Bill Summary – FastDemocracy

House File 2483 - Introduced
                                  HOUSE FILE 2483
                                  BY COMMITTEE ON STATE
                                      GOVERNMENT
                                  (SUCCESSOR TO HSB 663)
                                  (COMPANION TO SF 2204 BY
                                   COMMITTEE ON AGRICULTURE)
                            A BILL FOR
An Act relating to interests in agricultural land acquired
  or held by foreign businesses, foreign governments, or
  nonresident aliens, or by agents, trustees, or fiduciaries
  thereof, by providing for registration and reporting
  requirements, providing for enforcement, and providing
  penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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    Section 1. Section 9I.1, Code 2024, is amended by adding the
 following new subsections:
    NEW SUBSECTION. 4A. “Interest” means any estate, remainder,
 or reversion, or portion of the estate, remainder, or
 reversion, or an option pursuant to which one party has a right
 to cause legal or equitable title to agricultural land to be
 transferred.
    NEW SUBSECTION. 4B. “Intermediary” means any person,
 including a bank, broker, or dealer, that makes business or
 financial arrangements between companies or organizations that
 do not deal with each other directly.
    NEW SUBSECTION. 6. “Parent” means any corporation which
 directly, or indirectly through one or more intermediaries,
 controls more than fifty percent of the voting stock of another
 corporation.
    Sec. 2. Section 9I.7, Code 2024, is amended to read as
 follows:
    9I.7 Registration.
    A nonresident alien, foreign business, or foreign
 government, or an agent, trustee, or fiduciary thereof, which
 owns an interest in agricultural land within this state on or
 after January 1, 1980, shall register the agricultural land
 with the secretary of state. The registration shall be made
 within sixty days after January 1, 1980, or within sixty days
 after acquiring the land or the interest in land, whichever
 time is the later. The registration shall be made online or
 in the form and manner prescribed by the secretary and shall
 contain the name of the owner and the location and number of
 acres of the agricultural land by township and county of state.
 If the owner of the agricultural land or owner of the interest
 in agricultural land is an agent, trustee or fiduciary of a
 nonresident alien, foreign business or foreign government,
 the registration shall also include the name of any principal
 for whom that land, or interest in that land was purchased as
 agent. Information described in this section is a confidential
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 record and subject to use in the same manner as provided in
 section 10B.5. As part of the registration, the nonresident
 alien, foreign business, or foreign government, or an agent,
 trustee, or fiduciary thereof, shall file all of the following
 information:
    1. The legal name, street address, mailing address,
 if different, and the birthplace and nationality of the
 nonresident alien, foreign business, or foreign government that
 owns the interest in the agricultural land.
    2. The legal name, street address, mailing address,
 if different, and the birthplace and nationality of the
 agent, trustee, or fiduciary of the nonresident alien,
 foreign business, or foreign government in subsection 1, if
 specifically authorized to do any of the following:
    a. Purchase the agricultural land.
    b. Supervise the daily operations on the agricultural land.
    3. A statement of the purpose for conducting business in
 this state.
    4. A description of the purpose of the interest in the
 agricultural land in this state as it relates to the stated
 business purpose in subsection 3.
    5. The legal name, street address, and mailing address
 of any parent of the registering party, including the legal
 name, street address, and mailing address of any subsidiary or
 intermediary of the parent.
    6. The legal name, street address, and mailing address of
 any subsidiary of the registering party.
    7. A listing of all other interests in agricultural land
 that are held directly or indirectly by the registering party,
 parent of the registering party, or subsidiary or intermediary
 of the parent in the United States that exceeds two hundred
 fifty acres.
    Sec. 3. Section 9I.10, subsection 1, Code 2024, is amended
 to read as follows:
    1. If the secretary of state finds that a nonresident alien,
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 foreign business, foreign government, or an agent, trustee,
 or other fiduciary thereof, has acquired or holds title to or
 interest in agricultural land in this state in violation of
 this chapter or has failed to timely register as required under
 section 9I.7 or has failed to timely report as required under
 section 9I.8 10B.4, the secretary shall report the violation
 to the attorney general.
    Sec. 4. Section 9I.10, Code 2024, is amended by adding the
 following new subsection:
    NEW SUBSECTION. 4. The attorney general may conduct an
 inquiry or investigation regarding a violation of this chapter
 or section 10B.4. As part of that inquiry or investigation,
 and in accordance with the Iowa rules of civil procedure, the
 attorney general may issue a subpoena for the production of
 records, including but not limited to books, accounts, papers,
 correspondence, memoranda, purchase agreements, files, or other
 documents in a print or electronic format. If a person refuses
 compliance, the attorney general may seek enforcement by the
 district court.
    Sec. 5. Section 9I.12, Code 2024, is amended to read as
 follows:
    9I.12 Penalty —— failure to timely file.
    A civil penalty of not more than two thousand dollars to
 exceed twenty-five percent of the county’s assessed value of
 the subject agricultural land for the previous year shall be
 imposed, for each offense, upon a nonresident alien, foreign
 business, or foreign government, or an agent, trustee, or other
 fiduciary thereof, who fails to timely file the registration as
 required by section 9I.7, or who fails to timely file a report
 required by section 9I.8.
    Sec. 6. Section 10B.4, subsection 1, Code 2024, is amended
 to read as follows:
    1. A biennial report shall be filed by a reporting entity
 with the secretary of state on or before March 31 of each
 odd-numbered year as required by rules adopted by the secretary
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 of state pursuant to chapter 17A. However, a reporting entity
 required to file a biennial report pursuant to chapter 489,
 490, 496C, 497, 498, 499, 501, 501A, or 504 shall file the
 report required by this section in the same year as required
 by that chapter. The reporting entity may file the report
 required by this section together with the biennial report
 required to be filed by one of the other chapters referred to
 in this subsection. The reports shall be filed online or on
 forms prepared and supplied by the secretary of state. The
 secretary of state may provide for combining its reporting
 forms with other biennial reporting forms required to be used
 by the reporting entities.
    Sec. 7. Section 10B.4, subsection 2, unnumbered paragraph
 1, Code 2024, is amended to read as follows:
    A report required pursuant to this section shall contain
 information for the reporting period regarding the reporting
 entity as required by the secretary of state which shall at
 least include any updates to the information provided in the
 registration to the secretary of state in section 9I.7 and all
 of the following:
    Sec. 8. Section 10B.4, Code 2024, is amended by adding the
 following new subsection:
    NEW SUBSECTION. 4. The attorney general may conduct an
 inquiry or investigation regarding a violation of this section
 as provided in section 9I.10.
    Sec. 9. Section 10B.4A, Code 2024, is amended to read as
 follows:
    10B.4A Suspension of other filing requirements.
    The secretary of state shall not prepare or distribute forms
 for reports or file reports otherwise required pursuant to
 section 9I.8 or 501.103. A person required to file a report
 pursuant to this chapter is not required to file a report under
 those sections section 501.103. A person required to file a
 report pursuant to this chapter is not required to register
 with the secretary of state as otherwise required in section
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 9I.7.
    Sec. 10. NEW SECTION. 10B.5A Annual summary to governor and
 general assembly.
    The secretary of state shall prepare an annual summary of
 foreign landholding. The summary must be a report summarizing
 the compiled information included in the current registrations
 filed pursuant to section 9I.7 and the last reports filed
 pursuant to section 10B.4. The information is a confidential
 record as provided in section 22.7. The attorney general may
 have access to the annual summary and may use information
 in the annual summary in any action to enforce state law,
 including but not limited to chapters 9H and 9I, and this
 chapter. The annual summary shall be made available to the
 governor, members of the general assembly, and appropriate
 committees of the general assembly in order to determine the
 extent that agricultural land is held in this state by foreign
 entities and the effect of such land ownership upon the economy
 of this state. Upon request, the secretary of state shall
 assist any committee of the general assembly studying these
 issues.
    Sec. 11. Section 10B.6, subsection 1, Code 2024, is amended
 to read as follows:
    1. a. The Except as provided in paragraph “b”, the failure
 to timely file a report or the filing of false information in a
 report as provided in section 10B.4 is punishable by a civil
 penalty not to exceed one thousand dollars.
    b. The failure to file a report or the filing of false
 information in a report by a nonresident alien, foreign
 business, or foreign government, or an agent, trustee, or other
 fiduciary thereof as provided in section 10B.4 is punishable by
 a civil penalty of up to ten thousand dollars for each offense.
    Sec. 12. REPEAL. Section 9I.8, Code 2024, is repealed.
    Sec. 13. REGISTRATION REQUIREMENT. A nonresident alien,
 foreign business, or foreign government, or an agent, trustee,
 or fiduciary thereof, that currently owns an interest in
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  agricultural land must update their registration with the
  secretary of state’s office to comply with the requirements of
  section 9I.7, as amended by this Act, within one hundred eighty
  days of the effective date of this Act.
                            EXPLANATION
         The inclusion of this explanation does not constitute agreement with
         the explanation’s substance by the members of the general assembly.
    BACKGROUND —— GENERAL (CODE CHAPTERS 9H, 9I, AND 10B).
 Currently, three related Code chapters impose requirements upon
 the acquisition or holding of agricultural land suitable for
 farming in this state.
    BACKGROUND —— FARMING BY A DOMESTIC OR FOREIGN BUSINESS
 ENTITY (CODE CHAPTER 9H). Code chapter 9H, which is referred
 to but not amended by this bill, restricts certain business
 entities classified as either domestic (meaning formed in the
 state) or foreign (meaning formed outside the state) from
 acquiring or holding agricultural land, subject to a number
 of exceptions such as a family farm corporation (Code section
 9H.4). The Code chapter’s reporting requirement was repealed
 in 2003 (2003 Iowa Acts, chapter 115, sections 17 and 19).
    BACKGROUND —— FARMING BY A FOREIGN PERSON (CODE CHAPTER
 9I). Code chapter 9I, amended by the bill, restricts a foreign
 person from acquiring agricultural land suitable for use in
 farming in this state (Code section 9I.3). The Code chapter
 specifically describes a foreign person as a foreign business,
 foreign government, or nonresident alien and any authorized
 representative of the foreign business, foreign government, or
 nonresident alien. Similarly, the Code chapter describes an
 authorized representative as an agent, trustee, or fiduciary.
 A foreign business is a corporation incorporated under the
 laws of a foreign country or any other type of business entity
 (e.g., limited liability company) if the majority interest
 is owned directly or indirectly by one or more nonresident
 aliens. A foreign person must file two documents with the
 secretary of state, including a one-time registration (Code
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 section 9I.7) and an annual report (Code section 9I.8). The
 annual report must be filed by a foreign person that acquires
 agricultural land for development and is required to convert
 it for a nonfarming purpose within five years (Code section
 9I.4). Information in the registration or annual report is
 not a confidential record under Iowa’s open records law (Code
 chapter 22). A foreign person who fails to file a timely
 annual report is subject to a civil penalty of not more than
 $2,000 (Code section 9I.12). If the foreign person acquires
 or fails to convert agricultural land to a purpose other than
 farming within five years, the agricultural land escheats to
 the state pursuant to an enforcement action by the attorney
 general (Code section 9I.11).
    BACKGROUND —— SUPERSEDING FILING REQUIREMENTS (CODE CHAPTER
 10B). Code chapter 10B requires that a business entity
 described in Code chapter 9H, or a foreign person described
 in Code chapter 9I, acquiring or holding agricultural land,
 file a biennial report with the secretary of state (Code
 section 10B.4). In addition, a foreign person’s duty to
 file a registration and annual report under Code chapter 9I
 is permanently suspended (Code section 10B.4A). Information
 published in the biennial report is a confidential record but
 may be released to the attorney general and members of the
 general assembly (Code section 10B.5).
    BILL’S PROVISIONS —— REGISTRATION REQUIREMENT (CODE
 CHAPTERS 9I AND 10B). The bill eliminates the suspension
 of the registration requirement (Code section 10B.4A). The
 same confidentiality requirements that currently apply to
 information in a biennial report (Code section 10B.5) apply
 to information in the reinstated registration under Code
 section 9I.7. The bill requires specific information to
 be included in the registration. A foreign person must
 provide its legal name, mailing address, and nationality. An
 authorized representative of a foreign person must state the
 representative’s legal name, street and mailing address, and
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 nationality; and its authority to purchase the agricultural
 land and supervise any daily operations on the agricultural
 land. The foreign person must include a statement of the
 purpose of conducting a business in this state; a description
 of the purpose in the interest in the agricultural land; the
 legal name and mailing address of a parent corporation, or an
 intermediary or subsidiary of the parent corporation; and a
 listing of all other interests in agricultural land totaling
 more than 250 acres held in the United States by the foreign
 person, a parent of the foreign corporation, or intermediary or
 subsidiary of the parent. A foreign person currently owning
 agricultural land has 180 days after the bill’s enactment date
 to register.
    BILL’S PROVISIONS —— INQUIRY OR INVESTIGATION BY THE
 ATTORNEY GENERAL (CODE CHAPTERS 9I AND 10B). The bill
 authorizes the attorney general to conduct an inquiry or
 investigation regarding a violation of Code chapter 9I (Code
 section 9I.10) or the biennial reporting requirements in Code
 chapter 10B (Code section 10B.4). This includes the power to
 issue a subpoena for the production of records, and to seek
 compliance of the su