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:

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.

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:

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.