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AN ACT relating to the acquisition and ownership of real property by a foreign 1
principal. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
SECTION 1. A NEW SECTION OF KRS CHAPTER 381 IS CREATED TO 4
READ AS FOLLOWS: 5
As used in Sections 1 to 3 of this Act: 6
(1) "Adversarial foreign government" means a government or state-controlled 7
enterprise of a foreign nation determined by the United States Secretary of 8
Commerce to have engaged in a long-term pattern or serious instances of 9
conduct significantly adverse to the national security of the United States or the 10
security and safety of the people of the United States; 11
(2) "Agricultural land" has the same meaning as in KRS 132.010; 12
(3) "De minimis indirect interest" means ownership of registered equities in a 13
publicly traded company, and the ownership interest is either: 14
(a) Less than five percent (5%) of any class of registered equities or less than 15
five percent (5%) in the aggregate in multiple classes of registered equities; 16
or 17
(b) A noncontrolling interest in an entity controlled by a company that is both 18
registered with the United States Securities and Exchange Commission as 19
an investment adviser under the Investment Advisers Act of 1940, as 20
amended, and is not a foreign entity; 21
(4) "Foreign principal" means: 22
(a) An adversarial foreign government; 23
(b) An official of an adversarial foreign government; or 24
(c) A citizen of an adversarial foreign government; and 25
(5) "State-controlled enterprise" means a business enterprise in which a foreign 26
government has a controlling interest. 27 UNOFFICIAL COPY 24 RS BR 2048
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SECTION 2. A NEW SECTION OF KRS CHAPTER 381 IS CREATED TO 1
READ AS FOLLOWS: 2
(1) As used in this section, "department" means the Kentucky Department of 3
Agriculture. 4
(2) Notwithstanding any other provision of law to the contrary, a foreign principal 5
shall not directly or indirectly own, have a controlling interest in, or acquire by 6
purchase, grant, devise, or descent agricultural land or any interest, except a de 7
minimis indirect interest, in agricultural land in this Commonwealth. 8
(3) A foreign principal that directly or indirectly owns or acquires agricultural land 9
or any interest in agricultural land in this Commonwealth before the effective 10
date of this Act may continue to own or hold the agricultural land or interest, but 11
shall not purchase or otherwise acquire by grant, devise, or descent any 12
additional agricultural land or interest in agricultural land in this 13
Commonwealth. 14
(4) (a) A foreign principal that directly or indirectly owns or acquires agricultural 15
land or any interest in agricultural land in this Commonwealth before the 16
effective date of this Act shall register the ownership or interest with the 17
department by January 1, 2025. The department shall, by promulgation of 18
an administrative regulation in accordance with KRS Chapter 13A, 19
establish a form for the registration required under this subsection. The 20
form shall be available on the department's website and shall include, at a 21
minimum, the following: 22
1. The name of the owner of the agricultural land or the owner of the 23
interest in agricultural land; 24
2. The address of the agricultural land, the property value 25
administrator's parcel identification number, and the property's legal 26
description; and 27 UNOFFICIAL COPY 24 RS BR 2048
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3. The number of acres of the agricultural land. 1
(b) A foreign principal that fails to timely file a registration with the department 2
shall be subject to a civil penalty of one thousand dollars ($1,000) for each 3
day that the registration is not timely filed or is incomplete. The department 4
may place a lien against the unregistered agricultural land for the unpaid 5
balance of any penalties assessed under this paragraph. 6
(5) Notwithstanding subsection (2) of this section, a foreign principal may acquire 7
agricultural land on or after the effective date of this Act by devise or descent, 8
through the enforcement of security interests, or through the collection of debts, 9
provided that the foreign principal sells, transfers, or otherwise divests itself of 10
the agricultural land within three (3) years after acquiring the agricultural land. 11
(6) (a) At the time of sale or transfer, a grantee of agricultural land or an interest 12
in agricultural land shall provide an affidavit signed under penalty of 13
perjury attesting that the grantee is: 14
1. Not a foreign principal; and 15
2. In compliance with the requirements of this section. 16
(b) The grantee shall file the completed affidavit with the department within ten 17
(10) days of the transfer. 18
(c) The failure to verify execution of the affidavit or the failure of the grantee 19
to file the affidavit with the department shall not: 20
1. Affect the title or insurability of the title for the agricultural land; or 21
2. Subject the closing agent to civil or criminal liability, unless the 22
closing agent has actual knowledge that the transaction will result in a 23
violation of this section. 24
(d) The Kentucky Real Estate Commission shall promulgate regulations in 25
accordance with KRS Chapter 13A to implement this subsection, including 26
regulations establishing the form for the affidavit required under this 27 UNOFFICIAL COPY 24 RS BR 2048
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subsection. 1
(7) (a) Agricultural land or an interest in agricultural land that is owned or 2
acquired in violation of this section shall be forfeited to the Commonwealth. 3
(b) The department shall initiate a civil action in the Circuit Court of the 4
county in which the property is located for the forfeiture of the agricultural 5
land or any interest in the agricultural land. 6
(c) Upon filing the action with the court, the department shall file a notice of lis 7
pendens in the office of the county clerk of the county in which the property 8
is located. The defendant may at any time petition to modify or discharge 9
the lis pendens based upon a finding that there is no probable cause to 10
believe that the agricultural land, or any portion of the agricultural land, is 11
owned or held in violation of this section. 12
(d) If the court finds that the agricultural land, or any portion of the 13
agricultural land, is owned or held in violation of this section, the court 14
shall enter a final judgment of forfeiture vesting title to the agricultural 15
land in this Commonwealth, subject only to the rights and interests of bona 16
fide lienholders. The final judgment shall relate back to the date of the lis 17
pendens notice. 18
(e) The department shall sell the agricultural land subject to a final judgment 19
of forfeiture. Any proceeds from the sale shall first be paid to any 20
lienholders of the agricultural land, followed by payment of any outstanding 21
fines assessed pursuant to this section, after which the department shall be 22
reimbursed for all costs related to the forfeiture civil action and any costs 23
related to the sale of the agricultural land. Any remaining proceeds shall be 24
paid to the property owner. 25
(f) At any time during the forfeiture proceeding the department may seek an ex 26
parte order of seizure of the agricultural land upon a showing that the 27 UNOFFICIAL COPY 24 RS BR 2048
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defendant’s control of the agricultural land constitutes a clear and present 1
danger to the Commonwealth. 2
(8) A foreign principal that violates this section shall be guilty of a Class A 3
misdemeanor. 4
(9) A person who knowingly sells agricultural land or any interest in agricultural 5
land in violation of this section shall be guilty of a Class A misdemeanor. 6
(10) The department shall promulgate administrative regulations in accordance with 7
KRS Chapter 13A to implement this section. 8
SECTION 3. A NEW SECTION OF KRS CHAPTER 381 IS CREATED TO 9
READ AS FOLLOWS: 10
(1) As used in this section, "cabinet" means the Cabinet for Economic Development. 11
(2) Notwithstanding any other provision of law to the contrary, a foreign principal 12
shall not directly or indirectly own, or have a controlling interest in, or acquire by 13
purchase, grant, devise, or descent any interest, except a de minimis indirect 14
interest, in real property on or within ten (10) miles of any military installation in 15
this Commonwealth. 16
(3) A foreign principal that directly or indirectly owns or acquires any interest in real 17
property on or within ten (10) miles of any military installation in this 18
Commonwealth before the effective date of this Act may continue to own or hold 19
the real property, but shall not purchase or otherwise acquire by grant, devise, or 20
descent any additional real property on or within ten (10) miles of any military 21
installation in this Commonwealth. 22
(4) (a) A foreign principal shall register with the cabinet if the foreign principal 23
owns or acquires real property on or within ten (10) miles of any military 24
installation in this Commonwealth as authorized under subsection (5) of 25
this section or if the foreign principal owned or acquired an interest, other 26
than a de minimis indirect interest, in the real property before the effective 27 UNOFFICIAL COPY 24 RS BR 2048
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date of this Act. The cabinet shall, by promulgation of an administrative 1
regulation in accordance with KRS Chapter 13A, establish a form for the 2
registration required under this subsection. The form shall be available on 3
the cabinet's website and shall include, at a minimum, the following: 4
1. The name of the owner of the real property; and 5
2. The address of the real property, the property valuation 6
administrator's parcel identification number, and the property's legal 7
description. 8
(b) A foreign principal that fails to timely file a registration with the cabinet 9
shall be subject to a civil penalty of one thousand dollars ($1,000) for each 10
day that the registration is not timely filed or is incomplete. A foreign 11
principal shall register a property interest owned before the effective date of 12
this Act by December 31, 2024. The registration shall be considered 13
untimely after January 31, 2025. A foreign principal who owns or acquires 14
real property on or after the effective date of this Act, as authorized under 15
subsection (5) of this section, shall register the real property within thirty 16
(30) days after the property is owned or acquired. The cabinet may place a 17
lien against the unregistered real property for the unpaid balance of any 18
penalties assessed under this paragraph. 19
(5) Notwithstanding subsection (2) of this section, a foreign principal may purchase 20
one (1) residential real property that is up to two (2) acres in size if: 21
(a) The parcel is not on or within five (5) miles of any military installation in 22
this Commonwealth; 23
(b) The person has a current verified United States visa that is not limited to 24
authorizing tourist-based travel or the person has official documentation 25
confirming that the person has been granted asylum in the United States, 26
and the visa or documentation authorizes the person to be legally present 27 UNOFFICIAL COPY 24 RS BR 2048
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within this Commonwealth; and 1
(c) The purchase is recorded in the name of the person who holds the visa or 2
official documentation described in paragraph (b) of this subsection. 3
(6) Notwithstanding subsections (2) and (3) of this section, a foreign principal may 4
acquire real property or any interest in real property that is on or within ten (10) 5
miles of any military installation in this Commonwealth on or after the effective 6
date of this Act by devise or descent, through the enforcement of security 7
interests, or through the collection of debts, provided that the foreign principal 8
sells, transfers, or otherwise divests itself of the real property within three (3) 9
years after acquiring the real property. 10
(7) (a) At the time of sale or transfer, a grantee of the real property that is on or 11
within ten (10) miles of any military installation in this Commonwealth 12
shall provide an affidavit signed under penalty of perjury attesting that the 13
grantee is: 14
1. Neither a foreign principal nor a foreign principal prohibited from 15
purchasing the subject real property; and 16
2. In compliance with the requirements of this section. 17
(b) The grantee shall file the completed affidavit with the cabinet within ten 18
(10) days of the transfer. 19
(c) The failure to verify execution of the affidavit or the failure of the grantee 20
to file the affidavit with the cabinet shall not: 21
1. Affect the title or insurability of the title for the real property; or 22
2. Subject the closing agent to civil or criminal liability, unless the 23
closing agent has actual knowledge that the transaction will result in a 24
violation of this section. 25
(d) The Kentucky Real Estate Commission shall promulgate regulations in 26
accordance with KRS Chapter 13A to implement this subsection, including 27 UNOFFICIAL COPY 24 RS BR 2048
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regulations establishing the form for the affidavit required under this 1
subsection. 2
(8) (a) If any real property is owned or acquired in violation of this section, the real 3
property shall be forfeited to the Commonwealth. 4
(b) The cabinet shall initiate a civil action in the Circuit Court of the county in 5
which the property is located for the forfeiture of the real property or any 6
interest in the real property. 7
(c) Upon filing the action with the court, the cabinet shall file a notice of lis 8
pendens in the office of the county clerk of the county in which the property 9
is located. The defendant may at any time petition to modify or discharge 10
the lis pendens based upon a finding that there is no probable cause to 11
believe that the real property, or any portion of the real property, is owned 12
or held in violation of this section. 13
(d) If the court finds that the real property, or any portion of the real property, 14
is owned or held in violation of this section, the court shall enter a final 15
judgment of forfeiture vesting title to the real property in this 16
Commonwealth, subject only to the rights and interests of bona fide 17
lienholders. The final judgment shall relate back to the date of the lis 18
pendens notice. 19
(e) The cabinet shall sell the real property subject to a final judgment of 20
forfeiture. Any proceeds from the sale shall first be paid to any lienholders 21
of the land, followed by payment of any outstanding fines assessed pursuant 22
to this section, after which the cabinet shall be reimbursed for all costs 23
related to the forfeiture civil action and any costs related to the sale of the 24
land. Any remaining proceeds shall be paid to the property owner. 25
(f) At any time during the forfeiture proceeding the cabinet may seek an ex 26
parte order of seizure of the real property upon a showing that the 27 UNOFFICIAL COPY 24 RS BR 2048
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defendant’s control of the real property constitutes a clear and present 1
danger to the state. 2
(9) A foreign principal that purchases or acquires real property or any interest in 3
real property in violation of this section shall be guilty of a Class A misdemeanor. 4
(10) A person who knowingly sells real property or any interest in real property in 5
violation of this section shall be guilty of a Class A misdemeanor. 6
(11) The cabinet shall promulgate administrative regulations in accordance with KRS 7
Chapter 13A to implement this section. 8
Section 4. KRS 381.320 is amended to read as follows: 9
Any alien, not an enemy, may take and hold any personal property except chattels real. If 10
such alien resides within this Commonwealth[state] he or she may take and hold, subject 11
to the limitations set forth in Sections 2 and 3 of this Act, any lands for the purposes of 12
residence, or of occupation by him or her or his or her servants, or for the purpose of any 13
business, trade, or manufacture, for as long as he or she remains a resident of the 14
Commonwealth[state]. An alien so taking and holding shall have like rights, remedies 15
and exemptions concerning such property as if he or she were a citizen of the United 16
States. 17