is described in subparagraph 
                                (A), (B), or (C) of paragraph (1), and
                                    ``(II) has 10-percent control such 
                                entity.
    ``(c) Prorated Tax on Acquisitions by Entities Not More Than 50 
Percent Controlled by Disqualified Persons.--
            ``(1) In general.--In the case of any disqualified person 
        described in subsection (b)(1)(D) with respect to which persons 
        described in subparagraph (A), (B), or (C) of subsection (b)(1) 
        do not (in the aggregate) control such disqualified person, 
        subsection (a) shall be applied by substituting `the applicable 
        percentage of the amount' for `the amount'.
            ``(2) Applicable percentage.--For purposes of this section, 
        the term `applicable percentage' means, with respect to any 
        disqualified person to which paragraph (1) applies, the highest 
        percentage which could be substituted for `50 percent' both 
        places it appears in section 954(d)(3) without causing persons 
        described in subparagraph (A), (B), or (C) of subsection (b)(1) 
        (in the aggregate) to control (determined by taking into 
        account such substitution) such disqualified person.
    ``(d) Control.--For purposes of this section--
            ``(1) In general.--The term `control' has the meaning given 
        such term under section 954(d)(3), determined by treating the 
        rules of section 958(a)(2) as applying to both foreign and 
        domestic corporations, partnerships, trusts, and estates.
            ``(2) 10-percent control.--The term `10-percent control' 
        means control (as defined in paragraph (1)), determined by 
        substituting `10 percent' for `50 percent' both places it 
        appears in section 954(d)(3).
    ``(e) United States Agricultural Interest.--For purposes of this 
section--
            ``(1) In general.--The term `United States agricultural 
        interest' has the meaning which would be given the term `United 
        States real property interest' by section 897(c) if--
                    ``(A) paragraph (1)(A)(i) were applied by 
                substituting `an interest in agricultural land' for `an 
                interest in real property' and all that follows,
                    ``(B) paragraph (1)(A)(ii) were applied by 
                substituting `such corporation was not a United States 
                real property holding corporation at the time of 
                acquisition' for `such corporation' and all that 
                follows,
                    ``(C) paragraph (1)(B) did not apply, and
                    ``(D) paragraph (3) were applied by substituting 
                `at the time of acquisition' for `at some time during 
                the shorter of the periods described in paragraph 
                (1)(A)(ii)'.
            ``(2) Agricultural land.--For purposes of paragraph (1), 
        the term `agricultural land' means--
                    ``(A) agricultural land as defined in section 9 of 
                the Agricultural Foreign Investment Disclosure Act of 
                1978 (7 U.S.C. 3508), and
                    ``(B) land located in one or more States and used 
                for livestock production purposes (determined under 
                rules similar to the rules that apply under such 
                section 9).''.
    (b) Reporting Requirements.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of such Code is amended by adding at the end the 
        following new section:

``SEC. 6050AA. RETURNS RELATING TO ACQUISITION OF UNITED STATES 
              AGRICULTURAL INTERESTS BY DISQUALIFIED PERSONS.

    ``(a) In General.--The required reporting person, with respect to 
any acquisition of any United States agricultural interest by a 
presumptively disqualified person to which section 5000E(a) applies, 
shall make a return at such time as the Secretary may provide setting 
forth--
            ``(1) the name, address, and TIN of such presumptively 
        disqualified person,
            ``(2) a description of such United States agricultural 
        interest (including the street address, if applicable), and
            ``(3) the amount paid for such United States agricultural 
        interest.
    ``(b) Statement To Be Furnished to Presumptively Disqualified 
Person.--Every person required to make a return under subsection (a) 
shall furnish, at such time as the Secretary may provide, to each 
presumptively disqualified person whose name is required to be set 
forth in such return a written statement showing--
            ``(1) the name and address of the information contact of 
        the required reporting person, and
            ``(2) the information described in paragraphs (1), (2), and 
        (3) of subsection (a) which relates to such disqualified 
        person.
    ``(c) Required Reporting Person.--For purposes of this section, the 
term `required reporting person' means, with respect to any acquisition 
of any United States agricultural interest--
            ``(1) the person (including any attorney or title company) 
        responsible for closing the transaction in which such United 
        States agricultural interest is acquired, or
            ``(2) if no one is responsible for closing such transaction 
        (or in such other cases as the Secretary may provide), the 
        transferor of such United States agricultural interest.
    ``(d) Presumptively Disqualified Person.--For purposes of this 
section, the term `presumptively disqualified person' means any person 
unless such person furnishes to the required reporting person an 
affidavit by the such person stating, under penalty of perjury, that 
such person is not a disqualified person (as defined in section 
5000E(b)).
    ``(e) Requirement To Request Affidavit.--If the required reporting 
person, with respect to any acquisition of any United States 
agricultural interest, has not, as of the time of such acquisition, 
been furnished the affidavit described in subsection (d) by the 
acquirer of such interest, such required reporting person shall furnish 
to such acquirer, at such time, a written statement informing such 
acquirer of the required reporting person's obligation to make the 
return described in subsection (a) with respect to such acquisition and 
including such other information as the Secretary may require.
    ``(f) United States Agricultural Interest.--For purposes of this 
section, the term `United States agricultural interest' has the meaning 
given such term in section 5000E.''.
            (2) Penalties.--Section 6724(d) of such Code is amended--
                    (A) in paragraph (1)(B), by striking ``or'' at the 
                end of clause (xxvii), by striking ``and'' at the end 
                of clause (xxviii) and inserting ``or'', and by adding 
                at the end the following new clause:
                            ``(xxix) section 6050AA(a) (relating to 
                        returns relating to acquisition of United 
                        States agricultural interests by disqualified 
                        persons), and'', and
                    (B) in paragraph (2), by striking ``or'' at the end 
                of subparagraph (KK), by striking the period at the end 
                of subparagraph (LL) and inserting ``, or'', and by 
                inserting after subparagraph (LL) the following new 
                subparagraph:
                    ``(MM) subsection (b) or (e) of section 6055AA 
                (relating to statements relating to acquisition of 
                United States agricultural interests by disqualified 
                persons).''.
    (c) Clerical Amendments.--
            (1) The table of chapters for subtitle D of such Code is 
        amended by inserting after the item relating to chapter 50A the 
        following new item:

 ``Chapter 50B. Acquisition of United States Agricultural Interests by 
                        Disqualified Persons.''.

            (2) The table of sections for subpart B of part III of 
        subchapter A of chapter 61 of such Code is amended by adding at 
        the end the following new item:

``Sec. 6050AA. Returns relating to acquisition of United States 
                            agricultural interests by disqualified 
                            persons.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to acquisitions after the date of the enactment of this Act.
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