USDA Proposed Rule Would Expand Foreign Ownership Reporting to Renewable Energy and Pipeline Projects

What the Proposed Rule Does

Project development and finance approaches may now be impacted by the ongoing concerns over foreign ownership of U.S. farmland. The USDA has proposed significant changes to the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA) that would expand the scope of foreign ownership reporting requirements. Most notably, the proposed rule broadens the definition of “agricultural land” to include for the first time land used for wind, solar and pipeline projects. The rule would also lower the aggregate foreign ownership threshold that triggers reporting from 50% to 10%, narrow exemptions for agricultural land leaseholds from 10 years or less down to one year or less, and increase the information that must be disclosed, including tax identification numbers, foreign passport information and geospatial facility maps. Penalties for noncompliance would rise to as much as 25% of the fair market value of the foreign owner’s interest for each week of violation per project. Oversight of AFIDA reporting shifted in April 2026 from the USDA Farm Service Agency to the USDA’s Office of Homeland Security, a move that would be formally codified if the proposed rule is finalized, and which could lead to more aggressive enforcement. The public comment period closed on August 10, 2026.

Impact on Energy Projects

For the renewable energy and pipeline sectors, these changes could have a meaningful impact. Because many wind, solar and pipeline projects involve foreign investment and rely on long-term land leases, a wide range of existing and future projects would likely be included in the new reporting requirements. Developers, lenders and investors would need to incorporate foreign ownership analysis into their due diligence from the earliest stages of a project, potentially before site leases are even negotiated. For existing infrastructure, gathering the newly required information within the 90-day reporting window may pose real compliance challenges. The ongoing nature of these obligations is also worth noting because energy projects are long and frequently change hands. AFIDA compliance would not be a one-time exercise but an ongoing responsibility that must be revisited whenever ownership or project relationships change.

Industry Response and Deal Implications

Industry response to the proposed rule has been largely critical, with renewable energy and pipeline groups arguing it could chill foreign investment in U.S. projects and that the USDA may be exceeding its authority under AFIDA. From a deal perspective, the added disclosure and compliance requirements have the potential to slow transactions, increase necessary due diligence and make some foreign investors more reluctant to participate, particularly given the sensitivity of the personal information required.

How We Can Help

Fredrikson is monitoring this proposed rule and can help assess how these changes may affect your current projects and future development plans. For more information or questions, please contact Chris Storey or Sophia Forbush, Minnesota license pending.