Executive Summary
- What’s new: The USDA released a proposed rule that would overhaul reporting under AFIDA and compliance for foreign land ownership in the U.S. The proposed rule expands the scope of who must report, includes new requirements for those submitting reports, and strengthens AFIDA’s compliance mechanisms.
- Why it matters: The expanded scope would require filings for land interests that previously would not otherwise have been reportable under AFIDA. It also would impose a stricter penalty schedule and remove the discretionary downward adjustments under the prior regulation.
- What to do next: Foreign individual landholders or entities with foreign ownership interests that own land in the U.S. should consider proactive review to determine if the proposed changes would require any new or updated filings.
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On Thursday, June 25, 2026, the U.S. Department of Agriculture (USDA) published a proposed rule that would significantly overhaul its oversight of the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA) and its reporting obligations (the Proposed Rule). AFIDA is a reporting statute that requires a filing when land used for agricultural purposes (as defined within AFIDA) has 10% or more ownership by a foreign individual or entity.
The proposed changes appear intended to fulfill the priorities set forth in the National Farm Security Action Plan, which the Trump administration released in July 2025. The Action Plan called for changes “to fully integrate agriculture into the broader national security enterprise.” The Proposed Rule would expand the scope of who must report by eliminating several exemptions and also updating the definition of agricultural land to include new activity, including solar and wind electricity generation. The Proposed Rule would require filers to use a new online portal and effectively eliminate the prior FSA-153 form that filers had used. The Proposed Rule also would increase the risks of noncompliance by changing the penalty structure so that penalties accrue more quickly and by removing downward adjustments of penalties based on certain criteria.
Expanded Scope of Reporting
The Proposed Rule appears aimed at requiring a broader swath of foreign persons to report under AFIDA. Some of the changes include:
- Changing the exemption for leaseholds of less than 10 years to an exemption for leases of less than one year. The exemption for easements and rights of way would also be eliminated.
- Updating the definition of agricultural land to include new activity. In particular, the Proposed Rule would consider solar electric power generation and wind electric power generation to be agricultural activity. Pipeline transportation would also be considered agricultural activity.
- The Proposed Rule proposes removing the exemption for agricultural land not exceeding 10 acres where gross receipts from the sale of agricultural products do not exceed $1,000.
- “Beneficial owners,” as defined by the Proposed Rule, would be required to file regardless of the percentage interest they hold. The Proposed Rule considers Beneficial Owners to be any foreign person who directly or indirectly exercises decision-making authority over the land or legal entity holding the land.
- The Proposed Rule also includes new requirements for “shell corporations” — defined as “any company, partnership, trust, or legal entity that has no or nominal operations and is used to hold an interest in agricultural land” — to file.
- The Proposed Rule also contemplates retroactive application such that land that was not reportable under the prior regulation but would be reportable after the changes would require a filing within ninety days of the effective date.
Changes to Reporting Requirements
The Proposed Rule would make several significant adjustments to the filing format and the information that must be provided. Changes include:
- Requiring that filings be submitted through the USDA’s online portal. The online portal is intended to increase transparency and allow the agency to better track compliance. Filers previously could file with the local Farm Service Agency (FSA) county office. Practically speaking, this means that filings will be publicly available in an organized database.
- Essentially eliminating Form FSA-153, which has been the method of reporting since AFIDA was passed in the 1970s.
- Requiring filers to submit a geospatial map that subdivides land based on crop, pasture, forest, research, other agricultural and nonagricultural usage. The Proposed Rule suggests that a tool will be provided on the portal to assist with creation of the map, but this requirement could impose an onerous new burden on filers.
- Foreign persons will be required to disclose tax identification number(s) and foreign passport number(s) to “aid in identification of the foreign person who submitted the report.”
- Corporations meeting reporting requirements will be required to provide an “ownership diagram depicting the relationship between all interest holders.” Such a diagram would be more detailed than the prior requirement which only required a showing of the three tiers of ownership above an entity.
Strengthening the Enforcement Mechanism
The Proposed Rule delivers on the recent calls by the Trump administration to crack down on foreign ownership of agricultural land and increase penalties for noncompliance with reporting obligations. Changes include:
- Codifying delegation of oversight of AFIDA to the Office of Homeland Security within USDA. Previously AFIDA oversight was handled by the FSA. The change is meant to “address the national security equities associated with AFIDA.”
- The Proposed Rule would define “foreign adversary” as any foreign government or foreign nongovernment person from, a citizen of, or a controlled entity headquartered in a foreign country of concern as defined by 42 U.S.C. 19237(2). There would be increased penalties associated with noncompliance related to interests held by foreign adversaries.
- Creating a tiered penalty system based on the alleged violation. Penalties will be set by a formula based on whether the violations is for an acquisition/holding, transfer/inheritance or a newly reportable holding.
- Under each tier, penalties would accrue at a faster rate than the prior regulation. Generally, penalties will accrue by 2.5% of the fair market value of the land at set intervals if the foreign ownership is a country considered an adversary and at 1.5% at the same interval for interests owned by individuals from other countries.
- Penalties would cap at 25% of the fair market value of the land which is the cap set by the statute (though there currently is legislation before congress that could increase that cap).
- Removing discretion for downward adjustments based on criteria set forth in the prior regulation. Penalties for noncompliance with AFIDA have historically been low and the proposed rule could require that the USDA impose harsher penalties.
- Reducing time to appeal from 60 days to 30 days and removing a provision allowing for a written statement denying liability in whole or in part in lieu of an appeal hearing.
The comment period for the Proposed Rule closes on August 10, 2026. After the comment period closes, the USDA will decide whether to move forward with promulgating a final rule. There is no set timeline for when a final rule would issue. However, under the current version of the rule, new filing requirements would generally start 90 days after the effective date of a final rule.
Foreign individual landholders or entities with foreign ownership interests that own land in the United States should consider proactive review to determine if the proposed changes would require any new or updated filings.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.