119-hr1822

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1822 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 1822

To amend the Internal Revenue Code of 1986 to exclude from gross income 
 interest received on certain loans secured by rural or agricultural 
 real property.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 March 4, 2025

Mr. Feenstra (for himself, Mr. Davis of North Carolina, and Mr. Moran) 
 introduced the following bill; which was referred to the Committee on 
 Ways and Means

_______________________________________________________________________

 A BILL

To amend the Internal Revenue Code of 1986 to exclude from gross income 
 interest received on certain loans secured by rural or agricultural 
 real property.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Access to Credit for our Rural 
Economy Act of 2025'' or the ``ACRE Act of 2025''.

SEC. 2. EXCLUSION OF INTEREST ON LOANS SECURED BY RURAL OR AGRICULTURAL 
 REAL PROPERTY.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after 

section 139I the following new section:

``

SEC. 139J. INTEREST ON LOANS SECURED BY RURAL OR AGRICULTURAL REAL 
 PROPERTY.

 ``

    (a) In General.--Gross income shall not include interest received 
by a qualified lender on any qualified real estate loan.
 ``

    (b) Qualified Lender.--For purposes of this section, the term 
`qualified lender' means--
 ``

    (1) any bank or savings association the deposits of which 
 are insured under the Federal Deposit Insurance Act (12 U.S.C. 
 1811 et seq.),
 ``

    (2) any State- or Federally-regulated insurance company,
 ``

    (3) any entity wholly owned, directly or indirectly, by a 
 company that is treated as a bank holding company for purposes 
 of 

section 8 of the International Banking Act of 1978 (12 
 U.S.C. 3106) if--
 ``
        (A) such entity is organized, incorporated, or 
 established under the laws of the United States or any 
 State of the United States, and
 ``
        (B) the principal place of business of such 
 entity is in the United States (including any territory 
 of the United States),
 ``

    (4) any entity wholly owned, directly or indirectly, by a 
 company that is considered an insurance holding company under 
 the laws of any State if such entity satisfies the requirements 
 described in subparagraphs
        (A) and
        (B) of paragraph

    (3) , and
 ``

    (5) with respect to interest received on a qualified real 
 estate loan secured by real estate described in subsection
            (c) (3)
        (A) , any federally chartered instrumentality of the 
 United States established under 

section 8.1

    (a) of the Farm 
 Credit Act of 1971 (12 U.S.C. 2279aa-1

    (a) ).
 ``
            (c) Qualified Real Estate Loan.--For purposes of this section--
 ``

    (1) In general.--The term `qualified real estate loan' 
 means any loan--
 ``
        (A) secured by--
 ``
            (i) rural or agricultural real estate or 
 forestland, or
 ``
            (ii) a leasehold mortgage (with a status 
 as a lien) on rural or agricultural real 
 estate,
 ``
        (B) which is made to a person other than a 
 foreign adversary entity,
 ``
            (C) in the case of any loan with respect to 
 single family residence described in paragraph

    (3)
        (B) --
 ``
            (i) the proceeds of which are used to 
 purchase or improve such residence, and
 ``
            (ii) the principal of which (when added 
 to the principal of all other such loans with 
 respect to such residence) does not (as of the 
 time the interest income on such loan is 
 accrued) exceed $750,000, and
 ``
            (D) made after the date of the enactment of this 
 section.
 For purposes of the preceding sentence, the determination of 
 whether property securing such loan is rural or agricultural 
 real estate shall be made as of the time the interest income on 
 such loan is accrued.
 ``

    (2) Refinancings.--For purposes of subparagraphs
        (A) and
            (C) of paragraph

    (1) , a loan shall not be treated as made after 
 the date of the enactment of this section to the extent that 
 the proceeds of such loan are used to refinance a loan which 
 was made on or before the date of the enactment of this Act 
 (or, in the case of any series of refinancings, the original 
 loan was made on or before such date).
 ``

    (3) Rural or agricultural real estate.--The term `rural 
 or agricultural real estate' means--
 ``
        (A) any real property which is substantially used 
 for the production of one or more agricultural 
 products,
 ``
        (B) any single family residence--
 ``
            (i) which is the principal residence 
 (within the meaning of 

section 121) of its 
 occupant, and
 ``
            (ii) which is located in a rural area 
 within the meaning of 

section 1.11

    (b)

    (3) of the 
 Agricultural Credit Act of 1987 (12 U.S.C. 
 2019

    (b)

    (3) ),
 ``
            (C) any real property which is substantially used 
 in the trade or business of fishing or seafood 
 processing, and
 ``
            (D) any aquaculture facility.
 ``

    (4) Aquaculture facility.--The term `aquaculture 
 facility' means any land, structure, or other appurtenance that 
 is used for aquaculture (including any hatchery, rearing pond, 
 raceway, pen, or incubator) that is located in any State or any 
 territory of the United States.
 ``

    (5) Foreign adversary entity.--
 ``
        (A) In general.--The term `foreign adversary 
 entity' means--
 ``
            (i) a foreign adversary,
 ``
            (ii) a foreign person subject to the 
 jurisdiction of, or organized under the laws 
 of, a foreign adversary, and
 ``
            (iii) a foreign person owned, directed, 
 or controlled by an entity described in clause
            (i) or
            (ii) .
 ``
        (B) Foreign adversary.--The term `foreign 
 adversary' means--
 ``
            (i) the People's Republic of China, 
 including all Special Administrative Regions,
 ``
            (ii) the Republic of Cuba,
 ``
            (iii) the Islamic Republic of Iran,
 ``
            (iv) the Democratic People's Republic of 
 Korea,
 ``
            (v) the Russian Federation, and
 ``
            (vi) the Bolivarian Republic of Venezuela 
 during any period of time in which Nicholas 
 Maduro is President of the Republic.
 ``
            (d) Coordination With 

Section 265.--Qualified real estate loans 
shall be treated as obligations described in 

section 265

    (a)

    (2) the 
interest on which is wholly exempt from the taxes imposed by this 
subtitle.''.

    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to 

section 139I the 
following new item:

``

Sec. 139J. Interest on loans secured by rural or agricultural real 
 property.''.
            (c) Report to Congress.--Not later than 5 years after the date of 
the enactment of this Act, the Secretary of the Treasury (or the 
Secretary's delegate) shall submit a written report to the Committee on 
Ways and Means of House of Representatives and the Committee on Finance 
of the Senate analyzing the impact of 

section 139J of the Internal 
Revenue Code of 1986 (as added by subsection

    (a) ) on qualified real 
estate loans (as defined in such section), including whether such 
section has resulted in a reduction in the rate of interest on such 
loans.
            (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.
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