I
119THCONGRESS
1
STSESSION 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
MARCH4, 2025
Mr. F
EENSTRA(for himself, Mr. DAVISof 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 se-
cured by rural or agricultural real property.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Access to Credit for 4
our Rural Economy Act of 2025’’ or the ‘‘ACRE Act of 5
2025’’. 6
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SEC. 2. EXCLUSION OF INTEREST ON LOANS SECURED BY 1
RURAL OR AGRICULTURAL REAL PROPERTY. 2
(a) I
NGENERAL.—Part III of subchapter B of chap-3
ter 1 of the Internal Revenue Code of 1986 is amended 4
by inserting after section 139I the following new section: 5
‘‘SEC. 139J. INTEREST ON LOANS SECURED BY RURAL OR 6
AGRICULTURAL REAL PROPERTY. 7
‘‘(a) I
NGENERAL.—Gross income shall not include 8
interest received by a qualified lender on any qualified real 9
estate loan. 10
‘‘(b) Q
UALIFIEDLENDER.—For purposes of this sec-11
tion, the term ‘qualified lender’ means— 12
‘‘(1) any bank or savings association the depos-13
its of which are insured under the Federal Deposit 14
Insurance Act (12 U.S.C. 1811 et seq.), 15
‘‘(2) any State- or Federally-regulated insur-16
ance company, 17
‘‘(3) any entity wholly owned, directly or indi-18
rectly, by a company that is treated as a bank hold-19
ing company for purposes of section 8 of the Inter-20
national Banking Act of 1978 (12 U.S.C. 3106) if— 21
‘‘(A) such entity is organized, incor-22
porated, or established under the laws of the 23
United States or any State of the United 24
States, and 25
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‘‘(B) the principal place of business of 1
such entity is in the United States (including 2
any territory of the United States), 3
‘‘(4) any entity wholly owned, directly or indi-4
rectly, by a company that is considered an insurance 5
holding company under the laws of any State if such 6
entity satisfies the requirements described in sub-7
paragraphs (A) and (B) of paragraph (3), and 8
‘‘(5) with respect to interest received on a quali-9
fied real estate loan secured by real estate described 10
in subsection (c)(3)(A), any federally chartered in-11
strumentality of the United States established under 12
section 8.1(a) of the Farm Credit Act of 1971 (12 13
U.S.C. 2279aa–1(a)). 14
‘‘(c) Q
UALIFIEDREALESTATELOAN.—For purposes 15
of this section— 16
‘‘(1) I
N GENERAL.—The term ‘qualified real es-17
tate loan’ means any loan— 18
‘‘(A) secured by— 19
‘‘(i) rural or agricultural real estate or 20
forestland, or 21
‘‘(ii) a leasehold mortgage (with a sta-22
tus as a lien) on rural or agricultural real 23
estate, 24
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‘‘(B) which is made to a person other than 1
a foreign adversary entity, 2
‘‘(C) in the case of any loan with respect 3
to single family residence described in para-4
graph (3)(B)— 5
‘‘(i) the proceeds of which are used to 6
purchase or improve such residence, and 7
‘‘(ii) the principal of which (when 8
added to the principal of all other such 9
loans with respect to such residence) does 10
not (as of the time the interest income on 11
such loan is accrued) exceed $750,000, and 12
‘‘(D) made after the date of the enactment 13
of this section. 14
For purposes of the preceding sentence, the deter-15
mination of whether property securing such loan is 16
rural or agricultural real estate shall be made as of 17
the time the interest income on such loan is accrued. 18
‘‘(2) R
EFINANCINGS.—For purposes of sub-19
paragraphs (A) and (C) of paragraph (1), a loan 20
shall not be treated as made after the date of the 21
enactment of this section to the extent that the pro-22
ceeds of such loan are used to refinance a loan 23
which was made on or before the date of the enact-24
ment of this Act (or, in the case of any series of 25
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refinancings, the original loan was made on or be-1
fore such date). 2
‘‘(3) R
URAL OR AGRICULTURAL REAL ES -3
TATE.—The term ‘rural or agricultural real estate’ 4
means— 5
‘‘(A) any real property which is substan-6
tially used for the production of one or more 7
agricultural products, 8
‘‘(B) any single family residence— 9
‘‘(i) which is the principal residence 10
(within the meaning of section 121) of its 11
occupant, and 12
‘‘(ii) which is located in a rural area 13
within the meaning of section 1.11(b)(3) of 14
the Agricultural Credit Act of 1987 (12 15
U.S.C. 2019(b)(3)), 16
‘‘(C) any real property which is substan-17
tially used in the trade or business of fishing or 18
seafood processing, and 19
‘‘(D) any aquaculture facility. 20
‘‘(4) A
QUACULTURE FACILITY .—The term 21
‘aquaculture facility’ means any land, structure, or 22
other appurtenance that is used for aquaculture (in-23
cluding any hatchery, rearing pond, raceway, pen, or 24
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incubator) that is located in any State or any terri-1
tory of the United States. 2
‘‘(5) F
OREIGN ADVERSARY ENTITY .— 3
‘‘(A) I
N GENERAL.—The term ‘foreign ad-4
versary entity’ means— 5
‘‘(i) a foreign adversary, 6
‘‘(ii) a foreign person subject to the 7
jurisdiction of, or organized under the laws 8
of, a foreign adversary, and 9
‘‘(iii) a foreign person owned, di-10
rected, or controlled by an entity described 11
in clause (i) or (ii). 12
‘‘(B) F
OREIGN ADVERSARY .—The term 13
‘foreign adversary’ means— 14
‘‘(i) the People’s Republic of China, 15
including all Special Administrative Re-16
gions, 17
‘‘(ii) the Republic of Cuba, 18
‘‘(iii) the Islamic Republic of Iran, 19
‘‘(iv) the Democratic People’s Repub-20
lic of Korea, 21
‘‘(v) the Russian Federation, and 22
‘‘(vi) the Bolivarian Republic of Ven-23
ezuela during any period of time in which 24
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Nichola´s Maduro is President of the Re-1
public. 2
‘‘(d) C
OORDINATIONWITHSECTION265.—Qualified 3
real estate loans shall be treated as obligations described 4
in section 265(a)(2) the interest on which is wholly exempt 5
from the taxes imposed by this subtitle.’’. 6
(b) C
LERICALAMENDMENT.—The table of sections 7
for part III of subchapter B of chapter 1 of the Internal 8
Revenue Code of 1986 is amended by inserting after the 9
item relating to section 139I the following new item: 10
‘‘Sec. 139J. Interest on loans secured by rural or agricultural real property.’’.
(c) REPORT TOCONGRESS.—Not later than 5 years 11
after the date of the enactment of this Act, the Secretary 12
of the Treasury (or the Secretary’s delegate) shall submit 13
a written report to the Committee on Ways and Means 14
of House of Representatives and the Committee on Fi-15
nance of the Senate analyzing the impact of section 139J 16
of the Internal Revenue Code of 1986 (as added by sub-17
section (a)) on qualified real estate loans (as defined in 18
such section), including whether such section has resulted 19
in a reduction in the rate of interest on such loans. 20
(d) E
FFECTIVEDATE.—The amendments made by 21
this section shall apply to taxable years ending after the 22
date of the enactment of this Act. 23
Æ
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