by NALC Staff
Recently, the Utah state legislature enacted House Bill 291 (“HB 291”), which amends the state’s existing foreign ownership law. This amendment continues the ongoing trend among state legislatures to regulate foreign ownership of land located within the boundaries of their state. HB 291, which went into effect on May 6, 2026, establishes a broader prohibition on acquisition of Utah agricultural land and seeks to strengthen the state’s enforcement procedures under its foreign ownership law.
Existing Foreign Ownership Framework
In 2023, the Utah state legislature enacted the Restrictions on Foreign Acquisitions of Land Act (codified under Utah Code Ann. §§ 63L-13-101 to 204) and later amended certain provisions of the law during the 2024 and 2025 legislative sessions.
Essentially, Utah’s foreign ownership law prohibits a “restricted foreign entity” from acquiring land, including private and public agricultural land and waters located within the state. Like any piece of legislation, the definitions contained in a statute are important because they provide context to how the words or phrases are to be understood throughout the legislative text. 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. A “restricted foreign entity” is also defined as an entity owned or directly controlled by the government of China, Iran, North Korea, or Russia, and any business entity, whether foreign or domestic, containing a 51% ownership interest held by a restricted foreign entity.
Lower Ownership Threshold for Restricted Entities
One of the most significant changes under HB 291 involves the definition of a “restricted foreign entity.” Prior Utah law treated a business entity as a restricted foreign entity if a qualifying foreign government or restricted foreign company owned 51% or more of the entity. HB 291 lowers that threshold to 25% ownership, substantially expanding the range of entities that fall within the statute’s restrictions.
By reducing the ownership threshold, the amendment captures entities with minority ownership interests tied to foreign governments or companies identified as national security concerns. Under the prior 51% threshold, an entity could potentially avoid classification as a restricted foreign entity by structuring ownership through subsidiaries or joint ventures in which the foreign entity held a controlling influence but less than a majority ownership stake. Lowering the threshold to 25% reduces the ability to use these types of ownership structures to avoid the statute’s restrictions.
As a result, a greater number of corporate entities may now be classified as restricted foreign entities if they have ownership ties to governments or companies from countries identified in the statute as security concerns. This includes entities owned or controlled by governments such as China, Iran, North Korea, or Russia, as well as companies designated by federal authorities as foreign military companies.
The change also aligns Utah’s approach with a broader trend among state legislatures seeking to address concerns that foreign governments may obtain indirect control over land through layered corporate ownership structures or minority equity investments. By lowering the threshold to 25%, lawmakers intended to ensure that entities with substantial foreign ownership interests are subject to the same restrictions as those directly controlled by a foreign government.
Related Enforcement Mechanisms
HB 291 also establishes additional procedures designed to enforce the restricted entity designation. If the Utah Department of Public Safety (DPS) suspects that a business entity qualifies as a restricted foreign entity, the department may send a notice requiring the entity to provide evidence demonstrating that it does not meet the statutory definition. The entity must respond within 30 days after receiving the notice.
If the entity fails to respond within the required time period, the department may impose a daily fine of $500 until the entity provides the requested information or otherwise resolves the issue. If DPS ultimately determines that the entity is a restricted foreign entity holding an interest in prohibited land, the matter may be referred to the Utah Attorney General, who may initiate proceedings to force the sale of the property interest.
Criminal Liability for Certain Violations
HB 291 also creates criminal penalties for certain violations of the statute. Specifically, the law makes it a third-degree felony for an individual to knowingly purchase or lease land on behalf of a restricted foreign entity or otherwise attempt to circumvent the statute’s restrictions. Under Utah criminal law, a third-degree felony carries a penalty of up to 5 years in prison or a fine up to $5,000, or both.
Conclusion
Taken together, the lower ownership threshold and the associated enforcement provisions broaden the reach of Utah’s foreign land ownership restrictions. By expanding the definition of restricted foreign entity and attaching both civil penalties and criminal liability for violations, HB 291 seeks to strengthen the state’s ability to regulate land ownership involving entities with foreign government ties. HB 291 went into effect on May 6, 2026, and are now enforceable on certain foreign investments within the boundaries of the state.
Overall, the amendments to Utah’s foreign ownership law reflect a broader legislative effort seen in multiple states to address concerns raised by proponents of these measures, such as foreign government influence, national security, and critical infrastructure through land ownership. Other states to enact amendments to their foreign ownership law during the 2026 legislative session include Indiana (Senate Bill 256), South Dakota (Senate Bill 40), and Tennessee (Senate Bill 2424).
To read Utah’s HB 291, click here.
For NALC resources on foreign ownership of U.S. land, click here.
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