SESSION OF 2024
SUPPLEMENTAL NOTE ON HOUSE SUBSTITUTE FOR
SENATE BILL NO. 172
As Amended by House Committee on
Commerce, Labor and Economic Development
Brief*
House Sub. for SB 172, as amended, would create the
Kansas Land and Military Installation Protection Act (Act).
The bill would prohibit countries of concern’s agents,
residents, and citizens from acquiring any interest in non-
residential real property located within 150 miles of the
boundary of any military installation located in Kansas or an
adjacent state.
The Act would not apply to real property interests
including a de minimis interest in such real property;
transactions approved by the Committee of Foreign
Investment in the United States (CFIUS); and foreign
principals with a national security agreement with CFIUS or
the U.S. Department of Defense.
Real Property Interest Limitation
The bill would generally prohibit any foreign principal
from owning or acquiring any interest in real property located
within 150 miles of any military installation’s boundary in
Kansas or any adjacent state. Foreign principals would be
permitted to acquire such interests by devise or bequest,
through the enforcement of a security interest, or through the
collection of a debt.
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org Any foreign principal that owns or acquires any interest
in real property within the 150-mile radius would be required
to file registration of their ownership with the Attorney General
no later than 90 days after July 1, 2024, or the date the
interest is acquired, whichever is later. Registration of such
property would need to include the:
●Name of the individual or entity holding such
interest;
●Date of acquisition;
●Address and legal description of the real property;
and
●Number of acres comprising the real property.
Limitation Exceptions
The bill would provide a de minimis interest exception in
such real property. The Act would also not apply to a foreign
principal who registers such interest in real property in
accordance with the Act, and:
●CFIUS has concluded any action related to the
transaction, and the foreign principal has received
a determination that the transaction does not pose
an unresolved national security concern and there
has been no change in control since that
determination has taken place; or
●The foreign principal has a national security
agreement with either CFIUS or the U.S.
Department of Defense.
Divestiture of Property
All registered property would be required to be divested
no later than 360 days after July 1, 2024, or the date the
2- 172 interest is acquired, whichever is later. Any property that fails
to be registered would be required to be divested no later
than 180 days after July 1, 2024, or the date such interest is
acquired, whichever is later.
A copy of all documentation showing the required
divestiture would be required to be submitted to the Attorney
General no later than 30 days after the divestiture’s effective
date.
Property obtained by a foreign principal through devise
or bequest, security interest enforcement, or the collection of
debt would still be subject to the property limitation, reporting,
and divestiture provisions of this Act.
Reporting and Enforcement
The bill would allow any person to report a suspected
violation of the Act to the Attorney General.
The bill would require the Attorney General to establish
policies and procedures for reporting non-notified
transactions to the Attorney General. The bill would define
non-notified transactions as any transaction involving foreign
investment that is not voluntarily submitted to Committee on
Foreign Investment in the United States (CFIUS) for review.
The Attorney General would be required to investigate
any reports the Attorney General reasonably suspects
constitutes a violation of the Act. Upon finding that a violation
occurred, the Attorney General would be allowed to
commence an action in a court of competent jurisdiction to
enforce the Act.
In any such action, the Attorney General could seek:
●A court order directing the defendant’s divestiture
of the real property;
3- 172 ●Injunctive relief;
●Civil forfeiture of the defendant’s interest in the real
property; and
●Reasonable attorney fees and court costs.
The bill would also update current civil asset forfeiture
law to allow such property to be eligible for forfeiture.
Reporting on Foreign Investment
The bill would require the Attorney General to prepare
and submit a report on any identified, non-notified
transactions to CFIUS. The report would also be required to
be submitted to the:
●Governor;
●Adjutant General;
●Standing Committee on Federal and State Affairs
of the Senate; and
●Standing Committee on Federal and State Affairs
of the House of Representatives.
On or before February 1 of each year, the Attorney
General would be required to submit a report to the:
●Governor;
●Adjutant General;
●Standing Committee on Commerce, Labor and
Economic Development of the House of
Representatives; and
●Standing Committee on Commerce of the Senate.
4- 172 The Attorney General would be required to retain copies
of any documents that are submitted to CFIUS along with the
required report.
On or before January 1, 2025, the Attorney General
would be required to adopt rules and regulations to
implement the reporting requirements listed above.
Other Provisions
The bill would allow the Fusion Center Oversight Board
to adopt rules and regulations to reflect new designations or
removals of foreign terrorist organizations on the federal
terrorist organization list. The bill would not allow the Board to
adopt any rules or regulations that would designate an
organization as a foreign terrorist organization if that
organization is not on the federal terrorist organization list.
[Note: The Fusion Center Oversight Board was
established in KSA 2023 Supp. 48-3705. The Board consists
of the Attorney General, Adjutant General, and an appointee
of the Attorney General with expertise in critical infrastructure
protection.]
The bill would also prevent any foreign principal from
receiving any direct benefit related to any economic
development program.
The bill would also declare any provision severable from
the other provisions in the event one or more provisions are
held to be unconstitutional or invalid.
Definitions
Military installation
The bill would define “military installation” as any land,
buildings, or other structures owned or controlled by any
5- 172 division of the U.S. 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 States.
Country of Concern
The bill would define “country of concern” as meaning
the following countries:
●People’s Republic of China, including the Hong
Kong Special Administrative Region;
●Republic of Cuba;
●Islamic Republic of Iran;
●Democratic People’s Republic of Korea (North
Korea);
●Russian Federation;
●Bolivarian Republic of Venezuela; and
●Any organization listed on the federal foreign
terrorist list, except as otherwise provided by the
Fusion Center Oversight Board’s rules and
regulations.
The bill would exclude the Republic of China (Taiwan)
from the definition.
[Note: Excluding terrorist organizations, the list of
countries of concern would not be subject to modification by
the Fusion Center Oversight Board.]
Foreign Principal
The bill would define a “foreign principal” as:
6- 172 ●The government or any official of the government
of a country of concern;
●Any political party or any subdivision thereof, or
any member of a political party of a country of
concern;
●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. The
definition would also include any subsidiary owned
or wholly controlled by any such entity;
●Any agent of or any entity otherwise under the
control of a country of concern;
●Any individual who is a citizen or resident in a
country of concern and who is not a citizen or
lawful permanent resident of the United States; or
●Any individual, entity, or combination described
above that has a controlling interest in any
company formed for the purpose of holding any
interest in real property.
Real Property; Interest in Real Property
The bill would define “real property” as any real estate
located within Kansas except real property used exclusively
as a place of residence for human habitation.
The bill would define an “interest in real property” as:
●Ownership interest in any parcel of real property
acquired by purchase, gift, grant, devise, bequest,
or other transfer of such interest;
7- 172 ●Ownership or other interest in any easement or
other right of egress onto or across any parcel of
real property;
●Ownership or other interest in any right to any oil,
gas, minerals, or water located on or under any
parcel of real property; and
●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.
De minimis Interest in Real Property
A “de minimis interest” would mean any interest in real
property that is:
●The result of ownership of registered securities in a
publicly traded company; and
●Such ownership is:
○Less than 10.0 percent of any class of
registered securities or less than 10.0 percent
of the aggregate registered securities of
multiple classes of securities; or
○A non-controlling interest in an entity that is
controlled by a company that is registered
with the U.S. Securities and Exchange
Commission as an investment adviser under
the federal Investment Advisers Act of 1940
and is not a foreign entity.
Background
SB 172, as recommended by the Senate Committee on
Ways and Means, would have increased the KPERS lump-
sum death benefit from $4,000 to $6,000.
8- 172 The House Committee on Commerce, Labor and
Economic Development removed the contents of SB 172 and
inserted the contents of HB 2766, as amended. The
background for HB 2766 follows below.
HB 2766
HB 2766 was introduced by the House Committee on
Appropriations at the request of Representative Croft.
House Committee on Commerce, Labor and Economic
Development
In the House Committee hearing, proponent testimony
was provided by Representative Croft and representatives of
American Global Strategies and State Armor Action. The
proponents generally stated the bill would address national
security risks related to select countries and does so similar
to some neighboring states.
Written-only proponent testimony was provided by two
private citizens.
Opponent testimony was provided by representatives of
the Advance Power Alliance, CNano USA, Kansas
Agribusiness Retailers Association, Kansas Farm Bureau,
Kansas Livestock Association, and Syngenta. The opponents
generally stated the bill could force divestitures of Kansas
employers. They also noted other states’ laws and bills are
more confined in their distance radius around military
installations.
Written-only opponent testimony was provided by
representatives of the Kansas Chamber and Kansas Corn
Growers Association and a private citizen.
Neutral testimony was provided by representatives of
the Kansas Bureau of Investigation and the Office of the
9- 172 Attorney General. The testimony generally stated the bill
addresses a relevant security risk but needs to be amended
to most effectively accomplish its intent.
The House Committee amended the bill to:
●Add foreign terrorist organizations to the country of
concern definition;
●Authorize the Fusion Center Oversight Board to
adopt rules and regulations related to the listing of
foreign terrorist organizations;
●Add citizen or resident to the foreign principal
definition;
●Allow transactions that CFIUS concluded were not
an unresolved national security concern;
●Allow foreign principals with a national security
agreement with CFIUS or the U.S. Department of
Defense; and
●Allow such property to be subject to civil asset
forfeiture.
Fiscal Information
According to the fiscal note prepared by the Division of
Budget on the bill, as introduced, the Office of the Attorney
General states it would require 5.0 FTE positions at a total
cost of $440,000 in FY 2025 and $462,000 in FY 2026 from
the State General Fund to receive filings and notices,
investigate reports, take legal action, and prepare annual
reports and court documents, as required by the bill. In
addition, the Office states the bill would likely be challenged
in court which would require additional expenditures for
litigation costs. However, an estimate for litigation costs
cannot be determined.
10- 172 The Office of Judicial Administration states the bill could
increase the number of cases filed in district court because
the bill allows the Attorney General to bring a court action.
This would increase the time spent by district court judicial
and non-judicial personnel in processing, researching, and
hearing cases. The bill could also increase the collection of
docket fees, which would be deposited into the State General
Fund. However, the Office cannot determine a precise fiscal
effect of the bill.
The Department of Commerce, Adjutant General, and
Department of Revenue all state the bill would not have a
fiscal effect on agency operations.
Any fiscal effect associated with HB 2766 is not reflected
in The FY 2025 Governor’s Budget Report.
Real property; military installation; countries of concern; foreign principal; economic
development
11- 172