State Act to Prevent Foreign Adversaries from Owning Real Estate
| Model Bill Info | |
|---|---|
| Bill Title | State Act to Prevent Foreign Adversaries from Owning Real Estate |
| Date Introduced | July 17, 2025 |
| Type | Model Policy |
| Status | Draft |
| Task Forces | Commerce, Insurance and Economic Development; Federalism, Homeland Security and International Relations |
State Act to Prevent Foreign Adversaries from Owning Real Estate
ARTICLE Preventing Foreign Adversaries from Owning Real Estate in [STATE].
Ownership of real estate in [STATE].
Except as otherwise provided in This Article, any resident alien or citizen may acquire, hold, and transfer real estate in this state by deed, will, or other instrument, including in fee simple or any lesser estate.
Definitions.
As used in This Article:
“Control” means the power, direct or indirect, whether or not exercised, to determine, direct, or decide important matters affecting an entity, including but not limited to through ownership of at least 20 percent of the total outstanding voting interest, board representation, the ability to appoint or remove board members, proxy voting rights, special shares, contractual arrangements, legal obligations, or other formal or informal mechanisms to act in concert. “Controlling interest” means an ownership interest of 50 percent or more in the aggregate. “Owned or operated in whole or in part” means: (A) For a publicly traded company, the person or entity has the ability to control the company, access any material nonpublic technical information in the possession of the company, or exercise any other rights or involvement in substantive decision-making beyond those of a retail investor holding an equivalent ownership share; (B) For a privately held company, the person or entity possesses any ownership interest.
“Prohibited foreign party” means:
A citizen or resident of a country identified in This Article of the relevant state code and who is not a resident alien of the United States; A foreign government formed within a country identified in This Article of the relevant code; Any party other than an individual or a government: (A) That is created or organized under the laws of any state; and (B) In which a significant interest or substantial control is directly or indirectly held or is capable of being exercised by: (i) An individual referred to in the relevant subdivision of This Article of the relevant state code; (ii)A foreign government referred to in the relevant subdivision of the relevant state code; (iii) A party referred to in the relevant subdivision of the relevant state code; (iv) A combination of the individuals, parties, or governments referred to in paragraph (C) of this section; (C) An Entity of Particular Concern designated by the United States Department of State; or (D) An agent, trustee, or other fiduciary of a person or entity enumerated in This Article in the definition for “Owned or operated in whole or in part” (C) a.-d. of the relevant code. (E) Specific entities comprising the list of prohibited foreign parties will be identified annually by the Secretary of Homeland Security, in consultation with the Governor, this state’s Secretary of State, and this state’s Attorney General. Foreign adversaries include states or entities engaging in or supporting hostilities against the United States, United States citizens or armed forces, or United States’ allies; state sponsors of terrorism that have caused the deaths of citizens, and; states that align with communist or totalitarian ideologies. (F) Prohibited foreign parties include foreign governments or other foreign entities hostile to the United States or this state. (G) The initial list of prohibited foreign entities includes any person or entity with any association with the: (i)Chinese Communist Party or the Government of the People’s Republic of China, or associated entities. The ‘People’s Republic of China’ means all provinces and autonomous regions of the People’s Republic of China, including the Hong Kong Special Administrative Region and the Macao Special Administrative Region; but does not include Taiwan. (ii) Government of The Russian Federation or Russia or associated entities; (iii) Government of Belarus, or associated entities; (iv) Government of the Democratic People’s Republic of Korea, or associated entities; (v) Socialist Republic of Vietnam Government, or associated entities; (vi) Lao People’s Democratic Republic Government, or associated entities; (vii) Republic of Cuba Government, or associated entities; (viii) Government of Syria, or associated entities; (ix) Government of Qatar, or associated entities; (x) Islamic Republic of Iran Government, or associated entities; (xi)Government of Yemen, the Houthi movement, or associated entities; (xii) Current Government of Venezuela or the United Socialist Party of Venezuela, or associated entities; (xiii)Islamic Emirate of Afghanistan or the Taliban, or associated entities; (xiv) Lebanese Hezbollah, or associated entities; (xv)HAMAS or the Palestinian National Authority, or associated entities; (xvi) Other Foreign terrorist Organizations (FTOs) as designated by the Secretary of State in accordance with section 219 of the Immigration and Nationality Act. (xvii) An agent, trustee, fiduciary, or other entity acting on behalf of any of the foregoing; (xviii) Any foreign government, entity, or individual identified by a majority of the Governor, treasurer, Agriculture Commissioner, Auditor, Attorney General, and Secretary of State, in consultation with the Secretary of Homeland Security, as hostile to the interests of the United States or this state: Provided, That in the event of a tie, the Governor’s vote shall serve as the tie-breaking vote.
“Prohibited foreign-party-controlled business” means a corporation, company, association, firm, partnership, society, joint-stock company, trust, estate, or other legal entity in which a controlling interest is owned or operated, in whole or in part by a prohibited foreign party.
Prohibition on Ownership by Prohibited Foreign Parties.
(a) A prohibited foreign-party-controlled business may not directly or indirectly acquire or own by grant, purchase, devise, descent, or otherwise any interest in any real estate in this state, including the mineral rights.
(b) A person may not hold any interest in real estate as an agent, trustee, or fiduciary on behalf of a prohibited foreign-party-controlled business.
(c) Any interest in any real estate that is held on the effective date of this article shall be divested within six months of the effective date of This Article.
Enforcement; Judicial Sale.
(a) A prohibited foreign-party-controlled business that acquires real estate in this state in violation of This Article shall divest that interest within six months of acquisition.
(b) If the business fails to divest, the Attorney General shall file a civil action in the circuit court of the county where the real estate is located.
(c) Upon a circuit court finding by a preponderance of the evidence that a violation of the provisions of this article have occurred, the circuit court shall order the real estate to be sold through judicial sale under terms and conditions that are to be set by the circuit court.
(d) Proceeds of the sale shall first be distributed to lienholders according to priority, excluding liens that remain on the real estate under the terms of the sale, and any remaining funds shall be remitted to the prohibited foreign party. Lienholders may credit bid at the sale.
(e) If there are no liens against the property, then the full proceeds shall be remitted to the prohibited foreign party.
(f) The Attorney General shall promptly file in the office of the county clerk where the real estate is located the following:
(1) A notice of the pending action in the county in which the real estate is located upon commencement of the civil action filed pursuant to this article; and (2) Once all appellate rights have been exhausted by the parties, the circuit court’s final order that directs the sale of the real estate.
Good-Faith Protections.
(a) Title to real estate is not rendered invalid or subject to divestiture solely due to a prior violation of this article by a previous owner.
(b) person who is not subject to the prohibitions contained in this article is not required to investigate whether another person or entity is subject to the prohibitions contained in this article.