[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 838 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 838
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 SENATE OF THE UNITED STATES
March 4, 2025
Mr. Moran (for himself, Mr. King, Mr. Tuberville, Mr. Gallego, and Mr.
Cramer) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
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 as 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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