State Proposals on Restricting Foreign Ownership of Farmland: Part Four
In the past two years or so, as discussed in the first article of this series, the issue of restricting foreign investments and ownership in privately held farmland emerged or reemerged in the majority of states. This reemerging interest in restricting foreign investments in U.S. land, especially agricultural land, is partly due to a Chinese-owned company purchasing over 130,000 acres near a U.S. Air Force base in Texas. Another transaction that raised concerns among some lawmakers is the purchase of 300 acres near an Air Force base in North Dakota by the Chinese company Fefang Group.
Each of these states have proposed legislation that would restrict foreign ownership or investments in agricultural land to some degree. Like the states that currently have laws, many of these states have introduced bills that take its own approach to restricting foreign ownership and investments in agricultural land within their states. Of these states, Indiana is currently the only state to enact a foreign ownership law within the previous two years.
This article is the fourth of this series that discusses recent state proposals that seek to restrict foreign ownership of agricultural land. This article discusses the proposals introduced in Florida, Georgia, Idaho, and Iowa. To read the first, second, and third articles in this series, click here, here, and here.
Currently, Florida state law expressly allows foreign ownership of land located within the state. See Fla. Const. art. I, § 2. In February 2023, the Florida legislature introduced two identical bills—HB 835 and SB 924—which seek to restrict entities owned or controlled by the Chinese government or whose principle place of business is located in China from obtaining an interest in more than 50 acres of agricultural land within the state. Aside from the restriction on farmland investments, these proposals also seek to restrict Chinese entities from acquiring or holding real property that is located within 50 miles of a military base or “strategic asset”. Both measures define “strategic assets” as “water treatment facilities, power plants, emergency operation centers, telecommunication towers and facilities, law enforcement facilities, and other structures used for similar purposes or deemed strategic by the state.” If enacted, certain Chinese entities would be restricted from investing or holding certain types of real property or agricultural land after June 30, 2023.
On March 2, SB 264 and HB 1355 were introduced in the Florida legislature. Both measures seek to restrict a “foreign principal” from owning or acquiring agricultural land within the state. A “foreign principal” means a business entity, government, government official, or political party that is associated with a “foreign country of concern”. A “foreign country of concern” includes China, Russia, Iran, North Korea, Cuba, Venezuela’s Maduro regime, and Syria.
In 2023, a few proposals have been introduced in the Georgia legislature that seek to restrict certain foreign investments and acquisitions in the state’s land. Under Georgia state law, “[a]liens who are subjects of governments at peace with the United States” are permitted to purchase and hold land within the state. Ga. Code Ann. § 1-2-11. Although Georgia state law does restrict certain foreign persons from acquiring, holding, or owning an interest in real property within the state, the law derives from legislation enacted in the late-1700s and is likely not enforceable as currently written.
One of the proposals being considered by the Georgia legislature, HB 246, seeks to restrict individuals, business entities, and governmental entities of China, Iran, North Korea, and Russia from owning or holding real property located within the state. The bill specifies that “farms” and “property on which food is produced” are types of property subject to the restriction proposed under HB 246. Another bill considered by the state legislature is SB 132, which seeks to restrict nonresident individuals and business entities domiciled or owned by nonresident individuals or a government that “is a subject of a government designed as a Country of Particular Concern.” The U.S. Secretary of State determines which countries are of “particular concern”, and the current list of is available on the SOS website here. On March 2, 2023, SB 132 passed the Georgia Senate.
The Georgia legislature is also considering HB 452, which seeks to prohibit a “nonresident alien” from acquiring an interest in agricultural land or land within 25 miles of a military base, installation, or airport. Under this proposal, a “nonresident alien” means an individual that “is a subject of a government designed as a foreign adversary” and has either been “(i) physically absent from the [U.S.] for more than six months out of any 12 month period; or (ii) physically absent from Georgia for more than two months of any 12 month period.”
Business entities that are domiciled in a country whose government is a “foreign adversary” are considered “nonresident aliens” under the proposal. Further, certain U.S. business entities are considered “nonresident aliens” under HB 452 when a U.S. entity is primarily owned by another entity domiciled in a country designated as a “foreign adversary”. HB 452 also seeks to restrict foreign governments designated as a “foreign adversary” from purchasing farmland within the state. The U.S. Secretary of Commerce designates the foreign governments considered to be a “foreign adversary.” Currently, the governments designated as a “foreign adversary” include China, Cuba, Iran, North Korea, Russia, and Venezuela’s Maduro Regime. See 15 C.F.R. § 7.4.
On February 20, 2023, an Idaho state lawmaker proposed HB 173 to restrict foreign governments and government-owned enterprises from acquiring or holding “any interest in agricultural land, water rights, mining claims, or mineral rights” within the state. This proposal would amend Idaho’s current law that permits an “alien” to take and hold Idaho land. See Idaho Code Ann. § 55-103. The bill defines “agricultural land” as “land actively devoted to agricultural purposes” as provided in I.C. § 63-604. Each state that has enacted a foreign ownership law does not specifically restrict foreign interests in water rights, mining claims, or mineral rights, so Idaho would be the first to do so if the state’s legislature enacts HB 173. On March 2, 2023, the Idaho House passed HB 173 and it is now being considered by the state Senate.
Iowa is one of fourteen states that currently have a foreign ownership law that restricts nonresident aliens, foreign business entities, and foreign governments from purchasing or holding an interest in farmland located within the state. However, the Iowa legislature is considering a bill, HF 211, that seeks to the Chinese government and business entities domiciled in China from purchasing, acquiring, or transferring any real property. Additionally, this measure seeks to restrict U.S. business entities “in which a majority interest is owned directly or indirectly by nonresident aliens from” China.
HF 211 also restricts the Chinese government and Chinese-owned business entities from acquiring an interest in Iowa real estate by gift, inheritance, or through an individual’s will. Further, this measure would require a county recorder that discovers the Chinese government or a Chinese-owned business entity owns real estate to report the violation to the state’s attorney general. Another proposal, HF 542, being considered by the Iowa legislature contains similar provisions to HF 211 and also seeks to restrict certain Chinese investments in the state’s agricultural land.
In 2023, the issue of restricting foreign ownership and investments in farmland has emerged or reemerged in the majority of states. As a result, other states may begin to consider the issue of restricting foreign ownership of agricultural land located within their state.
On January 18, 2023, NALC hosted a webinar that focused on the federal and state legislative proposals that seek to increase oversight and restrict foreign investments and acquisitions of land located within the U.S. To watch a recording of that webinar, click here.
To read the other articles in this series, click here, here or here.
For compilation of state laws governing foreign ownership of agricultural land, click here.
To learn more about foreign ownership of agricultural land, click here.
Subscribe to NALC’s bi-weekly newsletter The Feed for recent legal developments affecting agriculture, including foreign ownership of agricultural land here.
For previous issues of The Feed, click here.