Growing restrictions on foreign entities in state laws: tensions between the U.S. and China. Florida's constitutional standoff. SB 264 in Shen vs. Simpson.

Growing restrictions on foreign entities in state laws: tensions between the U.S. and China. Florida's constitutional standoff. SB 264 in Shen vs.</div><div class=

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Geopolitical tensions and strategic competition between the United States and China have increasingly impacted the investment landscape in recent years, affecting established regulatory frameworks such as the Committee on Foreign Investment in the United States (CFIUS) as well as prompting non-standard state actors to take action.

Recently, plans to build a feed mill in North Dakota have caused state governments to take notice of their role in protecting both state and national security. In December 2022, CFIUS determined that it had no jurisdiction to review the proposed acquisition of land in North Dakota by China's Fufeng Group for the purpose of building a feed''s $700 million dollar plant. The Fufeng case has sparked considerable debate about national security and geopolitics in Washington, given the land's proximity to Grand Forks Air Force Base.

Since then, lawmakers in many U.S. states have been quick to introduce or pass legislation restricting foreign ownership of land in their states by governments, individuals, and/or organizations associated with certain "foreign adversaries" of the United States. While the bills often include other "foreign adversaries," most are particularly focused on China and Chinese investment. The list of states that have enacted such legislation in 2023 includes Alabama, Arkansas, Florida, Idaho, Indiana, Louisiana,''Mississippi, Montana, North Dakota, Oklahoma, South Dakota, Tennessee, Utah, West Virginia and Virginia - 20 more states have introduced bills that would regulate foreign ownership of real estate if passed.

In this post, we will discuss:

typical aspects of state laws relating to certain foreign real estate transactions;
a new trend in state laws governing the acquisition of real estate by certain foreign persons;
Special attention is being paid to Florida's SB 264;
and federal activity in this area and the potential impact on state initiatives;