Foreign investors that own or lease some types of US land face significantly broader disclosure requirements and sharply higher penalties under a proposed rule published by the US Department of Agriculture on June 25, 2026.
The department is proposing to expand the definition of agricultural land already subject to reporting to include land under solar and wind projects and pipelines. It is also proposing to cut an exemption that waives reporting where land is merely leased for 10 years to one year and to replace the current flat penalty for failure to report from 0.1% of the value of the foreign interest in land per week, with a tiered scheme that can reach 2.5% of fair market value every seven days for investors from countries designated as foreign adversaries. The comment period closed on August 10, 2026.
The Agricultural Foreign Investment Disclosure Act of 1978 requires any foreign person that acquires, transfers or holds any interest in US agricultural land to report the transaction to the US Department of Agriculture within 90 days. The regulations implementing AFIDA have historically been administered by the Farm Service Agency and are found in 7 CFR part 781. More information about the existing reporting requirements can be found here.
Three developments prompted the proposed overhaul. First, in January 2024, the Government Accountability Office recommended that USDA enhance its collection, tracking and sharing of AFIDA data, including sharing detailed and timely data with CFIUS -- a committee of 16 federal agencies that reviews proposed inbound foreign investments -- and assessing the feasibility of an online submission system. Second, the Consolidated Appropriations Act of 2023 required USDA to establish a streamlined electronic submission process, including an internet database, within three years. Third, on July 9, 2025, USDA announced a National Farm Security Action Plan calling on the agency to aggressively implement AFIDA reforms, including online reporting, geospatial disclosure requirements and higher civil penalties.
On April 13, 2026, USDA transferred AFIDA administration from the Farm Service Agency to the assistant secretary for administration, who has since subdelegated oversight to USDA's office of homeland security. USDA concluded that the office of homeland security is better suited to address the national security dimensions of the statute.
USDA is proposing to remove and reserve 7 CFR part 781 and create a new chapter LI in subtitle B of 7 CFR, comprising proposed sections 5100.1 through 5100.7. The Farm Service Agency would retain certain functions, including serving as the first point of public contact for foreign persons needing help with reporting and consulting on fair market value assessments for penalty purposes.
Agricultural land definition. The current regulations define agricultural land by reference to 1987 Standard Industrial Classification codes. USDA is proposing to replace those with 2022 NAICS codes and substantially broaden the definition. Newly covered categories include the following:
Conservation land enrolled in programs such as the Conservation Reserve Program would also fall within the definition if the land could be used for farming, ranching, forestry or timber production. Land meeting the definition is treated as agricultural land regardless of local zoning. The current exemption for parcels of 10 or fewer acres with annual gross receipts under $1,000 would be eliminated.
The expansion to solar and wind generation is a material change for energy developers. USDA explained that the inclusion of these NAICS codes is intended to capture generation occurring on land that otherwise meets the agricultural land definition, following public comment raising the issue of non-agricultural co-use of farmland for energy development.
Leases. The current regulations exempt leaseholds of less than 10 years. USDA is proposing to narrow that exemption to leases of less than one year, measured as a single period or in the aggregate over a continuous or discontinuous period, for lessees that are not foreign adversaries or "Foreign Adversary Controlled Entities." For foreign adversaries and Foreign Adversary Controlled Entities, the exemption disappears entirely; any lease of any duration would trigger a reporting obligation.
USDA acknowledged the complexity of valuing leased agricultural land for penalty purposes given that energy lease payments are often structured to allow viability studies, with payments starting at nominal or zero amounts before escalating. USDA sought public comment on how to calculate fair market value in this context.
Easements. The current regulations exempt from reporting surface and subsurface easements and rights of way used for purposes unrelated to agriculture. USDA is proposing to remove that exemption. Foreign persons that hold, acquire or transfer easements or rights of way over agricultural land would be required to file an AFIDA report.
Significant interest or substantial control. Under current regulations, a "significant interest or substantial control" that triggers reporting includes a 10% or greater interest held by a single foreign person, a 10% or greater aggregate interest held by foreign persons acting in concert, or a 50% or greater aggregate interest held by foreign persons even if not acting in concert. USDA is proposing to reduce the 50% aggregate threshold to 10%, applicable to any combination of foreign persons whether or not acting in concert.
Foreigners that are beneficial owners must also report interests in agricultural land. Beneficial owners are defined as any foreign persons that, directly or indirectly through any contract, understanding, relationship or other arrangement, exercise decision-making authority over the agricultural land or the legal entity holding it, including the power to direct the sale, lease or use of the property. Beneficial owners would automatically meet the definition of significant interest or substantial control regardless of the size of their economic interests. Any interest held by a foreign adversary or Foreign Adversary Controlled Entity would also be included under the definition regardless of amount.
Foreign adversary. USDA is proposing to add a definition of "foreign adversary" to mean any foreign government or foreign non-government person from, a citizen of, or a controlled entity headquartered in a foreign country of concern under 42 U.S.C. 19237(2), which covers China, North Korea, Russia, Iran and any other country the US government designates.
Foreign Adversary Controlled Entity. A "Foreign Adversary Controlled Entity" is any entity, including any corporation, partnership, trust or association, that is owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary.
USDA has already deployed an online portal for AFIDA submissions at https://afida.landmark.usda.gov. It is proposing to require all reports to be filed through that portal. Foreign persons that have difficulty accessing the portal may contact the local Farm Service Agency county office near the land for assistance.
Investors would be required in the future to report more information.
The type of interest, including percent of ownership or leasehold interest, must be reported by any foreign person that holds, acquires or transfers an interest.
Filers must report current acreage at the time of the transaction and submit a digital open-source geospatial map with property boundaries delineating the land interest, subdivided by crop, pasture, forest, other agriculture and non-agricultural land usage.
The intended use must be reported specifically. If the actual use later changes from the reported intended use, the foreign person must report the change through the portal; failure to do so constitutes a violation.
Filers must disclose their tax identification numbers, foreign passport numbers and other unique identifiers.
USDA may request any additional information it determines is necessary to verify the accuracy of the report.
For corporate and non-individual, non-government filers, USDA is proposing to add requirements to identify all foreign persons holding significant interests or substantial control; report the nature and percentage interest held individually by person and by country, and in aggregate by country; and submit an ownership diagram depicting the relationships among all interest holders, along with tax identification numbers and foreign passport numbers for all foreign persons.
Under current regulations, late-filed reports are subject to a penalty of 0.1% of the fair market value of the foreign person's interest for each week or portion of a week that the violation continues, up to a maximum of 25% of fair market value. Penalties may be adjusted downward based on time elapsed, method of discovery, extenuating circumstances and the nature of the misstated information.
USDA is proposing to replace this with a three-track scheme carrying substantially higher accrual rates and no downward adjustments.
Track 1 — Late acquisition or holding reports. A flat civil penalty of $250 is assessed on the 91st day after the date of acquisition or change in holding status. Thereafter, for foreign adversaries and Foreign Adversary Controlled Entities, an additional 2.5% of fair market value accrues every seven days. For all other foreign persons, the rate is 1.5% every seven days. Both tracks are capped at 25% of fair market value. At the foreign adversary rate of 2.5% every seven days, the 25% cap can be reached in approximately 10 weeks.
Track 2 — Late transfer or inheritance reports. A flat $250 penalty is assessed on the 91st day after transfer. For foreign adversaries, an additional 2.5% of fair market value is assessed 15 days after the initial penalty, again at 30 days, and every seven days thereafter. For all other foreign persons, the rate is 1.5% at the same intervals. Both are capped at 25% of fair market value. For inherited interests, penalties do not begin until 91 days after the foreign person knew, had reason to know, or should have reasonably become aware of the inheritance, reflecting that heirs often have no agency over the acquisition.
Track 3 — Newly reportable holdings (one year only). For holdings that become reportable only because of the expanded regulations, such as leases of more than one year but less than 10 years, easements, or land newly meeting the expanded agricultural land definition, a reduced, uniform penalty scheme applies for one year after the effective date of the final rule: a $250 initial penalty on the 91st day, then 1.5% of fair market value at 15 and 30 days after the initial penalty, and every seven days thereafter, for all filers regardless of foreign adversary status. After one year, Track 1 applies.
USDA says that the current downward adjustment mechanism has undermined the deterrent effect of the statute. The proposed new reporting regime removes it entirely.
Under current regulations, parties have 60 days to respond to a notice of apparent liability, with options including paying the penalty, submitting a written statement denying liability or requesting a hearing. USDA is proposing to reduce the response period to 30 days and consolidate the two existing response options into a single appeals process under proposed section 5100.6.
Appeals must be filed within 30 days after receipt of a notice of apparent liability and must include all supporting facts and documentation. Penalty accrual pauses upon receipt of the appeal. The office of homeland security must issue a notice of determination within 60 calendar days after receipt of the appeal. Appeal decisions are administratively final.
If a foreign person fails to comply within 30 days after an adverse decision on appeal, then penalties resume accruing and unpaid penalties are referred without further notice to the Department of Justice for civil action. Checks and money orders are eliminated as payment methods; all penalties must be paid electronically through www.pay.gov, consistent with a USDA-wide transition to electronic payments effective September 30, 2026.
The USDA proposals are among the most significant revisions to AFIDA since the statute was enacted in 1978. Several points warrant immediate attention.
The expansion of the agricultural land definition to include solar and wind generation and pipeline transportation is a material change. Foreign-owned energy companies that lease agricultural land for wind or solar development, including those currently exempt as holding leases of less than 10 years, may find themselves newly subject to reporting obligations when the final rule takes effect.
The reduction of the aggregate ownership threshold from 50% to 10%, combined with the new beneficial owner concept, will capture a broader range of corporate structures and passive investors than current rules require. Ownership diagrams and beneficial ownership disclosures will become standard components of AFIDA filings for non-individual filers.
The penalty increases are dramatic. The jump from 0.1% per week to 1.5% or 2.5% per seven-day period represents accrual rates that are roughly 10 to 17 times faster than current levels. The elimination of downward adjustments removes a meaningful source of relief for parties that would otherwise have been able to negotiate reduced penalties based on self-disclosure or extenuating circumstances.
USDA appears intent on prompt finalization in light of the Congressional mandates and the National Farm Security Action Plan already in place.