LAND OWNERSHIP BY ALIENS GENERALLY
Except as otherwise provided in this bill, all aliens are capable of taking, by deed or will, lands and tenements in fee simple, or other less estate, and of holding, aliening, and devising them.
CERTAIN FOREIGN PARTIES PROHIBITED FROM OWNING REAL PROPERTY
Present law prohibits the following individuals or entities from purchasing or otherwise acquiring real property in this state if the country where the individual or entity resides or is located, or the official sanctioned government representing that country, or agents, trustees, or fiduciaries thereof, is on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list:
(1) An individual who (i) is either a citizen of a foreign government or a person identified on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list; and (ii) is not a citizen of the United States or a person lawfully admitted into the United States for permanent residence, even if such status is conditional ("sanctioned nonresident alien");
(2) A business entity that is (i) a corporation incorporated under the laws of a foreign country of a sanctioned foreign government; (ii) a business entity whether or not incorporated, in which a majority interest is owned directly or indirectly by sanctioned nonresident aliens (where the determination of “owned,” in terms of ownership or control of a foreign business, is not affected by legal entities, including trusts, holding companies, multiple corporations, and other business arrangements); or (iii) a corporation or business entity that is identified on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list ("sanctioned foreign business"); and
(3) A government other than the government of the United States, its states, its territories, or its possessions, that is identified by the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list ("sanctioned foreign government").
However, the above provisions do not apply to the following:
(1) Real property acquired by devise or descent;
(2) A bona fide encumbrance on real property taken for purposes of security; and
(3) Real property acquired by a process of law in the collection of debts; by a deed in lieu of foreclosure, pursuant to a forfeiture of a contract for deed; or by a procedure for the enforcement of a lien or claim on the real property, whether created by mortgage or otherwise. However, real property so acquired must be sold or otherwise disposed of within two years after the title is transferred. Pending the sale or disposition, the real property must not be used for a purpose other than what it was used for immediately prior to the time the property was put up for sale, and the property must not be used except under lease to an individual, trust, corporation, partnership, or other business entity not subject to the restriction imposed by this provision.
The individual or entity prohibited from purchasing real property who holds real property in this state on July 1, 2023, may continue to own or hold the real property, but must not purchase or otherwise acquire additional real property in this state on or after July 1, 2023. The individual or entity must not transfer title to, or an interest in, real property to another restricted party as described above.
This bill replaces the terminology used to refer to individuals and entities restricted in their real property ownership and expands on prohibited methods of real property acquisition. Specifically, this bill prohibits the following:
(1) Acquisition by grant, devise, descent, or otherwise any interest in public or private land in this state by a corporation, company, association, firm, partnership, society, joint-stock company, trust, estate, or other legal entity whose controlling interest is owned by a prohibited foreign party ("prohibited foreign-party-controlled business"); and
(2) Holding public or private land as an agent, trustee, or other fiduciary for a prohibited foreign-party-controlled business in violation of this bill.
DIVESTMENT
Under present law, a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, who acquires real property or an interest in real property, by devise or descent after July 1, 2023, must divest itself of all right, title, and interest in the real property within two years from the date of acquiring the real property or interest. This provision does not require divestment of real property or an interest in real property acquired by devise or descent from a sanctioned nonresident alien if the property or interest was acquired by a sanctioned nonresident alien prior to July 1, 2023.
If a person, business, or other entity who purchases or otherwise acquires real property in this state except by devise or descent, after July 1, 2023, and whose status changes so that they become a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, then the person or entity must divest itself of all right, title, and interest in the real property within two years from the date that its status changed.
This bill removes the July 1, 2023, provision and requires a prohibited foreign-party-controlled business entity in violation of this bill to divest the public or private land within two years of the date the entity is found to be in violation. If a prohibited foreign-party-controlled business entity does not divest the public or private land, the attorney general and reporter must commence an action in the county in the circuit court within the jurisdiction of the public or private land. If the public or private land is held in violation of this bill, the court must order that the public or private land be sold through judicial foreclosure. Proceeds of the sale must be disbursed to lien holders, in the order of priority, except for liens which under the terms of the sale are to remain on the public or private land.
REGISTRATION
Under present law, a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, who owns an interest in real property in this state on or after July 1, 2023, must register the real property with the secretary of state. The registration must be made within 60 days after July 1, 2023, or within 60 days after acquiring the real property or the interest in real property, whichever time is later. This bill removes this provision.
PENALTIES
Under present law, if the secretary of state discovers a violation of the prohibition on land ownership, then the secretary of state must report the violation to the attorney general, who must then initiate an action in the circuit court of any county in which the real property is located. If the court finds a violation, then the real property escheats to the state and is sold; proceeds must be used to pay court costs, and remaining funds must be paid to the person divested of the property.
The secretary of state must assess a fine not to exceed $2,000 to any sanctioned nonresident alien, sanctioned foreign business, sanctioned foreign government, or an agent, trustee, or other fiduciary thereof, for failing to register real property as required under present law. Additionally, this bill provides that a violation of the prohibition on land ownership by a prohibited foreign-party-controlled business is a Class A misdemeanor, punishable by not more than 11 months and 29 days of confinement or a fine of $1,500, or both.
DEFENSE
This bill provides that it is an affirmative defense to prosecution under this bill that a prohibited foreign-party-controlled business entity is a resident alien of this state.
EXCEPTIONS
This bill clarifies that title to public or private land is not invalid or subject to divestiture due to a violation of this bill by (i) a former owner or (ii) another person holding or owning a former interest in the public or private land.
PERSONS OUTSIDE SCOPE
This bill does not require a person not subject to this bill to determine or inquire into whether another person is or may be subject to this bill.
AGRICULTURAL LAND
This bill prohibits the following:
(1) A prohibited foreign party from acquiring by grant, purchase, devise, descent, or otherwise any interest in agricultural land in this state regardless of whether the prohibited foreign party intends to use the agricultural land for nonfarming purposes; and
(2) A party from holding agricultural land as an agent, trustee, or other fiduciary for a prohibited foreign party in violation of this bill.
This bill provides that a prohibited foreign party that acquires agricultural land in violation of this bill remains in violation as long as the prohibited foreign party holds an interest in the agricultural land.
This bill authorizes a prohibited foreign party who is a resident alien of the United States to acquire and hold agricultural land in the state upon the same terms as a citizen of the United States during the continuance of his or her residence in this state. If a prohibited foreign party is no longer a resident alien, the prohibited foreign party must divest of the agricultural land within two years of moving from this state. However, if the prohibited foreign party does not divest of the agricultural land, the attorney general and reporter must commence an action in the county in which the majority of the land lies. If the agricultural land is held in violation of this bill, the court must order that the agricultural land be sold through judicial foreclosure.
For purposes of this bill, a "prohibited foreign party" means the following:
(1) A citizen or resident of a country subject to international traffic in arms regulations;
(2) A foreign government formed within a country subject to international traffic in arms regulations;
(3) A party other than an individual or a government that is created or organized under the laws of a foreign government within a country subject to international traffic in arms regulations; or
(4) A party other than an individual or a government (A) that is created or organized under the laws of a state; and (B) in which a significant interest or substantial control is directly or indirectly held or is capable of being exercised by (i) an individual referred to in (1) above; (ii) a foreign government referred to in (2) above; (iii) a party referred to in (3) above; or (iv) a combination of the individuals, parties, or governments referred to in this (4);
(5) An entity of particular concern; or
(6) An agent, trustee, or other fiduciary of a person or entity enumerated in (1)-(5) above.
For purposes of this bill, an "entity of particular concern" means an entity designated by the U.S. department of state and includes Al-Shabaab, Boko Haram, Hayat Tahrir al-Sham, the Houthis, ISIS-Sahel (formerly known as ISIS-Greater Sahara), ISIS-West Africa, Jamaat Nasr al-Islam wal Muslimin, the Taliban, and the Wagner Group based on its actions in the Central African Republic.
AGRICULTURAL LAND--REPORTING AND LEGAL PROCESS
This bill requires the office of agricultural intelligence, upon determining that a prohibited foreign party has acquired agricultural land in this state in violation of this bill, to report the violation to the attorney general. This bill authorizes the attorney general, upon receiving notice of a violation of agricultural land ownership or upon receipt of information that leads the attorney general to believe that a violation may exist, to issue subpoenas requiring (i) the appearance of witnesses; (ii) production of relevant records; and (iii) the giving of relevant testimony.
If, as a result of the investigation the attorney general concludes that a violation has occurred, then the attorney general must commence an action in circuit court within the jurisdiction of the agricultural land. If the agricultural land is held in violation of this bill, then the court must order that the agricultural land be sold through judicial foreclosure.
The proceeds of the sale of agricultural land by judicial foreclosure authorized under this bill must be disbursed to lien holders, in the order of priority, except for liens which under the terms of the sale are to remain on the agricultural land.
AGRICULTURAL LAND--PENALTY
This bill provides that a violation of the prohibition on agricultural land ownership is a Class A misdemeanor, punishable by not more than 11 months and 29 days of confinement, or a fine of $1,500, or both.
AGRICULTURAL LAND--DEFENSE
This bill provides that it is an affirmative defense to prosecution of a violation of agricultural land ownership that a prohibited foreign party is a resident alien of this state.
AGRICULTURAL LAND--DIVESTMENT
This bill provides that title to agricultural land is not invalid or subject to divestiture due to a violation of this bill by (i) any former owner or (ii) another person holding or owning a former interest in the agricultural land.
AGRICULTURAL LAND--PERSONS OUTSIDE SCOPE
A person not subject to this bill is not required to determine or inquire into whether another person is or may be subject to this bill.
OFFICE OF AGRICULTURAL INTELLIGENCE
This bill creates within the department of agriculture the office of agricultural intelligence, and both authorizes and directs the office to (i) collect and analyze information concerning the unlawful sale or possession of agricultural land by prohibited foreign parties; and (ii) administer and enforce this bill. The commissioner of agriculture may designate employees of the department to perform these duties, and the office must operate under the direction of the commissioner of agriculture.
RULEMAKING
This bill requires the commissioner to promulgate rules in accordance with state law to govern the administration of the office.
APPLICABILITY
This bill takes effect December 1, 2024.
ON APRIL 22, 2024, THE HOUSE ADOPTED AMENDMENT #3 AND PASSED HOUSE BILL 2553, AS AMENDED.
AMENDMENT #3 rewrites the bill to make the changes described below to the law regarding restrictions on land purchases by sanctioned aliens of entities. This amendment takes effect January 1, 2025.
LAND OWNERSHIP BY ALIENS GENERALLY
Except as otherwise provided in this amendment, all aliens are capable of taking, by deed or will, lands and tenements in fee simple, or other less estate, and of holding, aliening, and devising them.
CERTAIN FOREIGN PARTIES PROHIBITED FROM OWNING REAL PROPERTY
Present law prohibits the following individuals or entities from purchasing or otherwise acquiring real property in this state if the country where the individual or entity resides or is located, or the official sanctioned government representing that country, or agents, trustees, or fiduciaries thereof, is on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list:
(1) An individual who (i) is either a citizen of a foreign government or a person identified on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list; and (ii) is not a citizen of the United States or a person lawfully admitted into the United States for permanent residence, even if such status is conditional ("sanctioned nonresident alien");
(2) A business entity that is (i) a corporation incorporated under the laws of a foreign country of a sanctioned foreign government; (ii) a business entity whether or not incorporated, in which a majority interest is owned directly or indirectly by sanctioned nonresident aliens (where the determination of “owned,” in terms of ownership or control of a foreign business, is not affected by legal entities, including trusts, holding companies, multiple corporations, and other business arrangements); or (iii) a corporation or business entity that is identified on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list ("sanctioned foreign business"); and
(3) A government other than the government of the United States, its states, its territories, or its possessions, that is identified by the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list ("sanctioned foreign government").
However, the above provisions do not apply to the following:
(1) Real property acquired by devise or descent;
(2) A bona fide encumbrance on real property taken for purposes of security; and
(3) Real property acquired by a process of law in the collection of debts; by a deed in lieu of foreclosure, pursuant to a forfeiture of a contract for deed; or by a procedure for the enforcement of a lien or claim on the real property, whether created by mortgage or otherwise. However, real property so acquired must be sold or otherwise disposed of within two years after the title is transferred. Pending the sale or disposition, the real property must not be used for a purpose other than what it was used for immediately prior to the time the property was put up for sale, and the property must not be used except under lease to an individual, trust, corporation, partnership, or other business entity not subject to the restriction imposed by this provision.
The individual or entity prohibited from purchasing real property who holds real property in this state on July 1, 2023, may continue to own or hold the real property, but must not purchase or otherwise acquire additional real property in this state on or after July 1, 2023. The individual or entity must not transfer title to, or an interest in, real property to another restricted party as described above.
This amendment deletes these provisions entirely and replaces them with the provisions below.
This amendment prohibits a prohibited foreign party or prohibited foreign-party-controlled business from acquiring by grant, purchase, devise, descent, or otherwise an interest in agricultural land in this state regardless of whether the prohibited foreign party or prohibited foreign-party-controlled business intends to use the agricultural land for nonfarming purposes. A party must not hold agricultural land as an agent, trustee, or other fiduciary for a prohibited foreign party or prohibited foreign-party-controlled business in violation of this amendment. A prohibited foreign party or prohibited foreign-party-controlled business that acquires agricultural land in violation of this amendment remains in violation as long as the prohibited foreign party or prohibited foreign-party-controlled business holds an interest in the agricultural land.
As used in the amendment, a "prohibited foreign party" means the following:
(1) A citizen or resident of a country subject to international traffic in arms regulatio