In the ongoing wave of legislative efforts to curb foreign investments in U.S. agricultural land, Kentucky and Oklahoma are at the forefront, each proposing significant amendments to their existing foreign ownership laws. These states are part of a broader trend, with nearly every state having proposed legislation to restrict or prohibit foreign landholdings since 2021.
Kentucky, one of the 25 states with a foreign ownership law, is considering three measures that aim to further restrict foreign investments in agricultural land. Senate Bill 167 (SB 167) and House Bill 315 (HB 315) are companion bills that seek to prevent nonresident aliens, foreign business entities, or individuals tied to governments subject to the International Traffic in Arms Regulations (ITAR) from acquiring interests in public or private agricultural land. Countries currently under ITAR include China, Iran, North Korea, and Syria. These bills also prohibit these foreign entities from participating in programs administered by the Kentucky Department of Agriculture and related boards.
However, the proposed legislation is not without exceptions. Foreign entities from ITAR countries can continue holding agricultural land acquired before the bills’ effective dates and can acquire land for non-agricultural business operations, provided the land is not used for farming and the business is developed within five years. The Kentucky Department of Agriculture will review disclosures made to the USDA under the Agricultural Foreign Investment Disclosure Act (AFIDA) and refer potential violations to the state attorney general for investigation and possible divestment actions.
HB 393, another bill under consideration, goes further by restricting foreign principals from adversary countries—including China, Cuba, Iran, North Korea, Russia, and Venezuela—from owning, controlling, or acquiring any interest in real property, not just agricultural land. This bill requires foreign principals to register their property holdings with the Kentucky Cabinet for Economic Development and imposes penalties for non-compliance, including potential felony charges.
Across the border, Oklahoma has a long-standing foreign ownership law, originally enacted in 1910, which prohibits nonresident aliens from acquiring land. Recent amendments have narrowed the restrictions to prohibit foreign acquisitions through business entities or trusts engaged in illegal federal activities, such as marijuana production. Additionally, Senate Bill 1705, enacted in 2024, extended restrictions to foreign government adversaries and government-owned businesses, aligning with the federal designation of “hostile” or “Country of Particular Concern” nations.
The implications of these legislative efforts are significant. For foreign investors, the landscape is becoming increasingly complex, with varying restrictions and requirements across states. For domestic agricultural stakeholders, these laws aim to protect national security and economic interests by limiting foreign influence in critical sectors. However, the effectiveness and enforcement of these laws remain to be seen, as the legal and political debates continue to unfold. As the trend of restricting foreign landholdings gains momentum, it is crucial for stakeholders to stay informed and engaged in the evolving regulatory environment.