House File 2483 - Introduced HOUSE FILE 2483 BY COMMITTEE ON STATE GOVERNMENT (SUCCESSOR TO HSB 663) (COMPANION TO SF 2204 BY COMMITTEE ON AGRICULTURE) A BILL FOR An Act relating to interests in agricultural land acquired 1 or held by foreign businesses, foreign governments, or 2 nonresident aliens, or by agents, trustees, or fiduciaries 3 thereof, by providing for registration and reporting 4 requirements, providing for enforcement, and providing 5 penalties. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 5027HV (2) 90 da/ns
H.F. 2483 Section 1. Section 9I.1, Code 2024, is amended by adding the 1 following new subsections: 2 NEW SUBSECTION . 4A. Interest means any estate, remainder, 3 or reversion, or portion of the estate, remainder, or 4 reversion, or an option pursuant to which one party has a right 5 to cause legal or equitable title to agricultural land to be 6 transferred. 7 NEW SUBSECTION . 4B. Intermediary means any person, 8 including a bank, broker, or dealer, that makes business or 9 financial arrangements between companies or organizations that 10 do not deal with each other directly. 11 NEW SUBSECTION . 6. Parent means any corporation which 12 directly, or indirectly through one or more intermediaries, 13 controls more than fifty percent of the voting stock of another 14 corporation. 15 Sec. 2. Section 9I.7, Code 2024, is amended to read as 16 follows: 17 9I.7 Registration. 18 A nonresident alien, foreign business , or foreign 19 government, or an agent, trustee , or fiduciary thereof, which 20 owns an interest in agricultural land within this state on or 21 after January 1, 1980, shall register the agricultural land 22 with the secretary of state. The registration shall be made 23 within sixty days after January 1, 1980, or within sixty days 24 after acquiring the land or the interest in land, whichever 25 time is the later. The registration shall be made online or 26 in the form and manner prescribed by the secretary and shall 27 contain the name of the owner and the location and number of 28 acres of the agricultural land by township and county of state . 29 If the owner of the agricultural land or owner of the interest 30 in agricultural land is an agent, trustee or fiduciary of a 31 nonresident alien, foreign business or foreign government, 32 the registration shall also include the name of any principal 33 for whom that land, or interest in that land was purchased as 34 agent. Information described in this section is a confidential 35 -1- LSB 5027HV (2) 90 da/ns 1/ 9
H.F. 2483 record and subject to use in the same manner as provided in 1 section 10B.5. As part of the registration, the nonresident 2 alien, foreign business, or foreign government, or an agent, 3 trustee, or fiduciary thereof, shall file all of the following 4 information: 5 1. The legal name, street address, mailing address, 6 if different, and the birthplace and nationality of the 7 nonresident alien, foreign business, or foreign government that 8 owns the interest in the agricultural land. 9 2. The legal name, street address, mailing address, 10 if different, and the birthplace and nationality of the 11 agent, trustee, or fiduciary of the nonresident alien, 12 foreign business, or foreign government in subsection 1, if 13 specifically authorized to do any of the following: 14 a. Purchase the agricultural land. 15 b. Supervise the daily operations on the agricultural land. 16 3. A statement of the purpose for conducting business in 17 this state. 18 4. A description of the purpose of the interest in the 19 agricultural land in this state as it relates to the stated 20 business purpose in subsection 3. 21 5. The legal name, street address, and mailing address 22 of any parent of the registering party, including the legal 23 name, street address, and mailing address of any subsidiary or 24 intermediary of the parent. 25 6. The legal name, street address, and mailing address of 26 any subsidiary of the registering party. 27 7. A listing of all other interests in agricultural land 28 that are held directly or indirectly by the registering party, 29 parent of the registering party, or subsidiary or intermediary 30 of the parent in the United States that exceeds two hundred 31 fifty acres. 32 Sec. 3. Section 9I.10, subsection 1, Code 2024, is amended 33 to read as follows: 34 1. If the secretary of state finds that a nonresident alien, 35 -2- LSB 5027HV (2) 90 da/ns 2/ 9
H.F. 2483 foreign business, foreign government, or an agent, trustee, 1 or other fiduciary thereof, has acquired or holds title to or 2 interest in agricultural land in this state in violation of 3 this chapter or has failed to timely register as required under 4 section 9I.7 or has failed to timely report as required under 5 section 9I.8 10B.4 , the secretary shall report the violation 6 to the attorney general. 7 Sec. 4. Section 9I.10, Code 2024, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 4. The attorney general may conduct an 10 inquiry or investigation regarding a violation of this chapter 11 or section 10B.4. As part of that inquiry or investigation, 12 and in accordance with the Iowa rules of civil procedure, the 13 attorney general may issue a subpoena for the production of 14 records, including but not limited to books, accounts, papers, 15 correspondence, memoranda, purchase agreements, files, or other 16 documents in a print or electronic format. If a person refuses 17 compliance, the attorney general may seek enforcement by the 18 district court. 19 Sec. 5. Section 9I.12, Code 2024, is amended to read as 20 follows: 21 9I.12 Penalty failure to timely file. 22 A civil penalty of not more than two thousand dollars to 23 exceed twenty-five percent of the countys assessed value of 24 the subject agricultural land for the previous year shall be 25 imposed, for each offense, upon a nonresident alien, foreign 26 business , or foreign government, or an agent, trustee , or other 27 fiduciary thereof, who fails to timely file the registration as 28 required by section 9I.7 , or who fails to timely file a report 29 required by section 9I.8 . 30 Sec. 6. Section 10B.4, subsection 1, Code 2024, is amended 31 to read as follows: 32 1. A biennial report shall be filed by a reporting entity 33 with the secretary of state on or before March 31 of each 34 odd-numbered year as required by rules adopted by the secretary 35 -3- LSB 5027HV (2) 90 da/ns 3/ 9
H.F. 2483 of state pursuant to chapter 17A . However, a reporting entity 1 required to file a biennial report pursuant to chapter 489 , 2 490 , 496C , 497 , 498 , 499 , 501 , 501A , or 504 shall file the 3 report required by this section in the same year as required 4 by that chapter. The reporting entity may file the report 5 required by this section together with the biennial report 6 required to be filed by one of the other chapters referred to 7 in this subsection . The reports shall be filed online or on 8 forms prepared and supplied by the secretary of state. The 9 secretary of state may provide for combining its reporting 10 forms with other biennial reporting forms required to be used 11 by the reporting entities. 12 Sec. 7. Section 10B.4, subsection 2, unnumbered paragraph 13 1, Code 2024, is amended to read as follows: 14 A report required pursuant to this section shall contain 15 information for the reporting period regarding the reporting 16 entity as required by the secretary of state which shall at 17 least include any updates to the information provided in the 18 registration to the secretary of state in section 9I.7 and all 19 of the following: 20 Sec. 8. Section 10B.4, Code 2024, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 4. The attorney general may conduct an 23 inquiry or investigation regarding a violation of this section 24 as provided in section 9I.10. 25 Sec. 9. Section 10B.4A, Code 2024, is amended to read as 26 follows: 27 10B.4A Suspension of other filing requirements. 28 The secretary of state shall not prepare or distribute forms 29 for reports or file reports otherwise required pursuant to 30 section 9I.8 or 501.103 . A person required to file a report 31 pursuant to this chapter is not required to file a report under 32 those sections section 501.103 . A person required to file a 33 report pursuant to this chapter is not required to register 34 with the secretary of state as otherwise required in section 35 -4- LSB 5027HV (2) 90 da/ns 4/ 9
H.F. 2483 9I.7 . 1 Sec. 10. NEW SECTION . 10B.5A Annual summary to governor and 2 general assembly. 3 The secretary of state shall prepare an annual summary of 4 foreign landholding. The summary must be a report summarizing 5 the compiled information included in the current registrations 6 filed pursuant to section 9I.7 and the last reports filed 7 pursuant to section 10B.4. The information is a confidential 8 record as provided in section 22.7. The attorney general may 9 have access to the annual summary and may use information 10 in the annual summary in any action to enforce state law, 11 including but not limited to chapters 9H and 9I, and this 12 chapter. The annual summary shall be made available to the 13 governor, members of the general assembly, and appropriate 14 committees of the general assembly in order to determine the 15 extent that agricultural land is held in this state by foreign 16 entities and the effect of such land ownership upon the economy 17 of this state. Upon request, the secretary of state shall 18 assist any committee of the general assembly studying these 19 issues. 20 Sec. 11. Section 10B.6, subsection 1, Code 2024, is amended 21 to read as follows: 22 1. a. The Except as provided in paragraph b , the failure 23 to timely file a report or the filing of false information in a 24 report as provided in section 10B.4 is punishable by a civil 25 penalty not to exceed one thousand dollars. 26 b. The failure to file a report or the filing of false 27 information in a report by a nonresident alien, foreign 28 business, or foreign government, or an agent, trustee, or other 29 fiduciary thereof as provided in section 10B.4 is punishable by 30 a civil penalty of up to ten thousand dollars for each offense. 31 Sec. 12. REPEAL. Section 9I.8, Code 2024, is repealed. 32 Sec. 13. REGISTRATION REQUIREMENT. A nonresident alien, 33 foreign business, or foreign government, or an agent, trustee, 34 or fiduciary thereof, that currently owns an interest in 35 -5- LSB 5027HV (2) 90 da/ns 5/ 9
H.F. 2483 agricultural land must update their registration with the 1 secretary of states office to comply with the requirements of 2 section 9I.7, as amended by this Act, within one hundred eighty 3 days of the effective date of this Act. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanations substance by the members of the general assembly. 7 BACKGROUND GENERAL (CODE CHAPTERS 9H, 9I, AND 10B). 8 Currently, three related Code chapters impose requirements upon 9 the acquisition or holding of agricultural land suitable for 10 farming in this state. 11 BACKGROUND FARMING BY A DOMESTIC OR FOREIGN BUSINESS 12 ENTITY (CODE CHAPTER 9H). Code chapter 9H, which is referred 13 to but not amended by this bill, restricts certain business 14 entities classified as either domestic (meaning formed in the 15 state) or foreign (meaning formed outside the state) from 16 acquiring or holding agricultural land, subject to a number 17 of exceptions such as a family farm corporation (Code section 18 9H.4). The Code chapters reporting requirement was repealed 19 in 2003 (2003 Iowa Acts, chapter 115, sections 17 and 19). 20 BACKGROUND FARMING BY A FOREIGN PERSON (CODE CHAPTER 21 9I). Code chapter 9I, amended by the bill, restricts a foreign 22 person from acquiring agricultural land suitable for use in 23 farming in this state (Code section 9I.3). The Code chapter 24 specifically describes a foreign person as a foreign business, 25 foreign government, or nonresident alien and any authorized 26 representative of the foreign business, foreign government, or 27 nonresident alien. Similarly, the Code chapter describes an 28 authorized representative as an agent, trustee, or fiduciary. 29 A foreign business is a corporation incorporated under the 30 laws of a foreign country or any other type of business entity 31 (e.g., limited liability company) if the majority interest 32 is owned directly or indirectly by one or more nonresident 33 aliens. A foreign person must file two documents with the 34 secretary of state, including a one-time registration (Code 35 -6- LSB 5027HV (2) 90 da/ns 6/ 9
H.F. 2483 section 9I.7) and an annual report (Code section 9I.8). The 1 annual report must be filed by a foreign person that acquires 2 agricultural land for development and is required to convert 3 it for a nonfarming purpose within five years (Code section 4 9I.4). Information in the registration or annual report is 5 not a confidential record under Iowas open records law (Code 6 chapter 22). A foreign person who fails to file a timely 7 annual report is subject to a civil penalty of not more than 8 $2,000 (Code section 9I.12). If the foreign person acquires 9 or fails to convert agricultural land to a purpose other than 10 farming within five years, the agricultural land escheats to 11 the state pursuant to an enforcement action by the attorney 12 general (Code section 9I.11). 13 BACKGROUND SUPERSEDING FILING REQUIREMENTS (CODE CHAPTER 14 10B). Code chapter 10B requires that a business entity 15 described in Code chapter 9H, or a foreign person described 16 in Code chapter 9I, acquiring or holding agricultural land, 17 file a biennial report with the secretary of state (Code 18 section 10B.4). In addition, a foreign persons duty to 19 file a registration and annual report under Code chapter 9I 20 is permanently suspended (Code section 10B.4A). Information 21 published in the biennial report is a confidential record but 22 may be released to the attorney general and members of the 23 general assembly (Code section 10B.5). 24 BILLS PROVISIONS REGISTRATION REQUIREMENT (CODE 25 CHAPTERS 9I AND 10B). The bill eliminates the suspension 26 of the registration requirement (Code section 10B.4A). The 27 same confidentiality requirements that currently apply to 28 information in a biennial report (Code section 10B.5) apply 29 to information in the reinstated registration under Code 30 section 9I.7. The bill requires specific information to 31 be included in the registration. A foreign person must 32 provide its legal name, mailing address, and nationality. An 33 authorized representative of a foreign person must state the 34 representatives legal name, street and mailing address, and 35 -7- LSB 5027HV (2) 90 da/ns 7/ 9
H.F. 2483 nationality; and its authority to purchase the agricultural 1 land and supervise any daily operations on the agricultural 2 land. The foreign person must include a statement of the 3 purpose of conducting a business in this state; a description 4 of the purpose in the interest in the agricultural land; the 5 legal name and mailing address of a parent corporation, or an 6 intermediary or subsidiary of the parent corporation; and a 7 listing of all other interests in agricultural land totaling 8 more than 250 acres held in the United States by the foreign 9 person, a parent of the foreign corporation, or intermediary or 10 subsidiary of the parent. A foreign person currently owning 11 agricultural land has 180 days after the bills enactment date 12 to register. 13 BILLS PROVISIONS INQUIRY OR INVESTIGATION BY THE 14 ATTORNEY GENERAL (CODE CHAPTERS 9I AND 10B). The bill 15 authorizes the attorney general to conduct an inquiry or 16 investigation regarding a violation of Code chapter 9I (Code 17 section 9I.10) or the biennial reporting requirements in Code 18 chapter 10B (Code section 10B.4). This includes the power to 19 issue a subpoena for the production of records, and to seek 20 compliance of the subpoena in district court. 21 BILLS PROVISIONS PENALTIES (CODE CHAPTER 9I). The bill 22 changes the civil penalty imposed for failing to timely file 23 a registration to an amount not more than 25 percent of the 24 countys assessed value of the subject agricultural land for 25 the previous year, and retains language referring to each 26 offense. 27 BILLS PROVISIONS REPORTING REQUIREMENTS (CODE CHAPTERS 28 9I AND 10B). The bill eliminates the suspended annual 29 reporting requirements in Code chapter 9I (Code section 30 10B.4A). Unlike the reinstated registration requirement, the 31 annual reporting requirement is repealed (Code section 9I.8). 32 The bill amends the biennial reporting requirements in Code 33 chapter 10B (Code section 10B.4). Specifically, the biennial 34 report must include any updates to the information stated 35 -8- LSB 5027HV (2) 90 da/ns 8/ 9
H.F. 2483 in the registration. The secretary of state must prepare 1 an annual summary of compiled information in the current 2 registrations and last filed reports (Code section 10B.5A). 3 The information is a confidential record. However, the bill 4 creates an exception allowing access to the record by the 5 attorney general for enforcement purposes, and the governor and 6 general assembly for public policy purposes. 7 BILLS PROVISIONS PENALTIES (CODE CHAPTER 10B). The 8 civil penalty for failing to timely file a biennial report or 9 filing false information in such report is increased to an 10 amount of not more than $10,000 for violations by a foreign 11 person. There is another reference to each offense (Code 12 section 10B.6). 13 -9- LSB 5027HV (2) 90 da/ns 9/ 9