by NALC staff
On March 25, 2025, Utah Governor Spencer Cox signed into law House Bill 430 (“HB 430”) to amend a state law that restricts certain foreign purchases of real property located within the state. Under Utah’s foreign ownership law, certain foreign entities are prohibited from acquiring Utah land. HB 430 seeks to further limit restricted foreign entities from acquiring an interest in real property located within the state. Utah is among most states to consider at least one piece of legislation that seeks to enact or amend their states’ foreign ownership law in 2025, and it is not the only state to enact this type of legislation this year. In fact, Kentucky has enacted a foreign ownership law (House Bill 315) and Idaho has amended (Senate Bill 1149) certain portions of the state’s already existing foreign ownership restriction.
Background
In 2023, the Utah state legislature enacted the Restrictions on Foreign Acquisitions of Land Act (codified under Utah Code Ann. §§ 63L-13-101 to 202) which restricts certain foreign purchases of real property located within the state. Essentially, this law prohibits a restricted foreign entity from acquiring land, which includes private and public agricultural land and waters located within the state. The law defines “restricted foreign entity” as a military company required to be identified by the U.S. Department of Defense (“DOD”) under Section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (“NDAA 2021”). Under Section 1260H, DOD is required to identify Chinese military companies operating directly or indirectly in the U.S. An article discussing this law in more detail is available on NALC’s website here.
During the 2024 legislative session, the Utah state legislature enacted House Bill 516 (“HB 516”) which amended the state’s foreign ownership law by expanding the list of restricted foreign entities. Specifically, the legislation restricts entities owned or directly controlled by the government of China, Iran, North Korea, or Russia. Under the legislation, any business entity, whether foreign or domestic, containing a 51% ownership interest held by a restricted foreign entity is considered a restricted foreign entity subject to the restriction.
Further, HB 516 requires the Utah Department of Public Safety (“UDPS”) to establish a process for county recorders to report any land conveyances they suspect are in violation of Utah’s restriction. The law also requires UDPS to provide an annual notice to each county recorder that (1) provides instructions on how to identify restricted foreign entities and (2) the process which county recorders may report potential violations of the state’s foreign ownership law.
When a county recorder reports a potential violation, the law requires UDPS to investigate the validity of the conveyance. If UDPS determines that a violation has occurred, the department is required to give notice to the restricted foreign entity that they have one year to divest of their interest in the land held in violation of the law. If the restricted foreign entity fails to divest of their interest within the one-year period, UDPS must coordinate with the state’s Division of Facilities Construction and Management for the public sale of the land.
House Bill 430
Again in 2025, the Utah state legislature amended its state’s foreign ownership law with the enactment of HB 430. Specifically, HB 430 restricts any person from purchasing or leasing any interest in public or private land located in Utah on behalf of a restricted foreign entity. The law specifies two instances where a person purchases or leases Utah land “on behalf of” a restricted foreign entity. First, when a person uses funds provided to them by a restricted foreign entity. Second, when a person acquires the interest in land under the direction of the restricted foreign entity. Thus, a person using funds or under the orders of a restricted foreign entity to acquire Utah land is in violation of the restriction provided under HB 430. This means shell companies—business entities that exist but have no significant operations or assets—will be prohibited from acquiring land on behalf of a restricted foreign entity.
However, it’s unclear whether a “person” includes individuals and business entities because the legislation does not define the term. Nevertheless, the term “person” is defined in several chapters throughout Utah’s state code, which generally define the term as an individual, trust, organization, firm, group, association, partnership, or corporation. See Utah Code Ann. §§ 4-1-109; 26B-2-201(18); 56-3-1(2); 76-10-601(1); 78B-4-701(4)(a). Therefore, if this same broad definition applies to HB 430, any individual or businesses, including U.S. citizens and domestic entities, will be prohibited from acquiring Utah land at the direction of restricted foreign entities. Persons that do acquire an interest in Utah land on behalf of a restricted foreign entity in violation of this legislation are guilty of a third-degree felony, which carries a penalty of up to five years imprisonment and a fine up to $5,000.
Additionally, HB 430 requires an individual purchasing an interest in Utah land to disclose whether they served in the military of a restricted foreign entity. An individual who fails to disclose this military service is guilty of a third-degree felony.
HB 430 will go into effect on May 7, 2025.
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, including Utah, enacted a foreign ownership law or amended its foreign ownership law. With the majority of states currently considering at least one piece of legislation that seeks to enact or amend their states’ foreign ownership law, Utah, along with Kentucky and Idaho, are likely not the only states to enact or amend a restriction during the 2025 legislative session. NALC is tracking each states’ foreign ownership proposals and will update this Statutes Regulation Ownership of Agricultural Land compilation when there are changes to a state’s law.
To read HB 430, click here.
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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