PASS Act
- Sponsor
- Sen. Rounds, Mike [R-SD]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Mar 6, 2025
Bottom line
This bill mandates CFIUS review and prohibition of agricultural land and business acquisitions by foreign adversaries, aiming to bolster national security by safeguarding the U.S. food supply and critical infrastructure.
What it actually does
This bill amends the Defense Production Act of 1950 (DPA) to expand the authority of the Committee on Foreign Investment in the United States (CFIUS) to review and prohibit certain foreign acquisitions of agricultural land and businesses. It specifically targets transactions involving "covered foreign persons" from "covered countries" (e.g., China, Russia, Iran, North Korea) that acquire agricultural land near sensitive U.S. government facilities or gain control of U.S. agricultural businesses. The bill also adds the Secretary of Agriculture to CFIUS.
Proponents argue
Proponents argue the bill is crucial for national security, protecting the U.S. food supply chain and preventing foreign adversaries from gaining control over critical agricultural resources or land near military installations. They emphasize the need to close existing loopholes in CFIUS's jurisdiction regarding agricultural investments and ensure agricultural expertise is integrated into national security reviews.
Opponents contend
Opponents might argue that such broad prohibitions could deter legitimate foreign investment in the U.S. agricultural sector, potentially hindering economic growth or innovation. They might also raise concerns about the scope of "covered foreign persons" or "covered countries" and the potential for overreach or unintended consequences for international trade relations.
The bill is concise and its core provisions are readily understandable, making it accessible for a quick but informed review.
Section 2(a)(1), amending DPA Section 721(a)
Defining "Agriculture" for CFIUS Jurisdiction
This provision explicitly defines "agriculture" for the purposes of the Defense Production Act, referencing the definition in section 3 of the Fair Labor Standards Act of 1938. This expansion clarifies and broadens the scope of transactions that CFIUS can review to include agricultural activities, ensuring a comprehensive approach to national security concerns in the food sector.
Supporters argue
Supporters argue this definition is essential to ensure CFIUS has clear authority to review investments across the entire agricultural sector, which is vital for national security and food independence.
Critics contend
No specific opposition is typically raised against definitional clarity, though broader concerns about CFIUS overreach might implicitly apply to any expansion of its jurisdiction.
Tradeoffs
This provision balances the need for clear regulatory scope in national security reviews with potential concerns about expanding government oversight into a new economic sector.
Section 2(a)(2), amending DPA Section 721(b)(1)
Mandated CFIUS Review of Reportable Agricultural Land Transactions
This provision requires CFIUS to determine, within 30 days of notification from the Secretary of Agriculture, if a "reportable agricultural land transaction" is a "covered transaction." If it is, CFIUS must then decide whether to request a formal notice or initiate a review. A "reportable agricultural land transaction" is one that the Secretary of Agriculture believes is a covered transaction, involves foreign acquisition of agricultural land (excluding excepted investors), and requires reporting under the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA).
Section 2(a)(3), amending DPA Section 721(k)(2)
Inclusion of Secretary of Agriculture on CFIUS
This provision adds the Secretary of Agriculture as a member of the Committee on Foreign Investment in the United States (CFIUS). This membership is specifically for covered transactions related to the purchase of agricultural land, agricultural biotechnology, or any other aspect of the agriculture industry in the United States.
Section 2(a)(4), adding new DPA Subsection 721(r)
Mandatory Prohibition of Certain Agricultural Transactions
This provision mandates that the President prohibit transactions where a "covered foreign person" (an agent of a "covered country" like China, Russia, Iran, or North Korea) purchases or leases agricultural land near sensitive U.S. military or government facilities, or gains control of a U.S. business engaged in agriculture. The President may waive this prohibition on a case-by-case basis if it is determined to be in the national interest and reported to Congress.
This section defines "covered foreign person" as any foreign person (including a foreign entity) acting as an agent, representative, or employee of, or at the direction or control of, the government of a "covered country." It explicitly lists "covered countries" as the People's Republic of China, the Russian Federation, the Islamic Republic of Iran, and the Democratic People's Republic of Korea, if determined to be foreign adversaries pursuant to 15 CFR 791.4 (or a successor regulation).
Section 2(a)(4), new DPA Subsection 721(r)(4)
Why it matters:It is standard legislative practice to define terms relevant to a specific subsection within that subsection. The reference to the CFR is a common method to link to existing regulatory frameworks and avoid redundancy, rather than being intentionally evasive.
Case for: Supporters argue this provides clear targeting, focusing the prohibitions on specific adversarial governments and their proxies, ensuring national security measures are directed where most needed and are consistent with existing federal designations.
Case against: Critics might argue that relying on an external CFR definition for "foreign adversary" could lead to future changes in scope without direct congressional action, or that the explicit list of countries could be perceived as politically motivated rather than purely security-based, potentially affecting diplomatic relations.
Estimated impact: This definition directly determines which transactions are subject to mandatory prohibition, significantly narrowing the scope from all foreign persons to specific adversarial actors, thereby focusing the bill's impact.
This section specifies that the amendments made by the Act will take effect 30 days after the effective date of the regulations prescribed under subsection (c)(2). These regulations are required to be issued not later than one year after the date of the Act's enactment. Furthermore, the amendments will apply to any covered transaction (as defined in DPA Section 721) that is proposed, pending, or completed on or after this specified effective date.
Section 2(d)
Why it matters:This is standard legislative practice for transition provisions, ensuring a clear timeline for implementation and applicability. It is not necessarily evasive, but rather a technical detail for legal clarity.
Case for: Supporters argue this provides a necessary transition period for agencies to develop comprehensive regulations and for the public to understand the new rules, while ensuring the new rules apply broadly to ongoing transactions once they are fully in force.
Case against: Critics might argue that applying the rules to "pending" or "completed" transactions (even if only those completed after the effective date) could create legal uncertainty or unfairly impact investments made under previous legal frameworks, potentially leading to disputes.
Estimated impact: This provision delays the practical implementation of the bill's core prohibitions and review mandates for up to 13 months post-enactment, but ensures comprehensive coverage of transactions once the new regulatory framework is established.