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 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 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 fourth 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 Arizona, North Carolina, and North Dakota.
Arizona
Arizona is not one of twenty-five states that have enacted a foreign ownership law. Under Arizona state law, individuals and business entities are prohibited from purchasing more than 160 acres of public agricultural land and no more than 640 acres of public grazing land located within the state. See Ariz. Const, art. 10 § 1; Ariz. Rev. Stat. Ann. § 37-240. Thus, this restriction applies to all persons, not just foreign individuals or business entities, and does not restrict purchases of private agricultural and grazing land. Currently, the Arizona state legislature is seeking to enact a law that restricts certain foreign investors from acquiring an interest in any public or private real property located within the state.
Senate Bill 1066 (“SB 1066”) will extend its current restriction on public land purchases to prohibit foreign governments and foreign government-controlled business entities from acquiring any interest in public agricultural land or grazing land. However, this measure will exempt foreign governments and governmental entities from this restriction if it obtains majority approval of the purchase by the Arizona state legislature. SB 1066 also seeks to prohibit private land to be conveyed to a foreign entity that is hostile to the U.S., unless the foreign investor received approval of the Arizona state legislature to acquire the land. However, it is unclear which entities are subject to the restriction because the bill does not define which entities are “hostile” to the U.S.
Also, this measure will require the seller of land to submit to the Arizona Real Estate Department a form of identification of the person acquiring the land. SB 1066 has been referred to the Federalism 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.
The Arizona state legislature is also considering Senate Bill 1109 (“SB 1109”). Under this bill, a “foreign principal”—which is defined as a government and its officials, political party and its members, a business entity, or an individual of a designated country—will be prohibited from owning or acquiring an interest in private Arizona real property. This measure defines “designated country” as a country identified as a country that poses a risk to U.S. national security in the three most recent Annual Threat Assessments of the U.S. Intelligence Community. Countries identified in these assessments include China, Iran, North Korea, and Russia. SB 1109 seeks to require the Arizona attorney general to enforce the restriction and bring legal action against any potential violations. If a court determines a violation has occurred, the bill will require the court to order the real property be sold.
While this measure will impose a restriction on certain foreign investments in real property, it does provide some exceptions to the prohibition. First, it will permit a foreign principal to own or hold an interest in residential real property—on a parcel that is less than 2 acres—that is more than 50 miles from a military installation or crucial infrastructure and more than 25 miles from an air force range. Second, SB 1109 exempts foreign principals who are natural persons. However, it is unclear whether all foreign principals that are natural persons are exempt from the restriction because individuals who are domiciled in a designated country are subject to the restriction. Last, the bill permits foreign principals to acquire real property by inheritance or enforcement of a security interest or debt, but foreign principals will be required to divest of their interest in the property within 3 years.
SB 1109 has also been referred to the Federalism Committee for consideration.
North Carolina
North Carolina is another state that has not enacted a foreign ownership law. Currently, North Carolina state law expressly permits “aliens to take by purchase…any lands…and to hold and convey the same fully as citizens…” N.C. Gen. Stat. Ann. § 64-1. However, House Bill 133 (“HB 133”) was recently introduced in the North Carolina state legislature to limit certain foreign investments in land located within the state. Specifically, this measure seeks to restrict an adversarial foreign government from purchasing, acquiring, leasing, or holding any interest in agricultural land located within the state.
Like any piece of legislation, the definitions contained under HB 133 are important because they provide context to how the words or phrases are to be understood throughout the legislative text. HB 133 defines “adversarial foreign government” as a government of a country or group subject to International Traffic in Arms Regulations (“ITAR”). See 22 C.F.R. § 126.1. This definition also includes business entities owned or controlled by governments or groups subject to ITAR. Some countries currently subject to ITAR include China, Cuba, Iran, North Korea, and Syria. Accordingly, governments and government-controlled entities of these countries are prohibited from acquiring North Carolina agricultural land under HB 133.
The bill defines “agricultural land” as land “used for agricultural production purposes.” Under this definition, it is unclear whether an adversarial foreign government may acquire an interest in agricultural land located within state so long as the foreign investor does not use the land for agricultural production. Further, definition specifically excludes agricultural land leased for the purpose of research and development of agricultural products and inputs, so long as the aggregate agricultural acreage leased does not exceed 250 acres.
Under HB 133, any conveyance of land to an adversarial foreign government in violation of the restriction is void. Also, individuals and entities who are not subject to the restriction are not required to determine whether a conveyance of agricultural land is in violation of the restriction, and they are not subject to civil or criminal liability for failing to determine whether the investor is an adversarial foreign government.
On February 18, 2025, HB 133 was referred to the Committee on Homeland Security and Military and Veterans Affairs for consideration.
North Dakota
Since 1979, North Dakota state law restricts certain nonresident aliens and foreign businesses from acquiring or holding more than 160 acres of agricultural land located within the state. See N.D. Cent. Code Ann. § 47-10.1 et seq. In 2023, North Dakota was one of many states to amends its foreign ownership law (under House Bill 1135 (“HB 1135”) and Senate Bill 2371 (“SB 2371”)) to further limit certain foreign investments in the state. HB 1135 extended the state’s foreign ownership law to limit foreign governments and foreign governmental business entities from acquiring an interest in more than 160 acres of North Dakota agricultural land, and SB 2371 restricts business entities and governments identified by U.S. Secretary of Commerce as a foreign adversary from acquiring or holding an interest in any public or private real property within the state.
During the 2025 legislative session, the North Dakota state legislature has considered several proposals (Senate Bill 2026, Senate Bill 2314, Senate Bill 2337, and Senate Bill 2361) that seek to amend certain portions of its foreign ownership law. However, each of these measures failed to be enacted by the Senate. Although these measures failed, the state legislature is considering House Bill 1209 (“HB 1209”), which seeks to identify foreign threats to the state’s agricultural industry. While this measure does not seek to extend the state’s foreign ownership restriction, it will require the North Dakota Department of Emergency Services (“DES”) to assess the state’s vulnerabilities and identify threats that foreign adversaries pose on certain industries within the state, including the agricultural industry. HB 1209 will require DES to provide mitigation strategies relating to the identified risks and vulnerabilities to enhance the state’s ability to combat any threats posed by foreign adversaries. On January 27, 2025, HB 1209 passed the North Dakota House and was sent to the state senate. The measure has been referred to the Senate State and Local Government Committee.
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.
Subscribe to NALC’s bi-weekly newsletter The Feed for recent legal developments affecting agriculture, including foreign ownership of agricultural land here.
For previous issues of The Feed, click here.