II 118th CONGRESS 1st Session S. 2060 IN THE SENATE OF THE UNITED STATES June 20, 2023 Ms. Ernst (for herself and Ms. Stabenow ) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry A BILL To amend the Agricultural Foreign Investment Disclosure Act of 1978 to strengthen oversight over foreign investment in the United States agricultural industry, and for other purposes.

1. Short title This Act may be cited as the Foreign Agricultural Restrictions to Maintain Local Agriculture and National Defense Act of 2023 or the FARMLAND Act of 2023 . 2. Agricultural foreign investment (a) Findings Congress finds that— (1) agriculture is vital for the national security and economic prosperity of the United States and is a key element of United States national power; (2) agriculture of the United States feeds the people of the United States and the world, and has been a key contributor to advancements in technology and medicine; (3) strategic competitors of the United States have hegemonic goals to dominate the global agriculture industry and undermine the United States agriculture sector through intellectual property theft of seeds and other patented agriculture-related technologies; (4) China in particular has increased agricultural investments tenfold over the past decade and continues to make investments in United States agriculture, agribusiness, and animal processing industries, including by acquiring ownership of farmland in the United States; (5) the United States must prevent agricultural espionage and theft of intellectual property conducted by China and other foreign entities of concern (as defined in section 9 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3508 )); (6) agricultural intellectual property theft may enable global competitors to undercut United States producers in international seed markets; (7) the Federal Government does not fully exercise its authorized oversight over investment transactions within the agricultural industry, causing— (A) United States farmland to be under foreign acquisition; and (B) the influence of foreign adversaries on agriculture in the United States to be an unknown risk factor; and (8) the Federal Government must enforce and modernize existing laws to monitor and prevent malign actions of foreign entities of concern (as defined in section 9 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3508 )) on the farms and land of the United States. (b) Civil penalties Section 3 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3502 ) is amended— (1) by redesignating subsection (b) as subsection (d); (2) in subsection (a), in the matter preceding paragraph (1), by striking (a) If the and all that follows through Any such civil penalty in the third sentence and inserting the following: (a) In general A person shall be subject to a civil penalty imposed by the Secretary if the Secretary determines that the person— (1) has failed to submit a report in accordance with the provisions of section 2; or (2) has knowingly submitted a report under section 2 that— (A) does not contain all the information required to be in such report; or (B) contains information that is misleading or false. (b) Availability of funds from civil penalties A civil penalty collected under subsection (a) shall be available to the Secretary without appropriation and remain available until expended for the purpose of enforcing this Act. (c) Civil action Any civil penalty imposed by the Secretary under subsection (a) ; and (3) in subsection (d) (as so redesignated)— (A) by striking the subsection designation and all that follows through The amount and inserting the following: (d) Amount of penalty The amount ; (B) by striking of this section ; and (C) by striking shall not exceed 25 percent and inserting shall be not less than 5 percent, but not more than 25 percent, . (c) Public disclosure of noncompliant persons Section 3 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3502 ) (as amended by subsection (b)) is amended by adding at the end the following: (e) Public disclosure of noncompliant persons The Secretary shall publicly disclose the name of each person who paid to the Secretary a civil penalty imposed under subsection (a), including, if applicable, after the completion of an appeal of a civil penalty. . (d) Publication of reporting requirements Section 3 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3502 ) (as amended by subsection (c)) is amended by adding at the end the following: (f) Outreach Using existing resources and efforts to the maximum extent practicable, the Secretary shall carry out a nationwide outreach program directed primarily towards landlords, owners, operators, persons, producers, and tenants (as those terms are defined in section 718.2 of title 7, Code of Federal Regulations (as in effect on the date of enactment of the Foreign Agricultural Restrictions to Maintain Local Agriculture and National Defense Act of 2023 )) of agricultural land and county property appraiser offices, land appraisal companies, and real estate auction companies to increase public awareness and provide education regarding the reporting requirements under this section. . (e) Due diligence requirements The Agricultural Foreign Investment Disclosure Act of 1978 is amended by inserting after section 4 ( 7 U.S.C. 3503 ) the following: 5. Due diligence requirements Any entity (including a buyer, seller, real estate agent, broker, and title company) involved in the purchase or transfer of agricultural land in the United States shall— (1) conduct due diligence relating to the agriculture land being purchased or transferred; and (2) certify to the Secretary that, to the best of the knowledge and belief of the entity, the entity is in compliance with all applicable provisions of this Act. . 3. Report on agricultural land purchasing activities in the United States by countries designated as state sponsors of terrorism and certain other countries (a) Definitions In this section: (1) Agricultural land The term agricultural land has the meaning given the term in section 9 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3508 ). (2) Appropriate committees of Congress The term appropriate committees of Congress means— (A) the Committee on Agriculture, Nutrition, and Forestry of the Senate; (B) the Committee on Homeland Security and Governmental Affairs of the Senate; (C) the Committee on Intelligence of the Senate; (D) the Committee on Homeland Security of the House of Representatives; (E) the Committee on Agriculture of the House of Representatives; and (F) the Permanent Select Committee on Intelligence of the House of Representatives. (3) Covered foreign country The term covered foreign country means— (A) the People’s Republic of China; (B) the Russian Federation; (C) a state sponsor of terrorism; and (D) any other country identified by the Secretary of Homeland Security or the Secretary of Agriculture. (4) Covered foreign person The term covered foreign person means a foreign person (as defined in section 9 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3508 )) that is a citizen of, or headquartered in, as applicable, a covered foreign country. (5) State The term State has the meaning given the term in section 9 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3508 ). (6) State sponsor of terrorism The term state sponsor of terrorism means a country the government of which the Secretary of State has determined has repeatedly provided support for acts of international terrorism, for purposes of— (A) section 1754(c)(1)(A)(i) of the Export Control Reform Act of 2018 ( 50 U.S.C. 4813(c)(1)(A)(i) ); (B) section 620A of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2371 ); (C) section 40(d) of the Arms Export Control Act ( 22 U.S.C. 2780(d) ); or (D) any other provision of law. (b) Report (1) In general Not later than 180 days after the date of enactment of this Act, and annually thereafter, the Secretary of Agriculture, with support from the Secretary of Homeland Security and the head of any other appropriate Federal agency, shall submit to the appropriate committees of Congress a report describing the national security risks of the purchase and management of agricultural land by covered foreign persons. (2) Contents A report submitted under paragraph (1) shall include the following with respect to the year covered by the report: (A) A description of— (i) the number of acres of agricultural land owned or managed by covered foreign persons, organized by State; and (ii) for each State, the percentage of land owned or managed by covered foreign persons compared to the total acreage of the State. (B) An analysis of the possible threat to food security, food safety, biosecurity, or environmental protection due to the ownership of agricultural land by each covered foreign country through covered foreign persons. (C) An analysis of the annual and total cost of support for agricultural land owned by covered foreign persons through farm programs administered by the Farm Service Agency. (D) An analysis of the use of agricultural land for industrial espionage or intellectual property transfer by covered foreign persons. (E) An analysis of the potential use by covered foreign persons of agricultural land in close proximity to manufacturing facilities, water sources, and other critical infrastructure to monitor, interrupt, or disrupt activities critical to the national and economic security of the United States. (F) An analysis of other threats to the agricultural industry or national security of the United States due to the ownership of agricultural land by covered foreign persons. (3) Unclassified form A report submitted under this subsection shall— (A) be submitted in unclassified form, but may include a classified annex; and (B) be consistent with the protection of intelligence sources and methods. 4. Investigative actions (a) Investigative actions Section 4 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3503 ) is amended to read as follows: 4. Investigative actions (a) In general The Secretary shall appoint an employee in the Senior Executive Service (as described in section 3131 of title 5, United States Code) of the Department of Agriculture to serve as Chief of Operations of Investigative Actions (referred to in this section as the Chief of Operations ), who shall hire, appoint, and maintain additional employees to monitor compliance with the provisions of this Act. (b) Chief of operations The Chief of Operations may serve in such position simultaneously with a concurrent position within the Department of Agriculture. (c) Security The Secretary shall— (1) provide classified storage, meeting, and other spaces, as necessary, for personnel; and (2) assist personnel in obtaining security clearances. (d) Duties The Chief of Operations shall— (1) monitor compliance with this Act; (2) refer noncompliance with this Act to the Secretary, the Farm Service Agency, and any other appropriate authority; (3) conduct investigations, in coordination with the Department of Justice, the Federal Bureau of Investigation, the Department of Homeland Security, the Department of the Treasury, the National Security Council, and State and local law enforcement agencies, on malign efforts— (A) to steal agricultural knowledge and technology; and (B) to disrupt the United States agricultural base; (4) conduct an annual audit of the database developed under section 6(b) of the Foreign Agricultural Restrictions to Maintain Local Agriculture and National Defense Act of 2023 ; (5) seek to enter into memoranda of agreement and memoranda of understanding with the Federal agencies described in paragraph (3)— (A) to ensure compliance with this Act; and (B) to prevent the malign efforts described in that paragraph; (6) refer to the Committee on Foreign Investment in the United States transactions that— (A) raise potential national security concerns; and (B) result in agricultural land acquisition by a foreign person that is a citizen of, or headquartered in, as applicable, a foreign entity of concern; and (7) publish annual reports that summarize the information contained in every report received by the Secretary under section 2 during the period covered by the report. (e) Administration The Chief of Operations shall report to— (1) the Secretary; or (2) if delegated by the Secretary, to— (A) the Administrator of the Farm Service Agency; or (B) the Director of the Department of Agriculture Office of Homeland Security. . (b) Definition of foreign entity of concern Section 9 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3508 ) is amended— (1) in the matter preceding paragraph (1), by striking For purposes of this Act— and inserting In this Act: ; (2) in each of paragraphs (1) through (6)— (A) by striking the term and inserting The term ; and (B) by inserting a paragraph heading, the text of which comprises the term defined in that paragraph; (3) by redesignating paragraphs (2) through (6) as paragraphs (3), (4), (6), (7), and (8), respectively; (4) by inserting after paragraph (1) the following: (2) Foreign entity of concern The term foreign entity of concern has the meaning given the term in section 9901 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 ( 15 U.S.C. 4651 ). ; and (5) by inserting after paragraph (4) (as so redesignated) the following: (5) Malign effort The term malign effort means any hostile effort undertaken by, at the direction of, on behalf of, or with the substantial support of the government of a foreign entity of concern. . (c) Reports The Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3501 et seq. ) is amended by adding at the end the following: 11. Reports (a) Initial report Not later than 180 days after the date of enactment of this section, the Secretary shall submit to Congress a report that describes the progress of the Secretary in implementing the amendments made by the Foreign Agricultural Restrictions to Maintain Local Agriculture and National Defense Act of 2023 . (b) Report on tracking covered transactions Not later than 180 days after the date of enactment of this section, the Secretary shall submit to Congress a report on the feasibility of— (1) establishing a mechanism for quantifying the threats posed by foreign entities of concern to United States food security, biosecurity, food safety, environmental protection, and national defense; and (2) building, and submitting to the Committee on Foreign Investment in the United States for further review, a rigorous discovery and review process to review transactions described in section 721(a)(4)(B)(vi) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(a)(4)(B)(vi) ). (c) Yearly report Not later than 1 year after the date of enactment of this section, and annually thereafter for the following 10 years, the Secretary shall submit to Congress a report on the activities of the Secretary pursuant to this Act during the year covered by the report. . 5. Authority of Committee on Foreign Investment in the United States to review certain real estate purchases by foreign entities of concern (a) In general Section 721(a)(4) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(a)(4) ) is amended— (1) in subparagraph (A)— (A) in clause (i), by striking ; and and inserting a semicolon; (B) in clause (ii), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following: (iii) any transaction described in subparagraph (B)(vi) proposed or pending on or after the date of enactment of this clause. ; and (2) in subparagraph (B), by adding at the end the following: (vi) Subject to subparagraph (C), the purchase or lease by, or a concession to, a foreign entity of concern of private or public real estate in the United States if— (I) (aa) the value of the purchase, lease, or concession— (AA) exceeds $5,000,000; or (BB) in combination with the value of other such purchases or leases by, or concessions to, the same entity during the preceding 3 years, exceeds $5,000,000; or (bb) the real estate— (AA) exceeds 320 acres; or (BB) in combination with other private or public real estate in the United States purchased or leased by, or for which a concession is provided to, the same entity during the preceding 3 years, exceeds 320 acres; and (II) the real estate is primarily used for— (aa) agriculture, including raising of livestock and forestry; (bb) extraction of fossil fuels, natural gas, purchases or leases of renewable energy sources; or (cc) extraction of critical precursor materials for biological technology industries, information technology components, or national defense technologies. . (b) Foreign entities of concern Section 721(a) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(a) ) is amended— (1) by redesignating paragraphs (7) through (13) as paragraphs (8) through (14), respectively; and (2) by inserting after paragraph (6) the following: (7) Foreign entity of concern The term foreign entity of concern has the meaning given that term in section 9901 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 ( 15 U.S.C. 4651 ). . (c) Factors To Be considered Section 721(f) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(f) ) is amended— (1) by redesignating paragraphs (8) through (11) as paragraphs (9) through (12), respectively; and (2) by inserting after paragraph (7) the following: (8) the potential follow-on national security effects of the risks posed by the proposed or pending transaction to United States food security, food safety, biosecurity, environmental protection, or national defense; . (d) Inclusion of Secretary of Agriculture and the Commissioner of Food And Drugs on Committee On Foreign Investment in the United States Section 721(k)(2) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(k)(2) ) is amended— (1) by redesignating subparagraphs (H), (I), and (J) as subparagraphs (J), (K), and (L), respectively; and (2) by inserting after subparagraph (G) the following: (H) The Secretary of Agriculture. (I) The Commissioner of Food and Drugs. . (e) Annual report Section 721(m) of the Defense Production Act of 1950 ( 50 U.S.C. 4565(m) ) is amended— (1) by redesignating paragraph (4) as paragraph (5); and (2) by inserting after paragraph (3) the following: (4) List of real estate owned by foreign entities of concern The President and such agencies as the President shall designate shall include in the annual report submitted under paragraph (1) a list of all real estate in the United States owned by a foreign entity of concern or a person closely associated with such an entity. . (f) Report required Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury, in coordination with Secretary of State and the Secretary of Homeland Security, shall submit to Congress a report that includes— (1) an assessment of the feasibility of requiring retroactive divestment of real estate owned by foreign entities of concern (as defined in section 721(a) of the Defense Production Act of 1950, as amended by this section); and (2) a description of the process used by the Committee on Foreign Investment in the United States to review the national security implications of any connections between— (A) foreign investment in the United States made by the Government of the People’s Republic of China or entities controlled by or acting on behalf of that Government; and (B) the Chinese Communist Party. (g) Effective date The amendments made by this section take effect on the date of the enactment of this Act and apply with respect to any covered transaction the review or investigation of which is initiated under section 721 of the Defense Production Act of 1950 on or after such date of enactment. 6. Digitization and consolidation of foreign land ownership data (a) Definitions In this section: (1) Agricultural land The term agricultural land has the meaning given the term in section 781.2 of title 7, Code of Federal Regulations (as in effect on the date of enactment of this Act). (2) Appropriate committees of Congress In this section, the term appropriate committees of Congress has the meaning given the term in section 3(a). (3) Database The term database means the database developed under subsection (b). (4) Foreign person The term foreign person has the meaning given the term in section 9 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3508 ). (5) Secretaries The term Secretaries means— (A) the Secretary of Agriculture; and (B) the Secretary of Homeland Security. (b) Database Subject to the availability of appropriations, not later than 3 years after the date of enactment of this Act, the Secretaries, acting jointly, shall develop a database of agricultural land owned by foreign persons, using data that are— (1) collected— (A) pursuant to the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3501 et seq. ); and (B) from FSA–153 forms submitted to the Farm Service Agency; and (2) publicly available. (c) Contents Each entry in the database for each registration or updated registration of agricultural land owned by a foreign person shall include information in the applicable FSA–153 form. (d) Audit Not later than 180 days after the database is made publicly available, and annually thereafter, the Chief of Operations for Investigative Actions appointed under section 4 of the Agricultural Foreign Investment Disclosure Act of 1978 shall— (1) conduct an audit of the database; and (2) submit to the appropriate committees of Congress a report— (A) evaluating the accuracy of the database; and (B) describing recommendations for improving compliance with the reporting required under the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3501 et seq. ). 7. Prohibition of participation in Farm Service Agency programs by foreign persons (a) Definitions In this section: (1) Appropriate committees of congress The term appropriate committees of Congress has the meaning given the term in section 3(a). (2) Foreign person The term foreign person has the meaning given the term in section 9 of the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3508 ). (3) Operator The term operator has the meaning given the term in section 718.2 of title 7, Code of Federal Regulations (as in effect on the date of enactment of this Act). (4) Owner The term owner has the meaning given the term in section 718.2 of title 7, Code of Federal Regulations (as in effect on the date of enactment of this Act). (5) Participant The term participant has the meaning given the term in section 718.2 of title 7, Code of Federal Regulations (as in effect on the date of enactment of this Act). (6) Secretary The term Secretary means the Secretary of Agriculture. (b) Limitation for foreign-Owned or operated land No operator or owner who is a foreign person may be a participant. (c) Compliance (1) In general The Secretary may take such actions as the Secretary considers necessary to monitor compliance with subsection (b). (2) Ownership certification The Secretary shall require any owner or operator applying to be a participant to certify in the application that the owner or operator is not a foreign person. (3) Civil penalty (A) In general A foreign person shall be subject to a civil penalty imposed by the Secretary if the Secretary determines that the foreign person— (i) has received benefits prohibited under subsection (b); or (ii) has knowingly submitted a request for those benefits that contains information that is misleading or false. (B) Civil action A civil penalty imposed by the Secretary under subparagraph (A) shall be recoverable in a civil action brought by the Attorney General in an appropriate district court of the United States. (C) Amount The amount of a civil penalty imposed by the Secretary under subparagraph (A)— (i) shall be such amount as the Secretary determines to be appropriate to carry out the purposes of this section; but (ii) shall not exceed 125 percent of the monetary benefits provided to the foreign person in participating in the 1 or more programs of the Farm Service Agency in which participation is prohibited under subsection (b). (D) Use of civil penalties Penalties collected under this paragraph shall be available to the Secretary, without further appropriation and until expended, for the purpose of enforcing this section. (4) Use of information For the purpose of monitoring compliance under this subsection, the Secretary shall use information— (A) collected by the Secretary under the Agricultural Foreign Investment Disclosure Act of 1978 ( 7 U.S.C. 3501 et seq. ); and (B) from the FSA–153 form submitted to the Farm Service Agency. (d) Report The Secretary shall submit to the appropriate committees of Congress, on an annual basis, a report containing the following information: (1) A description of violations of subsection (b) during the year covered by the report. (2) An itemized list of savings for each program administered by the Farm Service Agency during the year covered by the report as a result of subsection (b). (3) A description of compliance actions taken by the Secretary under subsection (c) during the year covered by the report. (4) An itemized list of civil penalties imposed on foreign persons under subsection (c)(3) during the year covered by the report. (5) Such other information on enforcement under this section, compliance with this section, and the benefits of this section as the Secretary determines to be necessary. 8. Authorization of appropriations There are authorized to be appropriated to carry out this Act and the amendments made by this Act— (1) $35,000,000 for fiscal year 2024, to remain available until expended, for secure workspace buildout under the amendments made by section 4 and database system development under section 6; and (2) $9,000,000 for each of fiscal years 2024 through 2028 for all other activities.