What they should know about the Agricultural Foreign Investment Disclosure Act of 1978
Foreign investors who buy, sell, or hold a direct or indirect interest in U.S. agricultural land must report their holdings and transactions to the U.S. Secretary of Agriculture. The reporting requirement became law in late 1978 when the president signed the Agricultural Foreign Investment Disclosure Act (AFIDA). The data gained from these disclosures will be utilized in the preparation of periodic reports to the president and Congress concerning the effect of such holdings upon family farms and rural communities.
Failure to timely file an accurate report can result in a penalty with fines of up to 25 percent of the fair market value of the agricultural land.
Who must report
• Individuals who are not U.S. citizens or citizens of the Northern Mariana Islands or the Trust Territory of the Pacific Islands.
• Individuals who are not lawfully admitted to the United States for permanent residence or who are not paroled in the United States under the Immigration and Nationality Act.
• Any organization created under the laws of the foreign government or which has located its principal place of business outside the Untied States.
• Any U.S. organization in which a significant interest or substantial control is directly or indirectly held by foreign individuals, organizations or governments.
• Any foreign governments.
Definition of significant interest or substantial control
• A direct or indirect interest of 10 percent or more held by a single foreign individual, organization or government.
• A direct or indirect collective interest of 10 percent or more held by a group of foreign individuals, organizations, or governments, acting in concert.
• A direct or indirect collective interest of 50 percent or more held by a group of foreign individuals, organizations, or governments, not acting in concert.
What to report
• Each tract of agricultural land in the United States, its territories, the Northern Mariana Islands and the Trust Territories of the Pacific Islands owned by persons required to report.
• Leaseholds of 10 years or more.
Under the law, the term agricultural land means land used for forestry production* and land currently used for farming, ranching or timber production if tracts are more than 10 acres in size in the aggregate.
Ownership of tracts totaling 10 acres or less in the aggregate which produce annual gross receipts in excess of $1,000 from the sale of the farm, ranch, forestry or timber products must also be reported.
Land which is currently idle, but last used within the past five years for farming, ranching or timber production must also be reported.
* Land used for forestry production means land exceeding 10 acres in which 10 percent is stocked by trees of any size including land that formerly had such tree cover and will be naturally or artificially regenerated.
When to report
Foreign people, who owned land on February 1, 1979, were required to report by August 1, 1979. Those buying or selling land on or after February 2, 1979, must report the transaction within 90 days of the date of the transaction.
Where to report
The Secretary of Agriculture designated the Farm Service Agency (FSA) to collect the AFIDA reports representing foreign investment because FSA has numerous offices in rural counties throughout the United States. Those wishing to obtain an AFIDA report form (FSA-153) may do so from any of these county offices.
To find your FSA county office, look in the white pages of the telephone book. In most cases, it will be listed under U.S. government, then under the subhead U.S. Department of Agriculture. The office will be listed as FSA county office.
Although interested parties may obtain a report form from the FSA county office, the completed form must be returned to the FSA county office where the land is located or where the programs are administered.