23.1043.

03000 FIRST ENGROSSMENT

with House Amendments
Sixty-eighth
Legislative Assembly ENGROSSED SENATE BILL NO. 2371
of North Dakota

Introduced by

Senators Paulson, Larsen, Wobbema

Representatives Fisher, Hoverson, Louser

1 A BILL for an Act to create and enact a new section to chapter 11-11 and a new section to
2 chapter 40-05 of the North Dakota Century Code, relating to the power of counties and
3 municipalities to prohibit local development by a foreign adversary; to amend and reenact
4 section 47-01-09 of the North Dakota Century Code, relating to the prohibition on ownership of
5 real property by a foreign adversary; to provide a legislative management study; and to provide
6 an expiration date.

7 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:

8 SECTION 1. A new section to chapter 11-11 of the North Dakota Century Code is created
9 and enacted as follows:
10 Development by a foreign adversary - Prohibition.
11 1. A board of county commissioners, including a board in a home rule county, may not
12 procure, authorize, or approve a development agreement, building plan, or proposal
13 relating to county development with an individual or government identified as a foreign
14 adversary under 15 CFR 7.4(a) or a person identified on the office of the foreign
15 assets control sanctions list.
16 2. This section does not apply to a foreign adversary defined under subsection 1
17 possessing an interest in real property if the foreign adversary:
18 a. Is a duly registered business and has maintained a status of good standing with
19 the secretary of state for seven years or longer before the effective date of this
20 Act;
21 b. Has been approved by the committee on foreign investment in the United States;
22 and
23 c. Maintains an active national security agreement with the federal government.

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1 SECTION 2. A new section to chapter 40-05 of the North Dakota Century Code is created
2 and enacted as follows:
3 Development by a foreign adversary - Prohibition.
4 1. A board of city commissioners or city council, including a board or council in a home
5 rule city, may not procure, authorize, or approve a development agreement, building
6 plan, or proposal relating to city development with an individual or government
7 identified as a foreign adversary under 15 CFR 7.4(a) or a person identified on the
8 office of the foreign assets control sanctions list.
9 2. This section does not apply to a foreign adversary as defined in subsection 1
10 possessing an interest in real property if the foreign adversary:
11 a. Is a duly registered business and has maintained a status of good standing with
12 the secretary of state for seven years or longer before the effective date of this
13 Act;
14 b. Has been approved by the committee on foreign investment in the United States;
15 and
16 c. Maintains an active national security agreement with the federal government.
17 SECTION 3. AMENDMENT. Section 47-01-09 of the North Dakota Century Code is
18 amended and reenacted as follows:
19 47-01-09. Public or private ownership - All property subject to - Foreign ownership
20 prohibited.
21 1. All property in this state has an owner, whether that owner is the United States or the
22 state, and the property public, or the owner an individual, and the property private. The
23 state also may hold property as a private proprietor.
24 2. Notwithstanding any other provision of law, the following governments or entities may
25 not purchase or otherwise acquire title to real property in this state after the effective
26 date of this Act:
27 a. A foreign adversary.
28 b. A foreign business entity with a principal executive office located in a country that
29 is identified as a foreign adversary.
30 c. A foreign business entity in which a foreign adversary owns:

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1 (1) More than fifty percent of the ownership interests in the foreign business
2 entity as defined under subsection 45 of section 10-19.1-01, unless the
3 foreign business entity was operating lawfully in the United States on the
4 effective date of this Act; or
5 (2) Fifty percent or less of the ownership interests in the foreign business entity
6 as defined under subsection 45 of section 10-19.1-01, if the foreign
7 adversary actually directs the business operations and affairs of the foreign
8 business entity without the requirement of consent of any nonforeign
9 adversary, unless the foreign business entity was operating lawfully in the
10 United States on the effective date of this Act.
11 3. This section does not apply to an entity possessing an interest in real property under
12 subsection 2 if the entity:
13 a. Is a duly registered business and has maintained a status of good standing with
14 the secretary of state for seven years or longer before the effective date of this
15 Act;
16 b. Has been approved by the committee on foreign investment in the United States;
17 and
18 c. Maintains an active national security agreement with the federal government.
19 4. A foreign government or foreign business entity subject to and in violation of this
20 section shall divest itself of all real property in this state within thirty-six months after
21 the effective date of this Act.
22 5. If a foreign government or foreign business entity subject to this section fails to divest
23 itself of all real property in this state within the period specified under subsection 4, the
24 the state's attorney of the county in which the majority of the real property is situated
25 may issue subpoenas to compel witnesses to appear to provide testimony or produce
26 records.
27 6. Upon receiving testimony and records, if the state's attorney concludes a foreign
28 government or foreign business entity, in violation of this section, has failed to divest
29 ownership of real property as required under this section, the state's attorney shall
30 commence an action in the district court of the county in which the majority of the real
31 property is situated. Once the action is commenced, the state's attorney shall file a

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1 notice pursuant to section 28-05-07 with the recorder of each county where the real
2 property subject to the action is situated. If the court finds divestment of real property
3 under this section is proper, the district court shall enter an order consistent with its
4 findings. As part of the order, the court shall cancel the notice pursuant to section
5 28-05-08.
6 7. Pursuant to an order for divestment, a foreign government or foreign business entity
7 subject to an order shall divest all real property within six months from the date of the
8 final entry of judgment. A foreign government or foreign business entity that fails to
9 comply with the court's order is subject to a civil penalty not to exceed twenty-five
10 thousand dollars.
11 8. Any real property not divested within the period prescribed by law may be sold at a
12 public sale in the manner provided under chapter 32-19 through an action brought by
13 the state's attorney. A title to real property or encumbrance on the real property may
14 not be deemed invalid by an order of divestiture under this section.
15 9. A person that is not subject to this section may not be required to:
16 a. Determine whether another person is subject to this section; or
17 b. Inquire if another person is subject to this section.
18 10. For purposes of this subsection, "foreign adversary" means an individual or a
19 government identified as a foreign adversary in 15 CFR 7.4(a) or a person identified
20 on the office of foreign assets control sanctions list.
21 SECTION 4. LEGISLATIVE MANAGEMENT STUDY - REAL ESTATE OWNERSHIP AND
22 CONDUCT OF BUSINESS BY FOREIGN ADVERSARIES.
23 1. During the 2023-24 interim, the legislative management shall study the number of
24 persons that own or control any real estate or commercial assets or operate a
25 business within this state which is owned by, controlled by, or subject to the jurisdiction
26 or direction of foreign adversaries or individuals acting on behalf of or in conjunction
27 with foreign adversaries or persons listed on the office of foreign assets control
28 sanctions list.
29 2. The study must attempt to ascertain the number of such persons residing in this state
30 which operate a business or a charitable enterprise or have obtained a beneficial

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1 interest in real estate, commercial assets, or a business or charitable organization in

2 this state.
3 3. The study must consider which federal foreign adversary list would be best suited for
4 use for the security of this state and the impact of implementing a federally created list.
5 4. The study must determine how to create and implement a security verification system
6 that would:
7 a. Review business records and perform background checks on any existing entity
8 not considered a foreign adversary;
9 b. Identify optimal methods for state officials to work and collaborate with national
10 intelligence agents at the state and federal level; and
11 c. Outline what constitutes a national security threat and which person or agency
12 has the authority to declare a national security threat.
13 5. The legislative management shall report its findings and recommendations, together
14 with any legislation required to implement the recommendations, to the sixty-ninth
15 legislative assembly.
16 SECTION 5. EXPIRATION DATE. This Act is effective through July 31, 2025, and after that
17 date is ineffective.

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