Foreign Ownership of Property in the United States: Federal and State Restrictions

This report examines various legal issues raised by Federal and State laws restricting foreign ownership in U. S. property. The report examines the constitutional barriers to Federal and State laws restricting such ownership, and the possible constitutional predicates for Federal legislation regulating foreign ownership of property in the united States. The impact of treaties to which the United States is a party on both Federal and State restrictions on the rights of foreign persons to own U.S. property is also discussed.

JAN 0 6 )983 FOREIGN OWNERSHIP OF PROPERTY I N THE UNITED STATES: FEDERAL AND STATE RESTRICTIONS by Howard Z a r i t s k y Legislative Attorney A m e r i c a n Law D i v i s i o n J u l y 11, 1 9 7 9 Updated J u n e 23, 1980 The Congressional Research Service works exclusively for the Congress, conducting research, analyzing legislation, and providing information at the request of committees, Members, and their staffs. The Service makes such research available, without partisan bias, in many forms including studies, reports, compilations, digests, and background briefings. Upon request, CRS assists committees in analyzing legislative proposals and issues, and in assessing the possible effects of these proposals and their alternatives. The Service's senior specialists and , subject analysts are also available for personal consultations in their respective fields of expertise. ABSTRACT TtY.sr e p o r t examines v a r i o u s l e g a l i s s u e s r a i s e d by F e d e r a l and S t a t e l a w s r e s t r i c t i n g f o r e i g n o w n e r s h i p i n U. S. p r o p e r t y . The r e p o r t e x a m i n e s t h e c o n s t i t u t i o n a l b a r r i e r s t o F e d e r a l and S t a t e l a w s r e s t r i c t i n g s u c h o m e r s h i p , and t h e p o s s i b l e c o n s t i t u t i o n a l p r e d i c a t e s f o r F e d e r a l l e g i s l a t i o n r e g u l a t i n g f o r e i g n ownership of p r o p e r t y i n t h e united S t a t e s . The i m p a c t o f t r e a t i e s t o which t h e U n i t e d S t a t e s i s a p a r t y on b o t h F e d e r a l and S t a t e r e s t r i c t i o n s on t h e r i g h t s o f f o r e i g n p e r s o n s t o own U.S. discussed. property i s also F u r t h e r m o r e , t h e r e p o r t c o n t a i n s a summary o f a l l e x i s t i n g Fed- e r a l laws which r e s t r i c t t h e r i g h t o f f o r e i g n p e r s o n s t o own i n t e r e s t s i n v a r i o u s U.S. e n t e r p r i s e s , and t h e S t a t e l a w s r e s t r i c t i n g f o r e i g n i n v e s t m e n t in r e a l property located within the State. included. A selected bibliography is also TABLE OF CONTENTS T a b l e of C o n t e n t s ................................................ ................. Re.................... I. C o n s t i t u t i o n a l L i m i t a t i o n s o n S t a t e and F e d e r a l S t a t u t o r y R e s t r i c t i o n s on F o r e i g n Ownership o f P r o p e r t y A. C o n s t i t u t i o n a l L i m i t a t i o n s on S t a t e L e g i s l a t i o n s t r i c t i n g F o r e i g n Ownership o f P r o p e r t y 1. The F o u r t e e n t h Amendment: Due P r o c e s s , Equal P r o t e c t i o n and S t a t e R e s t r i c t i o n s on F o r e i g n P r o p e r t y Ownership ................................................. ........ ................... 2. E x c l u s i v i t y o f t h e F e d e r a l F o r e i g n R e l a t i o n s Power and S t a t e R e s t r i c t i o n s on F o r e i g n P r o p e r t y Ownerhsip B. C o n s t i t u t i o n a l P r e d i c a t e and L i m i t a t i o n s on F e d e r a l Res t r i c t i o n s on F o r e i g n P r o p e r t y Ownerehip ........... 11. Impact of T r e a t i e s on S t a t e and F e d e r a l R e s t r i c t i o n s on F o r e i g n Ownership o f P r o p e r t y i n t h e United S t a t e s ............................. 111. Summary of F e d e r a l S t a t u t e s R e g u l a t i n g o r L i m i t i n g F o r e i g n I n v e s t m e n t i n t h e United S t a t e s .................. ...................................... A. Laws R e s p e c t i n g R e p o r t i n g and D i e c l o s u r e B. F e d e r a l Laws D i r e c t l y I m p a c t i n g Upon F o r e i g n Investmenti n t h e United S t a t e s ..................................................... IV. Summary o f S t a t e S t a t u t e s R e s t r i c t i n g F o r e i g n Ownership o f Property .. ...........................,...............*..... A. S t a t e S t a t u t e s R e s t r i c t i n g F o r e i g n Ownership o f P r o p e r t y B. S t a t e S t a t u t e s Requiring Reporting of Foreign Property Ownership Selected Bibliography ...............m.......,..,.............m 40 FOREIGN OWNERSHIP OF REAL PROPERTY IN THE UNITED STATES: FEDERAL AND STATE RESTRICTIONS Both the Federal Government and some of the individual States impose statutory restrictions on the ownership of domestic real properties by foreign individuals and corporations, The limitations imposed by the various States generally affect the ownership of real property, often limited to agricultural property, and vary significantly with respect to scope and effect. The present limitations imposed by the Federal Government are more narrow and normally relate to specific industries. This report examines the limitations imposed by the United States C~nstitutionon State and Federal legislation regulating foreign ownership of property, and sunrmarizes the present Federal laws regulating foreign investment in this country and the State laws on foreign ownership of property. The summary of Federal laws will include some laws limiting foreign investment and participation in certain activities within the United States which may only indirectly affect ownership of real property. I. Constitutional Limitation6 on State and Federal Statutory Restrictions on Foreign Ownership of Property State legislation is subject to review under the Due Process and Equal Protection Clauses of the Fourteenth Amendment of the United States Constitu- . tion and the exclusive Federal jurisdiction over matters concerning foreign affairs. Federal legislation is subject to review for existence of an affirmative power under which it could be adopted and for satisfaction of the Due Process Clause of the Fifth Amendment. A. Constitutional Limitations on State Legislation Restricting Foreign Ownership of Property 1. The Fourteenth Amendment: Due Process, Equal Protection, and State Restrictions on Foreign Property Ownershie Both the Due Process and Equal protection Clauses of the Fourteenth Amendment to the United States Constitution apply to "persons," rather than "citizens," Consequently, these protections extend to foreign nationals law1/ fully within the United states, These protections notwithstanding, the Uni- ted States Supreme Court has historically upheld State limitations on proper2/ ty ownership by aliens, In recent years, however, the Court has repeatedly voided State laws which established classifications in government actions solely on the basis of citizenship. The Court has stated that a classification based solely upon citizenship or nationality is inherently suspect and subject to "strict scrutiny." It will be upheld only upon a finding of a compelling State interest - which can only be satisfied through this particular classification. In Gra31 ham v. Richardson, for example, the Court ruled that a number of State laws - which denied welfare benefits to resident aliens and to aliens who had not 1/ Levy v. Louisiana, 391 U.S. 68 (1963); Hines v. Davidowitz, 312 U.S. 52 (1941); Terrace v. Thompson, 263 U.S. 197 (1923); and Yick Wo y. Hopkins, 118 U.S. 356 (1886). 2/ Cockrill v. ~alifornia,268 U.S. 258 (1925); Frick v. Webb, 263 U.S. 326 (i923); Porterfield v. Webb, 263 U.S. 225 (1923); and Terrace v. Thomgson, 263 U.S. 197 (1923). - r e s i d e d i n t h e United S t a t e s f o r a s p e c i f i e d number of y e a r s were unconstitut i o n a l because they deprived t h e s e persons of equal p r o t e c t i o n of t h e laws. The Court noted: Under t r a d i t i o n a l equal p r o t e c t i o n p r i n c i p l e s , a S t a t e r e t a i n s broad d i s c r e t i o n t o c l a s s i f y a s long a s i t s c l a s s i f i c a t i o n has a reasonable b a s i s . ( c i t a t i o n s omitted) T h i s i s s o i n " t h e a r e a of economics and soc i a l welfare." ( c i t a t i o n s omitted) But t h e C o u r t ' s d e c i s i o n s have est a b l i s h e d t h a t c l a s s i f i c a t i o n s based on a l i e n a g e , l i k e t h o s e based on n a t i o n a l i t y o r r a c e , a r e i n h e r e n t l y suspect and s u b j e c t t o c l o s e judic i a l s c r u t i n y . A l i e n s a s a c l a s s a r e a prime example of a " d i s c r e t e and i n s u l a r " m i n o r i t y ( c i t a t i o n omitted) f o r whom such heightened j u d i c i a l s o l i c i t u d e i s a p p r o p r i a t e . Accordingly, i t was s a i d i n Takahashi, 334 U.S. a t 4 2 0 , t h a t " t h e power of a s t a t e t o apply i t s laws e x c l u s i v e l y t o i t s a l i e n i n h a b i t a n t s a s a c l a s s i s confined w i t h i n narrow limits." 4/ C i t i z e n s h i p was a l s o r e j e c t e d a s a l e g i t i m a t e c l a s s i f i c a t i o n w i t h res p e c t t o membership i n a S t a t e Bar, i n which t h e Court noted t h a t t h e S t a t e had not met i t s "heavy burden" of showing t h a t t h e d e n i a l of admission t o a l i e n s was necessary t o accomplish a c o n s t i t u t i o n a l l y p e r m i s s i b l e and s u t r stantial interest. While t h e Court admitted t h a t t h e S t a t e had a n i n t e r e s t i n a s s u r i n g t h e r e q u i s i t e q u a l i f i c a t i o n s of persons l i c e n s e d t o p r a c t i c e law, t h i s i n t e r e s t could be served adequately by a case-by-case review. A 5/ f l a t p r o h i b i t i o n was unnecessary and u n c o n s t i t u t i o n a l . Similarly, -6 / f l a t bans on employment of a l i e n s i n t h e S t a t e c i v i l s e r v i c e system, 4/ - Id. a t - -5/ I n Re G r i f f i t h s , 413 U.S. 371. 717 (1973). 6 / Sugarman v. Dougall, 413 U.S. 634 (1973). - - - 7/ 8/ as c i v i l engineers, a s r e a l e s t a t e s a l e s p e r s o n s , o r on t h e g r a n t i n g o f edu9/ c a t i o n a l b e n e f i t s t o aliens, were a l s o found t o b e e x c e s s i v e i n l i g h t o f t h e 101 S t a t e i n t e r e s t p r o t e c t e d . A s n o t e d b y t h e C o u r t i n Mathews v. D i a z , - I n s o f a r a s s t a t e welfare p o l i c y i s concerned, t h e r e i s l i t t l e , i f any, b a s i s f o r t r e a t i n g p e r s o n s who a r e c i t i z e n s o f a n o t h e r S t a t e d i f f e r e n t l y from p e r s o n s who a r e c i t i z e n s o f a n o t h e r c o u n t r y . Both g r o u p s a r e nonc i t i z e n s as f a r as the S t a t e ' s i n t e r e s t s i n administering its welfare p r o g r a m s a r e c o n c e r n e d . 111 The Supreme C o u r t , h o w e v e r , h a s somewhat l i m i t e d t h e s c o p e o f t h e s e p r o t e c t i v e d o c t r i n e s i n two r e c e n t c a s e s . In o n e , i t u p h e l d a New York s t a t u t e l i m i t i n g appointment t o t h e S t a t e p o l i c e f o r c e t o c i t i z e n s o f t h e United States. The C o u r t found t h a t when t h e c l a s s i f i c a t i o n r e l a t e d t o " i m p o r t a n t nonelective . . . positions" h e l d b y " o f f i c e r s who p a r t i c i p a t e d i r e c t l y i n t h e formulation, execution o r review of broad public policy," s t r i c t s c r u t i n y 121 was n o t r e q u i r e d w i t h r e g a r d t o q u a l i f i c a t i o n s o f c i t i z e n s h i p T The C o u r t noted t h a t : The p r a c t i c a l c o n s e q u e n c e o f t h i s t h e o r y i s t h a t " o u r s c r u t i n y w i l l n o t b e s o demanding where we d e a l w i t h m a t t e r s f i r m l y w i t h i n a S t a t e ' s c o n s t i t u t i o n a l p e r o g a t i v e s . " D o u g a l l : s u p r a . a t 648. The S t a t e n e e d o n l y j u s t i f y i t s c l a s s i f i c a t i o n b y a showlng o f some r a t i o n a l r e l a t i o n s h i p 7 / E x a m i n i n g Board o f E n g i n e e r s , e t c . v. F l o r e s d e O t e r o , 426 U.S. ( 19767. -8 1 I n d i a n a R e a l E s t a t e Commission v. S a t o s k a r , -9 / N y q u i s t v . M a u c l e- t , 432 U.S. 1 ( 1 9 7 7 ) . l o / 426 U.S. 67 ( 1 9 7 7 ) . 111 I d . a t 85. 1 2 1 F o l e y v , C o n n e l i e , 435 U.S. 291 ( 1 9 7 8 ) . - 417 U.S. 938 ( 1 9 7 4 ) . 572 ... between t h e i n t e r e s t sought t o b e p r o t e c t e d and t h e l i m i t i n g c l a s a i f i c a i s no more t h a n r e c o g n i t i o n o f t h e f a c t t h a t a democration. This Thus, i t i s c l e a r t h a t a S t a t e may t i c s o c i e t y i s r u l e d by i t s people. deny a l i e n s t h e r i g h t t o v o t e , o r t o r u n f o r e l e c t i v e o f f i c e , f o r r h e s e l i e a t t h e h e a r t o f o u r p o l i t i c a l i n s t i t u t i o n s . See a t 647-649. Similar considerations support a l e g i s l a t i v e determination t o excldde a l i e n s from j u r y s e r v i c e . 131 14/ I n Ambash v. ~ o r w i c h 7 f u r t h e r m o r e , t h e Court upheld a New York S t i n ~ c id., e t a t u t e forbidding c e r t i f i c a t i o n of a non-citizen a s a p u b l i c s ~ h o o lt e a c h e r u n l e s s t h a t p e r s o n had evidenced i n t e n t t o become a c i t i z e n . I n t h a t deei- s i o n , t h e Court h e l d t h a t c l a s s i f i c a t i o n on t h e b a s i s o f c i t i z e n s h i p would g e n e r a l l y b e p e r m i s s i b l e w i t h r e s p e c t t o government employment where a rat i o n a l b a s i s e x i s t e d between t h e c l a s s i f i c a t i o n and t h e g o v e r n m e n t ' s leg4:imate p o l i c i e s . The Court a l s o s t a t e d t h a t : P u b l i c e d u c a t i o n , l i k e t h e p o l i c e f u n c t i o n , " f u l f i l l s a most i ~ a : ' a m e n t a l o b l i g a t i o n o f government t o i t s c o n s t i t u e n c y . " [ c i t a t i o n m i t t e d ] The i m p o r t a n c e of p u b l i c s c h o o l s i n t h e p r e p a r a t i o n o f i n d i v i d u a l s a s c i t i z e n s , and i n t h e p r e s e r v a t i o n o f t h e v a l u e s on which o u r s o c i e t y r e s t s , long h a s been r e c o g n i z e d i n o u r d e c i s i o n s . 151 . . .- Taking i n t o c o n s i d e r a t i o n t h e r o l e of p u b l i c e d u c a t i o n , t h e Court fsumd c k a f a p r o h i b i t i o n on n o n - c i t i z e n s who had n o t e v i d e n c e d a n i n t e n t t o become , c i t i z e n was p e r m i s s i b l e under t h e United S t a t e s C o n s t i t u t i o n . Thus, t h e Court a p p e a r s t o have c a r v e d o u t an e x c e p t i o n t o t h e gtL?trFe r u l e t h a t a c l a s s i f i c a t i o n based on c i t i z e n s h i p i s s u b j e c t t o s t r i c t j u d i e ~ a i s c r u t i n y , f o r t h o s e s i t u a t i o n s i n which t h e c l a s s i f i c a t i o n r e l a t e s t o a n -- 131 I d . a t 296. 141 441 U.S. 68 151 441 U.S. a t - (1979). 76. essential governmental, political and constitutional function, such as voting, legislating, law enforcement, or teaching. In those situations, it appears that the less strict, rational basis test would be applied. 16/ the Court recently In Baldwin v. Fish and Game Commission of Montana, held that a State could draw a distinction in the license fees charged resident and nonresident elk-hunters. The Court found that the State distinction was not violative of either the Privileges and Immunities or Equal Protection Clauses of the Constitution, because the classification between residents and nonresidents bore a rational relationship to the legitimate State interest in protecting its limited natural resources. In this case, the Court appears to be recognizing a strong State interest in protecting its limited natural resources, which interest could come into play in distinguishing between citizens and aliens with respect to ownership of property. Consequently, while the Court in recent years appears to have provided rigid standards of constitutional review of State legislation distinguishing between citizens and aliens in the granting of rights and benefits, it is clear that some such statutes are subject to a less strict review which can be met. his appears to be especially true if a State is attempting to protect its limited natural resources. Although it appears that State laws distinguishing between resident aliens and citizens with respect to property ownership could be invalid under existing precedents, they might be sustained under newly evolving doctrines. The c o n s t i t u t i o n a l s a f e g u a r d s and p r o t e c t i o n s d i s c u s s e d above have gerre r a l l y been a f f o r d e d r e s i d e n t a l i e n s only. The c o n s t i t u t i o n a l p r o t e c t b ? ~;'~ forded a l i e n s l e g a l l y w i t h i n t h e United S t a t e s have g e n e r a l l y n o t been .: ed n o n r e s i d e n t a l i e n s . Although a p r e c i s e d e f i n i t i o n of t h e e x t e n t aP e~ * - s t i t u t i o n a l p r o t e c t i o n s a f f o r d e d t o n o n r e s i d e n t a l i e n s h a s n o t been made by t h e Court, review of such c l a s s i f i c a t i o n s would seem t o r e q u i r e even less t h a n t h e r a t i o n a l b a s i s r e q u i r e d i n review of non-suspect classificatfons under t h e F o u r t e e n t h Amendment. S t a t e l e g i s l a t i o n r e g u l a t i n g t h e p r o p e r t y r i g h t s of n o n r e s i d e n t a l i e n s , t h e r e f o r e , would c e r t a i n l y seem t o be more ' .Ti l i k e l y c o n s t i t u t i o n a l t h a n t h o s e r e g u l a t i n g t h e r i g h t s of r e s i d e n t aldcrc: 2. E x c l u s i v i t y of t h e F e d e r a l Foreign R e l a t i o n s Power and StaiteR e s t r i c t i o n s on Foreign P r o p e r t y Ownership I n Zschernig v. Miller, 18/ the United S t a t e s Supreme Court s t r u c k d a m -1 s t a t u t e of t h e S t a t e of Oregon which provided f o r t h e e s c h e a t .of properry which would otherwise p a s s t o a n o n r e s i d e n t a l i e n , u n l e s s c e r t a i n require-ments were m e t r e s p e c t i n g t h e laws of t h e f o r e i g n c o u n t r y i n which t h e a i i e ~ n resides. Under t h e Oregon s t a t u t e , t h e laws of t h e f o r e i g n n a t i o n had t ? provide r e c i p r o c a l r i g h t s of United S t a t e s c i t i z e n s t o i n h e r i t p r o p e r t y and 171' See, e . g . , F i a l l o v. B e l l , 430 U.S. 787 (1977); Shaughnessy vL-- " , r a ' " t e d s t a t e s e x r e l . Mezei, 345 U.S. 206 (1953); and Johnson v. E i s e n t r a g e r , 339 U.S. 763 (1949). See a l s o d i s c u s s i o n i n Mathews v . Diaz, 426 U.S. 6 7 ; az 77-78 (1977). t o r e c e i v e payments o f f u n d s from s u c h e s t a t e s . A d d i t i o n a l l y , t h e f o r e i g n h e i r s had t o r e c e i v e t h e p r o p e r t y w i t h o u t c o n f i s c a t i o n , i n whole o r i n p a r t , by t h e g o v e r n m e n t o f t h e f o r e i g n n a t i o n . The C o u r t h e l d t h a t t h i s s t a t u t e was u n c o n s t i t u t i o n a l b e c a u s e i t i n f r i n g e d on t h e e x c l u s i v e a u t h o r i t y o f t h e C o n g r e s s and t h e F e d e r a l e x e c u t i v e b r a n c h t o d e a l i n f o r e i g n a f f a i r s . The C o u r t n o t e d t h a t t h e Oregon s t a t u t e r e q u i r e d t h e l o c a l p r o b a t e courts to inquire into: t h e t y p e o f g o v e r n m e n t s t h a t o b t a i n i n p a r t i c u l a r f o r e i g n nations--whet h e r a l i e n s u n d e r t h e i r law h a v e e n f o r c e a b l e r i g h t s , w h e t h e r t h e s o c a l l e d " r i g h t s " a r e m e r e l y d i s p e n s a t i o n s t u r n i n g upon t h e whim o r cap r i c e of government o f f i c i a l s , whether t h e r e p r e s e n t a t i o n o f c o n s u l s , a m b a s s a d o r s , and o t h e r r e p r e s e n t a t i v e s o f f o r e i g n n a t i o n s i s c r e d i b l e o r made i n good f a i t h , w h e t h e r t h e r e i s i n t h e a c t u a l a d m i n i s t r a t i o n i n t h e p a r t i c u l a r f o r e i g n s y s t e m o f law any e l e m e n t o f c o n f i s c a t i o n . * * * A s we r e a d t h e d e c i s i o n s t h a t f o l l o w e d i n t h e wake o f C l a r k v . A l l e n , we f i n d t h a t t h e y r a d i a t e some o f t h e a t t i t u d e s o f t h e " c o l d war." where t h e s e a r c h i s f o r t h e "democracy q u o t i e n t " o f a f o r e i g n r e g i m e a s opposed t o t h e M a r x i s t t h e o r y . The Oregon s t a t u t e i n t r o d u c e s t h e c o n c e p t o f " c o n f i s c a t i o n , " which i s o f c o u r s e opposed t o t h e J u s t C o m p e n s a t i o n C l a u s e o f t h e F i f t h Amendment. And t h i s h a s l e d i n t o m i n u t e i n q u i r i e s c o n c e r n i n g t h e a c t u a l a d m i n i s t r a t i o n o f f o r e i g n law, i n t o t h e c r e d i b i l i t y o f f o r e i g n d i p l o m a t i c s t a t e m e n t s , and i n t o s p e c u l a t i o n w h e t h e r t h e f a c t t h q t some r e c e i v e d d e l i v e r y o f f u n d s s h o u l d " n o t p r e c l u d e wonderm e n t s a s t o how many may h a v e b e e n d e n i e d ' t h e r i g h t t o r e c e i v e ' 191 . . ." T h e r e f o r e , t h e C o u r t found t h e Oregon s t a t u t e u n c o n s t i t u t i o n a l b e c a u s e i t i n f r i n g e d on t h e e x c l u s i v e l y F e d e r a l j u r i s d i c t i o n o v e r f o r e i g n a f f a i r s . Other S t a t e l a w s which a t t e m p t t o r e s t r i c t t h e o w n e r s h i p o f p r o p e r t y o r i t s p a s s a g e a t t h e o w n e r ' s d e a t h would s i m i l a r l y h a v e t o b e examined i n l i g h t o f t h e exc l u s i v e Federal j u r i s d i c t i o n over f o r e i g n a f f a i r s . B. C o n s t i t u t i o n a l P r e d i c a t e and L i m i t a t i o n s on F e d e r a l R e s t r i c t n o n a j 2 F o r e i g n Ownership of P r o p e r t y While S t a t e s may b e a b l e t o r e s t r i c t t h e p r o p e r t y r i g h t s o f nonsew; a l i e n s i n t h e e x e r c i s e of t h e i r p o l i c e powers, t h e F e d e r a l Government i s a. :s.r of l i m i t e d powers which must l e g i s l a t e on t h e b a s i s o f a power e n u m e r ~ t e di n t h e U.S. C o n s t i t u t i o n . A s t h e r e i s no e x p r e s s F e d e r a l power t o r e g u l a t e Che p u r c h a s e , s a l e o r ownership o f a g r i c u l t u r a l p r o p e r t y , o t h e r t h a n , p e r h a p o , 201 w i t h r e s p e c t t o t e r r i t o r i e s o r t h e D i s t r i c t o f Columbia, o t h e r powers must ' be u t i l i z e d t o s u p p o r t such l e g i s l a t i o n . The most l i k e l y s o u r c e s o f s u c h 2 11 l e g i s l a t i o n a r e t h e F e d e r a l power o v e r n a t u r a l i z a t i o n 7 t h e power t o rep221 u l a t e i n t e r s t a t e and f o r e i g n commerce, and t h e power t o p r o v i d e f o r the 231 national defense. An e x a m i n a t i o n o f t h e s e powers a p p e a r s t o s u b s t a n t i s t s - - t h e e x i s t e n c e of a s i g n i f i c a n t b a s i s f o r such F e d e r a l l e g i s l a t i o n . The Congress h a s e x c l u s i v e power t o set t h e r e q u i r e m e n t s f o r n a t u r a i j z ~ t i o n and c i t i z e n s h i p , and t o admit and e x p e l a l i e n s . I t may a l s o e s t a h l f o t : t h o s e r e q u i r e m e n t s i t deems p r o p e r f o r t h e a d m i s s i o n o r d e p o r t a t i o n o f aliens. A s t h e Court h a s noted i n t h e p a s t : That t h e government o f t h e United S t a t e s , t h r o u g h t h e a c t i o n o f t h e Ze g i s l a t i v e d e p a r t m e n t , c a n e x c l u d e a l i e n s from i t s t e r r i t o r y i s a p r c p s i t i o n which we do n o t t h i n k open t o c o n t r o v e r s y . J u r i s d i c t i e ~6:cr i t s own t e r r i t o r y t o t h a t e x t e n t i s an i n c i d e n t o f e v e r y i n d e p e n d e n t 201 United S t a t e s C o n s t i t u t i o n , A r t . 211 Id., A r t . 1, Sec. 8, C l a u s e 4 . 221 Id., Art. - 1 , Sec. 8, C l a u s e 3. 231 Id., A r t . - 1, Sec. 8 , C l a u s e 1 2 . 1, Sec. 8, C l a u s e 18. n a t i o n . It is a p a r t of i t s independence. I f i t c o u l d n o t e x c l u d e a l i e n s , i t would be t o t h a t e x t e n t s u b j e c t t o t h e c o n t r o l of a n o t h e r power. The U n i t e d S t a t e s , i n t h e i r r e l a t i o n t o f o r e i g n c o u n t r i e s and t h e i r s u b j e c t s o r c i t i z e n s , a r e one n a t i o n , i n v e s t e d w i t h powers which b e l o n g t o i n d e p e n d e n t n a t i o n s , t h e e x e r c i s e of which c a n be i n voked f o r t h e m a i n t e n a n c e of i t s a b s o l u t e independence and s e c u r i t y 241 throughout i t s e n t i r e t e r r i t o r y . - .. I n a d d i t i o n t o t h e o b v i o u s powers of Congress t o r e g u l a t e t h e a d m i s s i o n and e x c l u s i o n of a l i e n s , t h i s power h a s been h e l d t o encompass t h e power t o regu l a t e t h e c o n d u c t of a l i e n r e s i d e n t s and t h e terms of t h e i r a d m i s s i o n and 251 C e r t a i n l y , i t would a p p e a r from t h e p r e c e d e n t s t h a t t h e Congress c o u l d make e n t r a n c e of a n a l i e n i n t o t h e United S t a t e s and r e s i d e n c y of such i n d i v i d u a l c o n d i t i o n e d upon h i s o r h e r not a c q u i r i n g any i n t e r e s t i n d o m e s t i c 261 land. The C o n s t i t u t i o n a l s o g r a n t s t h e Congress e x c l u s i v e power t o " r e g u l a t e 27 1 Commerce w i t h f o r e i g n N a t i o n s , and among t h e S e v e r a l S t a t e s . " The power t o r e g u l a t e i n t e r s t a t e commerce and t h e power t o r e g u l a t e f o r e i g n commerce a r e 241 C h i n e s e E x c l u s i o n Case (Chae Chan P i n g v. United S t a t e s ) , 130 U.S. 581, 6 0 3 , 604 ( 1 8 8 9 ) . 251 S e e , F i a l l o v . B e l l , 430 U.S. 787 (1977); K l e i n d e i n s t v. Mandel, 408 U.S. 7 5 3 ( 1 9 7 2 ) ; and Oceanic N a v i g a t i o n Co. v. S t r a n a h a n , 214 U.S. 320 ( 1 9 0 9 ) . 261 I n Matthews v . D i a z , 426 U.S. 67 (1976), f u r t h e r m o r e , t h e Supreme ~ o u r t u ~ h e lt hde r i g h t of Congress t o make e l i g i b i l i t y f o r c i t i z e n s h i p depend e n t upbn b o t h c h a r a c t e r and t h e d u r a t i o n of a n a l i e n ' s r e s i d e n c e i n a n e f f o r t t o draw t h e l i n e q u a l i f y i n g t h o s e a l i e n s w i t h a g r e a t e r a f f i n i t y t o t h e U n i t e d S t a t e s . The Court n o t e d t h a t w h i l e a l i e n s and c i t i z e n s a r e b o t h ent i t l e d t o t h e b e n e f i t of c o n s t i t u t i o n a l s a f e g u a r d s , i n c l u d i n g t h a t of t h e F i f t h Amendment's p r o h i b i t i o n a g a i n s t d e n i a l of due p r o c e s s of law, Congress h a s no c o n s t i t u t i o n a l d u t y t o p r o v i d e a l l a l i e n s w i t h t h o s e same b e n e f i t s provided t o c i t i z e n s . 271 See f n . 20, s u p r a . - CRS- 1 1 28/ g e n e r a l l y viewed a s coextensive and equal: The Commerce Clause has been the foundation f o r e x t e n s i v e l e g i s l a t i o n both r e g u l a t i n g i n t e r s t a t e and f -rr' 1 : ~ ar The power of t h e Congress under t h i s i , a x ~ d 29/ been u t i l i z e d t o r e s t r i c t t h e import of undesired itG t o impose h i g h tar31/ 30/ i f f s on c e r t a i n goods, and t o r e g u l a t e numerous i n d u s t r i e E Based on t h e s e commerce and p r o h i b i t i n g it. precedents, t h e Congress would appear t o possess t h e power t o r e s t r i c t t h e use of i n s t r u m e n t a l i t i e s of i n t e r s t a t e o r f o r e i g n ccmrmerce t o t r a n s a c t the s a l e o r exchange of p r o p e r t y t o a f o r e i g n person o r r e p r e s e n t a t i v e of a f o r 32 / e i g n person. A t h i r d b a s i s f o r Federal enactments r e s t r i c t i n g f o r e i g n ownership of r e a l p r o p e r t i e s could be t h e Congress's c o n s t i t u t i o n a l p w e r t o " r a i s e and 28/ United S t a t e s v. Carolene Products Co., 304 U.S. 144 (1938); P i t t s Cases * b u r g h x Southern Coal Co. v. Bates, 156 U.S. 577 (1895); and The L i c e m e- ---.5 How. (46 U.S.) 504 (1847); but a l s o s e e Brolan v. United S t a t e s , 236 U . S . 216 (1915). 29/ Weber v. Freed, 239 U.S. 325 (1915); The Abby Dodge, 223 U - S . ~ 6 6 ( 1 9 1 2 x and B u t t e r f i e l d v. Stranahan, 192 U.S. 470 (1904). 30/ Board of T r u s t e e s v. United S t a t e s , 289 U.S. slaug=er, 15 P e t . (40 U.S.) 449 (1841). 48 (1933); Grove8 - --. 31/ See, e.g., t h e I n t e r s t a t e Commerce Act, 24 S t a t . 379 (1887), ---kits-r-s t a t e - h n m e r c e Commission v. Brimson, 154 U.S. 447 (1894) ; t h e Sherman An1.it r u s t Act, 26 S t a t . 531 (1890), United S t a t e s S t e e l v. E. C. Knight C>., 1 5 6 U.S. 1 (1895); and t h e C i v i l R i g h t s Act of 1964, 42 U.S.C. §§ 2000a et=tk_, Heart of A t l a n t a Motel v. United S t a t e s , 379 U.S. 241 (1964); and -Katzenbaif: . v. McClung, 379 U.S. 294 (1964). - a l s o N & ; r t L kid. 32/ See, e - g . , 15 U.S.C. § § 77e, 78e, and 1701 e t 3.; -i c a n Company v. S e c u r i t i e s Exchange Commission, 327 XS. 686 (1946) ; am: E l e c t r i c Bond Company v. S e c u r i t i e s Exchange Cammission, 303 U . S . 419 r 1 ' > , , , -- s u p p o r t Armies." 331 - While t h i s power i s e x p r e s s e d s o l e l y i n t e r m s of p r o v i d i n g a r m i e s , t h e Supreme C o u r t h a s h e l d t h a t i t a l s o p e r m i t s Congress t o make s u c h p e a c e t i m e p r o v i s i o n s a s i t deems n e c e s s a r y t o p r o v i d e f o r t h e n a t i o n a l de- 34 1 - f e n s e . I n Ashwander v. T e n n e s s e e V a l l e y A u t h o r i t y , t h e Court u p h e l d l e g i s l a t i o n p r o v i d i n g f o r t h e c o n s t r u c t i o n of a dam and e l e c t r i c i t y g e n e r a t i n g p l a n t , f i n d i n g t h a t s u c h e n e r g y s u p p l i e s were a n i m p o r t a n t n a t i o n a l d e f e n s e f a c t o r . I f a l e g i s l a t i v e f i n d i n g were made t h a t ownership of a s i g n i f i c a n t amount of U. S . property by f o r e i g n p e r s o n s i m p a i r e d n a t i o n a l p r e p a r e d n e s s , i t a p p e a r s t h a t t h e r e g u l a t i o n o r p r o h i b i t i o n of s u c h ownership c o u l d be c o n s t r u e d as constitutional. I n a d d i t i o n t o a c t i n g upon a n e x p r e s s power u n d e r t h e C o n s t i t u t i o n , Fede r a l l e g i s l a t i o n must a l s o s a t i s f y t h e s t a n d a r d s of Due P r o c e s s and Equal P r o t e c t i o n embodied i n t h e Due P r o c e s s C l a u s e of t h e F i f t h Amendment of t h e 35 1 Constitution. The s t e n d a r d of r e v i e w of F e d e r a l l e g i s l a t i o n c l a s s i f y i n g p e r s o n s on t h e b a s i s of c i t i z e n s h i p , however, d i f f e r s s i g n i f i c a n t l y from t h a t t o which S t a t e laws a r e s u b j e c t . 361 I n Matthews v . D i a z , f o r example, t h e Supreme C o u r t u p h e l d t h e F e d e r a l d e n i a l of s u p p l e m e n t a l m e d i c a l b e n e f i t s u n d e r S o c i a l S e c u r i t y t o a l i e n s who 3 3 / U n i t e d S t a t e s C o n s t i t u t i o n , A r t . 1, Sec. 8 , C l a u s e 11. 341 297 U.S. 288 (1936). 351 The Due P r o c e s s C l a u s e of t h e F i f t h Amendment h a s a l s o been h e l d t o D r o v i d e a o r o t e c t i o n a g a i n s t F e d e r a l d e n i a l of Equal P r o t e c t i o n of t h e Laws. See ~ u c k l e ; v . V a l e o , 424 U.S. 1 ( 1 9 7 6 ) ; and ~ e i n b e r ~ v. e r W e i s e n f e l d , 420 U.S. 6 3 6 , 638, f n . 2 ( 1 9 7 5 ) . 361 426 U.S. 67 ( 1 9 7 7 ) . - had n o t been r e s i d e n t s of t h e United S t a t e s f o r f i v e y e a r s , i n s p i t e o f i t s 37 1 e a r l i e r voiding of a s i m i l a r requirement a p p l i e d t o S t a t e w e l f a r e benefits, Speaking f o r t h e C o u r t , M r . J u s t i c e Stevens noted t h a t : I n s o f a r a s s t a t e welfare p o l i c y i s concerned, t h e r e i s l i t t l e , i f any, b a s i s f o r t r e a t i n g p e r s o n s who a r e c i t i z e n s o f a n o t h e r S t a t e d i f f e r e n t l y from p e r s o n s who a r e c i t i z e n s o f a n o t h e r c o u n t r y . Both g r o u p s a r e q o n c i t i z e n s a s f a r a s t h e S t a t e ' s i n t e r e s t i s concerned. Thus, a d i v i s i o n by a S t a t e of t h e c a t e g o r y of p e r s o n s who a r e n o t c i t i z e n s o f t h a t S t a t e i n t o s u b c a t e g o r i e s o f U n i t e d S t a t e s c i t i z e n s and a l i e n s h a s no a p p a r e n t j u s t i f i c a t i o n , w h e r e a s , a c o m p a r a b l e c l a s s i f i c a t i o n by t h e F e d e r a l Government i s a r o u t i n e and n o r m a l l y l e g i t i m a t e p a r t o f i t s b u s i n e s s . F u r t h e r m o r e , whereas t h e C o n s t i t u t i o n i n h i b i t s e v e r y S t a t e ' s power t o r e s t r i c t t r a v e l a c r o s s i t s own b o r d e r s , C o n g r e s s i s e x p l i c i t l y empowered t o e x e r c i s e t h a t t y p e o f c o n t r o l o v e r t r a v e l a c r o s s t h e b o r d e r s o f t h e United S t a t e s . 381 T h e r e f o r e , i t would a p p e a r t h a t F e d e r a l l e g i s l a t i o n r e s t r i c t i n g t h e s a l e t o o r o w n e r s h i p by f o r e i g n p e r s o n s o f r e a l o r o t h e r p r o p e r t i e s i n t h e U n i t e d S t a t e s would s a t i s f y t h e c o n s t i t u t i o n a l r e q u i s i t e s o f d u e p r o c e s s and e q u a l p r o t e c t i o n , u n d e r t h e s t a n d a r d s a p p l i e d t o s u c h l a w s by t h e U n i t e d S t a t e s Supreme Court . Impact of T r e a t i e s on S t a t e and F e d e r a l R e s t r i c t i o n s on F o r e i g n owners hi^ of P r o p e r t y i n t h e U n i t e d S t a t e s G e n e r a l l y , t r e a t i e s between t h e U n i t e d S t a t e s and o t h e r n a t i o n s a r e a p a r t of F e d e r a l law. 371 Graham v. - A s s u e h , t h e y g o v e r n o v e r i n c o n s i s t e n t S t a t e l a w s and R i c h a r d s o n , 4 0 3 U.S. 365 ( 1 9 7 1 ) . 381 4 2 6 U.S. a t 85. See a l s o , P e r k i n s v. S m i t h , 4 2 6 U.S. 913 a f f ' g 370 F. SUG. 134 (D. Md. 19741, u p h o l d i n g e x c l u s i o n o f a l i e n s from b o t h e r a n d and p e t i t F e d e r a l j u r i e s . L p r i o r inconsistent Federal s t a t u t e s . 391 - A l t h o u g h few t r e a t i e s t o which t h e Uni- ted States is a party, d i r e c t l y g r a n t o r deny f o r e i g n n a t i o n a l s t h e r i g h t t o 401 own p r o p e r t y i n t h e U n i t e d s t a t e s , many U.S. t r e a t i e s may i m p a c t upon t h e v a l i d i t y of S t a t e o r F e d e r a l laws r e s t r i c t i n g t h e r i g h t s o f f o r e i g n p e r s o n s t o hold property i n t h e United S t a t e s . Perhaps t h e t r e a t y p r o v i s i o n s most a f f e c t i n g t h e v a l i d i t y o f S t a t e o r F e d e r a l l e g i s l a t i o n r e s t r i c t i n g t h e r i g h t s o f f o r e i g n n a t i o n a l s t o own r e a l property i n t h e United S t a t e s a r e t h e so-called trade treaties. " n a t i o n a l s c l a u s e s " o f many Under t h e s e c l a u s e s , t h e c i t i z e n s o f t h e b e n e f i c i a r y c o u n t r y a r e a f f o r d e d t h e r i g h t t o e s t a b l i s h and m a i n t a i n a g e n c i e s , o f f i c e s , f a c t o r i e s and o t h e r o p e r a t i o n s i n t h e U n i t e d S t a t e s . The n a t i o n a l s c l a u s e i n o u r t r a d e t r e a t y with Japan s t a t e s , f o r example: 1. N a t i o n a l s and c o m p a n i e s o f e i t h e r P a r t y s h a l l b e a c c o r d e d n a t i o n a l t r e a t m e n t w i t h r e s p e c t t o engaging i n a l l t y p e s o f commercial, indust r i a l , f i n a n c i a l and o t h e r b u s i n e s s a c t i v i t i e s w i t h i n t h e t e r r i t o r i e s o f t h e o t h e r P a r t y , w h e t h e r d i r e c t l y o r b y a g e n t o r t h r o u g h t h e medium o f a n y form o f l a w f u l j u r i d i c a l e n t i t y . A c c o r d i n g l y , s u c h n a t i o n a l s and c o m p a n i e s s h a l l be p e r m i t t e d w i t h i n s u c h t e r r i t o r i e s ( a ) t o e s t a b l i s h 391 S e e , M i s s o u r i v . H o l l a n d , 252 U.S. 416 ( 1 9 2 0 ) . 4 0 1 An e x c e p t i o n i s a t r e a t y w i t h F r a n c e which r e q u i r e s t h e n a t i o n a l s o f b o t h c o u n t r i e s t o a p p l y f o r and r e c e i v e p r i o r government a p p r o v a l b e f o r e p u r c h a s i n g r e a l p r o p e r t y i n t h a t country. See, P r o t o c o l t o Convention o f Estab2398, l i s h m e n t , U n i t e d S t a t e s - F r a n c e , Nov. 2 5 , 1 9 5 9 , 1 1 4 ( 1 9 6 0 ) , 1 1 U.S.T. 2 4 2 3 , T.I.A.S. No. 4625. C e r t a i n t r e a t i e s a l s o c o n t a i n c l a u s e s a s s u r i n g t h e r i g h t s o f n a t i o n a l s o f o t h e r c o u n t r i e s t o i n h e r i t p r o p e r t y from r e l a t i v e s dyi n g i n t h e U n i t e d S t a t e s . S e e , H a u e r s t e i n v . Lynham, 1 0 0 U.S. 4 8 3 ( 1 8 8 0 ; Geog r o y v . R i g g s , 133 U.S. 258 ( 1 8 9 0 ) ; S u l l i v a n v. K i d d , 254 U.S. 4 3 3 ( 1 9 2 1 ) ; N e i l s o n v . J o h n s o n , 279 U.S. 47 ( 1 9 2 9 ) ; and K o l o v r a t v . O r e g o n , 336 U.S. 187 (1961). and m a i n t a i n b r a n c h e s , a g e n c i e s , o f f i c e s , f a c t o r i e s and o t h e r e s t a b l i s h ments a p p r o p r i a t e t o t h e conduct o f t h e i r b u s i n e s s ; ( b ) t o o r g a n i z e c o w p a n i e s under t h e g e n e r a l company laws o f such o t h e r P a r t y , and t o acq u i r e m a j o r i t y i n t e r e s t s i n companies o f s u c h o t h e r P a r t y ; and ( c ) t o c o n t r o l and manage e n t e r p r i s e s which t h e y h a v e e s t a b l i s h e d o r a c q u i r e d . Moreover, e n t e r p r i s e s which t h e y c o n t r o l , whether i n t h e form o f i n d i v i d u a l p r o p r i e t o r s h i p s , companies o r o t h e r w i s e , s h a l l , i n a l l t h a t r e l a t e s t o t h e conduct o f t h e a c t i v i t i e s t h e r e o f , b e a c c o r d e d t r e a t m e n t no less f a v o r a b l e t h a n t h a t accorded l i k e e n t e r p r i s e s c o n t r o l l e d by n a t i o n a l s and companies o f s u c h o t h e r P a r t y . 411 A d d i t i o n a l l y , t h e United S t a t e s h a s s i g n e d numerous " T r e a t i e s o f F r i e n d s h i p , " c o n t a i n i n g "most f a v o r e d n a t i o n s " (MFN) c l a u s e s . Under t h e MFN c l a u s e s , t h e c i t i z e n s o f t h e b e n e f i c i a r y c o u n t r y a r e e n t i t l e d t o t h e same t r e a t m e n t under t h e laws of t h e United S t a t e s a s may b e accorded t h e n a t i o n a l s of any o t h e r n a t i o n . The a p p l i c a b l e MFN c l a u s e o f o u r t r e a t y w i t h Japan, which f o l l o w s t h e n a t i o n a l s c l a u s e o f t h a t t r e a t y , s t a t e s , f o r example: 4. N a t i o n a l s and companies o f e i t h e r P a r t y , a s w e l l a s e n t e r p r i s e s cont r o l l e d by s u c h n a t i o n a l s and companies, s h a l l i n any e v e n t b e a c c o r d e d most-favored-nation t r e a t m e n t w i t h r e f e r e n c e t o t h e m a t t e r s t r e a t e d i n t h e p r e s e n t Article. 421 Because F e d e r a l laws and t r e a t i e s a r e t h e supreme law o f t h e l a n d , p r i o r 43/ i n c o n s i s t e n t F e d e r a l s t a t u t e s and a l l i n c o n s i s t e n t S t a t e s t a t u t e s a r e i n v a l i x T h e r e f o r e , i t a p p e a r s t h a t a contemporary S t a t e law o r p r i o r F e d e r a l l a w which r e s t r i c t s t h e r e a l p r o p e r t y ownership r i g h t s o f t h e n a t i o n a l s o f c o u n t r i e s with which t h e United S t a t e s h a s a t r e a t y c o n t a i n i n g a " n a t i o n a l s c l a u s e " 411 United S t a t e s - J a p a n T r e a t y o f A p r i l 2, 1953, A r t i c l e V I I , 4 U.S.T. 2 0 6 9 . I t may be n o t e d t h a t s u c h t r e a t i e s o f t e n a l s o c o n t a i n some l i m i t a t i o n s with r e s p e c t t o f o r e i g n c o n t r o l of c e r t a i n s p e c i a l i n d u s t r i e s , such a s shipp i n g , t r a n s p o r t a t i o n , b a n k i n g , and e x p l o i t a t i o n o f n a t u r a l r e s o u r c e s . 421 - See c a s e s c i t e d i n f o o t n o t e 431 Id. - a t 4 U.S.T. 2070. s/. would b e i n v a l i d . S i m i l a r l y , an i n c o n s i s t e n t S t a t e law o r a p r i o r i n c o n s i s - t e n t F e d e r a l law u n d e r which t h e n a t i o n a l s o f a c o u n t r y e n t i t l e d t o most fav o r e d n a t i o n s s t a t u s was more s e v e r e l y r e s t r i c t e d i n t h e i r r i g h t s t o h o l d r e a l p r o p e r t y t h a n t h a n t h e c i t i z e n s o f o t h e r c o u n t r i e s would a p p e a r t o b e invalid. 111. Summary o f F e d e r a l S t a t u t e s R e g u l a t i n g o r L i m i t i n g F o r e i g n I n v e s t m e n t i n t h e United S t a t e s The t h i r d s e c t i o n o f t h i s r e p o r t s u m m a r i z e s t h e F e d e r a l s t a t u t e s w h i c h r e o t r i c t o r r e q u i r e r e p o r t i n g o r s t u d y o f f o r e i g n investment i n t h e United States. T h e s e s t a t u t e s a r e d i v i d e d i n t o two c a t e g o r i e s : t h o s e which r e q u i r e o n l y r e p o r t i n g and d i s c l o s u r e and t h o s e which r e s t r i c t f o r e i g n d i r e c t o r p o r t f o l i o i n v e s t m e n t i n t h e U n i t e d S t a t e s . With r e s p e c t t o b o t h t y p e s o f s t a t u t e s , t h i s l i s t s h a l l n o t b e l i m i t e d t o laws r e l a t i n g t o f o r e i g n i n v e s t ment i n U n i t e d S t a t e s r e a l e s t a t e , b u t x h a l l d i s c u s s l a w s r e l a t i n g t o f o r e i g n investment i n a l l a s p e c t s of United S t a t e s e n t e r p r i s e . A. Laws R e s p e c t i n g R e p o r t i n g and D i s c l o s u r e P u b l i c Law 95-460, 9 5 t h Cong., 2d S e s s . ( 1 9 7 8 ) [ A g r i c l u t u r a l F o r e i g n I n v e s t - ment D i s c l o s u r e Act o f 19781 R e q u i r e s any " f o r e i g n p e r s o n " who a c q u i r e s , t r a n s f e r s , o r h o l d s any i n t e r e s t i n a g r i c u l t u r a l l a n d s , o t h e r t h a n a s e c u r i t y i n t e r e s t such a s a mortgage, t o r e p o r t such h o l d i n g o r t r a n s f e r t o t h e S e c r e t a r y o f A g r i c u l t u r e (Form ASCS-153). Holdings of a g r i c u l t u r - a l l a n d by f o r e i g n p e r s o n s on F e b r u a r y 1 , 1 9 7 9 , w e r e a l s o r e q u i r e d t o b e r e p o r t e d t o t h e S e c r e t a r y o f A g r i c u l t u r e on o r b e f o r e August 6 , 1979. R e p o r t s a r e f i l e d i n t h e c o u n t y where t h e l a n d i s l o c a t e d . A l l t r a n s f e r s o f a g r i c u l t u r a l l a n d t o f o r e i g n p e r s o n s must b e re- p o r t e d w i t h i n 90 days a f t e r t h e d a t e o f a c q u i s i t i o n o f t h e l a n d b y a foreign person. 44 / - For t h i s p u r p o s e , a f o r e i g n p e r s o n i n c l u d e s a n y i n d i - v i d u a l who i s n o t l a w f u l l y r e s i d i n g i n t h e U n i t e d S t a t e s ( h a v i n g a p p l i e d f o r o r r e c e i v e d p a r o l e o r permanent r e s i d e n t s t a t u s under t h e Imm i g r a t i o n and N a t i o n a l i t y A c t ) and who a r e n o t c i t i z e n s o f t h e U n i t e d S t a t e s , t h e Northern Mariana I s l a n d s , o r t h e T r u s t T e r r i t o r i e s o f t h e P a c i f i c I s l a n d s . A f o r e i g n person a l s o i n c l u d e s an o r g a n i z a t i o n ( o t h e r t h a n a f o r e i g n government) which i s c r e a t e d under t h e laws o f a f o r e i g n c o u n t r y o r i n which a s i g n i f i c a n t i n t e r e s t o r s u b s t a n t i a l cont r o l i s owned by f o r e i g n p e r s o n s . T h e r e f o r e , United S t a t e s c o r p o r a t i o n s i n which f o r e i g n i n v e s t o r s own a s u b s t a n t i a l o r s i g n i f i c a n t i n t e r e s t and f o r e i g n c o r p o r a t i o n s would be f o r e i g n p e r s o n s f o r p u r p o s e o f t h e s e r e p o r t i n g and d i s c l o s u r e r u l e s . I n d e t e r m i n i n g ownership f o r r e p o r t i n g p u r p o s e s , a l l d i r e c t and i n d i r e c t ownership i s t a k e n i n t o a c c o u n t . I f ownership o f U.S. land i s through a l e g a l e n t i t y , a r e p o r t i s r e q u i r e d o n l y i f t h e f o r e i g n person owns, d i r e c t l y o r i n d i r e c t l y , a t l e a s t f i v e p e r c e n t o f t h e e n t i t y . Also, ownership i n c l u d e s any l e a s e h o l d f o r t e n y e a r s o r more and a n y noncont i n g e n t remainder o r o t h e r f u t u r e i n t e r e s t . - 44/ - See 7 C.F.R. 5 5 781, 781.3(c). The r e p o r t i n g r e q u i r e m e n t s a p p l y t o a g r i c u l t u r a l l a n d s o n l y . This i n c l u d e s p r o p e r t y c u r r e n t l y used f o r a g r i c u l t u r e , timber, o r f o r e s t r y , o r which i s c u r r e n t l y i d l e b u t which h a s b e e n u s e d f o r s u c h a p u r p o s e during t h e past f i v e years. A g r i c u l t u r a l land does n o t i n c l u d e property u n d e r o n e a c r e , which p r o d u c e s less t h a n $ 1 , 0 0 0 a n n u a l g r o s s s a l e s o f agr i c u l t u r a l p r o d u c t s , and l a n d t h e p r o d u c t s o f which a r e p r o d u c e d f o r p e r s o n a l o r household consumption. The S e c r e t a r y o f A g r i c u l t u r e may i m p o s e c i v i l p e n a l t i e s f o r f a i l u r e t o f i l e the required declarations. twenty-five The p e n a l t i e s may b e a s g r e a t a s p e r c e n t (25%) o f t h e f a i r market v a l u e o f t h e property. The Act a l s o r e q u i r e s t h e S e c r e t a r y o f A g r i c u l t u r e t o a n a l y z e t h e c o l l e c t e d i n f o r m a t i o n w i t h i n s i x months o f t h e e f f e c t i v e d a t e o f t h e r e p o r t i n g requirements, t o determine t h e e f f e c t s of f o r e i g n ownership of U n i t e d S t a t e s a g r i c u l t u r a l p r o p e r t i e s , p a r t i c u l a r l y w i t h r e s p e c t t o fami l y f a n s and r u r a l c o m m u n i t i e s , and t o r e p o r t t h e f i n d i n g s t o t h e Cong r e s s and t h e P r e s i d e n t . S i m i l a r r e p o r t s a r e r e q u i r e d a t t h e end o f t h e t w e l v e month p e r i o d b e g i n n i n g on t h e e f f e c t i v e d a t e o f t h e r e p o r t i n g requirements. 12 U.S.C. S 3101. The I n t e r n a t i o n a l Banking Act o f 1978 r e q u i r e s r e g i s t r a - t i o n w i t h t h e S e c r e t a r y o f t h e T r e a s u r y o f "any f o r e i g n b a n k t h a t maint a i n s an o f f i c e o t h e r t h a n a b r a n c h o r a g e n c y i n a n y S t a t e " o f t h e United States. A "branch" i s a n y p l a c e where " d e p o s i t s a r e r e c e i v e d " and an " a g e n c y " i s a n y p l a c e " a t which c r e d i t b a l a n c e s a r e m a i n t a i n e d i n c i d e n t a l t o o r a r i s i n g o u t o f t h e e x e r c i s e o f b a n k i n g powers, c h e c k s a r e p a i d , o r money i s l e n t , " b u t a t which d e p o s i t s may n o t b e a c c e p t e d from U.S. 15 U.S.C. citizens o r residents. S 78a n o t e . [Domestic and F o r e i g n I n v e s t m e n t Improved D i s c l o s u r e Expands t h e d i s c l o s u r e r e q u i r e m e n t s under t h e S e c u r i t i e r Act of 19771 Act o f 1933, a p p l i c a b l e t o p e r s o n s who p r o p o s e t o a c q u i r e t h r o u g h a t e n d e r o f f e r o r a l r e a d y p o s s e s s b e n e f i c i a l o w n e r s h i p o f more t h a n f i v e p e r c e n t ( 5 % ) of t h e v o t i n g s t o c k o f a c o r p o r a t i o n , t o r e q u i r e d i s c l o s u r e o f c i t i z e n s h i p , r e s i d e n c e and n a t u r e o f t h e b e n e f i c i a l e o n t r o l . nib was e n a c t e d a s an amendment t o t h e F o r e i g n C o r r u p t P r a c t i c e 8 Act o f 15 U.S.C. S 78b n o t e . [The F o r e i g n I n v e s t m e n t S t u d y Act o f 19741 Instructs t h e S e c r e t a r i e s of t h e T r e a s u r y and Commerce t o engage i n a d e t a i l e d and thorough s t u d y o f f o r e i g n d i r e c t and p o r t f o l i o i n v e s t m e n t i n t h e United S t a t e s . The Department o f Commerce was d i r e c t e d t o examine t h e s c o p e and impact o f f o r e i g n d i r e c t i n v e s t m e n t i n t h e United S t a t e s snd t h e Department o f t h e T r e a s u r y was d i r e c t e d t o examine t h e s c o p e and impact o f f o r e i g n p o r t f o l i o i n v e s t m e n t i n t h e United S t a t e s . For t h e p u r p o s e of t h e s e s t u d i e s , f o r e i g n d i r e c t i n v e s t m e n t was C e f i n e d a s ehe ownership o f t e n p e r c e n t ( 1 0 % ) o r more o f t h e v o t i n g s h a r e s o r i t s ., e q u i v a l e n t ( i n t h e c a s e o f an u n i n c o r p o r a t e d e n t e r p r i s e ) , and f o r e i g n p o r t f o l i o i n v e s t m e n t was d e f i n e d a s t h e i n v e s t m e n t i n v o t i n g s t o c k s i n v o l v i n g l e e s t h a n t e n p e r c e n t ( 1 0 % ) o w n e r s h i p by a f o r e i g n i n v e s t o r , 451 - Pub. L. 95-213, ~ i t l eI , 9 5 t h Cong,, 1 s t S e s s . ( 1 9 7 7 ) , and t h e investment i n non-voting stocks. 461 - The s t u d i e s were conducted by e x t e n s i v e s u r v e y q u e s t i o n n a i r e s ( T r e a s u r y Form FPI-1 and FPI-2, and Commerce Form B-12), t h e r e s p o n s e t o which was r e q u i r e d under regula47 1 t i o n s i s s u e d by t h e Commerce and T r e a s u r y ~ e ~ a r t m e n t s . I n 1976, b o t h d e p a r t m e n t s i s s u e d multi-volume 481 g r e ss .- 15 U.S.C. 5 r e p o r t s of t h e i r f i n d i n g- s t o t h e Con- 785. Requires t h e F e d e r a l Energy A d m i n i s t r a t o r ( t r a n s f e r r e d 49/ t h e S e c r e t a r y of Energy i n 1 9 7 7 ) , t o conduct a comprehensive review f o r e i g n ownership o f , i n f l u e n c e on and c o n t r o l of domestic energy s o u r c e s , and t o r e p o r t t o t h e Congress on such i n v e s t i g a t i o n . The le- g i s l a t i o n was e n a c t e d i n 1974 and t h e r e p o r t was f i l e d i n December of 501 t h a t year. 22 U.S.C. 5 3101 t o 3108. [The I n t e r n a t i o n a l Investment Study Act of 19761 T h i s Act g r a n t s t h e P r e s i d e n t " c l e a r and unambiguous a u t h o r i t y " t o cond u c t g e n e r a l i n v e s t i g a t i o n s and r e q u i r e s p e r i o d i c i n v e s t i g a t i o n s e v e r y 461 1 Commerce Department, Report t o t h e Congress on Foreign Direct Investment i n t h e United S t a t e s , p. 4-5 (1976); and 1 Treasury Department, Ep o r t t o t h e Congress on Foreign P o r t f o l i o Investment i n t h e United S t a t e s , p. v i i , 139-41 (1976). 471 3 1 C.F.R., P a r t 129 (1977) ( T r e a s u r y Department); and 15 C.F.R., P a r t 804 (1978) (Commerce Department). 481 Commerce Department, Report t o t h e Congress on Foreign D i r e c t Investment i n t h e United S t a t e s , Volumes 1-9 (1976); T r e a s u r y Department, Report t o t h e Congress on Foreign P o r t f o l i o Investment i n t h e United S t a t e s , Volumes 1-2 (1976). 491 - See Pub. L. 95-91, 9 5 t h Cong., 1st Sess. (1977). 501 F e d e r a l Energy Administration, O f f i c e of I n t e r n a t i o n a l Energy Aff a i r s r ~ e ~ o trot Congress on F o r e i g n Ownership C o n t r o l and I n f l u e n c e on Dom e s t i c Energy Sources and S u p p 9 (1974). f i v e y e a r s i n t o t h e e x t e n t and i m p a c t o f f o r e i g n i n v e s t m e n t i n t h e Uni.-51/ t e d S t a t e s and i n t o United S t a t e s i n v e s t m e n t abroad. The P r e s i d e n t was empowered t o d e l e g a t e by e x e c u t i v e o r d e r , power t o t h e Commerce and T r e a s u r y Departments t o s t u d y f o r e i g n d i r e c t and p o r t f o l i o i n v e s t m e n t , r e s p e c t i v e l y , and t h e a c t r e q u i r e d benchmark s u r v e y s by t h e s e d e p a r t ments a t l e a s t once e v e r y f i v e y e a r s , a s w e l l a s p r o v i d i n g f o r c o n t i n 521 u i n g and ongoing s t u d i e s . The Act empowered t h e r e q u i r e m e n t o f r e p o r t - - i n g and r e c o r d k e e p i n g , a s n e c e s s a r y t o e f f e c t u a t e t h e p u r p o s e s o f t h e Act. The Act a l s o a u t h o r i z e s t h e P r e s i d e n t t o s t u d y t h e f e a s i b i l i t y o f a m o n i t o r i n g system t o s t u d y f o r e i g n i n v e s t m e n t i n l a n d . Both c i v i l and c r i m i n a l p e n a l t i e s a p p l y t o t h o s e f a i l i n g t o r e p l y t o s u c h r e q u e s t s f o r r e p o r t i n g o r information. 46 V.S.C. § 41. The s a l e o f any v e s s e l r e g i s t e r e d a s a United S t a t e s v e s s e l t o any f o r e i g n c o u n t r y o r p e r s o n must b e r e p o r t e d t o t h e U n i t e d S t a t e s government, o r t h e s h i p w i l l e s c h e a t . - 511 Presumably, t h e a u t h o r i t y p r o v i d e d by t h i s l a w was t o b e c o n s t r u e d a s " c l e a r and unambiguous" by comparison w i t h E x e c u t i v e Order No. 11858 (May 7, 1 9 7 5 ) , by which t h e P r e s i d e n t e s t a b l i s h e d an i n t e r d e p a r t m e n t a l Committee on F o r e i g n I n v e s t m e n t i n t h e United S t a t e s , " t o m o n i t o r f o r e i g n i n v e s t m e n t a c t i v i t i e s i n t h e United S t a t e s and t o i n i t i a t e l e g i s l a t i v e and r e g u l a t o r y actions i n t h i s area. - 86; and 521 See E x e c u t i v e Order No. 11961 ( J a n . 19, 19771, 3 C.F.R. E x e c u t i v e Order No. 11962, 3 C.F.R. 86, implementing t h i s a u t h o r i t y . B. F e d e r a l Laws D i r e c t l y Impacting upon Foreign Investment i n t h e United S t a t e s 10 U.S.C. 55 2271-72, 2279. Design c o n t e s t s a r e h e l d t o determine who s h a l l r e c e i v e a c o n t r a c t t o d e s i g n a i r c r a f t , a i r c r a f t p a r t s , and a e r o n a u t i c a l accessories. No c o n t r a c t under t h e s e c o n t e s t s s h a l l be awarded t o an i n d i v i d u a l who i s not a U.S. c i t i z e n , a c o r p o r a t i o n i n which l e s s t h a n s e v e n t y - f i v e p e r c e n t (75%) of t h e c a p i t a l s t o c k i s h e l d by and a l l of t h e d i r e c t o r s of which a r e U.S. c i t i z e n s , o r an i n d i v i d u a l o r c o r p o r a t i o n without a m a n u f a c t u r i n g p l a n t i n t h e United S t a t e s . A d d i t i o n a l l y , an a l i e n em- ployee of a c o n t r a c t o r cannot have a c c e s s o t p l a n s o r s p e c i f i c a t i o n s , u n l e s s a p p r o v a l i s g i v e n by t h e S e c r e t a r y of t h e m i l i t a r y department involved i n t h e c o n t r a c t . 10 U.S.C. S 7435. C i t i z e n s of a f o r e i g n c o u n t r y which does n o t , by law, cus- tom o r r e g u l a t i o n , permit U.S. c i t i z e n s t h e p r i v i l e g e of l e a s i n g p u b l i c l a n d s t h e r e i n , s h a l l be denied t h e r i g h t t o own o r b e n e f i t from, e i t h e r d i r e c t l y o r by s t o c k ownership, t h e l e a s e of any land i n t h e n a v a l petroleum o r o t h e r n a v a l f u e l r e s e r v e s . The S e c r e t a r y of t h e Navy can c a n c e l any l e a s e s made i n v i o l a t i o n of t h i s p r o h i b i t i o n . 12 U.S.C. S S 2 6 , 72. The N a t i o n a l Bank Act r e q u i r e s a f o r e i g n bank which wishes t o do b u s i n e s s i n t h e United S t a t e s by means of a s u b s i d i a r y nat i o n a l bank t o seek approval of t h e Comptroller of t h e Currency, and a l l d i r e c t o r s of t h e i n s t i t u t i o n would have t o be U.S. c i t i z e n s , except when t h e a s s o c i a t i o n i s a s u b s i d i a r y o r a f f i l i a t e of a f o r e i g n bank, t h e Comptroller h a s d i s c r e t i o n t o waive t h e c i t i z e n s h i p requirement f o r a m i n o r i t y of t h e board members. Furthermore, a t l e a s t two-thirds of t h e d i r e c t o r s must r e s i d e , and must have r e s i d e d f o r a t l e a s t one y e a r preceding t h e i r e l e c t i o n , i n o r w i t h i n 100 m i l e s o f t h e S t a t e o r t e r r i t o r y in which t h e bank i s l o c a t e d . A l i m i t a t i o n on c i t i z e n s h i p o f d i r e c t o r s i s n o t a l i m i t a t i o n on t h e c i t i z e n s h i p o f t h e owners, however, e x c e p t i n s o f a r a s e v e r y d i r e c t o r "must own i n h i s own r i g h t s h a r e s o f t h e c a p i t a l s t o c k o f t h e a s s o c i a t i o n o f which he i s a d i r e c t o r t h e a g g r e g a t e p a r v a l u e o f which s h a l l n o t be l e s s t h a n $1,000," ( o r $500 f o r c e r t a i n smaller banks). Thus, a t l e a s t a s m a l l p e r c e n t a g e o f t h e s h a r e s o f e v e r y n a t i o n a l bank must be owned by U.S. 12 U.S.C. citizens. $ 5 1813 t o 1815. The F e d e r a l D e p o s i t I n s u r a n c e Act p r o v i d e s t h a t n a t i o n a l member banks ( i . e . , sured. o f t h e F e d e r a l Reserve System) must be in- N a t i o n a l nonmember banks and S t a t e banks may b e i n s u r e d , b u t o t h e r banks ( a s opposed t o b r a n c h e s ) may n o t b e i n s u r e d . ( T h e r e i s no F e d e r a l r e q u i r e m e n t t h a t banks i n c o r p o r a t e d under S t a t e law b e i n s u r e d ) . The terms " S t a t e nonmember bank" and " n a t i o n a l nonmember banks" a r e l i m i t e d t o t h o s e banks i n c o r p o r a t e d under t h e laws o f o r l o c a t e d i n a S t a t e o f t h e United S t a t e s , a t e r r i t o r y o f t h e U n i t e d S t a t e s , P u e r t o R i c o , Guam o r t h e V i r g i n I s l a n d s . T h e r e f o r e , w h i l e f o r e i g n i n v e s t m e n t i n U.S. banks i s n o t p r e c l u d e d e n t i r e l y , t h e banks must b e i n c o r p o r a t e d i n t h e United S t a t e s o r l o c a t e d t h e r e i n . 12 U.S.C. S S 3101-02. Under t h e I n t e r n a t i o n a l Banking Act o f 1978, a f o r e i g n bank may e n t e r t h e U.S. m a r k e t s by e s t a b l i s h i n g a f e d e r a l "branch o r agency1' ( s e e d i s c u s s i o n of t h e s e t e r m s r e g a r d i n g t h e r e p o r t i n g r e q u i r e m e n t s , s u p r a ) , a s an a l t e r n a t i v e t o q u a l i f y i n g under s t a t e law. e i g n bank may n o t e x e r c i s e f i d u c i a r y powers a s a f e d e r a l agency. A for- CRS- 24 16 U.S.C. § 742c. The S e c r e t a r y of t h e I n t e r i o r may l e n d money f o r t h e p u r c h a s e , c o n s t r u c t i o n and o p e r a t i o n of commercial f i s h i n g v e s s e l s and g e a r , but o n l y i f t h e l o a n a p p l i c a n t i s a U.S. owned 7 5 p e r c e n t by U.S. 16 U.S.C. § 797(e). c i t i z e n or corporation citizens. The F e d e r a l Energy R e g u l a t o r y Commission i s a u t h o r i z e d t o i s s u e l i c e n s e s f o r c o n s t r u c t i o n of dams, c o n d u i t s and r e s e r v o i r s o n l y t o c i t i z e n s , a s s o c i a t i o n s of c i t i z e n s , d o m e s t i c c o r p o r a t i o n s and S t a t e and l o c a l governments. 1 6 U.S.C. § 1821-1824. F o r e i g n f i s h i n g w i t h i n t h e f i s h e r y c o n s e r v a t i o n zone ( t h e a r e a between t t t c o a s t l i n e of t h e U n i t e d S t a t e s and t h e 2 0 0 mile l i m i t ) o r t h e Continental Shelf f i s h e r y resources i s prohibited, except u n d e r p e r m i t s i s s u e d by t h e S e c r e t a r y of Commerce, and s u c h p e r m i t s c a n be i s s u e d t o v e s s e l s of f o r e i g n n a t i o n s ( n o t documented i n t h e United S t a t e s ) , o n l y p u r s u a n t t o v a l i d I n t e r n a t i o n a l F i s h e r y Agreement, and o n l y i f t h a t n a t i o n e x t e n d s r e c i p r o c a l r i g h t s t o U.S. 2 2 U.S.C. § 2198(c). fishing vessels. An i n v e s t o r e l i g i b l e f o r i n s u r a n c e by t h e Overseas P r i - v a t e I n v e s t m e n t C o r p o r a t i o n may be a U.S. i n d i v i d u a l , a U.S. corporation, p a r t n e r s h i p o r a s s o c i a t i o n , o r a f o r e i g n o r g a n i z a t i o n a t least n i n e t y f i v e p e r c e n t ( 9 5 % ) of which i s owned by a U.S. p e r s o n . 3 0 U.S.C. 55 22, 2 4 . No p e r s o n may e x p l o r e f o r o r e x t r a c t m i n e r a l d e p o s i t s on F e d e r a l l a n d s u n l e s s t h e y a r e U.S. t h e i r i n t e n t t o become 3.S. c i t i z e n s , a l i e n s who have d e c l a r e d c i t i z e n s , o r domestic c o r p o r a t i o n s owned by f o r e i g n persons. ?C 5.S.C. § 181. L e a s e s of m i n e r a l l a n d s of t h e United S t a t e s , u n d e r t h e qt-r%l Lagd: T e a s : ~ ' Act of 1 9 2 0 , may o n l y be made t o U.S. c i t i z e n s , a s s o c i a t i o n s and c o r p o r a t i o n s of U.S. o t h e r c o u n t r y which a f f o r d s U.S. customs o r r e g u l a t i o n s . c i t i z e n s , and t o c i t i z e n s of an- c i t i z e n s s i m i l a r r i g h t s under i t s law, Those f o r e i g n p e r s o n s not q u a l i f y i n g a c c o r d i n g - l y cannot t a k e such i n t e r e s t s i n d i r e c t l y , t h r o u g h s t o c k ownership o r otherwise. 30 U.S.C. § 1015. Geothermal p r o d u c t i o n l e a s e s on F e d e r a l l a n d s may be is- sued only t o U.S. c i t i z e n s , a s s o c i a t i o n s of such c i t i z e n s , d o m e s t i c c o r p o r a t i o n s and S t a t e o r l o c a l governments. 33 U.S.C. § 1503(g), 1502(5). The S e c r e t a r y of T r a n s p o r t a t i o n may i s s u e a l i c e n s e t o c o n s t r u c t , o p e r a t e o r own a deepwater p o r t o n l y t o a U.S. citizen. A "United S t a t e s c i t i z e n " i n c l u d e s a group o r a s s o c i a t i o n o r ganized i n t h e United S t a t e s which has a s i t s p r e s i d e n t o r o t h e r c h i e f e x e c u t i v e o f f i c e r , i t s c h a i r p e r s o n of t h e board of d i r e c t o r s , and a m a j o r i t y of a quorum of i t s d i r e c t o r s U.S. 40 U.S.C. § 782. citizens. The S e c r e t a r y of Defense may n o t d i s p o s e of l o n g - l i n e conr m u n i c a t i o n s f a c i l i t i e s i n Alaska i n a manner which would p l a c e t h e i r d i r e c t o r i n d i r e c t c o n t r o l i n a n a l i e n o r r e p r e s e n t a t i v e of a n a l i e n , a f o r e i g n government o r i t s r e p r e s e n t a t i v e , a c o r p o r a t i o n o r g a n i z e d u n d e r t h e laws of a f o r e i g n government, a c o r p o r a t i o n of which any o f f i c e r o r d i r e c t o r o r owner of o n e - f i f t h o r more of t h e c a p i t a l s t o c k i s a n a l i e n , a f o r e i g n government, o r a r e p r e s e n t a t i v e of e i t h e r . D i s p o s i t i o n may a l s o not be made t o a c o r p o r a t e s u b s i d i a r y of a c o r p o r a t i o n a t l e a s t one-fifth of t h e c a p i t a l s t o c k of which i s owned by a n a l i e n , a f o r e i g n government, o r a r e p r e s e n t a t i v e of e i t h e r . 4 2 U.S.C $3 2133, 2134. The Nuclear R e g u l a t o r y Commission (NRC) i s e x p r e s s l y a u t h o r i z e d t o i s s u e l i c e n s e s t o p e r s o n s t o t r a n s p o r t , produce, a c q u i r e , and u s e atomic energy u t i l i z a t i o n o r p r o d u c t i o n f a c i l i t i e s f o r commerc i a l p u r p o s e s , r e s e a r c h and development o r f o r medical t h e r a p y , but no l i c e n s e s may be g i v e n t o any a l i e n o r c o r p o r a t i o n c o n t r o l l e d , owned o r dominated by a n a l i e n o r f o r e i g n government o r c o r p o r a t i o n . 4 3 U.S.C. S 161. U n t i l October 21, 1986, t h e Homestead Act of 1862 c o n t i n u e s i n e f f e c t f o r c e r t a i n l a n d s i n Alaska and only U.S. i n t e n d i n g t o become U.S. c i t i z e n s and p e r s o n s c i t i z e n s may e n t e r p u b l i c l a n d s f o r t h e pur- pose of homesteading. 4 3 U.S.C. 5 321. Under t h e Desert Land Act of 1877, a s amended, o n l y U.S. c i t i z e n s and p e r s o n s who a r e e n t i t l e d t o become c i t i z e n s and have dec l a r e d t h e i r i n t e n t t o do s o , and who a r e a l s o a r e s i d e n t c i t i z e n of t h e s t a t e i n which t h e l a n d i s l o c a t e d , may e n t e r o n t o U.S. d e s e r t lands i n c e r t a i n western s t a t e s . 46 U.S.C. § 11. A s h i p must be wholly owned by c i t i z e n s of t h e United S t a t e s i n o r d e r t o be documented i n t h e United S t a t e s and t o conduct i n t e r n a t i o n a l c a r g o t r a n s p o r t under a n American f l a g . U.S. A corporation is a c i t i z e n o n l y i f i t i s organized i n t h e United S t a t e s , h a s a c h i e f e x e c u t i v e o f f i c e r , c h a i r p e r s o n of t h e board and a m a j o r i t y of a quorum of i t s d i r e c t o r s who a r e U.S. 46 U.S.C. citizens. §§ 316, 1241(b). No s a l v a g e , dredging, and towing w i t h U.S. waters and no t r a n s p o r t a t i o n of government-financed commodities f o r e x p o r t , c a n be done by t h e s h i p s owned by any c o r p o r a t i o n u n l e s s i t meets t h e requirements of 46 U.S.C. 46 U. S . 3 . 2s § 11. 802, 833 t o C 4 & , 883, and 888. The Shipping Act of 1916 and t h e J o n e s Act l i m i t d o m e s t i c c a r g o and p a s s e n g e r t r a d e t o s h i p s owned by U.S. c i t i z e n s . For t h i s p u r p o s e , a U.S. p a r t n e r s h i p o r a s s o c i a t i o n i n which U.S. c i t i z e n includes a corporation, c i t i z e n s own c o n t r o l l i n g i n t e r e s t s and i n which t h e c h i e f e x e c u t i v e o f f i c e r , c h a i r p e r s o n of t h e board and a m a j o r i t y of a quorum of t h e d i r e c t o r s are U.S. c i t i z e n s , and t h e c o r p o r a t i o n i s i t s e l f o r g a n i z e d u n d e r t h e l a w s of t h e U n i t e d S t a t e s o r a S t a t e , T e r r i t o r y , D i s t r i c t o r p o s s e s s i o n of t h e U n i t e d S t a t e s . In t h e c a s e of a c o r p o r a t i o n a s s o c i a t i o n o r p a r t n e r s h i p o p e r a t i n g a n y vess e l i n t h e c o a s t w i s e t r a d e , t h e U.S. c i t i z e n s must own a t l e a s t s e v e n t y - f i v e percentum (75%) of t h e e n t i t y i n t e r e s t s . R u l e s g o v e r n i n g t r e a t m e n t of i n d i r e c t ownership a r e p r o v i d e d . 46 U.S.C. 5 835. During wartime o r n a t i o n a l emergency d e c l a r e d by t h e P r e s i - d e n t , s h i p p i n g f a c i l i t i e s may n o t be t r a n s f e r r e d t o f o r e i g n c o n t r o l w i t h o u t p r i o r a p p r o v a l of t h e S e c r e t a r y of Commerce. 46 U.S.C. § § 1 1 5 1 t o 52. Under t h e Merchant Marine Act of 1936, t h e o p e r a t - i n g d i f f e r e n t i a l s u b s i d i e s p a i d by t h e U n i t e d S t a t e s t o s h i p p u r c h a s e r s o r s h i p b u i l d e r s t o d e f r a y p a r t of t h e c o s t of a c q u i r i n g new s h i p s f o r u s e i n f o r e i g n commerce, c a n be made o n l y t o t o U.S. c i t i z e n s (as defined i n t h e S h i p p i n g Act of 1916, e x c e p t t h a t a l l of a c o r p o r a t i o n ' s d i r e c t o r s must be U.S. 46 U.S.C. 5 1160. c i t i z e n s ) , and U.S. shipyards. The S e c r e t a r y of Commerce i s a u t h o r i z e d t o p u r c h a s e o b s o l - e t e v e s s e l s i n exchange f o r a c r e d i t t o w a r d s new v e s s e l s , b u t a v e s s e l i s " o b s o l e t e " o n l y i f i t h a s been owned by U.S. c i t i z e n s (as defined i n t h e S h i p p i n g Act of 1 9 1 6 ) , f o r a t l e a s t t h r e e y e a r s i m m e d i a t e l y b e f o r e t h e d a t e of a c q u i s i t i o n . 46 U.S.C. § 1274. The S e c r e t a r y of Commerce i s a u t h o r i z e d t o p r o v i d e i n s u r a n c e i n c o n n e c t i o n w i t h m a r i t i m e a c t i v i t i e s , but o n l y t o v e s s e l s of U.S. c i t i z e n s ( a s d e f i n e d i n t h e S h i p p i n g Act of 1 9 1 6 ) . 47 U.S.C. § 17. No t e l e g r a p h o r c a b l e l i n e s owned o r o p e r a t e d o r c o n t r o l l e d by p e r s o n s who a r e n o t c i t i z e n s of t h e U n i t e d S t a t e s , o r by f o r e i g n c o r p o r a t i o n s o r governments, may be e s t a b l i s h e d i n o r p e r m i t t e d t o e n t e r t h e S t a t e of Alaska. 47 U.S.C. § 222. No proposed merger o r c o n s o l i d a t i o n of t e l e g r a p h c a r r i e r s w i l l be approved by t h e F e d e r a l Communications Commission where i f , as a r e s u l t of t h e m e r g e r , w r e t h a n o n e - f i f t h of t h e s t o c k of a c a r r i e r w i l l be owned, c o n t r o l l e d , v o t e d o r o t h e r w i s e d i r e c t e d by a n a l i e n , f o r e i g n government, o r r e p r e s e n t a t i v e of e i t h e r , o r by a c o r p o r a t i o n of which any o f f i c e r o r d i r e c t o r i s a n a l i e n o r more t h a n o n e - f i f t h of t h e c a p i t a l s t o c k i s h e l d by a l i e n s o r t h e i r r e p r e s e n t a t i v e s . 47 U.S.C. § 310. No r a d i o s t a t i o n l i c e n s e w i l l be g r a n t e d t o a n a l i e n , a f o r e i g n government, a r e p r e s e n t a t i v e of e i t h e r a n a l i e n o r f o r e i g n gove r n m e n t , a f o r e i g n c o r p o r a t i o n , a c o r p o r a t i o n i n which any o f f i c e r o r d i r e c t o r o r s t o c k h o l d e r s of more t h a n o n e - f i f t h of t h e c a p i t a l s t o c k a r e a l i e n s , o r a s u b s i d i a r y c o r p o r a t i o n of a p a r e n t c o r p o r a t i o n of which a n o f f i c e r o r h o l d e r s of one-f o u r t h of t h e s h a r e s a r e a l i e n s , f o r e i g n gove r n m e n t s , o r r e p r e s e n t a t i v e s of e i t h e r . of U.S. 47 U.S.C. p i l o t c e r t ~ f i c a t e so r f o r e i g n a i r c r a f t p i l o t c e r t i f i c a t e s . § § 733, 734. The o f f i c e r s of t h e Communications S a t e l l i t e Corpora- t i o n must be U.S. '?O'+': E x c e p t i o n i s made f o r h o l d e r s citizens. ?f t h e ag;;r:gat; ~f S i m i l a r l y , n o t more t h a n twenty p e r c e n t t h e s h c r e s of s t o c k of t h e c o r p o r a t i o n may be h e l d by a l i e n s o r o t h e r r e l a t e d p e r s o n s , a s d e s c r i b e d i n 47 U.S.C. 5 3 1 0 ( a ) . See above. 48 U.S.C. §§ 1501 t o 1508. Under t h e N a t u r a l Resources Act of 1887, a s amend- e d , o n l y a person who i s a U.S. c i t i z e n o r a n a l i e n who h a s d e c l a r e d h i s o r h e r i n t e n t i o n t o become a U.S. i n any of t h e U.S. c i t i z e n may a c q u i r e t i t l e t o any l a n d t e r r i t o r i e s , o t h e r t h a n a s such r i g h t s may be provided by t r e a t i e s of t h e United S t a t e s . Land a c q u i r e d by a n a l i e n by i n h e r i t a n c e , d i s t r i b u t i o n , o r f o r e c l o s u r e of a l i e n s e c u r e d by t h e r e a l ptope r t y can provide good t i t l e but must be d i s p o s e d of w i t h i n t e n y e a r s from a c q u i s i t i o n o r i t w i l l e s c h e a t . These same r e s t r i c t i o n s a p p l y w i t h r e s p e c t t o a l i e n a c q u i s i t i o n of l a n d i n t h e D i s t r i c t of Columbia. 48 U.S.C. 55 1509 t o 1512. P u b l i c l a n d s i n Hawaii may n o t be t r a n s f e r r e d t o a n a l i e n person who has not d e c l a r e d h i s o r h e r i n t e n t i o n t o become a c i t i zen. An a l i e n who h a s d e c l a r e d h i s o r h e r i n t e n t i o n t o become a c i t i z e n and a c q u i r e s t i t l e t o such l a n d s must become a c i t i z e n w i t h i n f i v e y e a r s t h e r e o f o r t h e l a n d e s c h e a t s . A g r i c u l t u r a l l a n d s i n Hawaii may be s o l d i n blocks of up t o t h r e e a c r e s , t o a l i e n s who have d e c l a r e d i n t e n t t o become U.S. 49 U.S.C. §5 citizens. 1301, 1371, 1378. No a i r c a r r i e r may engage i n a i r t r a n s p o r t * t i o n u n l e s s t h e r e i s a c e r t i f i c a t e of t h e C i v i l A e r o n a u t i c s Board (CAB) i n e f f e c t f o r such c a r r i e r n o r may any a i r c a r r i e r s merge, c o n s o l i d a t e , a c q u i r e a n o t h e r o r be a c q u i r e d w i t h o u t CAB a p p r o v a l . No a p p r o v a l f o r a c e r t i f i c a t e o r merger w i l l be allowed f o r a n e n t i t y which i s not a U.S. citizen. A U.S. c i t i z e n , f o r t h i s purpose, i n c l u d e s a n i n d i v i d u a l who i s a c i t i z e n of t h e United S t a t e s o r a t e r r i t o r y , a p a r t n e r s h i p i n which each p a r t n e r i s a c i t i z e n , o r a c o r p o r a t i o n o r a s s o c i a t i o n o r g a p i z e d under t h e laws of t h e United S t a t e s , a t e r r i t o r y o r S t a t e , i n which t h e p r e s i d e n t , two-thirds o r more of t h e d i r e c t o r s and o t h e r managing o f f i c e r s , and t h e h o l d e r s of a t l e a s t seventy-five p e r c e n t (75%) of t h e stock a r e citizens. 49 U.S.C. § 1401. No a i r c r a f t i s e l i g i b l e f o r U.S. owned by a U.S. r e g i s t r y unless it is c i t i z e n o r resident a l i e n , o r a corporation lawfully o r g a n i z e d and doing b u s i n e s s i n t h e United S t a t e s . 50 U.S.C. Appendix § 4. [Trading w i t h t h e Enemy Act] P e r m i t s t h e P r e s i d e n t o r a d e s i g n a t e d agency t c r e g u l a t e and l i c e n s e enemy a l i e n s engaged i n t h e b u s i n e s s of i n s u r a n c e . 50 U.S.C. Appendix § 5. [Trading w i t h t h e Enemy A c t ] T h i s Act p e r m i t s t h e P r e s i d e n t o r a d e s i g n a t e d agency, d u r i n g time of war, t o i n v e s t i g a t e , r e g u l a t e , o r p r o h i b i t t r a n s a c t i o n s i n f o r e i g n exchange, o r t h e h o l d i n g o r a c q u i s i t i o n o r u s e of any p r o p e r t y i n which a f o r e i g n c o u n t r y has a n interest 50 U.S.C. . Appendix § § 6 t o 9. [Trading w i t h t h e Enemy A c t ] P e n n i t s t h e Pres- i d e n t t o a p p o i n t and e s t a b l i s h t h e d u t i e s of a n a l i e n p r o p e r t y c u s t o d i a n f o r a n enemy a l i e n . 50 U.S.C. Appendix war-built 99 1735 t o 1746. Only U.S. c i t i z e n s may purchase s u r p l u s v e s s e l s s o l d by t h e United S t a t e s . IV. Summary of S t a t e S t a t u t e s R e s t r i c t i n g F o r e i g n Ownership of Property There a r e a number of S t a t e s which have adopted s t a t u t o r y r e s t r i c t i o n s on f o r e i g n ownership of r e a l p r o p e r t y . Generally, t h e s e r e s t r i c t i o n s vary i n scope and s e v e r i t y , w i t h some S t a t e s having n e a r l y g e n e r a l p r o h i b i t i o n s on a l i e n l a n d ownership, and o t h e r s only l i m i t i n g a l i e n a c q u i s i t i o n of S t a t e owned l a n d s . Three S t a t e s r e q u i r e r e g i s t r a t i o n of f o r e i g n p r o p e r t y owner- ship i n certain situations. Sometimes t h e p r o p e r t y r i g h t s of f o r e i g n corpor- a t i o n s a r e r e s t r i c t e d . The f o u r t h s e c t i o n of t h i s r e p o r t w i l l summarize t h e s e various S t a t e s t a t u t e s . A. S t a t e S t a t u t e s R e s t r i c t i n g F o r e i g n Ownership of P r o p e r t y ALASKA STATUTES § 38.05.190. No a l i e n s , o t h e r t h a n t h o s e who have d e c l a r e d t h e i r i n t e n t t o become c i t i z e n s , may a c q u i r e e x p l o r a t i o n and mining r i g h t s on S t a t e l a n d s u n l e s s t h e i r n a t i o n g r a n t s r e c i p r o c a l r i g h t s t o United S t a t e s c i t i z e n s . C o r p o r a t i o n s may not a c q u i r e such r i g h t s i f 50 p e r c e n t o r more of t h e i r s t o c k i s owned by u n q u a l i f i e d a l i e n s . ARKANSAS STATUTES 5 10-926. An a l i e n who i s not n a t u r a l i z e d may not o b t a i n from t h e S t a t e a deed t o t a x - f o r f e i t e d a g r i c u l t u r a l l a n d s . CALIFORNIA PUBLIC RESOURCES CODE 5 6801. Leases and p r o s p e c t i n g p e r m i t s on p u b l i c l a n d s can be i s s u e d only t o persons o r a s s o c i a t i o n s of p e r s o n s who a r e United S t a t e s c i t i z e n s , o r who have d e c l a r e d t h e i r i n t e n t t o become U.S. treaty. c i t i z e n s , o r whose c o u n t r y g r a n t s a r e c i p r o c a l r i g h t by Foreign c o r p o r a t i o n s a r e e l i g i b l e t o hold such l e a s e s and p e r m i t s only i f 90 p e r c e n t o r more of t h e i r s h a r e s a r e owned by e l i g i b l e persons o r corporations. CONNECTICUT GENERAL STATUTES 55 45-278, 47-57 & 47-58. Nonresident a l i e n s may n o t , g e n e r a l l y , a c q u i r e o r h o l d r e a l p r o p e r t y w i t h i n t h e S t a t e o f Connecticut. Exception$ a r e made f o r c i t i z e n s o f F r a n c e , a s l o n g a s F r a n c e p r o v i d e s r e c i p r o c a l r i g h t s , and f o r a l l n o n r e s i d e n t s who u s e t h e property f o r "quarrying, miqicg, d r e s s i n g o r smelting o r e s . . . o r con- v e r t i n g t h e p r o d u c t s o f such q u a r r i e s and mines i n t o a r t i c l e s o f t r a d e and commerce." I f a legatee, d i s t r i b u t e e , o r beneficiary i s not a res- i d e n t o f t h e United S t a t e s and would n o t , t h e r e f o r e , be e n t i t l e d t o b e n e f i t from p r o p e r t y bequeathed o r d e v i s e d , t h e p r o b a t e c o u r t may h o l d t h e p r o p e r t y f o r t h e b e n e f i t o f t h a t person. DISTRICT OF COLUMBIA CODE § $ 29-201, 5 1501-1503. 29-902, 45-1501 & 48 UNITED STATES CODE A l i e n s have t h e same p r o p e r t y r i g h t s i n t h e D i s t r i c t o f Columbia a s t h e y have i n t h e t e r r i t o r i e s o f t h e United S t a t e s . Land i n t h e t e r r i t o r i e s o f t h e United S t a t e s may be owned o n l y by c i t i z e n s , r e s i d e n t a l i e n s and a l i e n s who have d e c l a r e d t h e i r i n t e n t t o become c i t i zens. F o r e i g n c o r p o r a t i o n s have t h e same r i g h t s a s domestic c o r p o r a t i o n s , b u t n e i t h e r may be o r g a n i z e d s p e c i f i c a l l y " t o buy, s e l l , o r d e a l i n r e a l e a t a t e , except ocorporations t o transact the business o r d i n a r i l y carried on by r e a l e s t a t e a g e n t s o r brokers." HAWAII REVISED STATUTES 5 5 171-68, 206-9. A l i e n s who have n o t d e c l a r e d t h e i r i n t e n t t o become c i t i z e n s and r e s i d e d i n t h e S t a t e f o r a t l e a s t f i v e y e a r 8 may n o t a c q u i r e c e r t a i n s u b s i d i z e d r e s i d e n t i a l l o t s . Additionally, t h e law p r o v i d e s t h a t t h e p u r c h a s e o r l e a s e of l a n d s u n d e r t h e a u t h o r i t y of t h e Board of Land and N a t u r a l R e s o u r c e s may be r e s t r i c t e d t o resid e n t s and t o c i t i z e n s . IDAHO CODE 5 58-313. A l i e n s who have n o t d e c l a r e d t h e i r i n t e n t t o become c i t i z e n s may n o t p u r c h a s e I d a h o S t a t e l a n d s . ILLINOIS STATUTES, CHAPTER 6 § § 1, 2 . While a l i e n s may p u r c h a s e o r i n h e r i t l a n d i n t h e S t a t e of I l l i n o i s , t h e y must s e l l o r o t h e r w i s e d i s p o s e of i t t o a c i t i z e n w i t h i n s i x y e a r s o r i t i s s o l d by t h e S t a t e , which w i l l t a k e t h e proceeds. INDIANA CODE 5s 32-1-7-1, 32-1-8-2. A l i e n s may g e n e r a l l y a c q u i r e and convey r e a l e s t a t e i n I n d i a n a , b u t i f a n a l i e n a c q u i r e s more t h a n 320 a c r e s , t h e p r o p e r t y must be d i s p o s e d of w i t h i n f i v e y e a r s of i t s a c q u i s i t i o n o r of t h e a l i e n ' s e i g h t e e n t h b i r t h d a y , u n l e s s t h e a l i e n becomes a c i t i zen. The p e n a l t y i s e s c h e a t of t h e l a n d s t o t h e S t a t e . IOWA CODE § § 1726.5 e t seq., 567.1, 567.2. A l i e n s may g e n e r a l l y a c q u i r e with- o u t r e s t r i c t i o n l a n d w i t h i n t h e c o r p o r a t e l i m i t s of a n Iowa c i t y o r town, o r up t o 640 a c r e s of l a n d o u t s i d e s u c h c o r p o r a t e l i m i t s . Nonresi d e n t a l i e n s mayhold r e a l p r o p e r t y i n Iowa i f a c q u i r e d by t h e l a w s of d e s c e n t , i f t h e c o u n t r y of t h a t a l i e n ' s c i t i z e n s h i p p r o v i d e s a r e c i p rocal right. P r o p e r t y a c q u i r e d by d e v i s e o r d e s c e n t must be d i s p o s e d of w i t h i n twenty y e a r s , u n d e r p e n a l t y of e s c h e a t . For f i v e y e a r s f o l l o w i n g August 1 5 , 1975, no c o r p o r a t i o n , f o r e i g n o r d o m e s t i c , may a c q u i r e o r l e a s e , d i r e c t l y o r i n d i r e c t l y , a g r i c u l t u r a l l a n d i n Iowa. KANSAS STATUTES S § 17-5901, 59-511. A l i e n s i n e l i g i b l e f o r c i t i z e n s h i p may own P r o p e r t y i n Kansas, b u t may o n l y i n h e r i t i t a s provided by United States treaty. G e n e r a l l y , c o r p o r a t i o n s may n o t engage i n t h e b u s i n e s s o f a g r i c u l t u r e o r h o r t i c u l t u r e , b u t c e r t a i n d o m e s t i c c o r p o r a t i o n s i n which a l l o f t h e i n c o r p o r a t o r s a r e n a t u r a l p e r s o n s r e s i d i n g i n t h e S t a t e may own up t o 5,000 a c r e s o f l a n d and engage i n c e r t a i n & g r i c u l t u r a l and h o r t i c u l tural activities. KENTUCKY REVISED STATUTES !+S 2718.705, 381.300 t o 381.330. A l i e n s who have d e c l a r e d t h e i r i n t e n t t o become c i t i z e n s may a c q u i r e o r i n h e r i t land b u t , i f t h e a l i e n h a o n o t become a c i t i z e n w i t h i n e i g h t y e a r s , h e o r s h e must d i e p o s e o f t h e l a n d , under p e n a l t y o f e s c h e a t . A r e s i d e n t a l i e n may t a k e ana h o l d l a n d a s a r e s i d e n c e o r b u s i n e s s f o r up t o twentyone y e a r s . No c o r p o r a t i o n c a n h o l d any r e a l e s t a t e f o r a p e r i o d o f more t h a n f i v e y e a r e , e x c e p t a s may be p r o p e r and n e c e s s a r y f o r c a r r y i n g on i t s legitimate business. MINNESOTA STATUTES $ 4 500.24, 500.221. Only c i t i z e n s and a l i e n s who a r e per- manent r e s i d e n t s may a c q u i r e a g r i c u l t u r a l land w i t h i n t h e S t a t e o f Minnesota. on residents who a c q u i r e a g r i c u l t u r a l land through f o r e c l o s u r e , d e v i s e , o r i n h e r i t a n c e must d i s p o s e of i t w i t h i n t h r e e y e a r s . No d o m e s t i c o r f o r e i g n c o r p o r a t i o n may a c q u i r e an i n t e r e s t i n ~ i n n e s o t a a g r i c u l t u r a l l a n d , u n l e s s e i g h t y p e r c e n t (80%) o f i t s s t o c k i s h e l d by U.S. citizens. MISSISSIPPI CODE 5 5 29-1-75, 4, SECTION 8 4 ( 1 9 ) . 89-1-23, MISSISSIPPI STATE CONSTITUTION ARTICLE The ~ i s s i s s i p p iS t a t e c o n s t i t u t i o n r e q u i r e s t h e l e g i s l a - t u r e t o e n a c t laws t o " l i m i t , r e s t r i c t , o r prevent" non-resident aliens from owning M i s s i s s i p p i l a n d s . The a t a t u t o r y l a w o f ~ i s s i s s i p~r o~vii d e s t h a t n o n r e s i d e n t a l i e n s who h a v e n o t d e c l a r e d t h e i r i n t e n t t o become c i t i z e n s may n o t , g e n e r a l l y , h o l d r e a l e s t a t e i n ~ i s s i s s i p p i ,u n d e r pena l t y of e s c h e a t . Such d i s q u a l i f i e d p e r s o n s may, however, h o l d r e a l prope r t y t o s e c u r e a d e b t and, c i t i z e n s o f Lebanon o r S y r i a may a c q u i r e M i s s i s s i p p i p r o p e r t y through i n h e r i t a n c e . N o n r e s i d e n t a l i e n s and c o r p o r a t i o n s composed, i n whole o r i n p a r t , of n o n r e s i d e n t a l i e n s may n o t a c q u i r e , d i r e c t l y o r i n d i r e c t l y , Mississ i p p i public lands. MISSOURI REVISED STATUTES 5 5 442.560 t o 442.592. N o n r e s i d e n t a l i e n s and f o r - e i g n c o r p o r a t i o n s may n o t a c q u i r e o r h o l d more t h a n f i v e a c r e s o f ago r i c u l t u r a l l a n d i n M i s s o u r i , and l a n d s a c q u i r e d by s u c h p e r s o n s must b e d i v e s t e d w i t h i n two y e a r s . No c o r p o r a t i o n , d o m e s t i c o r f o r e i g n , may h o l d a g r i c u l t u r a l l a n d o r engage i n f a r m i n g , d i r e c t l y o r i n d i r e c t l y . MONTANA REVISED CODES 5 91A-2-111. The r i g h t o f an a l i e n t o i n h e r i t r e a l e s t a t e i s d e p e n d e n t upon a r e c i p r o c a l r i g h t a f f o r d e d U n i t e d S t a t e s c i t i z e n s by t h e a l i e n ' s n a t i o n o f c i t i z e n s h i p . NEBRASKA REVISED STATUTES 5 5 76-402 t o 76-414. A l i e n s may a c q u i r e and h o l d t i t l e t o l a n d w i t h i n t h r e e m i l e s o f a v i l l a g e , b u t any o t h e r l a n d t o which t h e y may a c q u i r e t i t l e must b e s o l d a f t e r f i v e y e a r s . Corporations may h o l d Nebraska l a n d w i t h i n t h e c i t y l i m i t s of a c i t y o r v i l l a g e o r w i t h i n t h r e e m i l e s of t h o s e l i m i t s , and as r e q u i r e d f o r m a n u f a c t u r i n g p l a n t s , p e t r o l e u m s e r v i c e s t a t i o n s , p u b l i c u t i l i t i e s , common c a r r i e r s , o r bulk s t a t i o n s . C o r p o r a t i o n s n o t i n c o r p o r a t e d i n Nebraska may h o l d no l a n d i f a m a j o r i t y of t h e i r d i r e c t o r s , e x e c u t i v e o f f i c e r s o r s t o c k h o l d e r s a r e nonresident a l i e n s . NEVADA REVISED STATUTES 5 134-230. N o n r e s i d e n t a l i e n s may n o t i n h e r i t l a n d i n Nevada u n l e s s t h e i r c o u n t r y of c i t i z e n s h i p a f f o r d s U.S. citizens reciprocal rights. NEW HAWSHIRE REVISED STATUTES § § 477.20 & 477.21. N o n r e s i d e n t a l i e n s may n o t t a k e o r convey r e a l p r o p e r t y i n t h e S t a t e of New Hampshire. NEW JERSEY STATUTES, TITLE 3A § 25-10. Where i t a p p e a r s t h a t a n o n r e s i d e n t a l i e n l e g a t e e , b e n e f i c i a r y , o r h e i r , would n o t have t h e b e n e f i t and c o n t r o l o v e r New J e r s e y p r o p e r t y p a s s i n g t o such a l i e n , t h e New J e r s e y c o u r t may h o l d t h e p r o p e r t y f o r t h e b e n e f i t of t h e a l i e n NEW MEXICO STATE CONSTITUTION, ARTICLE 11, SECTION 22. Under t h e New Mexico S t a t e C o n s t i t u t i o n , a l i e n s " i n e l i g i b l e t o c i t i z e n s h i p u n d e r t h e laws of t h e U n i t e d S t a t e s " and c o r p o r a t i o n s i n which a m a j o r i t y of t h e s t o c k i s owned by s u c h a l i e n s a r e not p e r m i t t e d t o a c q u i r e any i n t e r e s t i n r e a l e s t a t e , u n l e s s o t h e r w i s e p r o v i d e d by law. A New Mexico p r i o r s t a t u t e which p r o v i d e s t h a t " f o r e i g n e r s " may o t h e r w i s e h o l d l a n d h a s been i n t e r p r e t e d as i n a p p l i c a b l e t o n o n r e s i d e n t a l i e n s . N. M. Code § 70-1-24; 1929-30 A t t y . Gen. Op. 11. NORTH CAROLINA GENERAL STATUTES S 64-3. The r i g h t o f a n o n r e s i d e n t a l i e n t o i n h e r i t , North C a r o l i n a p r o p e r t i e s i s dependent upon a r e c i p r o c a l r i g h t under t h e law of t h a t p e r s o n ' s c o u n t r y . NORTH DAKOTA CENTURY CODE S 10-06-01. No c o r p o r a t i o n , d o m e s t i c o r f o r e i g n , may engage i n t h e b u s i n e s s e s o f farming and a g r i c u l t u r e . OKLAHOMA STATUTES TITLE 18 S S 1.20, 951 t o 953, and TITLE 60 $ 5 121-124. No a l i e n s e x c e p t bona f i d e r e s i d e n t s may h o l d t i t l e t o land i n Oklahoma, and any land h e l d by n o n r e s i d e n t a l i e n s must b e d i s p o s e d o f w i t h i n f i v e years of acquisition. No c o r p o r a t i o n c a n own r e a l e s t a t e w i t h i n t h e S t a t e l o c a t e d o u t s i d e o f an i n c o r p o r a t e d c i t y o r town, e x c e p t a s n e c e s s a r y and p r o p e r f o r t h e c a r r y i n g o u t o f t h e c o r p o r a t i o n ' s a c t i v i t i e s , owned through f o r e c l o e u r e , acquired f o r l e a s e o r s a l e , o r held only t i t u l a r l y . Property acquired through f o r e c l o s u r e must b e d i s p o s e d o f w i t h i n seven y e a r s . No f o r e i g n c o r p o r a t i o n s may be o r g a n i z e d t o own f a m l a n d i n Oklahoma n o r t o engage i n farming. OREGON REVISED STATUTES 5 273.255 & 517.010. A l i e n s who have n o t d e c l a r e d t h e i r i n t e n t t o become c i t i z e n s may n o t a c q u i r e r e a l e s t a t e i n Oregon. PENNSYLVANIA STATUTES, TITLE 68 S 32. A l i e n s may n o t h o l d l a n d e x c e e d i n g 5,000 a c r e s n o r producing a n e t annual income o f $20,000 i n t h e Commonw e a l t h o f Pennsylvania. SOUTH CAROLINA STATE CONSTITUTION, ARTICLE 3, SECTION 35, AND SOUTH CAROLINA CODE S 27-13-30, The C o n s t i t u t i o n o f t h e S t a t e o f South C a r o l i n a r e - q u i r e s t h e l e g i s l a t u r e t o e n a c t laws l i m i t i n g t h e number o f a c r e s an a l i e n o r f o r e i g n c o r p o r a t i o n may own i n t h e S t a t e . Under S t a t e s t a t u t e s , a l i e n s and a l i e n - c o n t r o l l e d c o r p o r a t i o n s may n o t h o l d more t h a n 500,000 a c r e s o f l a n d w i t h i n t h e S c a t e o f South C a r o l i n a , e x c e p t f o r a c q u i s i t i o n by f o r e c l o s u r e . Land i n e x c e s s of t h e 500,000 a c r e l i m i t a t i o n must be disposed of within f i v e years o f a c q u i s i t i o n . SOUTH DAKOTA COMPILED LAWS 8 47-9A. N e i t h e r f o r e i g n n o r domestic c o r p o r a - t i o n s may own farmland i n t h e S t a t e o f South Dakota. TEXAS REVISED CIVIL STATUTES, ART. 1302-4.01 t o 1302-4.06. N e i t h e r domestic n o r f o r e i g n c o r p o r a t i o n s may own l a n d i n Texas, beyond t h a t r e q u i r e d t o do b u s i n e s s , and e x c e s s l a n d s must b e d i s p o s e d of w i t h i n f i f t e e n y e a r s of a c q u i s i t i o n . WISCONSIN STATUTES S 710.02. A n o n r e s i d e n t a l i e n o r c o r p o r a t i o n i n which twenty p e r c e n t ( 2 0 % ) o r more of t h e s t o c k i s h e l d by n o n r e s i d e n t a l i e n s cannot h o l d more than 640 a c r e s o f land i n Wisconsin, u n l e s s a c q u i r e d by f o r e c l o s u r e o r i n h e r i t a n c e . WYOMING STATUTES S 34-15-101. Nonresident a l i e n s i n e l i g i b l e f o r c i t i z e n s h i p may n o t own, a c q u i r e , p o s s e s s o r t r a n s f e r r e a l p r o p e r t y i n t h e S t a t e o f Wyoming, u n l e s s t h e f o r e i g n c o u n t r y o f which such i n d i v i d u a l i s a c i t i zen a f f o r d s r e c i p r o c a l r i g h t s o f ownership t o United S t a t e s c i t i z e n s . B. S t a t e S t a t u t e s R e q u i r i n g Reporting of F o r e i g n P r o p e r t y Ownership ARIZONA REVISED STATUTES 5 33-1204. Where a t r u s t e e o r c u s t o d i a n i s appoint- ed t o a c q u i r e o r hold r e a l e s t a t e f o r a n o n r e s i d e n t a l i e n , an annual r e p o r t must be f i l e d with t h e S e c r e t a r y o f S t a t e and t h e c o u n t y r e c o r d e r f o r t h e c o u n t y i n which t h e land i s s i t u a t e d . IOWA CODE 5 567.9. Every n o n r e s i d e n t a l F e n owning o r l e a s i n g a g r i c u l t u r a l land i n t h e S t a t e o r engaged i n farming o u t s i d e t h e c o r p o r a t e l i m i t s of a c i t y i n Iowa must f i l e an a n n u a l r e p o r t w i t h t h e S e c r e t a r y o f State. MINNESOTA STATUTE $ 500.221. Where an a l i e n a c q u i r e s a g r i c u l t u r a l l a n d with- i n t h e S t a t e p r i o r t o May 27, 1977, b e f o r e t h e e f f e c t i v e d a t e o f t h e p r o h i b i t i o n a g a i n s t such a c q u i s i t i o n , h e o r s h e must f i l e a r e p o r t w i t h t h e commissioner of A g r i c u l t u r e w i t h i n 90 d a y s t h e r e o f . WEST V I R G I N I A CODE S 11-12-75. Any c o r p o r a t i o n which w i s h e s t o own more t h a n 10,000 a c r e s o f land w i t h i n t h e S t a t e must a p p l y t o t h e S e c r e t a r y o f t h e State. F a i l u r e t o comply s u b j e c t s t h e c o r p o r a t i o n t o a f i n e o f from twenty-five t o 500 d o l l a r s . Howard Z a r i t s k ~ Legislative Attorney American Law D i v i s i o n June 24, 1980 CRS-40 SELECTED BIBLIOGRAPHY Note: " R e g u l a t i o n o f F o r e i g n I n v e s t m e n t i n U.S. 586 ( 1 9 8 0 ) . Real E s t a t e , " 33 Tax Lawyer Langer , " D i s o l o s u r e Requirement s f o r F o r e i g n P e r s o n s I n v e s t i n g i n t h e U. S. F o r e i g n Tax P l a n n i n g 1979 p. 47 ( P r a c t i c i n g Law I n s t i t u t e 1 9 7 9 ) . U.S. G e n e r a l A c c o u n t i n g O f f i c e , F o r e i g n I n v e s t m e n t i n U.S. Land--How LC S h a p e s UE ( 1 9 7 9 ) . ," Agricultural t Z a g a r i e , "The ~ ~ a ~ u l t u Froar eli g n I n v e s t m e n t D i s c l o s u r e Act o f 1978: How W i l l I t A f f e c t t h e Market i n U.S. Real E s t a t e ? " 8 Real E s t a t e Law J o u r n a l 3 (1979). ;<<' +- Z a g a r i s , "The A g r i c u l t u r a l F o r e i g n I n v e s t m e n t D i s c l o s u r e Act o f 1978: The F i r s t R e g u l a t i o n of F o r e i g n I n v e s t m e n t i n U.S. Real E s t a t e , " F o r e i g n Tax P l a n n i n g 1979 p. 67 ( P r a c t i c i n g Law I n s t i t u t e 1979) Real E s t a t e : F e d e r a l and S t a t e Laws A f f e c t -i n" gF otrhe ei g nFo rI en ivgens t mI ne vn te sit no r ,U.S. " a r e p o r t o f t h e Committee on F o r e i g n I n v e s t ment i n U. S. Real E s t a t e , American Bar A s s o c i a t i o n S e c t i o n on Real E s Late, P r o b a t e and T r u s t Law, 1 4 Real E s t a t e , P r o b a t e and T r u s t J o u r n a l 1 (1979). B e l l , " ~ o r e i g n I n v e s t m e n t i n U.S. Properties," 8 Real E s t a t e Review 56 ( 1 9 7 8 ) . F i s c h , " S t a t e R e g u l a t i o n of A l i e n Land Ownership ," 43 M i s s o u r i Law Review 407 ( 1 9 7 8 ) . U.S. G e n e r a l Accounting O f f i c e , F o r e i g n Ownership of U.S. c e r n , L i t t l e Data (1978). Farmland: Much Con- Z a g a r i s , " I n v e s t m e n t by N o n r e s i d e n t A l i e n s i n United S t a t e s Real E s t a t e , " 31 U n i v e r i s t y of Miami Law Review 565 ( 1 9 7 7 ) . "Foreign D i r e c t Investment i n t h e United S t a t e s : P o s s i b l e R e s t r i c t i o n s a t Home and a New C l i m a t e f o r American I n v e s t m e n t Abroad," 26 American U n i v e r s i t y Law Review 109 ( 1 9 7 6 ) . " F o r e i g n D i r e c t I n v e s t m e n t i n U n i t e d S t a t e s R e a l E s t a t e : Xenophobic o r P r i n c i p l e d R e a c t i o n ? , " 28 U n i v e r s i t y o f F l o r i d a Law Review 491 ( 1 9 7 6 ) . F o r e i g n I n v e s t m e n t S t u d y Act o f 1 9 7 4 , " H e a r i n g s B e f o r e t h e S u b c o m m i t t e e o n F o r e i g n Commerce and Tourism o f t h e S e n a t e Committee on Commerce," 9 4 t h Cong., 2d S e s s . ( 1 9 7 6 ) . " F o r e i g n I n v e s t m e n t i n t h e U n i t e d S t a t e s : L e g a l I s s u e s and T e c h n i q u e s , I 1 D i s t r i c t o f Columbia Bar Manual ( 1 9 7 6 ) . Fouch and Lupo, " F o r e i g n D i r e c t I n v e s t m e n t i n t h e U n i t e d S t a t e s i n 1978," 5 9 S u r v e y o f C u r r e n t B u s i n e s s 38 ( 1 9 7 9 ) ( B u r e a u o f Economic A n a l y s i s , U.S. D e p a r t m e n t o f Commerce, No. 8 , P a r t I ) . Morse, " L e g a l S t r u c t u r e s A f f e c t i n g I n t e r n a t i o n a l R e a l E s t a t e I n v e s t m e n t s . " 26 American U n i v e r s i t y Law Review 34 ( 1 9 7 6 ) . Department o f Commerce, R e p o r t t o t h e C o n g r e s s on F o r e i g n D i r e c t Investment i n t h e United S t a t e s 9 v o l s . (1976) Department o f t h e T r e a s u r y , R e p o r t t o t h e C o n g r e s s on F o r e i g n P o r t f o l i o Investment i n t h e United S t a t e s 2 v o l s . (1976). " F o r e i g n I n v e s t m e n t i n t h e U n i t e d S t a t e s : Is America f o r S a l e ? , " 1 2 H o u s t o n Law Review 661 ( 1 9 7 5 ) . N i e h u s s , " F o r e i g n I n v e s t m e n t s i n t h e U n i t e d S t a t e s : A Review o f Government ~ o l i c y , " 16 V i r g i n i a J o u r n a l o f I n t e r n a t i o n a l Law 65 ( 1 9 7 5 ) . " S t a t e R e g u l a t i o n o f F o r e i g n I n v e s t m e n t , " 9 C o r n e l l I n t e r n a t i o n a l Law J o u r n a l 82 ( 1 9 7 5 ) . Dempsey, "Legal and ~ c o n o m i cI n c e n t i v e s f o r ~ o r e i g nD i r e c t I n v e s t m e n t i n t h e S o u t h e a s t e r n United S t a t e s , ' I 9 V a n d e r b i l t J o u r n a l o f T r a n s n a t i o n a l Law 247 ( 1 9 7 4 ) F o r e i g n I n v e s t m e n t i n t h e Unj t e d S t a ~ H, e a r i n g s B e f o r e t h e Subcommittee on F o r e i g n Economic P o l i c y o f t h e House Committee on F o r e i g n A f f a i r s , 93d Cong., 2d S e s s . ( 1 9 7 4 ) .