PIERRE, S.D. – Gov. Kristi Noem and two state lawmakers are proposing legislation to restrict foreign purchases of agricultural land in South Dakota. Noem specifically zeroed in on China.
“With this new process, we will be able to prevent nations who hate us – like Communist China – from buying up our state’s agriculture land,” Noem said in a release. “We cannot allow the Chinese Communist Party to continue to buy up our nation’s food supply, so South Dakota will lead the charge on this vital national security issue.”
The bill would be sponsored by Sen. Erin Tobin (R-Winner) and Rep. Elect Gary Cammack (R-Union Center).
Tobin stated he wants to “protect the security of that food supply for our kids,” and Cammack stated concern about “vital national security resources like Ellsworth Air Force Base. We cannot afford for our enemies to purchase land in South Dakota.”
If approved, the state would set up a board, called the Committee on Foreign Investment in the United States – South Dakota. This board would investigate attempted land purchases by foreign interests and recommend approval or denial to the governor.
According to the governor’s release, the jurisdiction of the board would cover transactions on or after July 1, 2023, including:
Any transaction of any number of acres – including a land transfer, purchase, grant, devise, descent, or inheritance of agricultural land – involving a “foreign entity” (any foreign person, foreign government, foreign business, or any organization controlled by a foreign person, government, or business).
Any lease of agricultural land to a foreign entity for a period of one year or longer.
Any transaction previously considered by the federal Committee on Federal Investment in the United States (CFIUS) board.
This is the third recent action Noem has taken that targets China. She also signed an executive order barring TikTok (owned by a Chinese company) from being used on state government electronic devices. Seven states followed her lead on this.
This latest move by the Governor could open the door for another round of calls for greater transparency and regulation of the state’s trust industry and additional transparency in any participation in the EB-5 program.
More than $360 billion is held in South Dakota and houses undisclosed accounts of interests from around the world, some of which could originate from China, Russia and other non-democratic countries. The question remains if Noem would support federal action to reduce the ability of dictators and those associated with them to hide their assets in South Dakota.
The last South Dakota legislative session saw protestors urge lawmakers to identify trust beneficiaries and freeze assets from countries such as Russia.
The move by Noem may also create scrutiny of the state’s use of the EB-5 Program that grants a fast track to U.S. citizenship in return for an investment of $500,000 or more from people from other countries. South Dakota has used the program extensively in the past to fund a variety of agriculture projects including dairy farms and a beef packing plant, attracting investors from China, North Korea and other countries.