Prohibits ownership of real property in State by adverse foreign governments and certain associated persons.

A4385

ASSEMBLY, No. 4385

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Assemblyman� ALEX SAUICKIE

District 12 (Burlington, Middlesex, Monmouth and Ocean)

SYNOPSIS

���� Prohibits ownership of real property in State by
adverse foreign governments and certain associated persons.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning the ownership of real property by adverse
foreign government interests and supplementing chapter 3 of Title 46 of the
Revised Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� The Legislature finds and
declares that:

���� a.� A security threat is
exacerbated if the actor posing the threat owns real property in the area being
threatened;

���� b.� The People�s Republic of
China (PRC), Russia, Iran, and North Korea have been listed as threats to the
national security of the United States and its citizens in each of the 2023,
2024, and 2025 Annual Threat Assessments of the United States Intelligence
Community;

���� c.� The PRC and other
adversaries continually employ aggressive efforts to target and steal sensitive
information, research, and technology of the United States, resulting in
billions of dollars in economic losses, damage to the competitiveness of the United
States, and the transfer of cutting-edge technology to adversarial militaries;

���� d.� Since 2023, United States
authorities have charged more than 20 individuals for activities related to
intellectual property theft and for violations of sanctions or export controls
for China, Iran, and Russia;

���� e.� PRC-affiliated cyber
actors are known to exploit vulnerabilities and publicly-available tools to
pre-position efforts to disrupt the nation�s critical infrastructure;

���� f.� Russian-affiliated cyber
actors are known to continually seek access to government networks, including
those of state and local governments, for espionage purposes, posing a threat
to critical infrastructure;

���� e.� North Korean cyber actors
continuously target financial entities within the United States, including
venture capital firms, exchanges, and individual accounts, to finance
Pyongyang�s strategic priorities and weapons programs, posing a continuing threat
to national security;

���� g.� The Iranian government and
other affiliated cyber actors are known to target the critical infrastructure
of the United States, in retaliation for support provided to Israel, using a
range of tactics, including exploiting publicly known software and hardware
vulnerabilities, social engineering techniques, and publicly available
cybersecurity tools;

���� h.� As the United States
Supreme Court observed in Board of Regents v. Roth, 408 U.S. 564 (1972),
property interests are not created by the United States Constitution, but by
independent sources such as state law;

���� i.� Accordingly, the
Legislature acts within the scope of its traditional competence when it
provides statutory requirements governing the disposition of real property and
restrictions on ownership, despite any incidental effect on foreign policy and
affairs; and

���� j.� Therefore, it is
appropriate, and a narrowly tailored remedy for the Legislature to prohibit the
ownership of real property in the State by adverse foreign governments and
persons affiliated with those governments, in order to achieve the compelling government
interest of the security of this State and its residents.�

���� 2.� As used in P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill):

���� "Adverse foreign
government" means any government other than the government of the United
States or any of its states, territories, possessions, or any political
subdivision thereof that is listed, or a military company of which is listed,
as posing a threat of terrorism and transnational repression, or as a threat to
the critical infrastructure or economic security of the United States, in at
least one of the three most recent Annual Threat Assessments of the U.S.
Intelligence Community issued pursuant to section 108B of the National Security
Act of 1947 (50 U.S.C. s.3043b).� "Adverse foreign government"
includes an agent, trustee, or fiduciary thereof, acting on behalf of an
adverse foreign government.

���� "
Beneficial
owner
"
means, with respect to a
partnership, corporation, association, limited liability company, trust, or
other legal entity, or an affiliate, subsidiary, or holding company thereof, an
individual who, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise, exercises substantial control over
the entity, or owns or controls not less than 10 percent of the ownership
interests of the entity.�
"
Beneficial
owner
"
shall not include:

���� (1)� an individual whose only
interest in a corporation, limited liability company, or other similar entity
is through a right of inheritance; or

���� (2)� a creditor of a
corporation, limited liability company, or other similar entity.

���� "Person of an adverse
foreign country" means:

���� (1)�� any individual who is
not a citizen of the United States, is not an alien friend as provided in
R.S.46:3-18, and is a nonresident alien of the United States or one of its
states, territories, or possessions, and is currently, or has been within the
last five years, a resident or citizen, or both, of a country controlled by an
adverse foreign government;

���� (2)�� a partnership,
corporation, association, limited liability company, trust, or other legal
entity created under the laws of an adverse foreign government; or

���� (3)�� a partnership,
corporation, association, limited liability company, trust, or other legal
entity created under the laws of the United States or any of its political
subdivisions, which is directly or indirectly held, owned, managed, or
controlled, legally or as a beneficial owner, by one or more adverse foreign
governments, by one or more persons of adverse foreign countries, by one or
more legal entities created under the laws of an adverse foreign government, or
by any combination thereof.�

���� "Real property"
means property that shall include, but shall not be limited to:

���� a.� agricultural land;

���� b.� an improvement located on
agricultural land;

���� c.� commercial property;

���� d.� industrial property;

���� e.� groundwater;

���� f.� residential property;

���� g.� a mine or quarry;

���� h.� a mineral in place;

���� i.� standing timber; or

���� j.� water rights.

���� 3.� a.� Notwithstanding any
law, rule, or regulation to the contrary, an adverse foreign government or
person of an adverse foreign country shall not acquire, purchase, or otherwise
obtain a legal, beneficial, or other interest in real property in the State on
or after the effective date of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill).

���� b.� An adverse foreign
government or person of an adverse foreign country owning or holding an
interest in real property in the State upon the effective date of P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill) may continue
to own or hold an interest in real property for a maximum of five years after
the effective date of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill), and shall not acquire, purchase, or otherwise obtain
an interest in, any other real property, in the State, on or after the
effective date of P.L.��� , c.��� (C.������� ) (pending before the Legislature
as this bill), except:

���� (1)� pursuant to a process of
law involving the collection of debt, the execution of a deed in lieu of
foreclosure, the forfeiture of a contract for deed, or the imposition of a lien
or claim on the real property, whether created by a mortgage or otherwise, in
which case, the provisions of subsection d. of this section shall apply;

���� (2)� by devise or descent, or
through the establishment of a bona fide encumbrance on real property taken for
the purposes of security, in which case, the provisions of subsection f. of
this section shall apply; or

���� (3)� in compliance with any
other condition that may be authorized by the Secretary of State in the rules
and regulations adopted pursuant to subsection f. of this section.

���� c.� An adverse foreign
government or person of an adverse foreign country owning or holding an
interest in real property in the State upon the effective date of P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill) shall sell or
otherwise convey the ownership of, or interest in, the real property within
five years after the effective date of P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill).� The real property or interest therein
shall be sold or conveyed to an individual, trust, corporation, partnership, or
other business entity that is not an adverse foreign government or person of an
adverse foreign country that is subject to the provisions of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).

���� d.� (1)� Real property that is
acquired by an adverse foreign government or person of an adverse foreign
country, on or after the effective date of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill), pursuant to the exception established
in paragraph (1) of subsection b. of this section, shall be sold or conveyed,
by the foreign owner thereof, within two years after title to the real property
is transferred to the adverse foreign government or person of an adverse
foreign country.�

���� (2)� Real property sold or
conveyed in accordance with this subsection shall be sold or conveyed to an
individual, trust, corporation, partnership, or other business entity that is
not an adverse foreign government or person of an adverse foreign country
subject to the provisions of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill).

���� e.� A provision of this
section that is inconsistent with, or in violation of, the federal
Constitution, or any law, treaty, rule, regulation, or executive order shall
not apply only to the extent that the provision of this section is determined
to be inconsistent or in conflict with, impede the federal objectives, or in
violation of the federal Constitution, or any law, treaty, rule, regulation, or
executive order.� If a provision of this section is determined to be
inconsistent or in conflict with, impede the federal objectives, or in
violation of the federal Constitution, or any law, treaty, rule, regulation, or
executive order, the provisions of this section shall be construed to apply to
only to those persons of an adverse foreign country that are determined to have
taken action that directly poses a threat of terrorism and transnational
repression, or that directly pose a threat to the critical infrastructure or
economic security of the United States.

���� f.� The attorney general may
bring an action in a court of competent jurisdiction against an individual or
entity that violates a provision of this section.� An individual or entity in
violation of this section shall be liable to the State for a civil penalty in
an amount that shall not exceed the greater of:

���� (1)� $250,000; or

���� (2)� 50 percent of the market
value of the interest in the real property that is the subject of the
violation.�

���� g.� The Secretary of State
shall adopt, pursuant to the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations to effectuate the
provisions of P.L. , c. (C. )
(pending before the Legislature as this bill), including but not limited to,
rules and regulations concerning the application of P.L.��� , c.��� (C.�������
) (pending before the Legislature as this bill) to any particular country or
individual.�

���� 4.� This act shall take effect
immediately.�

STATEMENT

���� This bill prohibits adverse
foreign governments and certain associated foreign persons, as defined in the
bill, from acquiring, purchasing, or otherwise obtaining a legal, beneficial,
or other interest in any real property in the State on or after the bill�s
effective date, with limited exceptions.� The bill applies to governments
listed as a threat of terrorism, transnational repression, or to the critical
infrastructure or economic security of the United States, in at least one of
the three most recent Annual Threat Assessments of the U.S. Intelligence
Community.� These governments currently consist of the People�s Republic of
China, Russia, Iran, and North Korea.�

���� The bill permits impacted
foreign governments and foreign persons that already own or hold an interest in
real property in the State, on the bill�s effective date, to continue to own or
hold that interest for a maximum of five years thereafter.� Within five years
after the bill�s effective date, the foreign government or foreign person would
be required to sell or otherwise convey the ownership of, or interest in, the
real property to an individual, trust, corporation, partnership, or other
business entity.�

���� The bill provides the
following exceptions to the general prohibition on the continued foreign
ownership of real property in the State:

���� 1) the acquisition of real
property through a process of law involving the collection of debt, the
execution of a deed in lieu of foreclosure, the forfeiture of a contract for
deed, or the imposition of a lien or claim on the property, whether by mortgage
or otherwise, provided that the person or government sell or convey the
property, within two years after the transfer of title to the person or
government, to an individual, trust, corporation, partnership, or other
business entity that is not prohibited from owning real property in the State;
and

���� 2) the acquisition of real
property by devise or descent, or pursuant to a bona fide encumbrance
established on real property taken for the purposes of security.

���� The bill provides that any
provision of the bill that is inconsistent with, or in violation of, the
federal Constitution, or any law, treaty, rule, regulation, or executive order
(federal law) is not to apply only to the extent that the provision is
determined to be inconsistent or in conflict with, impede the federal
objectives, or in violation of the federal law.� If a provision is determined
inconsistent or in conflict, impeding the federal objectives, or in violation
of federal law, the provisions of the bill are to be construed to apply to only
to those persons of an adverse foreign country that are determined to have
taken action that directly poses a threat of terrorism and transnational
repression, or that directly pose a threat to the critical infrastructure or
economic security of the United States.

���� The bill authorizes the
attorney general to bring an action against an entity that violates the bill.�
An entity in violation of the bill is to be liable to the State for a civil
penalty in an amount not to exceed the greater of:

�

$250,000; or

�

50 percent of the market value of the interest in the real
property subject to the violation.

���� The bill directs the Secretary
of State to adopt rules and regulations to effectuate the provisions of the
bill.�