by NALC staff
During the 2025 legislative session, the Idaho state legislature enacted House Bill 356 (“H356”) and Senate Bill 1149 (“S1149”) which amends a state law that restricts certain foreign investments in land located within the boundaries of the state. Previously, Idaho’s foreign ownership law restricted foreign governments and foreign government-owned entities from acquiring an interest in Idaho agricultural land. H356 amends the state’s restriction by prohibiting individuals, businesses, and foreign governments of certain adversarial countries from acquiring agricultural and forestland, including other types of property rights, located within the state, and S1149 provides the state attorney general authority to enforce the restriction against foreign investors that violate the restriction.
Background
In 2023, the Idaho state legislature enacted a foreign ownership law (codified under Idaho Code § 55-103) to restrict foreign governments and foreign government-owned enterprises from acquiring or holding agricultural land located within the state, as well as holding any rights or claims to minerals and water on any land located within the state. Under the law, a “foreign government” is defined as a government other than the U.S. government and the governments of any U.S. state, territory, or possession. A “state-controlled enterprise” includes business entities and wealth or investments funds which a foreign government has a controlling interest. Under the law, a “controlling interest” means: (i) an ownership interest in an entity that is more than 50%, or (ii) 50% or less ownership interest in an entity, but a foreign government “directs the business and affairs of the entity without the requirement or consent of any other party.” Accordingly, an entity is a “state-controlled enterprise” restricted from acquiring Idaho agricultural land if a foreign government owns 50.1% or more interest in the enterprise, or an interest 50% or less in the business entity whose business decisions are controlled by a foreign government.
Although the Idaho state legislature enacted a foreign ownership law, the legislation was silent on enforcement. Many states’ foreign ownership laws contain an enforcement provision. These states generally authorize their state’s attorney general to bring legal action against a suspected violator. Usually, if a foreign party is found to be in violation of the restriction, these states’ laws direct a judge to order the agricultural land be sold through judicial foreclosure or public auction. Essentially, Idaho’s law did not contain a similar provision, meaning there was no specific procedure for the enforcement of the restriction prescribed under the law. However, the Idaho state legislature enacted S1149 to establish enforcement procedures for the state’s restriction on foreign investments in land.
S1149
On April 3, 2025, Idaho Governor Brad Little signed S1149 into law which authorizes the Idaho Office of Attorney General (“IOAG”) to enforce the state’s foreign ownership law. Specifically, this legislation requires IOAG to investigate certain transactions and landholdings upon receiving information of a potential violation. If IOAG has reason to believe a violation has or is occurring, S1149 requires IOAG to bring a divestment action against any foreign investor in violation of the restriction. If a court concludes land, mineral or water rights are held in violation of the prohibition, the court must appoint a receiver—which is a neutral party that manages assets—to sell the land held in violation. Overall, with the enactment of S1149, IOAG has the authority to investigate and enforce the Idaho’s foreign ownership law, while also providing for a procedure to require the divestment of foreign investors that are holding land, mineral or water rights in violation of the restriction.
H356
Following the enactment of S1149, the Idaho state legislature also enacted H356 to amend certain provisions of the state’s foreign ownership law. According to proponents of this measure, the amendments to § 55-103 are intended to strengthen the state’s foreign ownership restrictions and to safeguard the state’s critical resources and infrastructure.
A significant amendment to the state’s foreign restriction under H356 is the extension of the restriction to a broader set of foreign investors. Previously, § 55-103 prohibited foreign governments and foreign-controlled business entities. However, H356 extends the restriction to “foreign principals from a foreign adversary” country, encompassing both governmental and non-governmental investors from acquiring an interest in agricultural land, forestland, water rights, mining claims, or mineral rights located within the state.
Like any piece of legislation, the definitions contained under H356 are important because they provide context to how the words or phrases are to be understood throughout the legislative text. H356 defines “foreign principal” as an individual, business entity, government and its officials, and a political party and its members of a foreign adversary country. An entity or subsidiary controlled by an individual or entity, or a collection of individuals or entities, of a foreign adversary is also considered a foreign principal under the legislation. In other words, U.S. business entities may be subject to Idaho’s restriction if a foreign principal holds a majority ownership interest in the domestic entity.
A “foreign adversary” is a country or government identified by the U.S. Secretary of Commerce under 7 C.F.R. § 791.4(a), as the list existed on January 1, 2025. At the beginning of 2025, the nations included on the foreign adversary list are China, Cuba, Iran, North Korea, Russia, Syria, and Venezuela. Accordingly, individuals, businesses, and governments of these countries are subject to Idaho’s foreign ownership law as amended under H356.
Unlike most foreign ownership laws, H356 requires foreign principals that own or control agricultural land, forestland, and water, mining, or mineral rights and claims within the state to sell, transfer, or otherwise divest of their interest by December 28, 2025. Additionally, the law mandates foreign principals to register their interests in land and water rights with the Idaho Department of Agriculture within 60 days of the effective date of the law or the date of acquisition, whichever is latest. Foreign principals that own or acquire mining claims or mineral rights within the state must register their interests with the Idaho Secretary of State within the same 60-day timeframe.
While most states’ foreign ownership laws contain investigation and enforcement provisions, Idaho’s H356 is the first state to enact a law that authorizes whistleblowers to refer potential violations. Specifically, any individual may act as whistleblower and provide information of a suspected violation to IOAG. If a whistleblower referral results in a divestiture action, the whistleblower is entitled to 30% of the proceeds from the sale of the land, mining claims, mineral rights, or asset sale resulting from the violation.
Like most foreign ownership laws, H356 establishes new exceptions to Idaho’s restriction. This law permits foreign principals of foreign adversary countries to hold a de minimis ownership interest in land located within the state. A “de minimis” interest is a 5% or less ownership interest in registered equities or classes of registered equities that hold interests in agricultural land, forestland, or water, mineral, or mining claims located in the state. Accordingly, this exception ensures that minor, non-controlling investments do not trigger the ownership prohibition.
H356 also permits foreign principals that have established, and maintained, a national security agreement with the Committee on Foreign Investment in the U.S. (“CFIUS”), to own and acquire an interest in Idaho land and water, mineral, and mining rights. A national security agreement with CFIUS is a legally binding agreement between a foreign investor or a U.S. business being acquired by a foreign entity that serves to mitigate national security risks identified by CFIUS while reviewing the foreign investment or acquisition. Therefore, so long as a foreign adversary enters into a national security agreement and maintains this agreement, they are not subject to Idaho’s restriction.
Aside from the amendments to § 55-103, H356 also enacted a new section to the state’s code (§ 55-115) that restricts foreign adversaries from purchasing or leasing land within specified coordinates near military bases or installations in Idaho. Many of the provisions contained under § 55-103, such as enforcement, divestiture requirements, and the whistleblower reward, are contained under this new section of the Idaho Code.
Conclusion
While the majority of states considering at least one piece of foreign ownership legislation, Idaho is one of only a few states to enact or amend its state’s foreign ownership restriction so far this year. The Idaho state legislature, with the enactment with H356 and S1149, seeks to strengthen the state’s restrictions on property ownership of adversarial foreign investors. Essentially, these measures extend the state’s restriction on foreign investments to individuals and business entities, not just governments, and provides investigation and enforcement procedures for the state to require foreign investors in violation of the law to divest of their land, mineral, water, and mining interests they hold in Idaho. The amendments to § 55-103 go into effect on July 1, 2025.
To read H356, click here.
To read S1149, 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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