Session of 2024
House Substitute for SENATE BILL No. 172
By Committee on Commerce, Labor and Economic Development
3-14
AN ACT concerning real property; relating to certain lands and military
installations; creating the Kansas land military installation protection
act; prohibiting foreign principals from countries of concern from
holding any interest in certain real property in this state; authorizing the
fusion center oversight board to adopt rules and regulations to add or
remove federally designated foreign terrorist organizations from the
definition of country of concern; prohibiting foreign principals from
countries of concern from receiving any economic development
program benefits; amending K.S.A. 2023 Supp. 60-4104 and 60-4106
and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) Sections 1 through 8, and amendments thereto,
shall be known and may be cited as the Kansas land and military
installation protection act.
(b) It is declared that the purpose of this act is to protect certain real
property and military installations located in this state by prohibiting
countries of concern and any agent thereof from acquiring any interest in
such real property.
New Sec. 2. As used in sections 1 through 8, and amendments
thereto:
(a) "Attorney general" means the attorney general of the state of
Kansas.
(b) "Company" means any:
(1) For-profit corporation, partnership, limited partnership, limited
liability partnership, limited liability company, joint venture, trust,
association, sole proprietorship or other organization, including any:
(A) Subsidiary of such company, a majority ownership interest of
which is held by such company;
(B) parent company that holds a majority ownership interest of such
company; and
(C) other affiliate or business association of such company whose
primary purpose is to make a profit; or
(2) nonprofit organization.
(c) (1) "Country of concern" means the following:
(A) People's republic of China, including the Hong Kong special
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administrative region;
(B) republic of Cuba;
(C) islamic republic of Iran;
(D) democratic people's republic of Korea;
(E) Russian federation; and
(F) Bolivarian republic of Venezuela; and
(G) any organization that is designated as a foreign terrorist
organization as of July 1, 2024, pursuant to 8 U.S.C. § 1189, as in effect on
July 1, 2024, except as otherwise provided by rules and regulations
adopted by the fusion center oversight board pursuant to section 7, and
amendments thereto.
(2) "Country of concern" does not include the republic of China
(Taiwan).
(d) "Covered control transaction" means the same as defined in 31
C.F.R. § 800.210, as in effect on July 1, 2024.
(e) "Covered transaction" means the same as defined in 31 C.F.R. §
800.213, as in effect on July 1, 2024.
(f) "De minimis interest" means any interest in real property that is:
(1) The result of ownership of registered securities in a publicly
traded company; and
(2) such ownership is:
(A) Less than 10% of any class of registered securities or less than
10% of the aggregate registered securities of multiple classes of securities;
or
(B) a noncontrolling interest in an entity that is controlled by a
company that is registered with the United States securities and exchange
commission as an investment adviser under the investment advisers act of
1940, P.L. 117-263 and is not a foreign entity.
(g) "Domicile" means the country where:
(1) A company is organized;
(2) a company completes a substantial portion of its business; or
(3) a majority of a company's ownership interest is held.
(h) "Economic development incentive program" means:
(1) Any economic development incentive program administered
wholly or in part by the secretary of commerce;
(2) any tax credit program, except for social and domestic tax credits,
regardless of the administering state agency;
(3) property that has been exempted from ad valorem taxation under
the provisions of section 13 of article 11 of the constitution of the state of
Kansas;
(4) property that has been purchased, acquired, constructed,
reconstructed, improved, equipped, furnished, repaired, enlarged or
remodeled with all or any part of the proceeds of revenue bonds issued
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under any authority granted in article 17 of chapter 12 of the Kansas
Statutes Annotated, and amendments thereto;
(5) any economic development fund, including, but not limited to, the
job creation program fund established by K.S.A. 74-50,224, and
amendments thereto, and the economic development initiatives fund
established by K.S.A. 79-4804, and amendments thereto; and
(6) any other economic development incentive program that provides
any form of tax credit, abatement or exemption or financial assistance
provided by or authorized by a governmental entity.
(i) "Foreign entity" means any company whose domicile is any
country other than the United States.
(j) "Foreign principal" means:
(1) The government or any official of the government of a country of
concern;
(2) any political party, subdivision thereof or any member of a
political party of a country of concern;
(3) any corporation, partnership, association, organization or other
combination of persons organized under the laws of or having its principal
place of business in a country of concern. "Foreign principal" includes any
subsidiary owned or wholly controlled by any such entity;
(4) any agent of or any entity otherwise under the control of a country
of concern;
(5) any individual who is a citizen or resident of a country of concern
and is not a citizen or lawful permanent resident of the United States; or
(6) any individual, entity or combination thereof described in
paragraphs (1) through (5) that has a controlling interest in any company
formed for the purpose of holding any interest in real property.
(k) "Fusion center oversight board" means the fusion center oversight
board established in K.S.A. 2023 Supp. 48-3705, and amendments thereto.
(l) "Interest in real property" means any:
(1) Ownership interest in any parcel of real property acquired by
purchase, gift, grant, devise, bequest or other transfer of such interest;
(2) ownership or other interest in any easement or other right of
egress onto or across any parcel of real property;
(3) ownership or other interest in any right to any oil, gas, minerals or
water located on or under any parcel of real property; and
(4) any interest or right to possess or use any parcel of real property
acquired by the execution of a lease, lease-purchase or any other form of
rental agreement.
(m) "Military installation" means any land, buildings or other
structures owned or controlled by any division of the United States
department of defense, Kansas national guard or any other federal or state
agency that is critical to the safety and security of Kansas or the United
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States.
(n) "Non-notified transaction" means any transaction involving
foreign investment in the United States that is not voluntarily submitted to
the committee on foreign investment in the United States for review
pursuant to 50 U.S.C. § 4565.
(o) "Real property" means any real estate located in this state except
residential real property.
(p) "Residential real property" means real property that is used
exclusively as a place of residence for human habitation.
(q) "Social and domestic tax credits" means the adoption credit
created pursuant to K.S.A. 79-32,202a, and amendments thereto, the
earned income tax credit created pursuant to K.S.A. 79-32,205, and
amendments thereto, the food sales tax credit created pursuant to K.S.A.
79-32,271, and amendments thereto, the child and dependent care tax
credit created pursuant to K.S.A. 79-32,111c, and amendments thereto, and
the homestead property tax refund created pursuant to K.S.A. 79-4501 et
seq., and amendments thereto.
(r) "State agency" means any department, authority, bureau, division,
office or other governmental agency of this state.
(s) "Tax credit program" means any credit allowed against the tax
imposed by the Kansas income tax act, the premium or privilege fees
imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by net income of financial institutions imposed
pursuant to article 11 of chapter 79 of the Kansas Statutes Annotated, and
amendments thereto.
New Sec. 3. (a) Except as provided in subsections (d) and (e), no
foreign principal shall directly or indirectly own or acquire any interest in
any real property located within 150 miles of the boundary of any military
installation located in this state or any adjacent state, except a de minimis
interest in such real property.
(b) Any foreign principal that directly or indirectly owns or acquires
any interest in real property as described in subsection (a) shall file
registration of such interest with the attorney general in such form and
manner as prescribed by the attorney general not later than 90 days after
July 1, 2024, or the date such interest is acquired, whichever is later. Such
filing shall include:
(1) The name of the individual or entity holding such interest;
(2) the date of acquisition;
(3) the address and legal description of the real property; and
(4) the number of acres comprising the real property.
(c) (1) Any foreign principal that directly or indirectly owns or
acquires any interest in real property as described in subsection (a) and
that has registered such interest in accordance with subsection (b) shall
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divest such interest in such real property not later than 360 days after
either July 1, 2024, or the date such interest is acquired, whichever is later.
(2) Any foreign principal that directly or indirectly owns or acquires
any interest in real property as described in subsection (a) that fails to
register such interest as required under subsection (b) shall divest such
interest in such real property not later than 180 days after either July 1,
2024, or the date such interest is acquired, whichever is later.
(3) A copy of all documentation evidencing such divestiture shall be
submitted to the attorney general in such manner as prescribed by the
attorney general not later than 30 days after the effective date of such
divestiture.
(d) A foreign principal may acquire an interest in real property by
devise or bequest, through the enforcement of any security interest or
through the collection of a debt. Any such acquisition shall be subject to
the provisions of subsections (b) and (c).
(e) A foreign principal may own, acquire or hold an interest in real
property notwithstanding the provisions of this section if:
(1) The foreign principal registers such interest in real property in
accordance with the provisions of subsection (b); and
(2) (A) any action concerning a covered transaction pursuant to 50
U.S.C. § 4565, as in effect on July 1, 2024, has concluded and such foreign
principal received a determination that such covered transaction does not
pose an unresolved national security concern, provided such foreign
principal has not undergone a change in control that would constitute a
covered control transaction since such determination was made; or
(B) the foreign principal has a national security agreement in effect
on July 1, 2024, with the committee on foreign investment in the United
States or the United States department of defense pursuant to 50 U.S.C. §
4565, as in effect on July 1, 2024, and continues to maintain such national
security agreement.
New Sec. 4. (a) Any person may report a suspected violation of
section 3, and amendments thereto, to the attorney general in such form
and manner as prescribed by the attorney general. The attorney general
shall investigate any reports that the attorney general reasonably suspects
constitutes a violation of section 3, and amendments thereto.
(b) Upon finding that a violation of section 3, and amendments
thereto, has occurred, the attorney general may commence an action in a
court of competent jurisdiction to enforce the provisions of section 3, and
amendments thereto. In any such action, the attorney general may seek:
(1) A court order directing the defendant to divest such defendant's
interest in such real property;
(2) injunctive relief;
(3) civil forfeiture of the defendant's interest in such real property
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pursuant to K.S.A. 60-4101 et seq., and amendments thereto; and
(4) reasonable attorney fees and court costs.
New Sec. 5. No foreign principal shall receive any direct benefit
related to any economic development program regardless of the form of
such benefit.
New Sec. 6. (a) The attorney general shall establish policies and
procedures for the reporting of information concerning non-notified
transactions to the attorney general. Any person may report information
concerning such transactions in such form and manner as prescribed by the
attorney general.
(b) The attorney general shall prepare and submit a report on any
identified non-notified transactions to the committee on foreign investment
in the United States. A copy of such report shall be submitted to the
governor, the adjutant general and the standing committees on federal and
state affairs of the senate and the house of representatives.
(c) On or before February 1 of each year, the attorney general shall
prepare and submit a report to the governor, the adjutant general, the
standing committee on commerce, labor and economic development of the
house of representatives and the standing committee on commerce of the
senate.
(d) The attorney general shall retain copies of any documents that are
made a part of or otherwise submitted to the committee on foreign
investment in the United States along with the report required under
subsection (b).
(e) On or before January 1, 2025, the attorney general shall adopt
rules and regulations to implement the provisions of this section.
New Sec. 7. (a) Upon any occasion when an organization is
designated as a foreign terrorist organization or has such designation
revoked pursuant to 8 U.S.C. § 1189, the fusion center oversight board
may adopt rules and regulations to reflect such designation or revocation
of such designation, but only after giving due consideration to the risks to
state and national security and the economic costs and benefits of such
action.
(b) In no case shall the fusion center oversight board adopt any rule
or regulation pursuant to this section that would designate an organization
as a foreign terrorist organization that is not designated as a foreign
terrorist organization pursuant to 8 U.S.C. § 1189.
New Sec. 8. Sections 1 through 7, and amendments thereto, are
declared severable. Any provision of sections 1 through 7, and
amendments thereto, or the application thereof to any person or
circumstance that is held to be unconstitutional or invalid shall not affect
the validity of any remaining provisions of sections 1 through 7, and
amendments thereto, or the applicability of such provisions to any person
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or circumstance.
Sec. 9. K.S.A. 2023 Supp. 60-4104 is hereby amended to read as
follows: 60-4104. Conduct and offenses giving rise to forfeiture under this
act, whether or not there is a prosecution or conviction related to the
offense, are:
(a) All offenses which statutorily and specifically authorize forfeiture;
(b) violations involving controlled substances, as described in K.S.A.
21-5701 through 21-5717, and amendments thereto;
(c) theft, as defined in K.S.A. 21-5801, and amendments thereto;
(d) criminal discharge of a firearm, as defined in K.S.A. 21-6308(a)
(1) and (a)(2), and amendments thereto;
(e) gambling, as defined in K.S.A. 21-6404, and amendments thereto,
and commercial gambling, as defined in K.S.A. 21-6406(a)(1), and
amendments thereto;
(f) counterfeiting, as defined in K.S.A. 21-5825, and amendments
thereto;
(g) unlawful possession or use of a scanning device or reencoder, as
described in K.S.A. 21-6108, and amendments thereto;
(h) medicaid fraud, as described in K.S.A. 21-5925 through 21-5934,
and amendments thereto;
(i) an act or omission occurring outside this state, which would be a
violation in the place of occurrence and would be described in this section
if the act occurred in this state, whether or not it is prosecuted in any state;
(j) an act or omission committed in furtherance of any act or omission
described in this section including any inchoate or preparatory offense,
whether or not there is a prosecution or conviction related to the act or
omission;
(k) any solicitation or conspiracy to commit any act or omission
described in this section, whether or not there is a prosecution or
conviction related to the act or omission;
(l) terrorism, as defined in K.S.A. 21-5421, and amendments thereto,
illegal use of weapons of mass destruction, as defined in K.S.A. 21-5422,
and amendments thereto, and furtherance of terrorism or illegal use of
weapons of mass destruction, as described in K.S.A. 21-5423, and
amendments thereto;
(m) unlawful conduct of dog fighting and unlawful possession of dog
fighting paraphernalia, as defined in K.S.A. 21-6414(a) and (b), and
amendments thereto;
(n) unlawful conduct of cockfighting and unlawful possession of
cockfighting paraphernalia, as defined in K.S.A. 21-6417(a) and (b), and
amendments thereto;
(o) selling sexual relations, as defined in K.S.A. 21-6419, and
amendments thereto, promoting the sale of sexual relations, as defined in
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K.S.A. 21-6420, and amendments thereto, and buying sexual relations, as
defined in K.S.A. 21-6421, and amendments thereto;
(p) human trafficking and aggravated human trafficking, as defined in
K.S.A. 21-5426, and amendments thereto;
(q) violations of the banking code, as described in K.S.A. 9-2012, and
amendments thereto;
(r) mistreatment of a dependent adult, as defined in K.S.A. 21-5417,
and amendments thereto;
(s) giving a worthless check, as defined in K.S.A. 21-5821, and
amendments thereto;
(t) forgery, as defined in K.S.A. 21-5823, and amendments thereto;
(u) making false information, as defined in K.S.A. 21-5824, and
amendments thereto;
(v) criminal use of a financial card, as defined in K.S.A. 21-5828, and
amendments thereto;
(w) unlawful acts concerning computers, as described in K.S.A. 21-
5839, and amendments thereto;
(x) identity theft and identity fraud, as defined in K.S.A. 21-6107(a)
and (b), and amendments thereto;
(y) electronic solicitation, as defined in K.S.A. 21-5509, and
amendments thereto;
(z) felony violations of fleeing or attempting to elude a police officer,
as described in K.S.A. 8-1568, and amendments thereto;
(aa) commercial sexual exploitation of a child, as defined in K.S.A.
21-6422, and amendments thereto;
(bb) violations of the Kansas racketeer influenced and corrupt
organization act, as described in K.S.A. 21-6329, and amendments thereto;
(cc) indecent solicitation of a child and aggravated indecent
solicitation of a child, as defined in K.S.A. 21-5508, and amendments
thereto;
(dd) sexual exploitation of a child, as defined in K.S.A. 21-5510, and
amendments thereto; and
(ee) violation of a consumer protection order as defined in K.S.A. 21-
6423, and amendments thereto; and
(ff) violation of the Kansas land and military installation protection
act as described in section 3, and amendments thereto.
Sec. 10. K.S.A. 2023 Supp. 60-4106 is hereby amended to read as
follows: 60-4106. (a) All property, including all interests in property,
described in K.S.A. 60-4105, and amendments thereto, is subject to
forfeiture subject to all mortgages, deeds of trust, financing statements or
security agreements properly of record prior to the forfeiture held by an
interest holder except that property specifically exempted hereunder:
(1) No real property or conveyance, or an interest therein, may be
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forfeited under this act unless the offense or conduct giving rise to
forfeiture constitutes a felony, except as provided in the Kansas land and
military installation protection act, section 1, et seq., and amendments
thereto.
(2) No conveyance used by any person as a common carrier in the
transaction of business as a common carrier is subject to forfeiture under
this act unless the owner or other person in charge of the conveyance is a
consenting party or privy to a violation of this act.
(3) No property is subject to forfeiture under this act if the owner or
interest holder acquired the property before or during the conduct giving
rise to the property's forfeiture, and such owner or interest holder:
(A) Did not know and could not have reasonably known of the act or
omission or that it was likely to occur; or
(B) acted reasonably to prevent the conduct giving rise to forfeiture.
(4) No property is subject to forfeiture if the owner or interest holder
acquired the property after the conduct giving rise to the property's
forfeiture, including acquisition of proceeds of conduct giving rise to
forfeiture, and such owner or interest holder:
(A) Acquired the property in good faith, for value; and
(B) was not knowingly taking part in an illegal transaction.
(5) (A) An interest in property acquired in good faith by an attorney
as reasonable payment or to secure payment for legal services in a criminal
matter relating to violations of this act or for the reimbursement of
reasonable expenses related to the legal services is exempt from forfeiture
unless before the interest was acquired the attorney knew of a judicial
determination of probable cause that the property is subject to forfeiture.
(B) The state bears the burden of proving that an exemption claimed
under this section is not applicable. Evidence made available by the
compelled disclosure of confidential communications between an attorney
and a client other than nonprivileged information relating to attorney fees,
is not admissible to satisfy the state's burden of proof.
(b) Notwithstanding subsection (a), property is not exempt from
forfeiture, even though the owner or interest holder lacked knowledge or
reason to know that the conduct giving rise to property's forfeiture had
occurred or was likely to occur, if the:
(1) Person whose conduct gave rise to the property's forfeiture had
authority to convey the property of the person claiming the exemption to a
good faith purchaser for value at the time of the conduct;
(2) owner or interest holder is criminally responsible for the conduct
giving rise to the property's forfeiture, whether or not there is a prosecution
or conviction; or
(3) owner or interest holder acquired the property with notice of the
property's actual or constructive seizure for forfeiture under this act, or
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with reason to believe that the property was subject to forfeiture under this
act.
(c) Prior to final judgment in a judicial forfeiture proceeding, a court
shall limit the scope of a proposed forfeiture to the extent the court finds
the effect of the forfeiture is grossly disproportionate to the nature and
severity of the owner's conduct including, but not limited to, a
consideration of any of the following factors:
(1) The gain received or expected to be received by an owner from
conduct that allows forfeiture;
(2) the value of the property subject to forfeiture;
(3) the extent to which the property actually facilitated the criminal
conduct;
(4) the nature and extent of the owner's knowledge of the role of
others in the conduct that allows forfeiture of the property and efforts of
the owner to prevent the conduct; and
(5) the totality of the circumstances regarding the investigation.
Sec. 11. K.S.A. 2023 Supp. 60-4104 and 60-4106 are hereby
repealed.
Sec. 12. This act shall take effect and be in force from and after its
publication in the statute book.
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