Gov. Kristi Noem’s bill to establish a panel that reviews agricultural land purchases by foreign individuals and groups dropped on Tuesday.
Senate Bill 185 reaffirms a 1979 law that prevents foreign governments from acquiring no more that 160 acres of agricultural land in South Dakota. It adds “foreign person, foreign entity” to the list.
The bill establishes a five-person panel to vet any purchases by a foreign person, entity or government. The panel is called the Committee on Foreign Investment in the United States—South Dakota.
Noem announced the bill back in the middle of December. During her state of the state address she said she was working with Republicans Senator Erin Tobin and Representative Gary Cammack to block purchases of South Dakota agriculture land from “nations that hate us.”
“This new board will include ag experts, national and state security experts, and legal counsel,” Noem said. “It will review any purchase, lease, or transfer of South Dakota agriculture land by a foreign person, company, or entity and make its recommendation to the governor whether the purchase should be approved.”
Noem has pitched this as a bill to prevent China from purchasing ag land in the state.
She has taken a tough stance on China in recent months. First, by banning the social media platform TikTok on state devices and then directing the investment council to review all state investments for potential ties to China.
When it comes to ag land, Noem points to an incident that occurred in North Dakota where a Chinese company purchased property about 20 miles from the Grand Forks Air Force Base.
"We cannot allow Chinese interests to purchase any South Dakota ag land, much less land near any military base or critical state infrastructure,” Noem said. “South Dakota will set the example here, too."
The Committee on Foreign Investment in the United States, or CFIUS, already exists at the federal level. South Dakota panel will mirror the work done there, but focus on agriculture property.
If passed, the panel is tasked with investigating and reviewing agricultural land transaction to “prevent aliens and foreign persons, including foreign governments from gaining undue control or influence” over the state’s food supply, critical infrastructure or “impairing the security or prosperity of the state.”
The panel will review any purchase, investment (regardless of the percentage interest), inheritance or lease of agriculture land starting after July 1, 2023.
Anyone subject to this law must let the panel know of its intent to acquire ag land and apply for approval. CFIUS—SD will review the application, which must include relevant titles, deeds, real estate transaction documents, and financial documentation related to funding of the ag land purchase. The applicant must also submit documents confirming their identity, all owner or investors affiliated with the applicant, and any “ultimate beneficial owner or investor that exercises control or influence over the applicant.”
Broadly, this bill would give the panel discretion to request any document relevant to their investigation. The review process could last up to a year.
The panel will recommend approval or denial of an ag land transaction to the governor and the governor will make the final decision.
According to a fact sheet by the governor's office, denials are appealable through the normal appellate procedure. The bill says the applicant has ten days after “the notification that the committee recommends that the governor deny the application, but before the governor renders a final decision,” to submit a letter to convince the governor to disagree with the committee.
State ag groups are still pretty silent on the bill. However, Breitbart—a national conservative media outlet—obtained an email sent by a coalition of the state’s ag groups who are ‘deeply concerned’ about the legality and constitutionality of drafts the governor’s office circulated. Two South Dakota agriculture groups are supportive of a bill South Dakota Republican US Senator Mike Rounds introduced Wednesday morning. The PASS Act is supported by the South Dakota Farmers Union and the South Dakota Sheep Growers Association.
Rounds’s bill is co-sponsored with Montana Democratic Senator Jon Tester. It would blacklist China, Russia, Iran and North Korea from investing in, purchasing or otherwise acquiring land or businesses involved in agriculture.
“While I feel securing agriculture land owned by family farmers and ranchers is best served by ensuring they are profitable from the goods they produce and sell at the market place, Senators Rounds and Testers’ PASS bill can be a good second position for food and national security for all American families both consumers and producers alike,” said Doug Sombke, President of South Dakota Farmers Union.
SB 185 bill has been introduced in the Senate. As of Wednesday morning it has not been assigned to a committee or scheduled for a hearing.
