New Jersey-2024-A1276-Introduced

An Act concerning the ownership of agricultural land in the State, and supplementing Title 4 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

"Agricultural land" means land devoted to agricultural use.

"Agricultural use" means the same as the term is defined in subsection b. of section 3 of P.L.1983, c.32 (C.4:1C-13).

"Department" means the Department of Agriculture.

"Foreign government" means any government other than the government of the United States or of its states, territories, possessions, or any political subdivision thereof. "Foreign government" includes an agent, trustee, or fiduciary thereof, acting for a foreign government.

"Foreign person" means any individual who is not a citizen of the United States and is a nonresident alien of the United States or one of its states, territories, or possessions; any corporation, partnership, association, or other legal entity created under the laws of a foreign government; or any corporation, partnership, association, or other legal entity, created under the laws of the United States or any of its political subdivisions, the majority of the ownership of which is directly or indirectly held, legally or beneficially, by one or more foreign governments, by one or more foreign persons, by one or more legal entities created under the laws of a foreign government, or by any combination thereof. "Foreign person" includes an agent, trustee, or fiduciary thereof, acting for a foreign person.

"Secretary" means the Secretary of Agriculture.

2. a. Notwithstanding any law, rule, or regulation to the contrary, no foreign government or foreign person shall acquire, purchase, or otherwise obtain a legal, beneficial, or other interest in any agricultural land in the State on or after the effective date of this act.

b. Any foreign government or foreign person owning or holding an interest in agricultural land in the State upon the effective date of this act may continue to own or hold an interest therein for a maximum of five years after the effective date of this act, and shall not acquire, purchase, or otherwise obtain an interest in, any other agricultural land, in the State, on or after the effective date of this act, except:

(1) pursuant to a process of law involving the collection of debt the execution of a deed in lieu of foreclosure, the forfeiture of a contract for deed, or the imposition of a lien or claim on the land, whether created by a mortgage or otherwise, in which case, the provisions of subsection d. of this section shall apply; or

(2) by devise or descent, or through the establishment of a bona fide encumbrance on agricultural land taken for the purposes of security, in which case, the provisions of subsection f. of this section shall apply.

c. A foreign government or foreign person owning or holding an interest in agricultural land in the State upon the effective date of this act shall sell or otherwise convey the ownership of, or interest in, the agricultural land within five years after the effective date of this act, with a deed of easement attached to the land requiring the land to remain devoted to agricultural use. The land or interest therein shall be sold or conveyed to an individual, trust, corporation, partnership, or other business entity that is not a foreign government or foreign person subject to the provisions of this act.

d. (1) Agricultural land that is acquired by a foreign government or foreign person, on or after the effective date of this act, pursuant to the exception established in paragraph (1) of subsection b. of this section, shall be sold or conveyed, by the foreign owner thereof, within two years after title to the land is transferred thereto. Upon such sale or conveyance of the land, a deed of easement shall be attached to the land requiring the land to remain devoted to agricultural use.

(2) Whenever a land assessment valuation is undertaken in association with a foreign government or person's acquisition of agricultural land, pursuant to paragraph (1) of subsection b. of this section, the valuation of the land shall incorporate and reflect the requirement that the land is to remain devoted to agricultural use.

(3) Land sold or conveyed pursuant to this subsection shall be sold or conveyed to an individual, trust, corporation, partnership, or other business entity that is not a foreign government or foreign person subject to the provisions of this act.

e. A foreign government or foreign person shall not transfer title or interest in agricultural land to another foreign government or foreign person, except by devise or descent, as authorized pursuant to paragraph (2) of subsection b. of this section.

f. Subsection a. of this section shall not apply to agricultural land that is acquired, by a foreign government or foreign person, pursuant to paragraph (2) of subsection b. of this section, through devise or descent or the establishment of a bona fide encumbrance on agricultural land taken for the purposes of security, including land for which title has been transferred, pursuant to subsection e. of this section, from one foreign government or foreign person to another.

g. Any provision of this section that is inconsistent with, or in violation of, any treaty between the United States and another country shall not apply to the foreign government or a foreign person of the country that is party to such treaty.

3. This act shall take effect immediately.

STATEMENT

This bill would prohibit any foreign government or foreign person from acquiring, purchasing, or otherwise obtaining a legal, beneficial, or other interest in any agricultural land in the State on or after the bill's effective date, with limited exceptions, as described below.

The bill would permit a foreign government or foreign person that already owns or holds an interest in agricultural land in the State, on the bill's effective date, to continue to own or hold the interest in such land for a maximum of five years thereafter. Within five years after the bill's effective date, the foreign government or foreign person would be required to sell or otherwise convey the ownership of, or interest in, the agricultural land to an individual, trust, corporation, partnership, or other business entity that is not a foreign government or foreign person, with a deed of easement attached to the land requiring the land to remain devoted to agricultural use.

The bill would provide the following exceptions to the general prohibition on the continued foreign ownership of agricultural land:

1) a foreign government or foreign person may acquire agricultural land, on or after the bill's effective date, through a process of law involving the collection of debt, the execution of a deed in lieu of foreclosure, the forfeiture of a contract for deed, or the imposition of a lien or claim on the land, whether by mortgage or otherwise, but such person or government would then be required to sell or convey the land, within two years after the transfer of title thereto, to an individual, trust, corporation, partnership, or other business entity that is not a foreign government or foreign person, with a deed of easement attached to the land requiring the land to remain devoted to agricultural use; and

2) the provisions of the bill would not be applicable to agricultural land acquired by devise or descent or pursuant to a bona fide encumbrance established on agricultural land taken for the purposes of security.

The bill further provides that, whenever a land assessment valuation is undertaken in association with a foreign government or person's acquisition of land pursuant to a process of law involving the collection of debt, the execution of a deed in lieu of foreclosure, the forfeiture of a contract for deed, or the imposition of a lien or claim on the land, whether created by a mortgage or otherwise, the valuation is to incorporate and reflect the fact that the land is to remain devoted to agricultural use.

Finally, the bill provides that any provision thereof which is inconsistent with, or in violation of, any treaty between the United States and another country would not apply to any foreign government or foreign person residing in a country that is party to the treaty.

This bill establishes prohibitions on foreign ownership of agricultural land similar to those established in Iowa law and provisions in other state laws that restrict foreign ownership of agricultural land. Nine states have laws restricting foreign ownership of agricultural land: Iowa, Kansas, Missouri, Minnesota, Nebraska, North Dakota, Oklahoma, South Dakota, and Wisconsin. Iowa has imposed restrictions on the foreign ownership of land since the 19th century. Since the 1970s when Iowa's law became a near-complete ban on foreign ownership, Iowa's law is regarded as one of the strictest in the nation.