Constitutional Currents

• Publication year: 2024
• Citation: Vol. 93 No. 4 Pg. 11
• Pages: 11

Constitutional Currents93 J. Kan. Bar Assn 4, 11 (2024)Kansas Bar JournalAugust 2024

Restrictions on Foreign Ownership of Land

By Richard E. Levy University of Kansas School of Law

In the 2024 session, the Kansas Legislature approved SB 172,^[1] the Kansas Land and Military Installation Act. The KLMI would prohibit the ownership of land within 100 miles of a military installation in the state by certain foreign adversaries of the United States.^[2] Although the Legislature failed to override the governor's veto of the bill, it seems likely that the issue will resurface in the coming legislative session.^[3]

Indeed, there has in recent years been a strong push in many states to enact restrictions on foreign land ownership.^[4] In Kansas, the adoption of SB 172 came on the heels of multiple bills introduced during the 2023 legislative session,^[5] followed by hearings during the 2023 interim.^[6] In addition, Attorney General Kris Kobach appears to be a strong proponent of restrictions on foreign ownership of land in the state.^[7] It is therefore worth considering the constitutional implications of SB 172 or similar legislation that might be enacted in Kansas.

There is a long history of restrictions on foreign ownership of land in the United States, as such limitations date back to the time of the founding. Nonetheless, depending on their form, state laws restricting foreign ownership of land raise a number of constitutional issues, including both federalism issues and potential individual rights claims. My goal here is to provide some context for the consideration of such issues and assess potential constitutional challenges to SB 172. The discussion begins with a general description of the KLMI and then considers whether it might be preempted by federal foreign relations law and policy or might violate equal protection or property rights.

The Provisions of the KLMI

The KLMI, like similar legislation introduced or adopted in many other states, is largely a response to recent concerns about national security threats posed by the Peoples Republic of China.^[8] These concerns reflect federal intelligence assessments indicating that China is engaged in active intelligence gathering and cyberattacks against the United States,^[9] but they also align with a resurgence of antiAsian sentiment and a long history of racist laws targeting Chinese and other Asian people.^[10] Although the provisions of the KLMI apply more broadly to countries designated by the federal government as foreign adversaries or terrorist organizations, much of the rhetoric surrounding the bill focused on China.^[11]

Some of the earlier legislative activity in Kansas focused on concerns about rising land prices and land use, which might support a general ban on foreign ownership of agricultural land,^[12] but the KLMI is self-evidently focused on the possibility that land ownership by foreign adversaries would compromise the security of military bases and other sensitive facilities.^[13] Section 3(a) provides that "no foreign principal shall directly or indirectly own or acquire any interest in any real property located within 100 miles of the boundary of any military installation located in this state or any adjacent state." Critically, a "foreign principal" is defined in § 2(j) to include governments, officials, and other agents of "a country of concern," which is defined in § 2(c) to include foreign adversaries and foreign terrorist organizations as defined by the federal government.^[14] The KLMI also prohibits foreign principals from receiving "any direct benefit related to any economic development program,"^[15] but our focus here is on land ownership.

The KLMI recognizes that foreign principals might already own land or might later acquire it through gift, inheritance or devise, or in satisfaction of debts, but in such cases requires the foreign principal to register the acquisition with the attorney general and then divest itself of the property within a specified time period.^[16] The attorney general would be empowered to investigate violations of the KLMI, enter into agreements for divestiture, and file actions in court seeking orders of divestiture or civil forfeiture.^[17] Although the KLMI contains miscellaneous other provisions,^[18] its core purpose is to prevent land ownership by foreign adversaries within 100 miles of a military installation. Given the location of military bases in Kansas, including Fort Leavenworth, Fort Riley, and McConnell Air Force Base, the 100 mile radius would effectively bar land ownership by foreign principles throughout much of the state.^[19]

The KLMI and similar laws raise a number of constitutional issues. In Shen v. Simpson,^[20] for example, a federal district court is considering constitutional challenges to a similar Florida law based on equal protection, preemption by the Fair Housing Act, the void for vagueness doctrine, and foreign affairs preemption. Although the district court concluded that the plaintiffs were unlikely to succeed on the merits of their claims, the United States Court of Appeals for the 11th Circuit granted a narrow injunction prohibiting the enforcement of the Florida law against the plaintiffs case pending review on the merits.^[21] The court concluded that the plaintiffs had demonstrated a substantial likelihood of success on their claim that the state law was preempted by a federal statute regulating transactions implicating national security.^[22]

Similar challenges might be brought against the KLMI or similar legislation should it be enacted in Kansas. First, because the conduct of foreign relations is generally reserved to the federal government, state efforts to regulate in this area may be preempted. In addition, the KLMI might be challenged as discriminatory in violation of equal protection, or as an improper interference with property rights. The discussion that follows considers the viability of such claims.

Foreign Affairs Preemption

The United States Constitution assigns the power over foreign affairs to the national government,^[23] including the power to provide for national defense, to conduct diplomatic relations, to enter into treaties and other agreements with foreign governments, and to regulate commerce with foreign nations. Although the states' reserved police powers include the power to regulate land usage, restrictions on foreign ownership are invalid to the extent that they are in conflict with the Constitution or federal law. The primary focus here is whether the KLMI is preempted by the federal foreign relations power.^[24]

In several early decisions, the Supreme Court acknowledged the states' general authority to prohibit foreign land ownership, but nonetheless held that state action restricting land ownership was preempted by federal treaties.^[25] Thus, it is clear that state laws restricting foreign land ownership are invalid if they come into conflict with a treaty provision.^[26] Accordingly, the issue in such cases turns primarily on the proper interpretation of the treaty.^[27]

It is unlikely that the KLMI would implicate any current treaties, however. The United States has a number of treaties of friendship, commerce, and navigation with other countries.^[28] These treaties often include provisions that protect the right of nationals of other countries to own land in the United States, so a general ban on foreign land ownership (such as 2023 SB 100) might be preempted as applied to nationals of a party to such a treaty.^[29] Although a careful examination of every U.S. agreement with countries identified as foreign adversaries is beyond the scope of this discussion, it does not appear that the United States has any treaties granting the right to own property to nationals of countries listed as foreign adversaries or with foreign terrorist organizations.

The KLMI, like similar legislation introduced or adopted in many other states, is largely a response to recent concerns about national security threats posed by the Peoples Republic of China.

The more difficult problem for the KMLI would be preemption by federal statutes and policies adopted pursuant to the foreign relations power. In general terms, "a state law must yield when it conflicts with an express federal foreign policy" and "even in the absence of any express federal policy, a state law still may be preempted under the foreign affairs doctrine if it intrudes on the field of foreign affairs without addressing a traditional state responsibility"^[30] Of particular concern is the potential that state restrictions on foreign land ownership enacted in the name of national security might improperly interfere with carefully crafted federal efforts to engage with foreign adversaries and balance competing considerations.

In Zschernig v. Miller,^[31] a seminal decision on federal foreign affairs preemption, the Supreme Court invalidated an Oregon law prohibiting foreign nationals from inheriting land in the state unless their country of origin afforded similar rights to U.S. nationals. Coming at the height of the Cold War, this provision targeted communist countries that did not recognize private property rights. The Court concluded that the Oregon law interfered with the conduct of foreign policy by the federal government because it required state courts to examine and pass judgment on the sovereign acts of a foreign nation and because the law would upset the delicate balance of competing foreign policy considerations reflected in federal law and policy.

Following Zschernig, other decisions have invalidated state laws imposing sanctions on foreign governments even when the federal government disapproved of the targeted country's conduct. In Crosby v. National Foreign Trade Council,^[32]for example, the Supreme Court invalidated a state law preventing state agencies from purchasing goods or services from companies doing business with...