OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 212 Bill Analysis
135th General Assembly
Click here for H.B. 212’s Fiscal Note
Version: As Introduced
Primary Sponsors: Reps. King and Klopfenstein
Effective date:
Abby Gerty, Research Analyst
SUMMARY
Prohibits all individuals and governments determined by the U.S. Secretary of
Commerce to constitute a foreign adversary or subject to economic sanctions
administered by the U.S. Office of Foreign Assets Control (OFAC), and certain associated
businesses, from acquiring real property in Ohio.
Requires the Ohio Secretary of State to periodically update the list of foreign
adversaries.
Requires foreign adversaries and associated businesses to divest of all current real
property holdings in Ohio within 36 months of the bill’s effective date.
Requires all real property conveyance forms to include a statement as to whether the
grantee is a foreign adversary or associated business, and whether the grantor is
required to divest of the real property.
Prohibits the county auditor from endorsing a conveyance of real property to a grantee
that does not affirm their eligibility to acquire real property in Ohio.
Stipulates that any transfer of an interest in real property to a foreign adversary or
associated business is void.
Requires the county auditor to refer grantors required to divest of real property
holdings to the county prosecutor for investigation.
Allows the county prosecutor to initiate a civil action against a property owner alleged
to have violated the bill in a court of common pleas of the county in which the property
is located.
Allows the court, in response to such an action, to issue an order for divestment.
February 21, 2024
Office of Research and Drafting LSC Legislative Budget Office
Requires the county prosecutor to impose a $25,000 civil penalty on a person that does
not comply with a court order for divestment and requires that the property escheat to
the state.
Requires escheated property to be sold at public auction in the same manner as real
property that is foreclosed upon for the payment of a debt.
Stipulates that proceeds from such a sale first are used to pay the costs of the civil
action, then deposited to the General Revenue Fund (GRF).
DETAILED ANALYSIS
Prohibition on acquisition or ownership of real property
The bill prohibits all individuals and governments determined to be “foreign
adversaries” and certain associated businesses from purchasing or acquiring any interest in real
property in Ohio. It also requires foreign adversaries and associated businesses that currently
own an interest in real property in Ohio to divest of that interest within 36 months after the
bill’s effective date. Transfers of real property in violation of the bill are void. Real property held
by a foreign adversary or associated business in violation of the bill may escheat to the state
and be sold at public auction.1
Application of restrictions
Foreign adversaries
The bill’s prohibitions apply to individuals and governments designated as foreign
adversaries by the U.S. Secretary of Commerce or that are subject to economic sanctions
administered by the Office of Foreign Assets Control (OFAC) within the U.S. Department of the
Treasury.2 Under federal law, the U.S. Secretary of Commerce designates as a foreign adversary
any person or government that has “engaged in a long-term pattern of serious instances of
conduct significantly adverse to the national security of the United States or security and safety
of United States persons. . . “ 3 The current list of foreign adversaries is as follows:
1 R.C. 5301.256.
2 R.C. 5301.256(A)(3).
3 15 Code of Federal Regulations (C.F.R.) 7.4.
P a g e |2 H.B. 212
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
China (including Hong Kong) Russia
Cuba Venezuelan politician Nicolas
Maduro
Iran
North Korea
A broader list of individuals and governments are subject to economic sanctions by the
OFAC, including the following:
Afghanistan Lebanon
Balkans Libya
Belarus Nicaragua
Burma Somalia
Central African Republic South Sudan
Cuba Syria
Congo West Bank
Ethiopia Yemen
Iran Zimbabwe
Iraq
Some of the OFAC sanctions are comprehensive, while others are selective. The bill does
not differentiate between the two for the purposes of its prohibitions. It appears that an
individual or government that is subject to any OFAC sanction is considered a foreign adversary
under the bill. 4
The bill requires the Ohio Secretary of State to periodically review the list of individuals
and governments determined to be foreign adversaries and allows for revisions provided that
they do not result in less stringent protection to real property.5
Associated businesses
The bill’s restrictions also apply to certain businesses associated with foreign
adversaries. A business that is directly or indirectly owned or controlled by a foreign adversary
is subject to the bill unless the business is operating lawfully in the U.S. as of the bill’s effective
date. For the purposes of the bill, a business is “owned” by a foreign adversary if the foreign
adversary has possession of more than half of the stock, equity, or other ownership interest of
4 See Sanctions Programs and Country Information, which is available on OFAC’s website:
ofac.treasury.gov.
5 R.C. 5301.256(F).
February 21, 2024
Office of Research and Drafting LSC Legislative Budget Office
the business. A business is “controlled” by a foreign adversary if the foreign adversary has
authority, by contract or by law, to direct the affairs and day-to-day operations of the business
without the consent of any other person.6
Furthermore, a business with a principal executive office located in a country governed
by a foreign adversary is subject to the bill unless the business meets all of the following
requirements:
Has filed articles of incorporation or any other documents or applications as a condition
precedent to engage in business at least seven years before the bill’s effective date;
Is in good standing, full force and effect, or registered with the Ohio Secretary of State
and has maintained that status for at least seven years before the bill’s effective date;
Has been approved to purchase or acquire real property by the U.S. Committee on
Foreign Investment pursuant to the “Defense Production Act of 1950”;
Is a party to an active national security agreement with the U.S. government;
Is operating lawfully in the U.S. as of the bill’s effective date.7
Real property conveyances
Under continuing law, whenever real property or a manufactured or mobile home is
transferred, the grantee is required to file a statement with the county auditor attesting to the
property’s value and acknowledging that certain information related to the property’s eligibility
for the homestead exemption or current agricultural use valuation (CAUV) status has been
considered as part of the transfer. The statement must be accompanied by any required
property transfer tax. The bill requires statements involving the transfer of real property to
include an affirmation from the grantee as to whether the grantee is prohibited from acquiring
real property in Ohio under the bill. Additionally, the grantor must submit an affirmation as to
whether the grantor is required to divest of the real property that is the subject of the transfer.
The bill prohibits the county auditor from indorsing a conveyance of real property if the
required affirmations are not submitted, or if the grantee confirms or the auditor has reason to
believe that the grantee is prohibited from purchasing or acquiring real property. The auditor
cannot refuse to indorse a conveyance merely because the grantor is prohibited from holding
the real property that is the subject of the transfer. In either case, the auditor must refer the
transfer to the county prosecutor, who is then required to investigate the allegation. If it is
found that the grantee is prohibited from purchasing or acquiring real property, the transfer is
void. An aggrieved party may appeal the county prosecutor’s determination in the court of
common pleas in the county in which the real property is located.8
6 R.C. 5301.256(A)(2), (A)(4), and (B)(3).
7 R.C. 2105.16 and 5301.256(B).
8 R.C. 319.202 and 5301.256(C); conforming change in R.C. 5323.02.
P a g e |4 H.B. 212
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Divestment
The bill requires a foreign adversary or associated business to divest of all real property
holdings in Ohio within 36 months after the bill’s effective date. If the county auditor has
reason to believe that a foreign adversary or associated business has not divested of its real
property interests, the county auditor must report the violation to the county prosecutor. The
county prosecutor is required to investigate the allegation and may subpoena witnesses and
documents as part of that investigation. If the real property that is the subject of the
investigation is located in more than one county, the county prosecutors of those counties may
investigate the allegation collaboratively.
If the prosecutor’s investigation indicates a violation of the bill’s divestment
requirement, the prosecutor is required to initiate an action in the court of common pleas in
the county where the real property is located. If the land is located in more than one county,
the prosecutor may initiate a single action in the county in which the majority of the real
property is located. After the action is commenced, the county prosecutor must file a notice of
pendency of the action with the county. If the court finds that a violation has occurred, it must
issue an order for divestment and the foreign adversary or business must comply fully within six
months after the date of the final entry of judgment.
If a foreign adversary or associated business fails to timely comply with a court ordered
divestment, the county prosecutor is required to impose a $25,000 civil penalty. Furthermore,
the property subject to the order escheats to the state. The clerk of the court must notify the
Governor that the title to the land is vested in the state by the court. The escheated real
property must be sold at public auction in the same manner as real property foreclosed upon
due to the owner’s failure to pay a debt, except that there is no right of redemption. After the
sale of the property, the proceeds are first used to pay court costs related to the action. The
remaining proceeds, if any, are distributed to the General Revenue Fund (GRF).9
Third party duties
The bill specifies that no person other than a foreign adversary or associated business is
required to inquire or determine whether another person is subject to the bill’s restrictions on
acquiring or holding an interest in real property in Ohio.10
Interaction with current law
The bill was introduced before the enactment of H.B. 33 of the 135 th General Assembly,
which prohibits persons determined by the Ohio Secretary of State to constitute a threat to the
agricultural production of Ohio or the U.S. from acquiring agricultural land.11 The bill is, in many
9 R.C. 5301.256(D); conforming change in R.C. 2105.16.
10 R.C. 5301.256(E).
11See pages 552-554 of the LSC Final Analysis for H.B. 33 (PDF), which is available on the General
Assembly’s website: legislature.ohio.gov.
P a g e |5 H.B. 212
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
ways, more stringent than the prohibition enacted by H.B. 33. For example, the bill applies to all
real property, whereas H.B. 33 applies only to agricultural land. Furthermore, the bill requires
foreign adversaries and associated businesses to divest of current land holdings, whereas
H.B. 33 allows for retention of land acquired before the provision’s effective date. The bill also
prescribes a different method for determining which countries and businesses are subject to its
restrictions. It does not include the exceptions, like those in H.B. 33, for property acquired by
devise or descent or through process of law in the collection of debts.
If enacted in its current form, the bill would supplement rather than replace the
prohibitions in H.B. 33. One area where harmonization may prove to be difficult is in the
enforcement mechanisms. H.B. 33 requires enforcement by the Attorney General rather than
county prosecutors. Furthermore, under H.B. 33, when real property escheats to the state and
is sold at public auction, the proceeds are distributed differently. After court costs, the former
land owner is reimbursed an amount not exceeding the amount paid for the escheated real
property. Then, if any proceeds remain, they are distributed to the general fund of the county
in which the property is located (rather than the GRF). It is not clear which procedure would
apply in cases where real property is acquired or held in violation of both H.B. 33 and the bill.
State authority to regulate foreign ownership
A similar Florida law is the subject of an ongoing legal challenge. A federal judge recently
enjoined enforcement of the Florida law against the plaintiffs in that challenge.12 If the bill were
challenged after enactment, a court might examine the following:
Whether depriving certain individuals and businesses of the right to acquire and hold
real property and, further, potentially seizing real property without providing
compensation to the owner, violates substantive and procedural due process rights
guaranteed by the Fifth Amendment of the U.S. Constitution or real property rights
protected by Article I, Section 1 of the Ohio Constitution;
Whether the bill is prohibited by the Supremacy Clause of the U.S. Constitution by
“interfering” with the federal government’s “plenary” power respecting foreign affairs,
requiring the state to make “minute inquiries concerning the actual administration of
foreign law,” or conflicting with a treaty (such as a “nationals clause” or a “most favored
nations” clause of U.S. trade treaties);13
12See Eleventh Circuit Narrowly Blocks Florida from Enforcing Foreign Ownership Law, Micah Brown,
which is available on The National Agricultural Law Center’s website: https://nationalaglawcenter.org/.
13U.S. Const., Article VI, Clause 2; Arizona v. United States, 567 U.S. 387 (2012); Wickard v. Filburn, 317
U.S. 111 (1942); Missouri v. Holland, 252 U.S. 416 (1920); and Zschernig v. Miller, 389 U.S. 429(1968);
see also Foreign Ownership of Property in the United States: Federal and State Restrictions, Howard
Zaritsky, Congressional Research Service, pgs. 14-16, updated June 23, 1980, which is available on the
University of North Texas Digital Library website: digital.library.unt.edu.
P a g e |6 H.B. 212
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Whether the bill infringes on the right of certain individuals and businesses to “equal
protection of the laws,” guaranteed by the U.S. Constitution;14
Whether the bill discriminates against foreign commerce without a “compelling
justification” based on legitimate, nondiscriminatory goals;15
Whether the General Assembly, by allowing the U.S. government and the Ohio
Secretary of State to designate foreign adversaries that are subject to the bill, unlawfully
delegates its power without a clear determination of policy and provide adequate