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The new legislation specifically exempts most foreign-held leases for concentrated animal feeding operations – also known as CAFO’s – in South Dakota.

Foreign ownership restricted, leasing still an option

PIERRE, S.D. — The Governor finally got what she wanted a year ago in HB1231 when state senators – on a 30-2 vote – gave final legislation approval last Friday to a bill that restricts foreign ownership of ag land in South Dakota.

But it didn’t go so far as to remove the elephant in the room; land and ag business leases to foreign individuals, entities or governments.

Last year, Governor Noem couldn’t get traction on similar legislation that would have allowed the governor to approve or deny any purchases of ag land by foreign individuals, entities or governments. Most ag organization in the state opposed the language.

Instead, HB1231 directs the state Department of Agriculture and Natural Resources  (DANR) to refer any evidence of noncompliance with the already in place law to the attorney general. The attorney general can then subpoena any information necessary to prove noncompliance.

On a 30-2 vote, state senators gave final legislative approval on Friday to HB1231. It broadens the 160-acre limit to cover foreign-controlled corporations and outright bans ownership by any person or group from six countries: People’s Republic of China, Cuba, Iran, North Korea, Russia and Venezuela.

Those same ag groups are neutral on this year’s version, which calls for the state DANR to refer suspected violations to the South Dakota Office of Attorney General for investigation and possible prosecution.

The current legislation builds on a chapter of state law that legislators passed in 1979. One of those now-retired lawmakers who helped write those laws, Democrat Kent Frerichs, pointed out through emails in recent weeks that the new legislation now specifically exempts most foreign-held leases for concentrated animal feeding operations also known as CAFO’s.

Senate Democratic leader Reynold Nesiba described it Friday as the “enormous leasing loophole.” He and Democratic Sen. Shawn Bordeaux would later vote against the legislation.

Republican Sen. Randy Deibert responded that the bill’s sponsors, Republican Rep. James Wangsness and Republican Sen. Erin Tobin, put in “a lot of hard work” during the past summer. Wangsness is a farmer and rancher. Tobin is a nurse practitioner and a rancher.

“They worked with a large group of agricultural users, and they came up with a bill that everybody could support,” Deibert said.

Republican Sen. Julie Frye-Mueller said she intended to vote for it but wondered about “shell companies.” Tobin said the legislation covers them as well and they would be listed in a report that the South Dakota Office of Secretary of State would annually compile.

“It would tend to be very complicated to filter through all this,” Tobin said, “and that’s why this is a great first step and something we can build on in the future, but we want to be able to monitor and keep track of with this bill, and so we know where the problem lies, and we can make changes in the future as we see fit.”

Nesiba asked whether there would be any list of foreign lease-holders. Tobin said the Legislature passed a law last year that addressed the question.

In her closing remarks, Tobin referred again to Nesiba’s query. “If there’s concern from the previous lawmaker about leases, it certainly is interesting that the reason we made that language to cover current leases was that we needed to protect the large hog producers to still have a place to take their hogs. So if that law was really working, we wouldn’t have had the concern and have to make the bill that you see in front of you today, as part of the bill, have the protection that you’re talking about,” she said.

She continued, “So this actually will allow us to monitor, and then, like I said previously, we can build on this. But we have to know exactly how and what the problem is. We have to be pro-active and this is what we need to start that process. And if I am re-elected, I can guarantee you I’ll be working on this until I decide to do something different.”

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