by NALC Staff
Since January 2021, almost every state has 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 degree. 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 continues in 2025 as the majority of states in the U.S. are considering measures that will enact a foreign ownership law or will amend certain provisions of their states’ foreign ownership law.
This is the sixth article of a series discussing recent state proposals that seek to limit or restrict foreign investments in land. The other articles in this series are available here. This article discusses the proposals introduced in Kentucky and Oklahoma.
Kentucky
Kentucky is considered one of twenty-five states that has enacted a foreign ownership law to limit certain foreign landholdings located within the boundaries of the state. Under the state’s law, real property owned by a nonresident alien may be escheated by the state eight years after the nonresident alien acquires the title of the property. See Ky. Rev. Stat. Ann. § 381.300. While the state law does not necessarily restrict foreign investments in real property, it does provide the state with the ability to take legal possession of real property held by a nonresident alien after a certain period of time. Currently, the Kentucky state legislature is considering three measures—Senate Bill 167 (“SB 167”), House Bill 315 (“HB 315”), and House Bill 393 (“HB 393”)—further restrict certain foreign investments in land located within the state.
Companion bills SB 167 and HB 315 each seek to restrict a nonresident alien, foreign business entity, or any person or entity who has a legal relationship or is legally bound to make decisions on behalf of a foreign government of a country subject to International Traffic in Arms Regulations (“ITAR”) (22 C.F.R. § 126.1) from acquiring any interest, include a leasehold interest, in public or private agricultural land located within the state. Some countries currently subject to ITAR include China, Iran, North Korea, and Syria. Further, these bills also seek to prohibit these foreign persons from participating in programs administered by the Kentucky Department of Agriculture, Agricultural Development Board, and the Kentucky Agricultural Finance Corporation.
While these measures will restrict certain investments in agricultural land, SB 167 and HB 315 do provide some exceptions to the restriction. First, the measures will permit foreign persons of countries subject to ITAR to continue holding any interest in Kentucky agricultural land they acquired before the effective date of the legislation. Second, foreign investors of ITAR countries may acquire agricultural land to develop and operate a nonagricultural business operation, so long as the land is not used for farming by the foreign investor and the development of the business is completed within five years from the date of acquiring the land.
SB 167 and HB 315 will require the Kentucky Department of Agriculture (“KDA”) to review disclosures foreign persons must submit to the U.S. Department of Agriculture (“USDA”) under the federal Agricultural Foreign Investment Disclosure Act (“AFIDA”). AFIDA requires certain foreign persons with an interest in agricultural or forestland located within the U.S. to disclose certain information about their interest in the land. For more information on AFIDA, click here. If KDA discovers a potential violation of the restriction, particularly upon reviewing the AFIDA data, these bills require the agency to refer evidence of the noncompliance to the state attorney general. Both bills will require the attorney general to investigate the potential violation and bring a divestment action against the foreign investor if land is purchased or held in violation of the law. If a court determines a violation has occurred, it will order the land be sold through a public sale.
SB 167 was recently referred to the Kentucky Senate Judiciary Committee. 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. On February 28, 2025, Kentucky House passed HB 315 with a vote of 93-0. The bill will now go to the Kentucky House for consideration.
The Kentucky state legislature is also considering HB 393, which restricts a foreign principal of a foreign adversary country, which includes China, Cuba, Iran, North Korea, Russia, and Venezuela, from owning, controlling, or acquiring any interest in real property, not just agricultural land, located within the state. The bill defines “foreign principal” as a nonresident alien, foreign business, and anyone under the direction, or makes decisions for, a foreign government. Accordingly, any of these foreign persons of a foreign adversary country will be prohibited from acquiring an interest in any Kentucky real property. However, HB 393 does provide an exception for real property held by a foreign principal before the effective date of the measure, if enacted. Further, a foreign principal may obtain an interest in real property by inheritance or enforcement of a security interest, but they must divest of this interest within three years.
This piece of legislation will also require foreign principals to register their real property holdings with the Kentucky Cabinet for Economic Development (“KCED”), and failure to timely file is a penalty of $1,000 each day the registration is late. Further, HB 393 permits KCED to place a lien on any property not properly registered. Like SB 167 and HB 315, this bill will authorize the state attorney general to investigate and bring a legal action against any real property held in violation of the restriction, and if a court determines land is held in violation, it shall order the property be sold through a public sale. Additionally, a foreign principal in violation of the restriction, and any person who knowingly sells real property or any interest in real property to a foreign principal, is guilty of a Class D felony, which carries a penalty of imprisonment up to five years.
HB 393 has been referred to the House Judiciary Committee for consideration.
Oklahoma
Oklahoma is also one of twenty-fives states that has enacted a foreign ownership law. Originally enacted in 1910, Oklahoma state law has prohibited nonresident aliens, with some exception, from acquiring any land located within the state. See Okla. Stat. tit. 60, § 121. Since 1971, the state has restricted foreign business entities from farming or ranching within the state, which also includes owning or leasing any interest in farmland or ranchland located within the state. See Okla. Stat. tit. 18, § 951 et seq.
During the two previous legislative sessions, the Oklahoma state legislature amended its foreign ownership law. Enacted in 2023, Senate Bill 212 (“SB 212”) amended the nonresident alien restriction under § 121; however, the legislation narrowed their restriction to specifically prohibit foreign acquisitions of land through business entities or trusts that engage in activities or ventures that are illegal under federal law (i.e., the production of marijuana). SB 212 also requires purchasers of real property in Oklahoma to certify their acquisition of the land does not violate the state foreign ownership law. Senate Bill 1705 (“SB 1705”), which was enacted during the 2024 legislative session, also amended § 121, but extended the restriction to foreign government adversaries and foreign government-owned businesses. A “foreign government adversary” is defined as a government designated by the U.S. Secretary of State as “hostile” or a Country of Particular Concern, which currently includes several countries, such as China, Cuba, Iran, North Korea, Russia, and Saudi Arabia. However, SB 1705 created an exception to the restriction for businesses that have an agreement with the Committee on Foreign Investment in the United States to operate in the U.S.
In 2025, the Oklahoma state legislature again seeks to enact or amend certain provisions of its foreign ownership law. One measure introduced in the state legislature this session is Senate Bill 727 (“SB 727”), which seeks to amend the state’s foreign ownership restriction to a business entities domiciled or headquartered in, or owned or controlled by a country of particular concern. Under the bill, a “country of particular concern” is any country designated by the U.S. Secretary of State (“SecState”) as hostile or a country listed as a Country of Particular Concern. Some countries on this list include China, Cuba, Iran, North Korea, Pakistan, Russia, and Saudi Arabia. Therefore, SB 727 seeks to extend the restriction to any business entity formed or domiciled in these countries, not just entities owned or controlled by the government of these countries.
The Oklahoma state legislature is also considering Senate Bill 893 (“SB 893”) and Senate Bill 910 (“SB 910”). These measures, which contain identical language, will restrict a “foreign principal”—which is an individual, business entity, government, government officials, political party, and its members—of a foreign adversary country from owning or acquiring any interest in agricultural land located within the state. Like SB 727, both bills define “foreign adversary country” as any country designated by the SecState as hostile or identified as a Country of Particular Concern. Further, if SB 893 or SB 910 are enacted, foreign principals would be required to divest itself of any interest in Oklahoma agricultural land within 180 days of the effective date of the measure. Both measures do permit foreign principals to acquire an interest in agricultural land by inheritance or enforcement of a security interest or debt, but they must divest of their interest within 180 days of acquiring the interest.
These bills will also require foreign principals to register any ownership or leasehold interest in agricultural land located within the state to the Oklahoma Department of Agriculture, Food, and Forestry within 60 days of the effective date or the date of acquisition, whichever is latest. This report must include the name of the owner of the interest in land, address, legal description and parcel identification number of the land, and the number of agricultural acres under the foreign principal’s control.
Like most foreign ownership laws, SB 893 and SB 910 directs the Oklahoma attorney general to enforce violations of the restriction and require a court to order the land held in violation be sold through a public auction. However, unlike other foreign ownership laws, these measures will authorize a whistleblower to refer to potential violations of the foreign ownership restriction to the 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. A similar type of reward is currently being considered by the Idaho state legislature under House Bill 12.
Another measure introduced this year is Senate Bill 916 (“SB 916”), which will restrict an individual, business entity, and government, including anyone acting on behalf of the government, of a foreign adversary country from acquiring any interest in agricultural land or land within 5 miles of a military installation located within Oklahoma. Any person or entity in violation of this restriction will be required to fully dispose of their interest in the land within 2 years of the effective date of this measure, if enacted into law. While this piece of legislation will expand the state’s restriction on certain foreign investments, it also provides some exceptions.
First, SB 916 will permit foreign adversaries to acquire agricultural land for research, development, or experimental purposes. In other words, these investors can purchase or lease farmland to develop or test agricultural inputs, such as seeds or crop protection products. Also, this bill seeks to exempt land acquired by a foreign adversary through inheritance or by enforcing a security interest or debt. However, foreign persons that acquire an interest in land will have 2 years to divest of this interest. Last, foreign adversaries are exempt from the restriction if the governor of Oklahoma determines the economic benefits of the foreign adversary’s acquisition in land outweighs any threat imposed by the acquisition.
SB 916 will require foreign adversaries to disclose the names of the individuals or entities that have an interest in real property located within Oklahoma, the address of the real property, and the property’s legal description to the Oklahoma attorney general. Foreign adversaries that fail to do so subject to a $1,000 fine each day the disclosure is late. Additionally, this measure seeks to require foreign persons, even non-foreign adversaries, who are required to file an AFIDA disclosure to USDA to file a copy of this disclosure to the state attorney general.
The Oklahoma state legislature is also considering Senate Bill 1308 (“SB 1308”), a bill almost identical to Arkansas’ foreign ownership law, which will restrict a prohibited foreign party (“PFP”), which includes individuals, business entities and governments, from acquiring any interest in real property located within the state, not just agricultural land. This bill specifies that a PFP is any individual, business entity, or government of a country subject to International Traffic in Arms Regulations (“ITAR”) and an Entity of Particular Concern as designated by the SecState. SB 1308 also restricts a prohibited foreign-party-controlled business (“PFPCB”), which is a business under the control of a PFP, from acquiring an interest in Oklahoma real property. Further, PFPs and PFPCBs will be required to sell, transfer, or otherwise dispose of their interest in real property within 2 years after the enactment of this measure, if enacted. However, a “resident alien”—an individual that is a non-U.S. citizen that is a legal resident of the U.S.—are exempt from this restriction.
This piece of legislation will authorize the state attorney general to investigate and bring a legal action against any potential violations of the restriction. SB 1308 will also establish the Office of Agricultural Intelligence to investigate and report potential violations of the foreign ownership restriction to the attorney general. If a court determines real property is held in violation, SB 1308 will require the court to order the real property be sold through a public auction. PFPs and PFPCBs that are convicted of violating the restriction are guilty of a felony punishable by imprisonment up to 2 years and/or a fine of $15,000. The Oklahoma state legislature is also considering House Bill 1453, which contains almost identical language to HB 1308.
Another measure, Senate Bill 114 (“SB 114”), does not extend the state’s foreign ownership restriction, but rather provides clarification to an exception provided under its law. Currently, the state’s foreign ownership law exempts bona fide residents of Oklahoma from the restriction; however, the law does not define “bona fide residents.” SB 114 seeks to define this term as a lawful permanent U.S. resident and defines “lawful permanent resident” as a “foreign national who has been granted the right to reside permanently in the United States.” Therefore, if SB 114 is enacted, an individual who is not a U.S. citizen but is lawfully residing in the state of Oklahoma will not be subject to the state’s foreign ownership restriction.
Each of the measures discussed above have been referred to a legislative committee for consideration. NALC will provide an update to this article as these measures advance through the legislative process.
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, fourteen states in 2024 enacted a foreign ownership law or amended its foreign ownership law. So far in 2025, this trend has continued as most states have introduced at least one piece of foreign ownership legislation in their state.
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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