House Engrossed Senate Bill

designated countries; land ownership; prohibition

State of Arizona

Senate

Fifty-sixth Legislature

Second Regular Session

2024

SENATE BILL 1403

An Act

amending title 33, chapter 4, article 3, Arizona Revised Statutes, by adding section 33-443; relating to property conveyances and deeds.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 33, chapter 4, article 3, Arizona Revised Statutes, is amended by adding section 33-443, to read:

START_STATUTE33-443. Prohibition against land ownership; foreign principals; enforcement; exception; definitions

A. Notwithstanding any other law and except as provided in subsections F and G of this section, a foreign principal from a designated country may not, directly or indirectly, purchase, own, acquire by grant or devise or have a SUBSTANTIAL interest in real property in this state.

B. The attorney general shall enforce this section. if the attorney general reasonably suspects a violation of this section occurred, the attorney general shall commence an action in superior court in the county in which the real property is located.

C. If the superior court finds that title or a substantial interest in real property was obtained in violation of subsection A of this section, the court shall enter an order:

1. Stating the court's findings.

2. Divesting the person's interest.

3. Directing the board of supervisors to sell the real property in a manner that is consistent with title 42, chapter 18, article 7, except that the board of supervisors shall distribute the remaining proceeds after paying taxes, interests, penalties, fees and costs in the following order of priority:

(a) to any valid lienholder for the value of their oUTSTANDING lien that is attached to the real property.

(b) To the appropriate county TREASURER and the attorney general to reimburse the Attorney general and the appropriate BOARD of supervisors for expenses incurred in the PROSECUTION of a violation of this section.

(c) TO the PROPERTY owner in an amount equal to the REMAINING proceeds of the sale, if any.

d. A title insurer, title agent, escrow agent or real estate licensee may not be held liable for any violation of this section.

E. A violation of this SECTION may not be the basis for a title insurance claim for any title insurance policy issued for property in this state.

F. a foreign PRINCIPAL may PURCHASE, own, ACQUIRE by grant or devise or have an interest in land in this state if all of the following CONDITIONS apply:

1. the Parcel is RESIDENTIAL real property.

2. The Parcel is two acres or less.

3. The foreign PRINCIPAL is a NATURAL person.

4. the parcel the foreign PRINCIPAL owns or is purchasing or ACQUIRING an INTEREST in is the foreign PRINCIPAL's sole real PROPERTY INTEREST in this state.

5. The parcel is located fifty miles or more from any MILITARY INSTALLATION, CRITICAL INFRASTRUCTURE or known vector route in this state.

6. The parcel is located twenty-five miles or more from an air force range with a total land area between one-half and two and one-half million acres.

7. The foreign PRINCIPAL POSSESSes a current VERIFIED United States visa that is not limited to tourist-based travel or OFFICIAL DOCUMENTATION that the United States GOVERNMENT has granted the FOREIGN PRINCIPAL asylum in the United States. For the PURPOSES of this paragraph, any documentation shall be in the name of the natural person.

g. a FOREIGN PRINCIPAL may acquire real property or any interest in real property in this state by devise or descent, the ENFORCEMENT of security interests or the collection of debt, if the FOREIGN PRINCIPAL sells, TRANSFERS or OTHERWISE DIVESTS from the real property within three years after acquiring the real property.

h. For the purposes of this section:

1. "CRITICAL iNFRASTRUCTURE" has the same meaning prescribed in section 41-1801.

2. "Designated country" means a country that is identified by the United States director of national intelligence as a country that poses a risk to the national security of the United States in each of the three most recent annual threat assessments of the United States intelligence community issued pursuant to section 108b of the national security act of 1947 (50 United States Code section 3043b).

3. "Foreign principal" means any of the following:

(a) The government or any official of the government from a designated country.

(b) A political party or member of a political party from a designated country.

(c) Any person who is domiciled in a designated country and who is not a citizen or lawful permanent resident of the United States.

(d) any BUSINESS or other entity that is DOMICILED in a DESIGNATED country.

(e) any business or other entity in which more than the majority of the business's or entity's ownership belongs to an ENtITY DOMICILED in a DESIGNATED country.

(f) any business or other entity in which the majority of the board of directors is controlled by an ENTITY DOMICILED in a designated country.

4. "MILITARY INSTALLATION" has the same meaning prescribed in section 26-261.

5. "SUBSTANTIAL interest" means an interest of thirty percent or more. END_STATUTE

Sec. 2. Applicability

A. A foreign principal that directly or indirectly owns or acquires any interest in real property in this state on or before the effective date of this act may continue to own or hold such real property.

B. A foreign principal that directly or indirectly owns or acquires any interest in real property in this state on or before the effective date of this act may not purchase or acquire any additional real property in this state except as provided in section 33-443, subsections F and G, Arizona Revised Statutes, as added by this act.

Sec. 3. Legislative findings

The legislature finds:

1. This act is necessary to protect this state from global security threats and halt or reverse the influence operation of the Chinese Communist Party or other adverse nations or entities that pose a risk to the national security of the United States.

2. This act is necessary to protect the critical infrastructure of this state.

3. This act's protection of this state's military, commercial and agricultural assets from foreign espionage and sabotage will place this state in a significantly stronger position to withstand national security threats.

4. This act is necessary to protect this state's F-35 equipment and technology and the F-35's squadron's critical mission to protect our national security.