On June 25, 2026, the U.S. Department of Agriculture (“USDA”) proposed a rule (the “Proposed Rule”)1 that would substantially expand the reach of the Agricultural Foreign Investment Disclosure Act of 1978 (“AFIDA”). Under the Proposed Rule, wind and solar generation facilities and pipelines would fall within AFIDA’s disclosure regime, and the AFIDA regulations would be amended to include lower reporting thresholds, a narrower lease exemption, expanded disclosure requirements, and significantly higher penalties for noncompliance. Energy companies developing, acquiring, financing or divesting renewable generation or pipeline assets with any foreign involvement should begin assessing any potential exposure now.
The AFIDA regime was enacted to provide a nationwide system to monitor ownership and purchase of U.S. agricultural land by foreign persons. Foreign persons who acquire, transfer, or hold an interest in U.S. agricultural land (certain land used for farming, ranching, or timber production) must report such transactions to the USDA, which compiles the data into a national database. This database is used to monitor the extent and impact of foreign ownership of U.S. farmland, informing policymakers, supporting agricultural and rural development analysis, and enabling assessment of any effects on food security, land use, and local agricultural economies.
Under current AFIDA regulations, reporting requirements are triggered when a foreign person holds 10% or greater ownership interest in agricultural land, or when multiple foreign persons acting in concert have a 10% or greater ownership interest in agricultural land. Foreign persons who are not acting in concert must report under AFIDA when the aggregate foreign ownership interest in agricultural land exceeds 50% and to which reporting requirements and not otherwise triggered through individual holdings over the above 10% threshold.
- Wind, solar and pipeline projects would newly qualify as “agricultural land.” USDA proposes adding NAICS codes for solar (221114) and wind (221115) power generation and pipeline transportation (486) to the definition, since these facilities are frequently sited on or across land that otherwise qualifies as agricultural.
Reporting thresholds would drop. The aggregate ownership threshold for foreign persons not acting in concert would fall from 50% to 10%, and any interest held by a “Foreign Adversary” or “Foreign Adversary Controlled Entity” would automatically trigger reporting, regardless of percentage held. The Proposed Rule defines a “Foreign Adversary” as “any foreign government or foreign non-government person from, a citizen of, or a controlled entity headquartered in” China, North Korea, Russia, or Iran (or additional countries as designated by the Secretary of State).
The lease exemption would shrink from 10 years to one year—and disappear entirely for Foreign Adversaries. Under the current AFIDA regulations, leases of less than 10 years are generally exempt from AFIDA reporting. However, under the Proposed Rule, long-term land leases and easements typical of wind, solar and pipeline projects would generally become reportable, with no exemption for Foreign Adversary lessees regardless of lease duration.
Disclosure requirements would expand. Filings under the Proposed Rule would require tax identification and foreign passport numbers, geospatial maps of property boundaries, and ownership diagrams showing relationships among all interest holders—for both new and existing holdings.
Penalties would increase. The Proposed Rule creates three penalty schemes for late reporting, depending on whether the required report is an acquisition/holding, transfer/inheritance, or a newly reportable holding. The weekly penalty accrual rate for late-filed reports would rise from .1% of fair market value to 1.5% of fair market value (2.5% for Foreign Adversaries or Foreign Adversary Controlled Entities), up to the existing 25% of fair market value cap.
Why this matters
If finalized, the Proposed Rule would move foreign ownership analysis from a discrete transactional issue to a threshold diligence question from the earliest stages of site assembly. Because the Proposed Rule would apply to existing holdings, current owners of operating assets—not just new entrants—should audit existing ownership and lease structures for newly reportable interests. Newly reportable holdings under the Proposed Rule—namely, holdings that did not previously require an AFIDA report but will following the Proposed Rule’s scoping changes—must be reported within 90 days of the effective date of the rule’s adoption. This is consistent with current AFIDA reporting requirements: any foreign person holding an interest in land that was not previously covered but is subsequently designated as “agricultural land” will have 90 days from the date of that designation to submit the applicable AFIDA report.
The final rule is expected to be issued by December 2026. Energy companies with foreign ownership, financing or technology providers involved in wind, solar or pipeline projects should review land agreements and ownership structures now, and monitor the rulemaking.
1 See U.S. Department of Agriculture, Agricultural Foreign Investment Disclosure Act of 1978; Proposed Rule, 91 Fed. Reg. 38315 (June 25, 2026)
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