Under present law, if the attorney general initiates an action in circuit court because a sanctioned nonresident alien, sanctioned foreign business, sanctioned foreign government, or an agent, trustee, or other fiduciary thereof, has acquired or holds title to or interest in real property in this state in violation of state law, then the court must declare the real property escheated to the state and order the sale of the real property in the manner provided by law for the foreclosure of a mortgage on real estate for default of payment. The proceeds of the sale must be used to pay court costs, and the remaining funds, if any, must be paid to the person divested of the real property.
This bill removes the sentence regarding the use of proceeds of the sale, and requires that the proceeds of the sale be disbursed in the following order:
(1) The payment of authorized costs of the sale, including all approved fees and expenses of the referee and any taxes and assessments due;
(2) The payment, in an amount approved by the court, to the attorney general for reimbursement of investigation and litigation costs and expenses;
(3) To bona fide lien holders, in their order of priority, except for liens which under the terms of the sale are to remain on the property; and
(4) To the person divested of the real property.
PARTIES NOT LIABLE FOR PURCHASE OF LAND
Present state law relative to restrictions on land purchases by sanctioned aliens or entities does not impose liability on a person licensed under the Tennessee Real Estate Broker License Act of 1973; an attorney licensed in this state; or a title insurance company or an agent licensed in this state who is involved in a transaction in which a sanctioned nonresident alien, sanctioned foreign business, sanctioned foreign government, or an agent, trustee, or other fiduciary of such alien, business, or government, acquired property in violation of state law. This bill removes this provision.
Under this bill, state law relative to restrictions on land purchases by sanctioned aliens or entities does not impose liability on the following:
(1) A person licensed under the Tennessee Real Estate Broker License Act of 1973;
(2) An attorney licensed in this state;
(3) A title insurance company or an agent licensed in this state who is involved in a transaction in which a foreign adversary or person connected with a foreign adversary, or an agent, trustee, or other fiduciary of such foreign adversary or person connected with a foreign adversary, acquired property in violation of state law;
(4) A state or national bank insured by the federal deposit insurance corporation or an operating subsidiary of that bank, or any employee of that bank;
(5) A state or federal credit union insured by the national credit union administration, or an employee of that credit union; or
(6) Any other individual or entity licensed by the department of financial institutions.
This bill places the responsibility for determining whether an entity is subject to liability under this bill solely with the foreign entity and the attorney general and no other individual or entity. An individual or entity who is not a foreign entity is not required to determine or inquire whether another person or entity is or may be subject to this bill, and bears no civil or criminal liability under this bill.
For purposes of this bill, "foreign adversary" means an individual or a government identified as a foreign adversary pursuant to federal regulations and identified in the database maintained by the U.S. department of treasury, office of foreign assets control; and "person connected with a foreign adversary" means an entity that the foreign adversary has the power to direct or cause the direction of management or policies of the entity whether through ownership of securities, by contract, or otherwise. A person that directly or indirectly has the right to vote 50 percent or more of the voting interests of an entity or is entitled to 50 percent or more of its profits is presumed to have the power to direct or cause the direction of the management or policies of the entity.
FORMER OWNERS NOT LIABLE
This bill clarifies that title to an interest in land is not invalid or subject to divestiture by reason of the violation of this bill by any former owner or other person holding or owning a former interest in such land.

Statutes affected:
Introduced: 66-2-306(d)(2), 66-2-306, 66-2-306(f)