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 first article of a series discussing recent state proposals that seek to limit or restrict foreign investments in land. This article discusses the proposals introduced in Alabama, Illinois, and Indiana.
Alabama
In 2023, Alabama enacted the Alabama Property Protection Act (codified under Ala. Code § 35-1-1.1) which prohibits a “foreign principal” from acquiring title to or a controlling interest in agricultural or forest property located within the state. Like any piece of legislation, the definitions contained under Alabama’s law are important because they provide context to how the words or phrases are to be understood throughout the legislative text. The law defines “foreign principal” is a political party and its members, a government, and any government official of China, Iran, North Korea, and Russia. Foreign principals also include countries or governments that are subject to any sanction list of the U.S. Office of Foreign Assets Control (“OFAC”). While Alabama’s law expressly restricts foreign principals from acquiring title to or a “controlling interest” in agricultural and forest property, the law is unclear as to whether the restriction applies to leases because leaseholders do not acquire title to land they lease and the term “controlling interest” is not defined under the statute.
On December 4, 2024, Alabama Rep. Scott Stadthagen pre-filed a bill (HB 68) for the 2025 legislative session to amend the state’s foreign ownership law. Specifically, this measure seeks to prohibit foreign principals from acquiring a leasehold interest in agricultural and forest land located within the state. HB 68 also seeks to amend the definition of “foreign principal” to extend the restriction to individuals and business entities identified on OFAC’s sanctions lists. These amendments to Alabama law, if enacted, would go into effect on August 1, 2025.
HB 68 will be referred to a committee for consideration once the Alabama state legislature beings its session in February.
Illinois
Illinois is another state considering foreign ownership legislation in 2025. Currently, Illinois state law expressly permits all noncitizens to acquire and hold real property within the state. See 765 Ill. Comp. Stat. Ann. 60/7. However, the state does monitor certain foreign landholdings by requiring foreign investors to disclose their agricultural and forestland interests to the Illinois Director of Agriculture. See 765 Ill. Comp. Stat. Ann. 50/1 through 50/8. Recently, State Representative Chris Miller introduced the Foreign Land Ownership and Foreign Countries of Concern Act (“House Bill 1162” or “HB 1162”) to establish certain limitations on foreign investments within the state.
House Bill 1162 seeks to restrict a foreign principal from acquiring almost any interest in agricultural land located within the state. A “foreign principal” is defined as an individual, business entity, government, government official, political party, or member of the political party of a “country of concern”, which includes China, Russia, Iran, North Korea, Cuba, Venezuelan regime of Nicolas Maduro, or Syria. HB 1162 does exempt landholdings held by foreign principals before the effective date of the measure and “de minimis indirect interests”, which are interests that are less than 5% or a noncontrolling interest, in a company that holds agricultural land. Further, this measure would require foreign principals with agricultural landholdings within the state to register these interests with the Illinois Department of Agriculture by July 1, 2026.
The legislation would require any person buying or acquiring an interest in agricultural land to sign an affidavit stating that they are not a foreign principal, and the acquisition does not violate the foreign ownership restriction. If enacted, HB 1162 would direct the state attorney general to enforce potential violations of the restriction. Land held in violation of the law is subject to forfeiture where the state will sell the property through a public auction. Additionally, foreign principals that acquire and persons that knowing convey an interest in agricultural land to a foreign principal may be convicted of a Class B misdemeanor. This means U.S. citizens and entities that knowingly sell or lease agricultural land to a prohibited foreign investor may face up to 6 months imprisonment and a $1,500 fine.
Aside from the agricultural land restriction, HB 1162 seeks to restrict foreign principals from acquiring land within a 10-mile radius of any military installation or critical infrastructure facility, such as an electric utility, water treatment facility, an airport, or a gas processing plant.
Another measure recently introduced in the Illinois state legislature is the Foreign Countries of Concern Act (“Senate Bill 48” or “SB 48”). Similar to HB 1162, this bill seeks to restrict individuals, business entities, governments and government officials of foreign countries of concern from acquiring any interest, except for a de minimis indirect interest, in agricultural land located within the state. SB 48 would require prohibited foreign investors to register their agricultural landholdings with the Illinois Department of Agriculture within 6 months after the effective date of the bill, if enacted, and persons that fail to properly register may face a civil penalty of $1,000 for each day the registration is late. Unlike HB 1162, this measure seeks to specifically restrict the Chinese government, its officials and members, business entities of China, and non-U.S. citizens or residents who are domiciled in China from acquiring any interest in real property located within the state. Illinois’ SB 48 is very similar to the language contained in Florida’s foreign ownership law (codified under Fla. Stat. Ann. §§ 692.201–692.205), which was enacted in 2023 and has previously faced legal challenge from a group of Chinese citizens residing in the state of Florida. See Shen v. Simpson, No. 4:23-cv-208 (N.D. Fla. 2023).
HB 1162 has been assigned to the Rules Committee and SB 48 is currently under the Senate Assignment Committee.
Indiana
During the 2022 legislative session, the Indiana state legislature enacted Senate Bill 388 (codified under Ind. Code Ann. §§ 32-22-3-0.5 to 6.5) which prohibits, with some exception, any foreign business entity from acquiring an interest in agricultural land used for crop farming or timber production. In 2023, the state legislature enacted a measure (codified under Ind. Code Ann. §§ 1-1-16-1 to 11) which restricts any domestic business entity, state government agency, or political subdivision from entering into an agreement relating to critical infrastructure or a cybersecurity system with a business entity owned or controlled by a citizen of China, Iran, North Korea, Russia, or a country designated as a threat to critical infrastructure by the governor.
In 2024, the Indiana state legislature enacted House Bill 1183 (codified under Ind. Code Ann. § 1-1-16-10.2) which extended the state’s law to other property besides crop and forest land. Essentially, this measure prohibits individuals, business entities, and governments of a country identified as a “foreign adversary” by the U.S. Secretary of Commerce (“SecCom”) from acquiring or leasing any real property located within the state. See 15 C.F.R. § 791.4(a). Currently, the foreign adversary list includes China, Cuba, Iran, North Korea, Russia, and Venezuela’s Maduro Regime. The legislation also restricts these foreign investors from acquiring or leasing any mineral, water, or riparian rights on Indiana agricultural land.
The Indiana state legislature is again considering legislation to limit certain foreign investments within the state in 2025. Recently, House Bill 1032 (“HB 1032”) was introduced in the state legislature, which seeks to further limit certain foreign investments and increase monitoring of foreign activities within the state of Indiana. First, this measure seeks to restrict a “prohibited person”, which includes individuals and business entities of a country identified as a foreign adversary, from entering into a contract for goods or services with the state, a state agency, or a local government within the state. Additionally, HB 1032 would prohibit individuals and foreign business entities of a foreign adversary from acquiring an interest in a U.S. entity. This piece of legislation would also require individuals and business entities from a foreign adversary country to divest of their interest in a domestic entity by January 1, 2026.
Third, the bill seeks to prohibit individuals and business entities of a foreign adversary from acquiring any interest in real property located within the state, including leaseholds that are not for residential purposes or less than one year. Next, HB 1032 would require persons who must disclose their agricultural landholdings to the U.S. Department of Agriculture (“USDA”) under the federal Agricultural Foreign Investment Disclosure Act (“AFIDA”) to file a copy of this report to the Office of the Indiana Attorney General. For more information on AFIDA, click here.
Last, HB 1032 seeks to require “agents” of a “foreign principal” to register with the state attorney general a statement which includes several pieces of information, such as their name, business and residential address, nationality, a complete list of the agent’s employees, and character of the business or activities of the agent. The legislation defines “agent” as a person, business entity, or government who is an employee, representative, servant, a person engaging in political activities, a person who represents the interests of the foreign principal, or a person whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized by a foreign principal. A “foreign principal” includes several difference countries, such as China, Cuba, Iran, North Korea, Pakistan, Russia, and Saudi Arabia, among others. To date, no other state has proposed a similar provision that requires agents of a foreign principal to register with a state agency in an effort to monitor foreign activities within their state.
HB 1032 was introduced on 1/8/2025 and referred to the Committee on Judiciary for the Indiana House of Representatives. 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.
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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