Prohibit Foreign Ownership of NC Land.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 5
SENATE BILL 394
Agriculture, Energy, and Environment Committee Substitute Adopted 4/8/25
Judiciary Committee Substitute Adopted 4/29/25
House Committee Substitute Favorable 5/12/26
House Committee Substitute #2 Favorable 6/9/26

Short Title: Prohibit Foreign Ownership of NC Land. (Public)
Sponsors:
Referred to:
March 25, 2025
*S394-v-5*
A BILL TO BE ENTITLED 1
AN ACT TO PROHIBIT T HE ACQUISITION OF AG RICULTURAL LANDS OR LANDS 2
ADJACENT TO MILITARY INSTALLATIONS BY CE RTAIN ADVERSARIAL 3
ENTITIES; TO PROVIDE FOR THE DIVESTMENT OF THOSE LANDS; AND TO 4
PROVIDE FOR DOCUMENT ATION AND REGISTRATI ON OF LAND OWNERSHIP 5
BY CERTAIN ADVERSARIAL ENTITIES. 6
The General Assembly of North Carolina enacts: 7
SECTION 1. Chapter 64 of the General Statutes is amended by adding a new Article 8
to read: 9
"Article 4. 10
"Prohibit Adversarial Foreign Party Acquisition of Certain Lands. 11
"§ 64-60. Title. 12
This act shall be known and be cited as the North Carolina Farmland and Military Protection 13
Act. 14
"§ 64-61. Purpose. 15
The General Assembly fin ds that it is in the public interest for the State to exercise its 16
governmental police power to guard its agricultural land and military installations from the 17
potential of adversarial foreign government control in order to ensure that the State's farmers are 18
able to produce a safe, abundant, and affordable supply of food and fiber and to protect our 19
national security for the benefit of the people of this State and the United States. 20
"§ 64-62. Definitions. 21
As used in this Article, the following definitions apply: 22
(1) Adversarial foreign government . – A state -controlled enterprise or the 23
government of a country or group listed in International Traffic in Arms 24
Regulations in 22 C.F.R. § 126.1(d). 25
(2) Agricultural land. – Any land situated in this State that is used for agricultural 26
production purposes as defined in G.S. 106-581.1(1) through (4). The term 27
does not include land situated in this State that is leased for agricultural 28
research and development purposes or other activities for the purpose of 29
producing inputs or products for farmers or other end-users, provided that the 30
acreage leased by the lessee does not exceed 250 acres in the aggregate. 31
(3) De minimis direct interest. – Any ownership of land resulting from: 32
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 394-Fifth Edition
a. Ownership of registered equities in a publicly traded company owning 1
the land and if the ownership interest in the company is either of the 2
following: 3
1. Less than ten percent (10%) of any class of registered equities. 4
Ownership of registered equities is determined by processes 5
established under federal law. 6
2. A noncontrolling interest in an entity controlled by a company 7
that is both registered with the United States Securities and 8
Exchange Commission as an investment adviser under the 9
Investment Advisers Act of 1940, as amended, and is not a 10
foreign entity. 11
b. Any passive ownership interest of a prohibited foreign party in an 12
entity, provided that the prohibited foreign party does not possess, by 13
virtue of that owners hip interest or otherwise, the power to direct or 14
cause the direction of the management or policies of the entity with 15
respect to the interest in real property. 16
(4) Foreign government. – Any government other than : (i) the federal 17
government, (ii) the government of a state , (iii) a political subdivision of a 18
state, or (iv) federally or state recognized tribal governments. 19
(5) Interest. – Any estate, remainder, or reversion, or any portion of the estate, 20
remainder, or reversion, or an option pursuant to which one party has a right 21
to cause the transfer of legal or equitable title to land described in 22
G.S. 64-63(a), including , without limitation, a lease of land described in 23
G.S. 64-63(a): (i) for a term of one year or longer or (ii) renewable by option 24
for terms which, if the options were all exercised, would total one year. 25
(6) Military installation. – Fort Bragg, Pope Army Airfield, Marine Corps Base 26
Camp Lejeune, New River Marine Corps Air Station, Cherry Point Marine 27
Corps Air Station, Military Ocean Terminal at Sunny Point, the United States 28
Coast Guard Air Station at Elizabeth City, Naval Support Activity Northwest, 29
Air Route Surveillance Radar (ARSR -4) at Fort Fisher, North Carolina 30
National Guard facilities , and Seymour Johnson Air Force Base, in its own 31
right and as the responsible entity for the Dare County Bombing Range, and 32
any military traini ng facility located within the State that is subject to the 33
installations' oversight and control. Military installation does not include 34
churches, schools, offices, or residential facilities outside the defined 35
boundaries of the above named facilities, and does not include temporary 36
military operations areas. The North Carolina Real Estate Commission, in 37
coordination with the Department of Military and Veterans Affairs, will 38
develop, publish, and maintain a map with the bases and lines drawn for the 39
applicable mileage from the military boundaries for public use. 40
(7) Party. – Any corporation, company, association, firm, partnership, society, 41
joint-stock company, trust, estate, or any other legal entity. 42
(8) Prohibited foreign party. – Any of the following: 43
a. An adversarial foreign government or a foreign government formed 44
within an adversarial foreign government. 45
b. An entity or trust, other than a government, that is created or organized 46
under the laws of a foreign government within a n adversarial foreign 47
government. 48
c. An entity or trust , other than a government , that meets all of the 49
following criteria: 50
General Assembly Of North Carolina Session 2025
Senate Bill 394-Fifth Edition Page 3
1. Is created or organized under the laws of any state , or any 1
foreign government. 2
2. A significant interest or substantial control is directly or 3
indirectly held or is capable of being exercised by one or more 4
of the following: 5
I. A foreign government referred to in sub-subdivision a. 6
of this subdivision. 7
II. A party referred to in sub -subdivision b. of this 8
subdivision. 9
III. A combination of the pa rties or governments referred 10
to in this sub-sub-subdivision. 11
d. An agent, trustee, or other fiduciary of an entity enumerated in this 12
subdivision. 13
e. This definition does not apply to an entity that meets any of the 14
following criteria: 15
1. The entity has received a determination from the Committee of 16
Foreign Investment in the United States (CFIUS) that there are 17
no unresolved national security concerns with respect to the 18
entity in connection to a matter submitted to CFIUS and which 19
CFIUS co ncluded all action pursuant to section 721 of the 20
Defense Production Act of 1950, as amended. 21
2. The entity has a national security agreement with CFIUS and 22
maintains the validity of such national security agreement. 23
3. A United States domiciled subsidiary of an entity that meets 24
the criteria of sub -sub-subdivision 1. or 2. of this 25
sub-subdivision. 26
(9) Significant interest or substantial control. – One of the following: 27
a. An interest of thirty-three percent (33%) or more held by one or more 28
of the following: 29
1. A single government referred to in sub-subdivision a. of 30
subdivision (8) of this section. 31
2. A party referred to in sub-subdivision b. of subdivision (8) of 32
this section. 33
3. A party referred to in sub-subdivision c. of subdivision (8) of 34
this section. 35
b. An interest of thirty -three percent (33%) or more held whenever the 36
parties or governments referred to in subdivision (8) of this section are 37
acting in concert with respect to the interest even though no single 38
party or government holds an interest of thirty-three percent (33%) or 39
more. 40
c. An interest of fifty percent (50%) or more, in the aggregate, held by 41
parties or governments referred to in subdivision ( 8) of this section 42
even though the parties or governments may not be acting in concert. 43
"§ 64-63. Prohibited foreign party acquisition of certain lands prohibited. 44
(a) Notwithstanding any provision of law to the contrary, no prohibited foreign party 45
shall purchase, acquire, lease, or hold any direct interest in the following: 46
(1) Agricultural land. 47
(2) Property situated within a 50-mile radius of a military installation. 48
(b) A prohibited foreign party shall not acquire by grant, purchase, devise, descent, or 49
otherwise, any interest, other than a de minimis direct interest, in land described in subsection 50
(a) of this section in this State regardless of how the prohibited foreign party intends to use the 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 394-Fifth Edition
land. A party may not knowingly hold land as an agent, trustee, or other fiduciary for a prohibited 1
foreign party in violation of this section. A prohibited foreign party that acquires land in violation 2
of this section remains in violation as long as the prohibited foreign party holds an interest in the 3
land. 4
(c) A prohibited foreign party that has acquired a ny direct interest in land described in 5
subsection (a) of this section in this State prior to the effective date of this section, or prior to the 6
country of residence being added to 22 C.F.R. § 126 .1(d), may continue to own or hold th at 7
interest, but may not acquire by grant, purchase, devise, descent, or otherwise, any additional 8
interest in land described in subsection (a) of this section in this State and must register with the 9
Secretary of State. The Secretary of State shall maintain a report, updated monthly, of those 10
prohibited foreign parties that have registered, and the report shall be a public record and be 11
accessible on the Secretary of State's website. The Secretary of State shall establish a registration 12
form for the purposes of this subsection and the form shall include at least the following: 13
(1) The name of the owner of the land or the owner of the interest in the land. 14
(2) The address of the land and the parcel identification number. 15
(3) The number of acres of the land. 16
(4) The mailing address of the owner of the land. 17
(5) The country or state of incorporation of the owner of the property or the owner 18
of the interest in the property. 19
(d) The Secretary of State will provide the registry to the Attorney General 's office one 20
year from the effective date of this act and every six months thereafter, and the Attorney General 21
shall enforce the payment of the civil fine as provided by this subsection. A prohibited foreign 22
party that fails to timely file a registration with the Secretary of State is subject to a civil penalty 23
of not less than one thousand dollars ( $1,000) for each day that the registration is late , the clear 24
proceeds of which shall be remitted to the Civil Penalty and Forfeiture Fund, in accordance with 25
G.S. 115C-457.2. The unpaid balance of any penalties assessed under this subsection shall 26
constitute a lien against the land if a Notice of Foreign Ownership Violation Lien has been 27
recorded by the Attorney General in the office of the register of deeds in the county where the 28
property is located , and the lien shall have priority from the date and time of recordation and 29
shall be enforced by the Attorney General. 30
(e) A prohibited foreign party that acquires land described in subsection (a) of this section 31
on or after the effective date of this section , by devise or descent, through the enforcement of 32
security interests, or through the collection of debts, other than a de minimis direct interest, shall 33
sell, transfer, or otherwise divest itself of the land within one year after acquiring the land. 34
(f) At a time no later than the time of closing , a buyer of any direct interest in land 35
described in subsection (a) of this section shall provide an affidavit signed under penalty of 36
perjury attesting that the buyer is (i) not a prohibited foreign party and (ii) in compliance with 37
the requirements of this section. The affidavit is not required to be notarized and shall be attached 38
as an exhibit to the deed or other document that conveys an ownership interest in the land. No 39
affidavit is required to be attached to a deed of trust, mortgage, assignment of rents, security 40
interest, or other lien securing payment or performance of an obligation under this section by (i) 41
a federally or state chartered bank, savings institution, or credi t union, (ii) a licensed mortgage 42
lender or servicer, ( iii) a governmental or quasi -governmental lending agency, or ( iv) an entity 43
subject to federal anti -money laundering and suspicious activity reporting requirements under 44
the Bank Secrecy Act. The failure to obtain or maintain the affidavit shall not affect the title or 45
insurability of the title for the land . The North Carolina Real Estate Commission shall establish 46
the form for the affidavit required under this subsection. 47
(g) Upon receipt of information that leads the Attorney General to believe that a 48
prohibited foreign party has not divested itself of the land described in subsection (a) of this 49
section as required under subsection (e) of this section , the Attorney General shall enforce a 50
violation of this section by commencing a receivership proceeding in the county where the 51
General Assembly Of North Carolina Session 2025
Senate Bill 394-Fifth Edition Page 5
property is situated under Article 38A of Chapter 1 of the General Statutes seeking the 1
appointment of a general receiver pursu ant to G.S. 1-507.24(e1). Any interest in real property 2
acquired or held in violation of this section shall be subject to divestiture pursuant to G.S. 64-64. 3
(h) A violation of this section by a prohibited foreign party may, at the discretion of the 4
noteholder, be deemed a default under a loan, mortgage, or deed of trust and shall provide the 5
lender the automatic right to trigger default on the loan, mortgage, or deed of trust. 6
(i) The responsibility for determining whether any entity is subject to th is Article, 7
pursuant to either civil or criminal law, rests solely with the prohibited foreign party and the State 8
of North Carolina and no other individual or entity. 9
(j) Title to land described in subsection (a) of this section is not invalid or subject to 10
divestiture due to a violation of this section by any former owner or any other person holding or 11
owning a former interest in the land described in subsection (a) of this section. 12
(k) Except as provided in subsection (l) of this section, no individual, real estate broker, 13
or any other entity, other than a prohibited foreign party, shall bear any civil or criminal liability 14
for any of the following: 15
(1) Failing to determine or make inquiry of whether any entity is a prohibited 16
foreign party. 17
(2) Failing to obtain , maintain, or otherwise comply with the affidavit 18
requirements provided by subsection (f) of this section. 19
(l) A party who knowingly sells an interest in land described in subsection (a) of this 20
section in violation of this section or who has actual knowledge that the transaction will result in 21
a violation of subsection (a) of this section but aids and abets a p arty in knowingly selling an 22
interest in land described in subsection (a) of this section, shall be guilty of a Class 2 23
misdemeanor. 24
(m) This Article does not create or authorize a private right of action to enforce the 25
provisions of this Article. 26
"§ 64-64. Divestiture procedure. 27
(a) Upon receipt of information that leads the Attorney General to believe that a violation 28
of G.S. 64-63 may have occurred, the Attorney General shall investigate the alleged violation 29
and may issue subpoenas requiring any of the following: 30
(1) Appearances of witnesses. 31
(2) Production of relevant records. 32
(3) Giving of relevant testimony. 33
(b) The Attorney General shall enforce a violation of G.S. 64-63 by commencing a 34
receivership proceeding under Article 38A of Chapter 1 of the General Statutes seeking the 35
appointment of a general receiver pursuant to G.S. 1-507.24(e1). The foll owing apply to a 36
receivership proceeding initiated pursuant to this section: 37
(1) Proceeds of the sale shall be paid as follows: 38
a. The costs of the receivership and sale. 39
b. To secured parties, in their order of priority, except for liens which 40
under the terms of the sale are to remain on the property. 41
c. No proceeds shall be distributed from the receivership sale to the 42
prohibited foreign party. Any excess proceeds are forfeited and shall 43
be remitted to the Civil Penalty and Forfeiture Fund in accordance with 44
G.S. 115C-457.2. 45
(2) At the receivership sale, any secured party shall be able to place a bid in an 46
amount that is not more than the amoun t owed plus any costs incurred to the 47
secured party as of the date of the sale, as established in the court order for the 48
sale of the property. 49
(3) Upon commencement of an action under this section, the Attorney General 50
shall file a notice of lis pendens a s soon as practicable with the register of 51
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 394-Fifth Edition
deeds of the county or counties in which the real property is situated. Upon 1
the entry of an order for the sale of the property under this section, the 2
Attorney General shall record a copy of the order as soon as practicable in the 3
office of the register of deeds of the county or counties where the real property 4
is situated. 5
(4) The receiver shall honor and give priority to any default that has been 6
triggered on a loan, mortgage, or deed of trust prior to the comme ncement of 7
a receivership under this section." 8
SECTION 2. Article 2 of Chapter 161 of the General Statutes is amended by adding 9
a new section to read: 10
"§ 161-14.04. Affidavit of parties to a deed or conveyance. 11
When recording a deed or other document that conveys an ownership interest in land 12
described by G.S. 64-63(a), the register of deeds shall attach the affidavit as an exhibit to the 13
deed or other document that conveys an ownership interest in land as requir ed by G.S. 64-63(f) 14
according to the requirements of G.S. 161-22. The register of deeds shall not be liable for failure 15
of the document to include the affidavit. Failure to attach the affidavit does not impair 16
constructive notice, lien priority, validity, or insurability." 17
SECTION 3. G.S. 1-507.24 is amended by adding a new subsection to read: 18
"(e1) Receiver for Sale of Real Property Owned by Prohibited Foreign Party. – A general 19
receiver may be appointed for the purpose of conducting a sale of real property in accordance 20
with G.S. 64-64 upon a finding by the court that an interest in the real property is held by a 21
prohibited foreign party in violation of G.S. 64-63(a)." 22
SECTION 4. The North Carolina Real Estate Commission, in coordination with the 23
Department of Military and Veterans Affairs, will develop and publish the map described in 24
G.S. 64-62(6) by December 1, 2026, and shall maintain the map by publishing an updated version 25
annually each December 1 thereafter. 26
SECTION 5. If any section or prov ision of this act is declared unconstitutional or 27
invalid by the courts, it does not affect the validity of this act as a whole or any part other than 28
the part so declared to be unconstitutional or invalid. 29
SECTION 6. Sections 1, 2, and 3 of this act beco me effective December 1, 2026, 30
and Section 1 of this act applies to offenses committed on or after that date. The remainder of 31
this act is effective when it becomes law. 32