CHEYENNE – States like Wyoming are looking for ways to restrict or regulate foreign land ownership near critical infrastructure.
During the 2024 budget session, Sen Tara NethercottR-Cheyenne introduced a bill that would allow the state to investigate foreign-owned land transactions. The bill, which was passed by Gov. Mark Gordonprovides a definition for ‘critical infrastructure’, ‘critical infrastructure zone’ and ‘designated country or persons’.
The legislation allows Gordon and the Wyoming Office of Homeland Security (HLS) to designate these zones, and requires county clerks to report land transactions that occur in or within a five-mile radius of the critical infrastructure zone.
It also authorizes the Director of HLS and the Division of Criminal Investigation to investigate, upon reasonable suspicion, any of these reported land transactions involving “a designated country or person, or if the transaction poses a threat to the national or state security or that of critical infrastructure,” said a memo from the Legislative Service Office (LSO).
On Thursday, members of the Legislature’s Joint Appropriations Committee sought advice from experts on where further state regulation of foreign land ownership is appropriate in Wyoming. LSO attorney Tamara Rivale said she was unsure what would happen if a security threat were discovered under Nethercott’s bill.
This issue is the fifth interim topic for the JAC. Rivale advised lawmakers when writing new legislation to keep in mind how it will correlate with Nethercott’s bill, Senate File 77, which becomes law on July 1.
The U.S. president already has some oversight of foreign policy through a committee called CFIUS, or Committee on Foreign Investment in the United States, Rivale said. This committee focuses more on transactions with a foreign entity, she said. This includes mergers, acquisitions and business deals where a foreign entity becomes a business owner or has significant asset backing in a business.
The only real estate component under CFIUS is when a foreign entity acquires land within a certain distance of a military installation, she said. There is “not a complete overlap” between what falls under CFIUS’ purview and SF 77, Rivale said.
President Joe Biden recently identified the purchase of properties by MineOne, a British Virgin Islands company owned by Chinese nationals, as a potential national security threat through a CFIUS recommendation. The company is a specialized cryptocurrency mining operation that acquired property within a mile of the FE Warren Air Force Base in June 2022.
CFIUS said the transaction was not initially reported to the commission, but it learned about it through a public tip. Following the President’s declaration, the Cheyenne Company was ordered to sell or transfer the property within 120 days, and to remove any items, structures or other physical objects or installations from the property within 90 days.
The president’s divestiture decision — an order to divest all or part of the company — in May made this issue “current,” Rivale said. Committee co-chair Rep. Bob Nicholas, R-Cheyenne, asked how the state’s role fits into this.
“If the FBI is doing it, why should we do it?” said Nicholas. “Because if the FBI takes action, it removes our liability or risk, which has a number of benefits.”
“That is one of the current issues,” Rivale said, “whether the state can act in this area at all or whether CFIUS anticipates it.”
She said it was clear under federal law that CFIUS had control over foreign land ownership near military installations. What is less clear “is who would have control over critical infrastructure,” she said, such as power plants and dams.
Rep. Lloyd Larsen, R-Lander, asked if the failure to report the foreign land transaction in Cheyenne was something that could be handled at the state level.
“If the FBI doesn’t know they’re there and there’s a transaction taking place, is it reasonable or appropriate for a state to put something in place?” Larsen said.
Rivale responded that this could be an argument for the state to enact legislation that would help the federal government strengthen national security. States are better equipped to know what’s happening at the local level, she said.
Constitutional consequences
A provision in the Wyoming Constitution, Article 1, Section 29, “prohibits discrimination against resident aliens with property rights,” Rivale said. Drafting a bill banning all foreign citizens from owning land would violate this constitutional provision.
She added that it has not been interpreted by Wyoming courts if foreign companies would qualify under this provision. Other areas to consider when drafting a bill, Rivale said, include how it applies to agriculture and military bases, whether and how it should apply to all noncitizens and whether it should apply are on companies.
Other areas to consider include considerations of which countries fall under foreign adversaries and whether foreign-owned companies that have been around for a long time are affected.
Gordon’s chief of staff, Drew Perkins, said when it comes to critical infrastructure, “we’re all talking about the same thing,” just different subsets of the definition. He also warned lawmakers against creating a “broad policy.”
The U.S. Court of Appeals for the 11th Circuit is currently hearing a case in Florida involving a state law that bans foreign ownership of real estate for certain nationalities, including Chinese immigrants. Florida law prohibits immigrants from certain countries from purchasing homes in various areas of the state.
“States need to be very, very careful when they talk about why this is important for national security,” Perkins said.
He praised Nethercott’s bill, which he said provided the basic framework for identifying real estate transactions within a certain proximity to critical infrastructure.
“The idea was simply that the state would act as the eyes and ears of the FBI and then pass along that information,” Perkins said.
He advised lawmakers to consider the feasibility of a five-mile radius around F.E. Warren Air Force Base, as it included large portions of the city of Cheyenne.
“You have to be incredibly careful with that proximity because it just becomes impractical,” Perkins said. “You could easily rule out everyone within Cheyenne.”
Mining, concerns about the food industry
Jody Levin, speaking on behalf of the Wyoming Mining Association and the trona industry, said foreign land ownership regulations are a major concern for the mining industry. Levin said three of the four Trona mines in Wyoming are owned by foreign companies, as are both expansion projects.
There is also foreign ownership in uranium and other rare earth metals, she said. The concerns are specifically about the broad definitions of “agriculture” and “critical infrastructure.” Trona’s operations are located in Flaming Gorge, near Interstate 80, substations and major electrical lines – all of which can be considered critical infrastructure – as well as chemical processing plants.
These operations supply more than 90% of the U.S. soda ash market, she said.
“So we are in a huge dilemma,” Levin said. “There is no right way to solve this problem.”
Some of these trona operations had been going on for decades, she added, and hardly appeared to pose a threat to national security.
“These are some of the best, high-paying jobs in the state of Wyoming,” Levin said. “They are great taxpayers. They are great corporate citizens.”
Brett Moline, government relations director for the Wyoming Farm Bureau Federation, said his organization shared the same concerns.
“We don’t want to leave out our friends who are doing good work,” Moline said. “It’s the hostile countries that control our food supply and other aspects of our economy that we’re most concerned about.”
