Florida Governor Ron DeSantis recently enacted legislation that restricts Chinese citizens who are not U.S. citizens or permanent residents from purchasing residential or commercial land or farmland within the state. The newly signed Senate Bill 264, titled “Interests of Foreign Countries,” introduces several prohibitions and restrictions. It prevents Chinese nationals from acquiring land unless they hold American citizenship or permanent resident status. The law also imposes limitations on Chinese citizens and individuals from countries like Russia and Venezuela who hold non-tourist visas when it comes to land purchases near military bases in Florida. For instance, Chinese citizens with non-tourist visas are restricted to owning fewer than two acres of land located at least five miles away from any military installations.
Senate Bill 264, in pertinent parts, states that foreign principals cannot directly or indirectly own, control, or acquire agricultural land or any interests in such land within the state. Additionally, it restricts foreign principals from owning, controlling, or purchasing any interests in real property situated on or within 10 miles of a military installation or critical infrastructure facility in Florida. While the law also applies to citizens from “countries of concern,” including Russia, Iran, and North Korea, who are prohibited from acquiring land near military bases or critical infrastructure within 10 miles, only Chinese residents are barred from owning land anywhere in Florida. Other foreign citizens face restrictions on land acquisition under certain conditions. For instance, Russian, Iranian, Cuban, Syrian, North Korean, and Venezuelan citizens cannot purchase land within 10 miles of military bases but can still own property elsewhere in the state. Senate Bill 264 is set to take effect on July 1, 2023.
This legislation aligns with ongoing state-level initiatives aimed at preventing non-U.S. citizens or permanent residents from owning U.S. real estate. It builds on a March 16, 2023 publication by the Financial Crimes Enforcement Network (FinCEN) that could have a significant impact on foreign individuals and entities seeking to acquire and own commercial real estate (CRE) in the U.S. This new law, however, raises concerns about potential discrimination against Chinese homeowners and may face constitutional challenges in the future, specifically in the realm of national origin discrimination.
In February 2023, Kentucky proposed similar legislation, House Bill 500, aimed at safeguarding agricultural land. House Bill 500 prohibits individuals associated with foreign countries deemed a threat by the federal government from purchasing or leasing agricultural land. Criteria for such designations are outlined in section 126.1 of Title 22 of the Code of Federal Regulations, which currently lists 24 such countries, including China, Iran, North Korea, Russia, and Venezuela.
Senate Bill 264 and Kentucky House Bill 500 evoke memories of the Alien Land Laws, enacted by 15 states in the 19th and 20th centuries, which prohibited Chinese, Japanese, and other foreign individuals and entities from acquiring and leasing real estate in the U.S. These laws were declared unconstitutional by the U.S. Supreme Court in 1952. SB 264 and House Bill 500 are expected to face close monitoring and legal challenges.
Currently, 15 states in the U.S. have laws that restrict foreign private investment in agricultural land, including Indiana, Iowa, Kentucky, Kansas, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Virginia, and Wisconsin.
In conclusion, given the evolving legislative landscape in Florida and other states, it is imperative for foreign landowners and investors involved in residential, commercial, or farmland transactions to conduct thorough compliance checks to ensure they do not violate these new laws or regulations. Non-compliance may lead to civil and/or criminal penalties or enforcement actions.