In the past two years or so, as discussed in the first article of this series, the issue of restricting foreign investments and ownership in privately held farmland emerged or reemerged in the majority of states. This reemerging interest in restricting foreign investments in U.S. land, especially agricultural land, is partly due to a Chinese-owned company purchasing over 130,000 acres near a U.S. Air Force base in Texas. Another transaction that raised concerns among some lawmakers is the purchase of 300 acres near an Air Force base in North Dakota by the Chinese company Fefang Group.
Each of these states have proposed legislation that would restrict foreign ownership or investments in real property or agricultural land to some degree. Like the states that currently have laws, many of these states have introduced bills that take its own approach to restricting foreign ownership and investments in agricultural land within their states. In 2023, ten states—Alabama, Arkansas, Florida, Idaho, Montana, North Dakota, Oklahoma, Tennessee, Utah, and Virginia—have enacted a law restricting certain foreign investments in land located within their state.
This is the seventh article of a series discussing recent state proposals that seek to restrict foreign ownership of land. This article discusses the proposals introduced in New Jersey and New York. To read the other articles in this series, click here.
There are three proposals (A 5120; S 3534; A 5383) the New Jersey legislature is currently considering. Each of these measures seeks to restrict certain foreign landholdings in farmland. Specifically, all three measures, if enacted, would restrict any “foreign person”, which includes individuals and business entities, and any “foreign government” from purchasing, acquiring, or other interest in agricultural land within the state. Also, the measures would require foreign persons and foreign governments to divest their interests in farmland within 5 years after the enactment date. A foreign person or government would be prohibited from transferring or conveying title to another foreign person or government.
Each of these measures provides exceptions to the restriction. Under the measures, foreign persons and governments may acquire and hold an interest in agricultural land if they obtain that interest by enforcing a security interest or lien on the land. Also, foreign persons and governments may inherit agricultural land. However, if a prohibited foreign party obtains an interest in land under these exceptions, they are required to divest that interest within two years.
Although the three measures are very similar, there are some differences. For example, A 5120 defines “foreign person” as “any individual who is not a citizen of the United States and is a nonresident alien of the United States…” while S 3534 and A 5383 define the term as an individual that is a non-citizen who is a nonresident alien or a resident alien of the U.S. In other words, S 3534 and A 5383 seek to restrict nonresident aliens and resident aliens of the U.S. from acquiring an interest in the state’s agricultural land.
Another difference between the measures is the type of land that could be barred from foreign investments. A 5120 and S 3534 seek to restrict certain foreign investments in land devoted to “agricultural use” while A 5383 seeks to restrict investments of foreign persons and governments in agricultural land, horticultural land, and agricultural woodlands.
Further, S 3534 and A 5383 seek to require the state’s Secretary of Agriculture to compile a report for the governor and the state legislature that specifies certain information concerning foreign agricultural landholdings within the state, such as the nationalities of foreign persons and foreign governments with the most extensive ownership of agricultural acreage within the state, the percentage change in foreign ownership, and the purpose for which foreign farmland has been used in the previous five years. This requirement is not included in the current version of A 5120.
A 5120 and A 5383 have been referred to the Assembly Agriculture and Food Security Committee and S 3534 has been referred to the Senate Economic Growth Committee.
Under New York state law, noncitizens are permitted to acquire, hold, and transfer real property within the state in the same manner as U.S. citizens. N.Y. Real Prop. Law §10(2). However, in 2023, the New York state legislature is considering multiple measures that seek to amend the state’s law on foreign ownership. Two measures being considered by the New York legislature is A 5301 and S 6522. These measures are companion bills and contain identical language. These two measures seek to restrict certain foreign investments in real property located within the state. Specifically, these bills would restrict foreign governments, foreign business entities, and nonresident individuals of a “country of particular concern” or an “entity of particular concern” as determined by the U.S. Secretary of State (“SOS”). Countries such as China, Russia, Iran, and North Korea have been identified by the SOS as “countries of particular concern.”
Other measures being considered by the New York legislature include A 6444 and S 6583 (companion bills). In general, these measures seek to restrict a “foreign adversary” from acquiring or transferring “any interest in agricultural land” located within the state. These measures define “foreign adversary” as “any foreign government or nongovernment person…to have engaged in a long-time pattern or serious instances of conduct significantly adverse to the national security of the United States” as determined by the U.S. Secretary of Commerce. This list of “foreign adversaries” is codified at 7 C.F.R. § 126.1. Under the legislation, a transfer of any interest in agricultural land which violates the restriction is void or invalid.
These measures include some exceptions to the restriction. First, these measures exclude agricultural land held by a foreign adversary prior to January 1, 2024. This type of exception is known as a “grandfather clause.” Second, the bills exclude “any federally recognized Indian tribe or its government units and enterprises” from the restriction.
Also, these measures would require the New York Department of Agriculture and Markets to compile and publish an annual report on certain information concerning foreign ownership of land within the state, including any changes or trends in foreign-owned energy production, storage, or distribution facilities.
The New York state legislature is also considering A 6410 which seeks to restrict certain foreign governments, foreign entities, and foreign individuals from acquiring real property that is zoned for industrial, light industrial, heavy industrial, residential agricultural, agricultural, or rural agricultural purposes. Specifically, this measure seeks to restrict individuals, business entities, and governments of a “country of particular concern” or “entity of particular concern” as determined by the U.S. Secretary of State. Some countries identified as a “particular concern” by the SOS include China, Iran, Pakistan, and Saudi Arabia.
In 2023, the issue of restricting foreign ownership and investments in farmland has emerged or reemerged in the majority of states. In fact, ten states have enacted a law that seeks to restrict certain foreign investments in land located within their state. NALC is tracking each states’ foreign ownership proposal(s) and will update its Statutes Regulating Ownership of Agricultural Land compilation when there are changes to a state’s law.
To read the other articles in this series, click here.
For compilation of state laws governing foreign ownership of agricultural land, click here.
To learn more about foreign ownership of agricultural 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.