Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
94th General Assembly A Bill 2
Regular Session, 2023 SENATE BILL 340 3
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By: Senator B. Johnson 5
By: Representative Vaught 6
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For An Act To Be Entitled 8
AN ACT TO AMEND THE LAW CONCERNING OWNER SHIP AND 9
POSSESSION OF REAL P ROPERTY; AND FOR OTH ER PURPOSES. 10
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Subtitle 13
TO AMEND THE LAW CONCERNING OWNERSHIP AND 14
POSSESSION OF REAL PROPERTY. 15
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 18
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SECTION 1. Arkansas Code § 18 -11-101(a), concerning the capacity of 20
aliens to take and transfer lands, is amended to read as follows: 21
(a) All Except as provided in §§ 18 -11-110 and 18-11-701 et seq., all 22
aliens shall be capable o f taking, by deed or will, lands and tenements in 23
fee simple, or other less estate, and of holding, aliening, and devising 24
them. 25
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SECTION 2. Arkansas Code § 2 -3-102(1), concerning the definition of 27
"agricultural land" used in the Arkansas Agricultural Fo reign Investment Act 28
is amended to read as follows: 29
(1)(A) “Agricultural land” means any Arkansas land which is 30
outside the corporate limits of a municipality and is : used or capable, 31
without substantial modification to the character of the land, of use for 32
agricultural, forestry, or timber production, 33
(i) Used for forestry production, including without 34
limitation land exceeding ten (10) acres in which ten percent (10%) of the 35
land is stocked by trees of any size, including land that formerly had t rees 36 SB340
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of any size covering the land that will be naturally or artificially 1
regenerated; or 2
(ii) Currently used for, or, if currently idle, land 3
last used within the past five (5) years, for farming, ranching, or timber 4
production, except land not excee ding ten (10) acres in the aggregate, if the 5
annual gross receipts from the sale of the farm, ranch, or timber products 6
produced on the land do not exceed one thousand dollars ($1,000), including 7
without limitation land used for activities described in the Standard 8
Industrial Classification Manual (1987), Division A, exclusive of industry 9
numbers 0711-0783, 0851, and 0912 -0919 which cover animal trapping, game 10
management, hunting carried on as a business enterprise, trapping carried on 11
as a business enterpr ise, and wildlife management. 12
(B) "Agricultural land" but does not include oil, gas, and 13
all other minerals, including coal, lignite, brine, and all minerals known 14
and recognized as commercial minerals underlying the land; 15
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SECTION 3. Arkansas Co de § 2-3-102(3)(D), concerning the definition of 17
"foreign party" used in the Arkansas Agricultural Foreign Investment Act, is 18
amended to read as follows: 19
(D) Any A party other than an individual or a government: 20
(i) Which is created or organized u nder the laws of 21
any state; and 22
(ii) In which a significant interest is directly or 23
indirectly held or in which not insubstantial or substantial control is 24
directly or indirectly held or is capable of being exercised by: 25
(a) Any An individual referred to in 26
subdivision (3)(A) of this section; 27
(b) Any A foreign government; 28
(c) Any A party referred to in subdivision 29
(3)(C) of this section; 30
(d) Any A combination of such individuals, 31
parties, or government referred to in this subdivision (3)(D)(ii) of this 32
section; and 33
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SECTION 4. Arkansas Code § 2 -3-102, concerning the definitions used in 35
the Arkansas Agricultural Foreign Investment Act, is amended to add an 36 SB340
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additional subdivision to read as follows: 1
(5) "Significant interest" or "substantial control" means: 2
(A) An interest of thirty -three percent (33%) or more held 3
by: 4
(i) A party referred to in subdivision (3)(D) of 5
this section; 6
(ii) An individual referred to in subdivision (3)(A) 7
of this section; 8
(iii) A party referred to in subdivision (3)(C) of 9
this section; or 10
(iv) A single government referred to in subdivision 11
(3)(B) of this section; 12
(B) An interest of thirty -three percent (33%) or more held 13
whenever the parties, individuals, or gov ernments referred to in subdivision 14
(5)(A) of this section are acting in concert with respect to the interest 15
even though no single individual, party, or government holds an interest of 16
thirty-three percent (33%) or more; or 17
(C) An interest of fifty pe rcent (50%) or more, in the 18
aggregate, held by parties, individuals, or governments referred to in 19
subdivision (5)(A) of this section even though the individuals, parties, or 20
foreign governments may not be acting in concert. 21
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SECTION 5. Arkansas Code § 2 -3-103(a)(1)(A), concerning registration 23
of foreign interest in agricultural land in Arkansas, is amended to read as 24
follows: 25
(a)(1)(A)(i) When after April 19, 1979, any foreign party acquires any 26
interest in agricultural land in Arkansas by grant, purch ase, adverse 27
possession, devise, descent, or in any other manner or any agent, trustee, or 28
fiduciary acquires title to agricultural land in Arkansas on behalf of a 29
foreign party, the foreign party or agent, trustee, or fiduciary shall 30
register the ownershi p in the office of the circuit clerk in the county in 31
which the land is located within sixty (60) days after the acquisition. 32
(ii) A foreign party that acquires an interest in 33
agricultural land by reason of grant, purchase, devise, descent, or otherwi se 34
before August 1, 2023, and failed to register the ownership as required by 35
subdivision (a)(1)(A)(i) of this section shall be granted a grace period 36 SB340
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until midnight December 31, 2023, to register the ownership. 1
(iii) A registration of ownership by a foreign party 2
made by the end of the grace period under subdivision (a)(1)(A)(ii) of this 3
section is proper and not in violation of this section. 4
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SECTION 6. Arkansas Code Title 18, Chapter 11, Subchapter 1, is 6
amended to add an additional section to rea d as follows: 7
18-11-110. Land ownership by prohibited foreign party controlled 8
business prohibited — Definitions. 9
(a) As used in this section: 10
(1) "Controlling interest" means an ownership interest of fifty 11
percent (50%) or more, in the aggregate; 12
(2) "Prohibited foreign party controlled business" means a 13
corporation, company, association, firm, partnership, society, joint -stock 14
company, trust, estate or other legal entity whose controlling interest is 15
owned by a prohibited foreign party; and 16
(3) "Prohibited foreign party" means the same as provided by § 17
18-11-702. 18
(b)(1) A prohibited foreign party controlled business shall not 19
acquire by grant, purchase, devise, descent, or otherwise any interest in 20
public or private land in this state. 21
(2) A party may not hold public or private land as an agent, 22
trustee, or other fiduciary for a prohibited foreign party controlled 23
business in violation of this section. 24
(c)(1) A prohibited foreign party controlled business entity in 25
violation of this sect ion shall have two (2) years to divest of the public or 26
private land. 27
(2) Any public or private land that is not divested within two 28
(2) years as required by subdivision (c)(1) of this section shall be sold: 29
(A) By order of the circuit court; and 30
(B) At a public sale in the manner prescribed by law for a 31
statutory foreclosure under § 18 -50-101 et seq. 32
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SECTION 7. Arkansas Code Title 18, Chapter 11, is amended to add an 34
additional subchapter to read as follows: 35
Subchapter 7 — Foreign Ownership of Agricultural Land 36 SB340
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18-11-701. Purpose. 2
Under § 2-4-101, "It is the declared policy of the state to conserve, 3
protect, and encourage the development and improvement of its agricultural 4
and forest lands and other facilities for the production of food, fiber, and 5
other agricultural and silvicultural products". 6
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18-11-702. Definitions. 8
As used in this subchapter: 9
(1) "Agricultural land" means the same as provided by § 2 -3-102; 10
(2) "Foreign government" means the same as provided by § 2 -3-11
102; 12
(3) "Interest in agricultural land" means all direct interest 13
acquired, transferred, or held in agricultural land including without 14
limitation a lease of agricultural land: 15
(A) For a term of one (1) year or longer; or 16
(B) Renewable by op tion for terms which, if the options 17
were all exercised, would total one (1) year; 18
(4) "Party" means the same as provided by § 2 -3-102; 19
(5) "Prohibited foreign party" means: 20
(A) A citizen or resident of a country subject to 21
international Traffic in Arms Regulations, 22 C.F.R. § 126.1; 22
(B) A foreign government formed within a country subject 23
to International Traffic in Arms Regulations, 22 C.F.R. § 126.1; 24
(C) A party other than an individual or a government, that 25
is created or organized un der the laws of a foreign government within a 26
country subject to International Traffic in Arms Regulations, 22 C.F.R. § 27
126.1; or 28
(D) Any party other than an individual or a government: 29
(i) That is created or organized under the laws of 30
any state; and 31
(ii) In which a significant interest or substantial 32
control is directly or indirectly held or is capable of being exercised by: 33
(a) An individual referred to in subdivision 34
(5)(A) of this section; or 35
(b) A foreign government referred to in 36 SB340
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subdivision (5)(B) of this section; 1
(c) A party referred to in subdivision (5)(C) 2
of this section; 3
(d) A combination of the individuals, parties, 4
or governments referred to in this subdivision (5)(D)(ii) of this section; 5
(E) An Entity of Particular Concern designated by the 6
United States Department of State; or 7
(F) An agent, trustee, or other fiduciary of a person or 8
entity enumerated in subdivisions (5)(A) -(E) of this section; 9
(6) "Residence" means a person's principal dwel ling place where 10
the person intends to remain permanently for an indefinite period of time; 11
(7) "Resident alien" means a person who: 12
(A) Is not a citizen of the United States; and 13
(B) Is a resident of a: 14
(i) State of the United States; 15
(ii) Territory of the United States; 16
(iii) Trusteeship of the United States; or 17
(iv) Protectorate of the United States; and 18
(8) "Significant interest" or "substantial control" means the 19
same as provided by § 2 -3-102. 20
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18-11-703. Limitations on owning agricultural land — Violation. 22
(a)(1) Except as provided in § 18 -11-704, a prohibited foreign party 23
shall not acquire by grant, purchase, devise, descent, or otherwise any 24
interest in agricultural land in this state regardless of whether the 25
prohibited foreign party intends to use the agricultural land for nonfarming 26
purposes. 27
(2) A party may not hold agricultural land as an agent, trustee, 28
or other fiduciary for a prohibited foreign party in violation of this 29
subchapter. 30
(b) A prohibited foreign party that acquires agricultural land in 31
violation of this subchapter remains in violation as long as the prohibited 32
foreign party holds an interest in the agricultural land. 33
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18-11-704. Interest in agricultural land owned by prohibited foreign 35
parties — Exceptions — Penalty. 36 SB340
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(a) A prohibited foreign party who is a resident alien of the United 1
States shall have the right to acquire and hold agricultural land in the 2
state upon the same terms as a citizen of the United States during the 3
continuance of his or her residence in the State of Arkansas. 4
(b)(1) If a prohibited foreign party is no longer a resident alien 5
under subsection (a) of this section, he or she shall have two (2) years to 6
divest of the agricultural land. 7
(2) Any agricultural land that is not divested within two (2) 8
years as required by subdivision (b)(1) of this section shall be sold: 9
(A) By order of the circuit court; and 10
(B) At a public sale in the manner prescribed by law for a 11
statutory foreclosure under § 18-50-101 et seq. 12
(c)(1) When the Office of Agricultural Intelligence determines a 13
foreign party has acquired agricultural land in Arkansas in violation of this 14
subchapter, the office shall report the violation to the Attorney General. 15
(2) Upon receiving notice under subdivision (c)(1) of this 16
section, or otherwise in his or her discretion, the Attorney General shall 17
institute an action in the circuit court of any county in which any portion 18
of the agricultural land acquired or held in violation of th is subchapter is 19
located. 20
(3) A prohibited foreign party owning agricultural land 21
subsequent to the passage of this subchapter and not listed under one (1) of 22
the exceptions set out in subsections (a) and (b) of this section shall upon 23
conviction be guilty of a felony punishable by not more than two (2) years 24
imprisonment in the custody of the Division of Correction or a fifteen 25
thousand dollar ($15,000) fine, or both. 26
(d) It is an affirmative defense to prosecution under this subchapter 27
that a prohibited foreign party is a resident alien of the State of Arkansas. 28
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18-11-705. Office of Agricultural Intelligence – Creation – Duties. 30
(a) There is created within the Department of Agriculture the Office 31
of Agricultural Intelligence. 32
(b) The office is authorized and directed to: 33
(1) Collect and analyze information concerning the unlawful sale 34
or possession of agricultural land by prohibited foreign parties; and 35
(2) Administer and enforce the provisions of this subchapter, 36 SB340
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including without limita tion the reporting of a violation of this subchapter 1
to the Attorney General under § 18 -11-705(c). 2
(c) The office shall operate under the direction of the Secretary of 3
the Department of Agriculture. 4
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