by NALC staff

Since January 2021, the majority of states have proposed at least one piece of legislation to prohibit or restrict foreign investments and landholdings in land, particularly private agricultural land, located within the boundaries of their states to some degrees. In fact, over the past few years, the number of states with a foreign ownership law has increased from fourteen to twenty-five. This trend is likely going to continue this year as most states enter into legislative sessions and foreign investments in U.S. agricultural land continue to increase. So far in 2025, foreign ownership legislation has been proposed in nineteen states, including Alabama, Arizona, Hawaii, Idaho, Illinois, Indiana, Michigan, Missouri, Nebraska, New Jersey, New York, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, Washington, and Wyoming. Each of these states are considering measures that will enact a foreign ownership law or will amend certain provisions of their states’ foreign ownership law.

This is the second article of a series discussing recent state proposals that seek to limit or restrict foreign investments in land. The first article in this series is available here. This article discusses the proposals introduced in Hawaii, Idaho, and Michigan.

Hawaii

Under Hawaii state law, nonresident individuals are prohibited from acquiring an interest in public agricultural land. See Haw. Rev. Stat. § 171-68; HI Organic Act § 73(f). Hence, the state does not restrict foreign persons and entities from acquiring or holding private land within the state. Recently, Senate Bill 1 (“SB 1”) was introduced in the Hawaii state legislature for the 2025 session, which marks the third session in a row the state legislature has considered foreign ownership legislation.

Under SB 1—which is similar to Arkansas’ foreign ownership law—a prohibited foreign party (“PFP”) would be prohibited from acquiring any interest in agricultural land located within the state. This bill specifies six different types of investors that fall within the definition of PFP:

1. Individuals that are citizens or residents of a country subject to the federal International Traffic in Arms Regulations (“ITAR”);
2. Foreign governments of a country subject to ITAR;
3. Legal entities organized under the laws of a foreign government subject to ITAR;
4. Entities, including U.S. entities, where a “significant interest or substantial control is directly or indirectly held or is capable of being exercised by” a party, or any combination of the parties, referred to in (1) through (3);
5. An Entity of Particular Concern as designated by the U.S. Secretary of State; and
6. Agents, trustees, or other fiduciaries of individuals, governments, or entities specified in (1) through (5) of this list.

Although most PFPs are subject to the restriction, SB 1 does exempt “resident aliens”, which are non-U.S. citizen individuals who reside within the U.S. Thus, an individual from a country subject to ITAR can still acquire Hawaii agricultural land if they are a resident of a U.S. state.

Like Arkansas’ foreign ownership law, SB 1 seeks to establish an Office of Agricultural Intelligence (“OAI”). Under the bill, OAI would be directed to investigate potential PFP agricultural landholdings within the state. If a potential violation is discovered, SB 1 would require OAI to notify the Attorney General of Hawaii for an investigation. If the investigation reveals a violation has occurred, the attorney general is required to bring a legal action against the PFP in violation of the restriction. If the court finds the PFP in violation, SB 1 would order the land held in violation be sold at a public auction. Additionally, PFPs that are convicted of a violating the restriction are guilty of a class C felony that carries a penalty of 1 to 5 years imprisonment.

The Hawaii state legislature is also considering Senate Bill 242 (“SB 242”) and its companion bill, House Bill 192 (“HB 192”). Under these measures, “no foreign entity [and foreign government] shall own, lease, or hold a controlling interest in more than ____ acres of agricultural land within the State.” While these measures seek to establish a limitation on certain foreign investments, these bills provide an exception for foreign businesses and governments to hold some amount of agricultural acreage within the state; however, under the current version of these measures, an acreage amount is not specified. Further, it is unclear what is considered a “controlling interest” because the measures do not define the term.

SB 242 and HB 192 would also require foreign businesses and foreign governments to with an ownership or leasehold interest in Hawaii agricultural land to disclose their interests to the Hawaii Department of Agriculture, detailing the total acreage and location of the land, the type of agricultural production or land use, and any material changes in ownership or leasehold status of the land.

Another measure also being considered by the state legislature is Senate Bill 206 (“SB 206”). This measure seeks to restrict a nonresident alien, which is defined as a non-U.S. citizen or resident who is a foreign national, foreign business entity, and trusts having more than 20% of the value of its assets held by a beneficiary that’s a nonresident alien or foreign business entity, from acquiring or holding any interest in residential property. This type of proposal is different from most foreign ownership laws because this measure seeks to restrict investments in residential property rather than agricultural land or land in close proximity to military installations or critical infrastructure facilities.

The Hawaii state legislature began its session on January 15, 2025, and each of these measures will likely soon be referred to a committee for consideration.

Idaho

In 2023, the Idaho state legislature enacted a foreign ownership law (codified under Idaho Code § 55-103) to restrict foreign governments and foreign government-owned enterprises from acquiring or holding agricultural land located within the state. The law also restricts these foreign investors from holding an interest in water rights, mining claims or rights. In the current 2025 legislative session, the Idaho state legislature is considering House Bill 12 (“H12”), which seeks to amend the § 55-103 to extend the restriction to a foreign principal from a foreign adversary country.

The legislation defines “foreign principal” as a government and its official, political party, political party and its members, a business entity, or a person domiciled in a foreign adversary country. A “foreign adversary” includes China, Cuba, Iran, North Korea, Russia, Syria, and Venezuela, or any other country designated by Idaho’s governor and adjutant general. H12 permits the governor and adjutant general to seek advice from the U.S. Secretary of State, U.S. Secretary of Defense, or the U.S. Secretary of Homeland Security in designating foreign adversary countries.

Further, H12 seeks to restrict foreign principals from acquiring forestland located within the state. Therefore, if enacted, H12 would restrict individuals, businesses, and governments from foreign adversary countries from acquiring and holding agricultural land, water rights, mineral rights, and forestland located within Idaho.

This measure would also require foreign principals of foreign adversary countries that owns or controls agricultural land within the state to sell, transfer, or otherwise divest of their interest in agricultural land within 180 days of the effective date of the legislation. Additionally, while the measure would permit a foreign principal to acquire agricultural land by inheritance or by enforcing a security interest, H12 would require foreign principals to dispose of this interest within 180 days.

H12 also seeks to require foreign principals that own or acquire any interest in agricultural land located within the state to register with their interest with the Idaho Department of Agriculture within 60 days of the effective date of the measure or the date of acquisition. Under this disclosure requirement, foreign principals must report the name of the owner of the land or the owner of the interest in the land, the address of the land, and the number of agricultural acres under the owner’s control.

Like most foreign ownership laws, H12 would direct the state attorney general to enforce violations of the restriction and require a court to order the land be sold through a public auction if held in violation. However, unlike other foreign ownership laws, H12 would authorize a whistleblower to referrer potential violations of the foreign ownership restriction to the Idaho attorney general. Additionally, whistleblower referrals that result in a divestiture of land are entitled to 30% of the proceeds from the land sale resulting from a violation of the restriction.

On January 15, 2024, H12 was referred to the House State Affairs Committee for consideration. At this stage, the committee can review the bill, hear testimony in support and opposition of the bill, amend the bill, pass the bill for consideration by its respective chamber, or vote to fail passage of the bill out of committee.

Michigan

Michigan is another state that expressly permits noncitizens from acquiring and holding land located within the state. See Mich. Comp. Laws Ann. § 554.135. However, over the past couple of years, the state legislature has attempted to enact a law that limits certain foreign acquisitions in Michigan real property, and the state legislature is again considering similar legislation in 2025. On January 8, Senate Bill 10 (“SB 10”) was introduced and referred to the Committee on Government Operation. This bill seeks to restrict a foreign government or state-sponsored enterprise from purchasing or acquiring farmland located within the state. A “state-sponsored enterprise” is a business entity in which a foreign government primary owns or controls its operations. SB 10 would also restrict individuals operating on behalf of a foreign government or state-sponsored enterprise from acquiring farmland.

There are some exceptions to the restriction provided under SB 10. First, the restriction would not apply to restricted foreign investors who owns or holds farmland located within the state before October 1, 2023. In other words, these foreign investors would be able to continue to hold their interests in the farmland, but they would be prohibited from acquiring additional farmland in the state. Additionally, SB 10 would exempt acquisitions of farmland by foreign governments and its entities who are permitted to acquire land under a treaty with the U.S. federal government.

Conclusion

Over the past few years, the issue of restricting foreign ownership and investments in real property, particularly agricultural and forestland, has emerged or reemerged in almost every state. In fact, twelve states in 2024 enacted a law that limits or restricts certain foreign investments in land located within their state. So far in 2025, nineteen states have introduced at least one piece of foreign ownership legislation in their state, but if this legislative session is similar to recent years, it is likely more states will begin proposing similar measures in their states’ legislature.

To read NALC articles discussing foreign investments in U.S. agriculture, click here.
To learn more about foreign ownership of U.S. land, click here.

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