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ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
designated countries; land ownership; prohibition
Purpose
Prohibits a foreign principal from a designated country from, directly or indirectly, purchasing, leasing, owning, acquiring by grant or devising or having any other interest in real property in Arizona.
Background
Every deed or conveyance of real property must be signed by the grantor and must be duly acknowledged before an officer is authorized to take acknowledgments (A.R.S. § 33-401).
The U.S. Director of National Intelligence is required to post an Annual Threat Assessment of the U.S. Intelligence Community (Annual Threat Assessment) that focuses on the most direct, serious threats to the United States during the following year. The 2021, 2022 and 2023 Annual Threat Assessments identified China, Russia, Iran and North Korea as countries that pose a risk to the national security of the United States (U.S. DNI Annual Threat Assessment 2021; 2022; and 2023).
Current statute prohibits a public entity from entering into or renewing a contract with a company to acquire or dispose of services, supplies, information technology, goods or construction unless the contract includes a written certification that the company does not currently, and agrees for the duration of the contract that it will not use: 1) the forced labor of ethnic Uyghurs in the People's Republic of China; 2) any goods or services produced by the forced labor of ethnic Uyghurs in the People's Republic of China; or 3) any contractors, subcontractors or suppliers that use the forced labor or any goods or services produced by the forced labor of ethnic Uyghurs in the People's Republic of China (A.R.S. § 35-394).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits a foreign principal from a designated country, from directly or indirectly, purchasing, leasing, owning, acquiring by grant or devising or having any other interest in real property in Arizona.
2. Requires the Attorney General (AG) to enforce the outlined prohibition against land ownership.
3. Requires the AG, if the AG reasonably suspects a violation of the outlined prohibition against land ownership occurred, to commence an action in superior court in the county in which the real property is located.
4. Requires the superior court, if the superior court finds that title or any interest in real property was obtained in violation of the outlined prohibition against land ownership, to enter an order:
a) stating the court's findings;
b) divesting the person's interest; and
c) directing the board of supervisors to sell the real property in an outlined manner, except that the board of supervisors must forward any balance remaining after paying the taxes, interests, penalties, fees and costs to the state Treasurer for deposit in the state General Fund.
5. Prohibits a title insurer, title agent, escrow agent or real estate licensee from being held liable for any violation of the outlined prohibition against land ownership.
6. Stipulates that a violation of the outlined prohibition against land ownership is not the basis for a title insurance claim for any title insurance policy issues for property in Arizona.
7. Defines designated country as a country that is identified by the U.S. 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 U.S. intelligence community.
8. Defines foreign principal as:
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 a citizen of a designated country or 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; or
f) any business or other entity where the majority of the board of directors is controlled by an entity domiciled in a designated country.
9. Contains a statement of legislative findings.
10. Becomes effective on the general effective date.
Prepared by Senate Research
February 12, 2024
ZD/SB/cs