LIHU‘E — The United States Department of Agriculture recently announced that foreign investors of agricultural land could suffer severe penalties if they fail to report transactions. USDA executive director Robert Ishikawa said realtors are supposed to tell foreign investors about
LIHU‘E — The United States Department of Agriculture recently announced that foreign investors of agricultural land could suffer severe penalties if they fail to report transactions.
USDA executive director Robert Ishikawa said realtors are supposed to tell foreign investors about the requirement.
A USDA press release stated that foreign investors with an interest in agricultural lands in the United States are required to report their holdings and any transactions to the U.S. Secretary of Agriculture, through the USDA Farm Service Agency.
Any foreign who acquires or transfers any interest, other than a security interest, in agricultural land in the U.S. is required by law to report the transaction no later than 90 days after the date of the transaction.
Foreign investors or entities must file Agricultural Foreign Investment Disclosure Act reports with the USDA in the county where the land is located, according to the release.
Failure to file a report, filing a late report or filing an inaccurate report can result in a penalty with fines up to 25 percent of the fair market value of the agricultural land.
For AFIDA purposes, agricultural land is defined as any land used for farming, ranching or timber production, if the land is more than 10 acres in size or if the land is 10 acres or less and in the aggregate producing gross annual receipts of more than $1,000 from the sale of farm, ranch, or timber products in total.
Disclosure reports are also required when there are changes in land use. For example, reports are required when land use changes from nonagricultural to agricultural or from agricultural to nonagricultural.
When the AFIDA was signed into law in 1978, the reporting requirement was adopted as part of the same legislation. Data gained from these disclosures is used in the preparation of periodic reports to the president and Congress concerning the effect of such holdings upon family farms and rural communities in the U.S.
The release also stated that foreign investors must also file a report when there is a change in the status of ownership such as owner changes from foreign to non-foreign, from non-foreign to foreign or from foreign to foreign.
Go to www.usda.gov or call the Kaua‘i USDA office at 245-9014 for more information.
