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