HF 83 (LSB 1647YH (3) 91)

HOUSE FILE 83

BY  DIEKEN

A BILL FOR

An Act prohibiting foreign governments from acquiring or owning real property or agricultural land located in the state.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 9I.2, unnumbered paragraph 1, Code 2025, is amended to read as follows:
   1.  A nonresident alien, or foreign business or foreign government may acquire, by grant, purchase, devise, or descent, real property, except agricultural land or any interest in agricultural land in this state, and may own, hold, devise, or alienate the real property, and shall incur the same duties and liabilities in relation thereto as a citizen and resident of the United States.  On or after the effective date of this Act, a foreign government, or an agent, trustee, or fiduciary thereof, shall not acquire, by grant, purchase, devise, or descent, real property or any interest in real property in this state.
   2.  A foreign government, or an agent, trustee, or fiduciary thereof, which has purchased or has otherwise acquired real property or an interest in real property prior to the effective date of this Act, shall divest itself of all right, title, and interest in the land within two years of the effective date of this Act.
    Sec. 2.  Section 9I.3, subsection 1, Code 2025, is amended to read as follows:
   1.  A nonresident alien, foreign business, or foreign government, or an agent, trustee, or fiduciary thereof, shall not purchase or otherwise acquire agricultural land in this state. A nonresident alien, foreign business or foreign government, or an agent, trustee, or fiduciary thereof, which owns or holds agricultural land in this state on January 1, 1980, may continue to own or hold the land, but shall not purchase or otherwise acquire additional agricultural land in this state.
    Sec. 3.  Section 9I.3, subsection 3, unnumbered paragraph 1, Code 2025, is amended to read as follows:
   The restriction set forth in subsection 1 of this section, as to nonresident aliens or foreign businesses or their agents, trustees, or fiduciaries, does not apply to the following:
    Sec. 4.  Section 9I.3, subsection 3, paragraph d, subparagraph (3), subparagraph division (a), Code 2025, is amended to read as follows:
   (a)  The nonresident alien, foreign business, or foreign government or an agent, trustee, or fiduciary of the alien, or business, or government must shall not hold the agricultural land other than as a lessee. The term of the lease must be for not more than twelve years. A lessee shall not renew a lease entered into under this subparagraph (3). The lessee shall not enter into a lease under this paragraph, if another lease under this paragraph has been entered into by the lessee.
    Sec. 5.  Section 9I.3, subsection 3, paragraph d, subparagraph (4), Code 2025, is amended to read as follows:
   (4)  Culls and test animals may be sold under subparagraph (3). For a three-year period beginning on the date that the lease takes effect, the gross sales for any year shall not be greater than five hundred thousand dollars. After the three-year period ends, the gross sales for any year shall not be greater than twenty-five percent of the gross sales for that year of the breeding stock, or five hundred thousand dollars, whichever is less. As used in subparagraph (3), “lessee” means a nonresident alien, or foreign business, or foreign government, or an agent, trustee, or fiduciary acting on behalf of the nonresident alien, or foreign business, or foreign government, or any other trade or business which is under the lessee’s common control as provided in 26 U.S.C. §414.
    Sec. 6.  Section 9I.3, subsection 3, paragraph e, Code 2025, is amended to read as follows:
   e.  An interest in agricultural land, not to exceed three hundred twenty acres, acquired for an immediate or pending use other than farming. However, a nonresident alien, or foreign business or foreign government, or an agent, trustee, or fiduciary thereof, who lawfully owns over three hundred twenty acres on January 1, 1980, may continue to own or hold the land, but shall not purchase or otherwise acquire additional agricultural land in this state except by devise or descent from a nonresident alien. Pending the development of the agricultural land for purpose other than farming, the land shall not be used for farming except under lease to an individual, trust, corporation, partnership, or other business entity not subject to the restriction on the increase in agricultural land holdings imposed by section 9H.4.
    Sec. 7.  Section 9I.3, subsection 4, Code 2025, is amended to read as follows:
   4.  A nonresident alien, or foreign business or foreign government, or an agent, trustee, or fiduciary thereof, shall not transfer title to or interest in agricultural land to a nonresident alien, or foreign business or foreign government, or an agent, trustee, or fiduciary thereof, except by devise or descent.
    Sec. 8.  Section 9I.5, Code 2025, is amended to read as follows:
   9I.5  Land acquired by devise or descent.
   1.  A nonresident alien, or foreign business or foreign government, or an agent, trustee, or fiduciary thereof, which acquires agricultural land or an interest in agricultural land, by devise or descent after January 1, 1980, shall divest itself of all right, title, and interest in the land within two years from the date of acquiring the land or interest. This section shall not require divestment of agricultural land or an interest in agricultural land, acquired by devise or descent from a nonresident alien, if such land or an interest in such land was acquired by any nonresident alien prior to July 1, 1979.
   2.  A foreign government, or an agent, trustee, or fiduciary thereof, which has acquired real property, or an interest in real property, or agricultural land, or an interest in agricultural land, by devise or descent prior to the effective date of this Act, shall divest itself of all right, title, and interest in the land within two years of the effective date of this Act. A foreign government, or an agent, trustee, or fiduciary thereof, which acquires real property, or an interest in real property, or agricultural land, or an interest in agricultural land, by devise or descent on or after the effective date of this Act, shall divest itself of all right, title, and interest in the land within two years from the date of acquiring the land or interest.
    Sec. 9.  Section 9I.10, subsection 1, Code 2025, is amended to read as follows:
   1.  a.  If the secretary of state finds that a nonresident alien, foreign business, foreign government, or an agent, trustee, or other fiduciary thereof, has acquired or holds title to or interest in agricultural land in this state in violation of this chapter or has failed to timely register as required under section 9I.7 or has failed to timely report as required under section 10B.4, the secretary shall report the violation to the attorney general.
   b.  If a county recorder finds that a foreign government, or an agent, trustee, or fiduciary thereof, has acquired or holds title to, or interest in, real property located in this state in violation of this chapter, the county recorder shall report the violation to the attorney general.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill prohibits foreign governments from acquiring real property, or an interest in real property, located in the state by grant, purchase, devise, or descent on or after the effective date of the bill. Under current law, except for agricultural land, foreign governments may acquire real property. The bill provides for divestment of real property or interests in real property currently owned or acquired by foreign governments within two years of the effective date of the bill. Under current law, foreign governments may own agricultural land acquired on or before January 1, 1980, and agricultural land of a certain size or for certain purposes. The bill makes conforming changes to prohibit foreign government ownership in agricultural land in Code section 9I.3 (restriction on agricultural land holdings).
   The bill requires real property or agricultural land acquired by a foreign government by devise or descent prior to the effective date of the bill to be divested within two years from the effective date of the bill. Real property or agricultural land acquired by a foreign government by devise or descent after the effective date of the bill must be divested within two years from the date of acquiring the land or interest. The divestment language for real property in the bill aligns with the divestment requirement for agricultural land acquired by devise or descent by a nonresident alien, foreign business, or foreign government in current law.
   The bill requires a county recorder to report a violation of the bill to the attorney general. Upon receipt of a report from the secretary of state, the attorney general shall initiate an action in the district court of any county in which the land is located. If the court finds that the land in question has been acquired in violation of the bill, the court shall declare the land escheated to the state pursuant to Code section 9I.11.