[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2583 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 2583

  To ban new corporate ownership of agricultural land, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 27, 2023

  Mr. Booker introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
  To ban new corporate ownership of agricultural land, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Farmland for Farmers Act of 2023''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) it is the longstanding policy of the United States to 
        foster and encourage the family farm system of agriculture in 
        the United States;
            (2) the maintenance of the family farm system of 
        agriculture is essential to the social and economic wellbeing 
        and national security of the United States;
            (3) agricultural land is--
                    (A) a critical and limited resource of the United 
                States that provides needed food and fiber for the 
                people of the United States and others throughout the 
                world; and
                    (B) a source of wealth, including generational 
                wealth, for the people of the United States;
            (4) since the 2008 financial crisis, corporations and, in 
        particular, pension funds, have increasingly turned to farmland 
        investment;
            (5) from 2009 to 2022--
                    (A) the number of institutionally-owned farm 
                properties rose three-fold; and
                    (B) the market value of that property increased 
                from less than $2,000,000,000 to more than 
                $14,000,000,000;
            (6) large corporate investors that own farmland--
                    (A) are more focused on short-term profits than 
                long-term land conservation; and
                    (B) have less interest than independent family 
                farmers in ensuring that agricultural land is used in a 
                way that most benefits the local community;
            (7) since 2005, farmland prices in the United States have 
        nearly doubled;
            (8) higher farmland prices provide an advantage to well-
        capitalized corporate interests who can often outbid 
        independent family farmers;
            (9) continued expansion of ownership and control of 
        agricultural land by corporate owners, especially institutional 
        investors--
                    (A) threatens the future use of the agricultural 
                land for the benefit of the people of the United 
                States; and
                    (B) is detrimental to the welfare and national 
                security of the United States;
            (10) the operational scope and economic impacts of 
        corporate ownership of agricultural land--
                    (A) is increasingly interstate; and
                    (B) directly affects the continued wellbeing and 
                security of millions of residents of rural communities; 
                and
            (11) there is a national public interest in regulating 
        corporate ownership of agricultural land.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Actively engaged in farming.--
                    (A) In general.--The term ``actively engaged in 
                farming'', with respect to a natural person who is a 
                shareholder in an authorized legal entity, an officer, 
                a director, or an employee of an authorized legal 
                entity, a member or manager of an authorized legal 
                entity, a partner in an authorized legal entity, a 
                beneficiary or trustee of an authorized legal entity, 
                or any other individual, means--
                            (i) regularly and frequently making or 
                        taking an important part in making management 
                        decisions substantially contributing to or 
                        affecting the operation of a farm or forest; or
                            (ii) performing physical work, which 
                        significantly contributes to cultivation, 
                        stewardship, crop or livestock production, or 
                        food production.
                    (B) Exclusion.--The term ``actively engaged in 
                farming'' does not include solely providing capital.
            (2) Agricultural land.--The term ``agricultural land'' 
        means land located in a State that--
                    (A) is cropland, grassland, rangeland, pasture, 
                forestland or other agricultural land on which 
                agricultural or forest-related products or livestock 
                are produced; or
                    (B) if the land is idle as of the date of transfer 
                of an ownership interest in the land, was used within 
                the 10-year period preceding the date of that transfer 
                for production of agricultural or forest-related 
                products or livestock.
            (3) Authorized farmer or rancher cooperative.--The term 
        ``authorized farmer or rancher cooperative'' means a farmer-
        controlled or rancher-controlled entity--
                    (A) with bylaws requiring 1 vote per member;
                    (B) from which benefits are derived and distributed 
                equitably by each of the farmer or rancher owners;
                    (C) the members of which are actively engaged in 
                farming; and
                    (D) that is not a subsidiary of, or owned in any 
                part by, a multilayer subsidiary entity.
            (4) Authorized legal entity.--The term ``authorized legal 
        entity'' means a legal entity that meets each of the following 
        requirements:
                    (A) The legal entity is not a subsidiary of, or 
                owned in any part by, a multilayered subsidiary entity.
                    (B) The shareholders, partners, members, or 
                beneficial owners of the legal entity do not exceed 25.
                    (C) The shareholders, partners, members, or 
                beneficial owners of the legal entity are all natural 
                persons who are actively engaged in farming.
            (5) Beneficial owner.--The term ``beneficial owner'', with 
        respect to a legal entity, means any person who, directly or 
        indirectly, through any contract, arrangement, understanding, 
        relationship, or otherwise, has or shares--
                    (A) voting power, including the power to vote for, 
                or to direct the voting of, the legal entity; or
                    (B) investment power, including the power to 
                dispose, or to direct the disposition, of an interest 
                in the legal entity.
            (6) Corporation.--The term ``corporation'' means--
                    (A) a domestic corporation organized pursuant to 
                the laws of a State; and
                    (B) a foreign corporation.
            (7) Fiduciary capacity.--The term ``fiduciary capacity'' 
        means an undertaking to act as executor, administrator, 
        personal representative, guardian, conservator, or receiver.
            (8) Indirect.--The term ``indirect'' means to act, or 
        attempt to accomplish an act, through an interest in a business 
        association, through 1 or more affiliates or intermediaries, or 
        by any method other than a direct approach, including by any 
        circuitous or oblique method.
            (9) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).
            (10) Legal entity.--The term ``legal entity'' means any 
        corporation, business trust, estate, trust, partnership, 
        limited liability company, association, joint venture, public 
        corporation, cooperative, pension or investment fund, or any 
        other legal or commercial entity organized or created under the 
        laws of any State or country.
            (11) Multilayer subsidiary entity.--The term ``multilayer 
        subsidiary entity'' means--
                    (A) a privately held or publicly traded legal 
                entity that exists within a hierarchy of legal entities 
                that includes 2 or more levels of subsidiary entities;
                    (B) a privately held or publicly traded legal 
                entity that has as its parent or subsidiary a 
                management or holding company; or
                    (C) a privately held or publicly traded legal 
                entity that engages in intramarket transfers using 
                special purpose vehicles.
            (12) Natural person.--The term ``natural person'' means a 
        human being.
            (13) Ownership interest.--
                    (A) In general.--The term ``ownership interest'', 
                with respect to agricultural land, means all interest 
                acquired, transferred, or held in the agricultural 
                land.
                    (B) Exclusions.--The term ``ownership interest'', 
                with respect to agricultural land, does not include--
                            (i) security interests;
                            (ii) contingent future interests;
                            (iii) noncontingent future interests that 
                        do not become possessory on the termination of 
                        the present possessory estate;
                            (iv) surface or subsurface easements and 
                        rights-of-way used for a purpose unrelated to 
                        agricultural production; and
                            (v) an interest solely in mineral rights.
            (14) Pension or investment fund.--The term ``pension or 
        investment fund'' means--
                    (A) a pension or employee welfare benefit fund 
                (however organized);
                    (B) a mutual fund;
                    (C) a life insurance company separate account;
                    (D) a common trust of a bank or other trustee 
                established for the investment and reinvestment of 
                money contributed to the common trust;
                    (E) a real estate investment trust; and
                    (F) an investment company (as defined in section 
                3(a) of the Investment Company Act of 1940 (15 U.S.C. 
                80a-3(a))).
            (15) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (16) State.--The term ``State'' means--
                    (A) each of the 50 States;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico;
                    (D) the United States Virgin Islands; and
                    (E) any territory or insular possession subject to 
                the jurisdiction of the United States.
            (17) Trust.--
                    (A) In general.--The term ``trust'', with respect 
                to property, means a fiduciary relationship that 
                subjects the person by whom the property is held to 
                equitable duties to deal with the property for the 
                benefit of another person, which arises as a result of 
                a manifestation of an intention to create the fiduciary 
                relationship.
                    (B) Inclusions.--The term ``trust'' includes a 
                legal entity holding property as trustee, agent, escrow 
                agent, attorney-in-fact, or in any similar capacity.
                    (C) Exclusions.--The term ``trust'' does not 
                include--
                            (i) a person acting in a fiduciary 
                        capacity; or
                            (ii) a revocable trust.
            (18) Unauthorized legal entity.--The term ``unauthorized 
        legal entity'' means a legal entity that is not an authorized 
        legal entity.

SEC. 4. RESTRICTIONS ON AGRICULTURAL LAND HOLDINGS AND EXCEPTIONS.

    (a) In General.--Except as provided in subsection (b), an 
unauthorized legal entity shall not, directly or indirectly, acquire or 
otherwise hold an ownership interest in any agricultural land.
    (b) Exceptions.--
            (1) In general.--Subsection (a) shall not apply to the 
        following:
                    (A) A bona fide encumbrance taken for purposes of 
                security.
                    (B) Agricultural land acquired for research or 
                experimental purposes.
                    (C) Agricultural land acquired and operated--
                            (i) by or for a public institution of 
                        higher education for research, experimental, 
                        demonstration, or test purposes; or
                            (ii) by or for a nonprofit corporation 
                        organized specifically for research, 
                        experimental, demonstration, or test purposes 
                        in support of or in conjunction with an 
                        institution of higher education.
                    (D) Agricultural land acquired by a legal entity 
                for immediate use in non-agricultural purposes, subject 
                to the condition that the land remain in use for non-
                agricultural purposes.
                    (E) Agricultural land acquired by a legal entity by 
                process of law in the collection of debts, pursuant to 
                a contract for deed executed prior to the date of 
                enactment of this Act, or by any procedure for the 
                enforcement of a lien or claim on the agricultural 
                land, whether created by mortgage or otherwise, if all 
                agricultural land acquired is disposed of not later 
                than 5 years after the date on which the legal entity 
                acquires the title to the agricultural land.
                    (F) Agricultural land acquired or owned by a 
                municipal corporation.
                    (G) Agricultural land acquired or owned by a 
                nonprofit legal entity that--
                            (i) is organized under the laws of any 
                        State as a nonprofit legal entity; and
                            (ii) qualifies as tax exempt under section 
                        501 of the Internal Revenue Code of 1986.
                    (H) Agricultural land that is acquired or owned by 
                a legal entity in a fiduciary capacity.
                    (I) Agricultural land that is acquired or owned by 
                a legal entity formed by owners of heirs' property (as 
                defined in section 761.2(b) of title 7, Code of Federal 
                Regulations (or a successor regulation)).
                    (J) Agricultural land that is acquired or owned by 
                an authorized farmer or rancher cooperative.
                    (K) Agricultural land owned by a legal entity on 
                the date of enactment of this Act, subject to the 
                condition that the legal entity owning the land on that 
                date of enactment continues to own the agricultural 
                land.
            (2) Research or experimental purposes.--For purposes of 
        paragraph (1)(B), agricultural land is acquired for research or 
        experimental purposes if the agricultural land is used in 
        accordance with any of the following:
                    (A) Research and experimental activities.--
                            (i) In general.--Research and experimental 
                        activities are carried out on the agricultural 
                        land and commercial sales of products produced 
                        from farming the agricultural land do not occur 
                        or are incidental to those research or 
                        experimental activities.
                            (ii) Incidental sales.--For purposes of 
                        clause (i), commercial sales are sales that are 
                        incidental to the research or experimental 
                        purposes of the legal entity when the sales are 
                        less than 25 percent of the gross sales of the 
                        primary product of the research and 
                        experimental activities carried out on the 
                        agricultural land.
                    (B) Public seed varieties.--
                            (i) In general.--The agricultural land is 
                        used for the primary purpose of testing, 
                        developing, or producing public seed varieties 
                        or plants for sale or resale to farmers as seed 
                        stock and commercial sales of other products 
                        produced from farming the agricultural land do 
                        not occur or are incidental.
                            (ii) Incidental sales.--For purposes of 
                        clause (i), commercial sales described in that 
                        clause are incidental if the sales are less 
                        than 25 percent of the gross sales of the 
                        primary product of the testing, development, or 
                        production of public seed varieties or plants 
                        for sale or resale to farmers as seed stock 
                        carried out on the agricultural land.
            (3) Land acquired by law.--For purposes of paragraph 
        (1)(E)--
                    (A) the 5-year period described in that paragraph 
                shall be a covenant running with the title to the 
                agricultural land against any grantee, assignee, or 
                successor of the legal entity; and
                    (B) any agricultural land acquired shall not be 
                used for farming during the 5-year period described in 
                that paragraph, except under a lease to an authorized 
                legal entity in accordance with this Act.

SEC. 5. COMPLIANCE.

    (a) Certifying Affidavit.--For any acquisition of an ownership 
interest in agricultural land by a legal entity after the date of 
enactment of this Act, at the time of acquisition, the legal entity 
purchasing the agricultural land shall sign, and submit to the 
Secretary, an affidavit, under penalty of perjury, certifying 
compliance with this Act.
    (b) Federal Tax Return Affidavit.--Beginning with the first taxable 
year after the date of enactment of this Act, any legal entity with an 
ownership interest in agricultural land shall file an affidavit along 
with the Federal tax return submitted by the legal entity, under 
penalty of perjury, certifying compliance with this Act.
    (c) USDA Programs and Farm Credit System.--Any legal entity 
applying to participate in any program of the Department of Agriculture 
or the Farm Credit System after the date of enactment of this Act shall 
provide documentation that demonstrates compliance with this Act as a 
condition of eligibility for the program.
    (d) Ineligibility.--Any unauthorized legal entity that holds an 
ownership interest in agricultural land described in section 4(b)(1)(K) 
shall not be eligible to participate in any program of the Department 
of Agriculture or the Farm Credit System after the date of enactment of 
this Act.
    (e) Reports to Congress.--Each calendar year, the Secretary shall 
submit to Congress, and make publicly available on the website of the 
Department of Agriculture, a report on violations of this Act 
discovered through affidavits received under subsections (a) and (b) 
and documentation received under subsection (c).

SEC. 6. ENFORCEMENT.

    (a) Referral.--If the Secretary determines that a legal entity has 
acquired, or holds title to or interest in, agricultural land in 
violation of this Act, the Secretary shall report that violation to the 
Attorney General for enforcement in accordance with subsection (b).
    (b) Enforcement by Attorney General.--
            (1) In general.--On receipt of a referral of a violation of 
        this Act reported by the Secretary pursuant to subsection (a), 
        the Attorney General--
                    (A) shall conduct an investigation relating to that 
                referral; and
                    (B) may initiate an action in the district court of 
                the United States with jurisdiction over the county in 
                which the applicable agricultural land is located to 
                require divestiture of the agricultural land by the 
                legal entity.
            (2) Notice; order.--
                    (A) In general.--The Attorney General shall file 
                notice of the pendency of an action brought under 
                paragraph (1)(B) with the recorder of deeds of each 
                county in which the applicable agricultural land is 
                located.
                    (B) Order required.--If the applicable district 
                court of the United States finds that the agricultural 
                land subject to an action brought under paragraph 
                (1)(B) was acquired, or held, in violation of this Act, 
                the court shall--
                            (i) enter an order declaring that 
                        violation; and
                            (ii) file a copy of the order with the 
                        recorder of deeds in each county in which any 
                        portion of the agricultural land is located.
            (3) Divestment of agricultural land.--
                    (A) In general.--On issuance of an order described 
                in paragraph (2)(B), the unauthorized legal entity 
                owning or having an ownership interest in the 
                agricultural land subject to that order shall have a 
                period of 1 year from the date on which the order was 
                issued to divest the agricultural land.
                    (B) Covenant.--The 1-year period described in 
                subparagraph (A) shall be deemed to be a covenant 
                running with the title to the agricultural land against 
                any legal entity, grantee, assignee, or successor.
                    (C) Violation.--Any agricultural land not divested 
                in accordance with subparagraph (A) shall be sold at 
                public sale in the manner prescribed by law for the 
                foreclosure of a mortgage by action.
            (4) Enjoinment.--Any prospective or threatened violation of 
        this Act may be enjoined through an action brought by the 
        Attorney General in a manner provided by law.
            (5) Penalties.--
                    (A) Civil penalties.--
                            (i) In general.--Any natural person or 
                        legal entity that violates this Act may be 
                        assessed a civil penalty by the Secretary in an 
                        amount that is not more than 2 times the fair 
                        market value of the agricultural land at issue 
                        for each violation.
                            (ii) Multiple violations.--Each violation 
                        of this Act shall constitute a separate 
                        offense.
                            (iii) Notice.--No penalty shall be assessed 
                        on any natural person or legal entity unless 
                        the natural person or legal entity is given 
                        notice and opportunity for a hearing with 
                        respect to the violation.
                            (iv) Failure to pay.--
                                    (I) In general.--On failure to pay 
                                the penalty assessed under clause (i), 
                                the Secretary may request the Attorney 
                                General institute a civil action in a 
                                district court of the United States for 
                                any district in which the natural 
                                person or legal entity is found, 
                                resides, or transacts business to 
                                collect the penalty.
                                    (II) Deference.--In any action 
                                commenced under subclause (I), the 
                                applicable district court of the United 
                                States shall sustain the issuance of a 
                                penalty by the Secretary under clause 
                                (i) if supported by substantial 
                                evidence.
                    (B) Criminal penalties.--
                            (i) In general.--Any natural person who 
                        knowingly violates this Act as a shareholder, 
                        partner, member, or beneficial owner of an 
                        unauthorized legal entity with an ownership 
                        interest in the agricultural land at issue 
                        shall be imprisoned for not more than 5 years, 
                        fined in accordance with section 3571 of title 
                        18, United States Code, or both.
                            (ii) Multiple violations.--Each violation 
                        of this Act shall constitute a separate 
                        offense.
    (c) Enforcement by State Attorneys General.--
            (1) In general.--If the attorney general of a State has 
        reason to believe that an interest of the residents of the 
        State has been, or is, threatened or adversely affected by the 
        engagement of an unauthorized legal entity in a practice that 
        violates this Act, or a regulation promulgated pursuant to this 
        Act, the attorney general of the State may, as parens patriae, 
        bring a civil action on behalf of the residents of the State in 
        an appropriate district court of the United States--
                    (A) to enjoin that practice;
                    (B) to compel divestiture of the agricultural land;
                    (C) to obtain damages, restitution, or other 
                compensation on behalf of the residents of the State;
                    (D) to obtain such other relief as the court 
                considers appropriate; or
                    (E) to obtain a civil penalty in an amount 
                determined under paragraph (2).
            (2) Civil penalties.--
                    (A) Calculation.--Subject to subparagraph (B), for 
                purposes of imposing a civil penalty under paragraph 
                (1)(E) with respect to an unauthorized legal entity 
                that violates this Act, the amount determined under 
                this paragraph is the amount obtained by multiplying--
                            (i) the number of days that the 
                        unauthorized legal entity is not in compliance 
                        with this Act; and
                            (ii) an amount not greater than $3,000, as 
                        determined by the appropriate district court of 
                        the United States.
                    (B) Maximum total liability.--The total amount of 
                civil penalties that may be imposed with respect to an 
                unauthorized legal entity that violates this Act shall 
                not exceed the greater of $1,000,000 and the fair 
                market value of the ownership interest in agricultural 
                land involved in the applicable action for all civil 
                actions brought against that unauthorized legal entity 
                under paragraph (1) for that violation.
            (3) Investigatory powers.--Nothing in this paragraph 
        prevents the attorney general of a State from exercising the 
        powers conferred on the attorney general by the laws of the 
        State to conduct investigations, to administer oaths or 
        affirmations, or to compel the attendance of witnesses or the 
        production of documentary or other evidence.
            (4) Actions by other state officials.--In addition to civil 
        actions brought by State attorneys general under paragraph (1), 
        any other officer of a State who is authorized by the State may 
        bring a civil action under that paragraph, subject to the same 
        requirements and limitations that apply under that paragraph to 
        civil actions brought by the attorney general in the State.
            (5) Savings provision.--Nothing in this subsection 
        prohibits an attorney general or other authorized official of a 
        State from initiating or continuing any proceeding in a court 
        of the State for a violation of any civil or criminal law of 
        the State.

SEC. 7. STATE AUTHORITY.

    (a) In General.--Pursuant to its powers under the Commerce Clause 
of section 8 of article I of the Constitution of the United States, 
Congress hereby authorizes States to regulate legal entities that are 
permitted to own agricultural land within the State in a manner that is 
at least as restrictive as the manner described in this Act.
    (b) Inclusions.--Regulation under subsection (a) may include more 
restrictive requirements, including restrictions that provide more 
stringent definitions of ``actively engaged in farming'', 
notwithstanding whether the requirements are more burdensome for owners 
of agricultural land in a certain State, who are residing in other 
States, to satisfy.
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