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Arkansas Senate Bill SB340

Arkansas 2023 Regular Session

Arkansas Senate Bill SB340 Compare Versions

Only one version of the bill is available at this time.
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11 Stricken language would be deleted from and underlined language would be added to present law.
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44 State of Arkansas 1
55 94th General Assembly A Bill 2
66 Regular Session, 2023 SENATE BILL 340 3
77 4
88 By: Senator B. Johnson 5
99 By: Representative Vaught 6
1010 7
1111 For An Act To Be Entitled 8
1212 AN ACT TO AMEND THE LAW CONCERNING OWNER SHIP AND 9
1313 POSSESSION OF REAL P ROPERTY; AND FOR OTH ER PURPOSES. 10
1414 11
1515 12
1616 Subtitle 13
1717 TO AMEND THE LAW CONCERNING OWNERSHIP AND 14
1818 POSSESSION OF REAL PROPERTY. 15
1919 16
2020 17
2121 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 18
2222 19
2323 SECTION 1. Arkansas Code § 18 -11-101(a), concerning the capacity of 20
2424 aliens to take and transfer lands, is amended to read as follows: 21
2525 (a) All Except as provided in §§ 18 -11-110 and 18-11-701 et seq., all 22
2626 aliens shall be capable o f taking, by deed or will, lands and tenements in 23
2727 fee simple, or other less estate, and of holding, aliening, and devising 24
2828 them. 25
2929 26
3030 SECTION 2. Arkansas Code § 2 -3-102(1), concerning the definition of 27
3131 "agricultural land" used in the Arkansas Agricultural Fo reign Investment Act 28
3232 is amended to read as follows: 29
3333 (1)(A) “Agricultural land” means any Arkansas land which is 30
3434 outside the corporate limits of a municipality and is : used or capable, 31
3535 without substantial modification to the character of the land, of use for 32
3636 agricultural, forestry, or timber production, 33
3737 (i) Used for forestry production, including without 34
3838 limitation land exceeding ten (10) acres in which ten percent (10%) of the 35
3939 land is stocked by trees of any size, including land that formerly had t rees 36 SB340
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4444 of any size covering the land that will be naturally or artificially 1
4545 regenerated; or 2
4646 (ii) Currently used for, or, if currently idle, land 3
4747 last used within the past five (5) years, for farming, ranching, or timber 4
4848 production, except land not excee ding ten (10) acres in the aggregate, if the 5
4949 annual gross receipts from the sale of the farm, ranch, or timber products 6
5050 produced on the land do not exceed one thousand dollars ($1,000), including 7
5151 without limitation land used for activities described in the Standard 8
5252 Industrial Classification Manual (1987), Division A, exclusive of industry 9
5353 numbers 0711-0783, 0851, and 0912 -0919 which cover animal trapping, game 10
5454 management, hunting carried on as a business enterprise, trapping carried on 11
5555 as a business enterpr ise, and wildlife management. 12
5656 (B) "Agricultural land" but does not include oil, gas, and 13
5757 all other minerals, including coal, lignite, brine, and all minerals known 14
5858 and recognized as commercial minerals underlying the land; 15
5959 16
6060 SECTION 3. Arkansas Co de § 2-3-102(3)(D), concerning the definition of 17
6161 "foreign party" used in the Arkansas Agricultural Foreign Investment Act, is 18
6262 amended to read as follows: 19
6363 (D) Any A party other than an individual or a government: 20
6464 (i) Which is created or organized u nder the laws of 21
6565 any state; and 22
6666 (ii) In which a significant interest is directly or 23
6767 indirectly held or in which not insubstantial or substantial control is 24
6868 directly or indirectly held or is capable of being exercised by: 25
6969 (a) Any An individual referred to in 26
7070 subdivision (3)(A) of this section; 27
7171 (b) Any A foreign government; 28
7272 (c) Any A party referred to in subdivision 29
7373 (3)(C) of this section; 30
7474 (d) Any A combination of such individuals, 31
7575 parties, or government referred to in this subdivision (3)(D)(ii) of this 32
7676 section; and 33
7777 34
7878 SECTION 4. Arkansas Code § 2 -3-102, concerning the definitions used in 35
7979 the Arkansas Agricultural Foreign Investment Act, is amended to add an 36 SB340
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8484 additional subdivision to read as follows: 1
8585 (5) "Significant interest" or "substantial control" means: 2
8686 (A) An interest of thirty -three percent (33%) or more held 3
8787 by: 4
8888 (i) A party referred to in subdivision (3)(D) of 5
8989 this section; 6
9090 (ii) An individual referred to in subdivision (3)(A) 7
9191 of this section; 8
9292 (iii) A party referred to in subdivision (3)(C) of 9
9393 this section; or 10
9494 (iv) A single government referred to in subdivision 11
9595 (3)(B) of this section; 12
9696 (B) An interest of thirty -three percent (33%) or more held 13
9797 whenever the parties, individuals, or gov ernments referred to in subdivision 14
9898 (5)(A) of this section are acting in concert with respect to the interest 15
9999 even though no single individual, party, or government holds an interest of 16
100100 thirty-three percent (33%) or more; or 17
101101 (C) An interest of fifty pe rcent (50%) or more, in the 18
102102 aggregate, held by parties, individuals, or governments referred to in 19
103103 subdivision (5)(A) of this section even though the individuals, parties, or 20
104104 foreign governments may not be acting in concert. 21
105105 22
106106 SECTION 5. Arkansas Code § 2 -3-103(a)(1)(A), concerning registration 23
107107 of foreign interest in agricultural land in Arkansas, is amended to read as 24
108108 follows: 25
109109 (a)(1)(A)(i) When after April 19, 1979, any foreign party acquires any 26
110110 interest in agricultural land in Arkansas by grant, purch ase, adverse 27
111111 possession, devise, descent, or in any other manner or any agent, trustee, or 28
112112 fiduciary acquires title to agricultural land in Arkansas on behalf of a 29
113113 foreign party, the foreign party or agent, trustee, or fiduciary shall 30
114114 register the ownershi p in the office of the circuit clerk in the county in 31
115115 which the land is located within sixty (60) days after the acquisition. 32
116116 (ii) A foreign party that acquires an interest in 33
117117 agricultural land by reason of grant, purchase, devise, descent, or otherwi se 34
118118 before August 1, 2023, and failed to register the ownership as required by 35
119119 subdivision (a)(1)(A)(i) of this section shall be granted a grace period 36 SB340
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124124 until midnight December 31, 2023, to register the ownership. 1
125125 (iii) A registration of ownership by a foreign party 2
126126 made by the end of the grace period under subdivision (a)(1)(A)(ii) of this 3
127127 section is proper and not in violation of this section. 4
128128 5
129129 SECTION 6. Arkansas Code Title 18, Chapter 11, Subchapter 1, is 6
130130 amended to add an additional section to rea d as follows: 7
131131 18-11-110. Land ownership by prohibited foreign party controlled 8
132132 business prohibited — Definitions. 9
133133 (a) As used in this section: 10
134134 (1) "Controlling interest" means an ownership interest of fifty 11
135135 percent (50%) or more, in the aggregate; 12
136136 (2) "Prohibited foreign party controlled business" means a 13
137137 corporation, company, association, firm, partnership, society, joint -stock 14
138138 company, trust, estate or other legal entity whose controlling interest is 15
139139 owned by a prohibited foreign party; and 16
140140 (3) "Prohibited foreign party" means the same as provided by § 17
141141 18-11-702. 18
142142 (b)(1) A prohibited foreign party controlled business shall not 19
143143 acquire by grant, purchase, devise, descent, or otherwise any interest in 20
144144 public or private land in this state. 21
145145 (2) A party may not hold public or private land as an agent, 22
146146 trustee, or other fiduciary for a prohibited foreign party controlled 23
147147 business in violation of this section. 24
148148 (c)(1) A prohibited foreign party controlled business entity in 25
149149 violation of this sect ion shall have two (2) years to divest of the public or 26
150150 private land. 27
151151 (2) Any public or private land that is not divested within two 28
152152 (2) years as required by subdivision (c)(1) of this section shall be sold: 29
153153 (A) By order of the circuit court; and 30
154154 (B) At a public sale in the manner prescribed by law for a 31
155155 statutory foreclosure under § 18 -50-101 et seq. 32
156156 33
157157 SECTION 7. Arkansas Code Title 18, Chapter 11, is amended to add an 34
158158 additional subchapter to read as follows: 35
159159 Subchapter 7 — Foreign Ownership of Agricultural Land 36 SB340
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164164 1
165165 18-11-701. Purpose. 2
166166 Under § 2-4-101, "It is the declared policy of the state to conserve, 3
167167 protect, and encourage the development and improvement of its agricultural 4
168168 and forest lands and other facilities for the production of food, fiber, and 5
169169 other agricultural and silvicultural products". 6
170170 7
171171 18-11-702. Definitions. 8
172172 As used in this subchapter: 9
173173 (1) "Agricultural land" means the same as provided by § 2 -3-102; 10
174174 (2) "Foreign government" means the same as provided by § 2 -3-11
175175 102; 12
176176 (3) "Interest in agricultural land" means all direct interest 13
177177 acquired, transferred, or held in agricultural land including without 14
178178 limitation a lease of agricultural land: 15
179179 (A) For a term of one (1) year or longer; or 16
180180 (B) Renewable by op tion for terms which, if the options 17
181181 were all exercised, would total one (1) year; 18
182182 (4) "Party" means the same as provided by § 2 -3-102; 19
183183 (5) "Prohibited foreign party" means: 20
184184 (A) A citizen or resident of a country subject to 21
185185 international Traffic in Arms Regulations, 22 C.F.R. § 126.1; 22
186186 (B) A foreign government formed within a country subject 23
187187 to International Traffic in Arms Regulations, 22 C.F.R. § 126.1; 24
188188 (C) A party other than an individual or a government, that 25
189189 is created or organized un der the laws of a foreign government within a 26
190190 country subject to International Traffic in Arms Regulations, 22 C.F.R. § 27
191191 126.1; or 28
192192 (D) Any party other than an individual or a government: 29
193193 (i) That is created or organized under the laws of 30
194194 any state; and 31
195195 (ii) In which a significant interest or substantial 32
196196 control is directly or indirectly held or is capable of being exercised by: 33
197197 (a) An individual referred to in subdivision 34
198198 (5)(A) of this section; or 35
199199 (b) A foreign government referred to in 36 SB340
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203203
204204 subdivision (5)(B) of this section; 1
205205 (c) A party referred to in subdivision (5)(C) 2
206206 of this section; 3
207207 (d) A combination of the individuals, parties, 4
208208 or governments referred to in this subdivision (5)(D)(ii) of this section; 5
209209 (E) An Entity of Particular Concern designated by the 6
210210 United States Department of State; or 7
211211 (F) An agent, trustee, or other fiduciary of a person or 8
212212 entity enumerated in subdivisions (5)(A) -(E) of this section; 9
213213 (6) "Residence" means a person's principal dwel ling place where 10
214214 the person intends to remain permanently for an indefinite period of time; 11
215215 (7) "Resident alien" means a person who: 12
216216 (A) Is not a citizen of the United States; and 13
217217 (B) Is a resident of a: 14
218218 (i) State of the United States; 15
219219 (ii) Territory of the United States; 16
220220 (iii) Trusteeship of the United States; or 17
221221 (iv) Protectorate of the United States; and 18
222222 (8) "Significant interest" or "substantial control" means the 19
223223 same as provided by § 2 -3-102. 20
224224 21
225225 18-11-703. Limitations on owning agricultural land — Violation. 22
226226 (a)(1) Except as provided in § 18 -11-704, a prohibited foreign party 23
227227 shall not acquire by grant, purchase, devise, descent, or otherwise any 24
228228 interest in agricultural land in this state regardless of whether the 25
229229 prohibited foreign party intends to use the agricultural land for nonfarming 26
230230 purposes. 27
231231 (2) A party may not hold agricultural land as an agent, trustee, 28
232232 or other fiduciary for a prohibited foreign party in violation of this 29
233233 subchapter. 30
234234 (b) A prohibited foreign party that acquires agricultural land in 31
235235 violation of this subchapter remains in violation as long as the prohibited 32
236236 foreign party holds an interest in the agricultural land. 33
237237 34
238238 18-11-704. Interest in agricultural land owned by prohibited foreign 35
239239 parties — Exceptions — Penalty. 36 SB340
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244244 (a) A prohibited foreign party who is a resident alien of the United 1
245245 States shall have the right to acquire and hold agricultural land in the 2
246246 state upon the same terms as a citizen of the United States during the 3
247247 continuance of his or her residence in the State of Arkansas. 4
248248 (b)(1) If a prohibited foreign party is no longer a resident alien 5
249249 under subsection (a) of this section, he or she shall have two (2) years to 6
250250 divest of the agricultural land. 7
251251 (2) Any agricultural land that is not divested within two (2) 8
252252 years as required by subdivision (b)(1) of this section shall be sold: 9
253253 (A) By order of the circuit court; and 10
254254 (B) At a public sale in the manner prescribed by law for a 11
255255 statutory foreclosure under § 18-50-101 et seq. 12
256256 (c)(1) When the Office of Agricultural Intelligence determines a 13
257257 foreign party has acquired agricultural land in Arkansas in violation of this 14
258258 subchapter, the office shall report the violation to the Attorney General. 15
259259 (2) Upon receiving notice under subdivision (c)(1) of this 16
260260 section, or otherwise in his or her discretion, the Attorney General shall 17
261261 institute an action in the circuit court of any county in which any portion 18
262262 of the agricultural land acquired or held in violation of th is subchapter is 19
263263 located. 20
264264 (3) A prohibited foreign party owning agricultural land 21
265265 subsequent to the passage of this subchapter and not listed under one (1) of 22
266266 the exceptions set out in subsections (a) and (b) of this section shall upon 23
267267 conviction be guilty of a felony punishable by not more than two (2) years 24
268268 imprisonment in the custody of the Division of Correction or a fifteen 25
269269 thousand dollar ($15,000) fine, or both. 26
270270 (d) It is an affirmative defense to prosecution under this subchapter 27
271271 that a prohibited foreign party is a resident alien of the State of Arkansas. 28
272272 29
273273 18-11-705. Office of Agricultural Intelligence – Creation – Duties. 30
274274 (a) There is created within the Department of Agriculture the Office 31
275275 of Agricultural Intelligence. 32
276276 (b) The office is authorized and directed to: 33
277277 (1) Collect and analyze information concerning the unlawful sale 34
278278 or possession of agricultural land by prohibited foreign parties; and 35
279279 (2) Administer and enforce the provisions of this subchapter, 36 SB340
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284284 including without limita tion the reporting of a violation of this subchapter 1
285285 to the Attorney General under § 18 -11-705(c). 2
286286 (c) The office shall operate under the direction of the Secretary of 3
287287 the Department of Agriculture. 4
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