11th circuit ruling on Florida’s foreign-owned law may spur similar lawsuits

By Mary Hightower
U of Arkansas System Division of Agriculture

FAYETTEVILLE, Ark. —  The successful appeal of an attempt to stop a Florida law restricting foreign ownership of real estate may be the vanguard of legal actions against similar laws in other states, said Micah Brown, staff attorney for the National Agricultural Law Center.

Last week, the 11th U.S. Circuit Court of Appeals, based in Atlanta, halted enforcement of the law barring two Chinese investors from buying real estate in the Sunshine State. The federal court heard the case after a lower court denied an injunction sought by plaintiffs.

Brown: Florida case has signficant differences from other laws regarding foreign ownership. (U of A System Division of Agricuture file photo)

Nearly half of the nation’s states have laws that put some kind of limits on foreign ownership of real property, particularly agricultural land, located within their state. From 2021-22, 12 states proposed such laws, but in 2023, 36 states considered at least one measure that sought to restrict foreign investments, 12 of which enacted such a law.

“With this ruling, we might see an uptick in litigation or challenges to some of these laws,” Brown said on Monday.

However, Brown said there are significant differences between the Florida case and those that might spring up in other states.

“As it stands right now, the opinion is only for those two specific plaintiffs in the Florida suit,” he said. “What the court is saying, is ‘Florida, you cannot enforce this foreign ownership law on these two specific plaintiffs.’ The upshot is this really isn't going to make any waves for any of the other foreign-owned laws that are out there now because each law only applies to land located within the boundaries of that state.”

The other difference is in the Florida law itself.

“In the batch of 2023 laws — almost across the board — they use some kind of federal definition, or restrict investments from specific countries, namely, ‘the Big Four’: China, Iran, North Korea and Russia,” Brown said. “Florida is a little bit different where it doesn't use a federal definition.”

Arkansas was one of the states that enacted restrictions on foreign ownership in 2023, the governor signing a bill into law in May. Three months later, Arkansas became the first state to take enforcement action, when Attorney General Tim Griffin ordered the China National Chemical Company to divest itself of farmland in Craighead County. The company was also fined $280,000.

Resources and information on foreign ownership of ag land can be found online at the NALC website.

For information about the National Agricultural Law Center, visit nationalaglawcenter.org or follow @Nataglaw on Twitter. The National Agricultural Law Center is also on Facebook and LinkedIn.

For updates on agricultural law and policy developments, subscribe free of charge to The Feed, the NALC’s newsletter highlighting recent legal developments facing agriculture, which issues twice a month.

To learn about extension programs in Arkansas, contact your local Cooperative Extension Service agent or visit www.uaex.uada.edu. Follow us on X and Instagram at @AR_Extension. To learn more about Division of Agriculture research, visit the Arkansas Agricultural Experiment Station website: https://aaes.uada.edu. Follow on X at @ArkAgResearch. To learn more about the Division of Agriculture, visit https://uada.edu/. Follow us on X at @AgInArk.

Arkansas’ unique law on foreign ownership of agricultural lands

By Drew Viguet
National Agricultural Law Center
U of A System Division of Agriculture

Micah Brown, staff attorney for the National Ag Law Center, presented legislative update on foreign ownership during the NALC's Sept. 20 webinar. Brown detailed state foreign ownership laws that have been enacted in 2023, including Arkansas' Senate Bill 383.  (U of A System Division of Agriculture image)

FAYETTEVILLE, Ark. — Nearly half of our nation’s states have laws that put some kind of limits on foreign ownership of agricultural land. Arkansas’ law, however, has aspects that no other state does, including an Office of Agricultural Intelligence established to investigate potential violations, according to Micah Brown, staff attorney for the National Agricultural Law Center.

Brown, who has focused on this issue since 2021, provided an overview during his Sept. 20 NALC webinar, “Who Owns the Farm? Foreign Ownership Legislative Update.” The webinar was recorded and is available to watch online.

In April, Arkansas enacted its own foreign ownership law, Senate Bill 383. In 2021, Arkansas put into effect a law that contained a reporting requirement alone, not a restriction of foreign ownership.

The 2023 Arkansas law restricts a “prohibited foreign party,” or PFP, from acquiring any interest in ag land and forestland.

Brown noted that, like some states’ laws, Arkansas attaches its definition of foreign ownership — or who is prohibited from purchasing — to a federal definition. Specifically, PFPs are individuals, entities, and governments of a country subject to the U.S. Secretary of State’s International Traffic in Arms Regulations.

Arkansas’s attorney general enforces the law. The law directs the AG to investigate and bring a judicial foreclosure, and if a court deems there is a violation, the land will go up for public sale.

Unlike other states, Arkansas created a separate investigative office — the Office of Agricultural Intelligence, or OAI. The department is under the Arkansas Department of Agriculture.

“They are directed to investigate potential violations of this law,” Brown said. “And if they see violations, they report it to the AG, and that’s when the AG will bring a judicial foreclosure action against a PFP.”

The law also extends beyond agricultural lands. Arkansas does not allow “PFP-controlled businesses” to acquire any real estate within the state. Arkansas was also the first, and at the time the only, state to attach criminal liability to its foreign ownership law, meaning foreign investors owning land in violation of the law can be convicted of a felony. This can result in a prison sentence up to two years or a $15,000 fine.

Florida was the only other state to attach criminal liability to its foreign ownership law.

No grandfather clause
There are other unique aspects to Arkansas’ law.

“Generally, a lot of these foreign ownership laws have a grandfather clause or exempt any foreign-owned ag land before the enactment date of the law to continue to hold,” Brown said. “Generally, they restrict expansion or other acquisition of ag land after the enactment date, but Arkansas’ does not seem to expressly say any foreign land holdings in agricultural land before this date continue owning the land.”

The law also contains no exemptions for research and experimentation. Generally, these types of exceptions are important for foreign-owned businesses that require research and testing of agricultural products, such as crop protection companies.

Old issue
“This issue of restricting foreign ownership goes back all the way to the founding of our nation,” Brown said during the presentation. “And it’s popped back up at different political flashpoints through our nation’s history.”

The resurgence in interest in foreign ownership started in 2021, when media attention was drawn to Chinese companies in Texas and North Dakota that purchased ag land near U.S. Air Force bases.

From 2021-22, “we had 12 states that had some kind of proposal” to restrict foreign ownership, Brown said. In 2023, 35 states had some kind of proposal to restrict foreign ownership. Of those 35, 12 states enacted a foreign ownership law, and 10 of which are new states that did not have prior restrictions. North Dakota and Oklahoma had restrictions in place but amended their restrictions.

Overall, there are “24 states that have some kind of law that restricts foreign investments, foreign ownership, foreign leases within their state,” Brown said.

Resources and information on foreign ownership of ag land can be found online at the NALC website.

For information about the National Agricultural Law Center, visit nationalaglawcenter.org or follow @Nataglaw on Twitter. The National Agricultural Law Center is also on Facebook and LinkedIn.

For updates on agricultural law and policy developments, subscribe free of charge to The Feed, the NALC’s newsletter highlighting recent legal developments facing agriculture, which issues twice a month.

About the National Agricultural Law Center

The National Agricultural Law Center serves as the nation’s leading source of agricultural and food law research and information. The NALC works with producers, state and federal policymakers, Congressional staffers, attorneys, land grant universities, and many others to provide objective, nonpartisan agricultural and food law research and information to the nation’s agricultural community.

The NALC is a unit of the University of Arkansas System Division of Agriculture and works in close partnership with the USDA Agricultural Research Service, the National Agricultural Library.

NALC’s Brown: State, federal lawmakers zero in on foreign ownership of U.S. farmland

By Drew Viguet
National Agricultural Law Center
U of A System Division of Agriculture

FAYETTEVILLE, Ark. — When it comes to foreign ownership of agricultural land in the United States, legislatures at both the state and federal levels are asking “how much is too much?”

AG LAW — Micah Brown is a staff attorney with the National Agricultural Law Center. (U of A System Division of Ag photo by Fred Miller)

According to the U.S. Department of Agriculture Farm Service Agency, foreign ownership and investments in U.S. agricultural land have increased to more than 40 million acres, an increase of almost 36 percent in foreign-owned farmland since 2011.

“Foreign ownership of agricultural land has emerged as arguably the single most active issue at the state and federal government levels, with more than half the states in the country proposing some kind of restriction on foreign ownership since Jan. 1,” Micah Brown, staff attorney at the National Agricultural Law Center, said. “This emerging interest in restricting foreign investments in U.S. land, especially agricultural land, is partly due to a Chinese-owned company purchasing more than 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."

Brown, who specializes in agricultural finance and credit issues at the NALC, including foreign ownership of agricultural land, recently spoke at the U.S. Department of Agriculture’s 99th Annual Agricultural Outlook Forum. He presented the session “State Restrictions on Foreign Ownership of Agricultural Land and Recent State Proposals.” Information on the event, as well as presentation slides and recordings of the sessions, can be found online.

“Some state foreign ownership proposals seek to restrict certain countries, such as China, Iran, North Korea, and Russia,” Brown noted in his presentation. He also said that there are fourteen states that currently restrict foreign ownership of farmland within their state to some degree.

In 2023, the Arkansas legislature has considered four proposals — HB 1255; HB 1479; SB 340; SB 383 — that seek to restrict certain foreign investments in agricultural land. Specifically, HB 1478 would restrict acquisitions of agricultural land by governmental entities of China and companies headquartered in China, while SB 340 and SB 383 seek to restrict foreign investments of governments and entities from several different countries, such as China, Cuba, Iran, North Korea, and Syria.

There is no federal law restricting foreign individuals, business entities, or foreign governments from acquiring or holding U.S. agricultural land, but Congress is considering proposals that seek to restrict certain foreign investments in farmland, such as the Promoting Agriculture Safeguards and Security Act — the PASS Act of 2023. If enacted, the PASS Act would require the president to prohibit certain foreign investments in U.S. agriculture, including acquisitions of businesses engaged in agriculture and land used in agriculture.

“The NALC covers, on a daily basis, many issues important to the agricultural industry, but foreign ownership of agricultural land has definitely risen to the top in 2023,” NALC Director Harrison Pittman said. “Micah has emerged as a leading national expert on the topic, providing invaluable information to legislators, states’ farm bureaus, attorneys, and many others around the country.” 

In January, Brown presented a National Agricultural Law Center webinar on foreign ownership. The recording of the webinar, “Foreign Ownership of Agricultural Land: Federal & State Legislative Update,” is available online on the NALC website. He has also developed the NALC’s Foreign Ownership of Agricultural Land: FAQs and Resource Library, highlighting state laws, AFIDA, federal proposals, and more.

For updates on foreign ownership of agricultural land and other agricultural law developments, subscribe free of charge to The Feed, the NALC’s newsletter highlighting recent legal developments facing agriculture, which publishes twice a month.

For information about the National Agricultural Law Center, visit nationalaglawcenter.org or follow @Nataglaw on Twitter. The National Agricultural Law Center is also on Facebook and LinkedIn.

About the National Agricultural Law Center

The National Agricultural Law Center serves as the nation’s leading source of agricultural and food law research and information. The NALC works with producers, state and federal policymakers, Congressional staffers, attorneys, land grant universities, and many others to provide objective, nonpartisan agricultural and food law research and information to the nation’s agricultural community.

The NALC is a unit of the University of Arkansas System Division of Agriculture and works in close partnership with the USDA Agricultural Research Service, National Agricultural Library.