Bill Text: CA AB475 | 2023-2024 | Regular Session | Amended

California Assembly Bill 475

Bill Title: Sensitive military land: foreign ownership and interests: prohibited foreign actors.

Spectrum: Strong Partisan Bill (Republican 10-1)

Status: (Failed) 2024-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB475 Detail]

Download: California-2023-AB475-Amended.html

Amended IN Assembly March 15, 2023

Amended IN Assembly March 01, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 475

Introduced by Assembly Members Mathis and Quirk-Silva
(Coauthors: Assembly Members Alanis, Dixon, Flora, and Hoover)
(Coauthors: Senators Dahle, Jones, Nguyen, Niello, and Seyarto)

February 07, 2023

An act to add Chapter 6 (commencing with Section 747) to Title 2 of Part 1 of Division 2 of the Civil Code, relating to property.

LEGISLATIVE COUNSEL'S DIGEST

AB 475, as amended, Mathis. Sensitive military land: foreign ownership and interests: prohibited foreign actors.

Existing law provides that all property has an owner, whether that owner is the state, and the property is public, or the owner is an individual, and the property is private. Existing law establishes the California National Guard and regulates the operation of that force. The United States Constitution authorizes Congress to provide for the common defense and general welfare of the United States.

This bill would prohibit a prohibited foreign actor, as defined, from purchasing, acquiring, leasing, or holding an interest, as defined, in any land that is located within 50 miles of a United States military base or California National Guard base within the State of California. The bill would exempt land held by a prohibited foreign actor before January 1, 2024, from that prohibition. The bill would provide land transferred in violation of these provisions would be subject to divestiture, as specified. The bill would provide that these provisions may not be applied in a manner inconsistent with any provision of any treaty between the United States and another country.

Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Chapter 6 (commencing with Section 747) is added to Title 2 of Part 1 of Division 2 of the Civil Code, to read:

CHAPTER 6. Prohibited Foreign Actors and Property Ownership

747.

For purposes of this chapter, the following definitions apply:

(a) “Controlling interest” means either of the following:

(1) Possession of 51 percent or more of the ownership interests in an entity.

(2) A percentage ownership interest in an entity of less than 51 percent, if the prohibited foreign actor ~~actually directs~~ has the contractual right and power to direct the business and affairs of the entity without the requirement or consent of any other party.

(b) “Fiduciary” means an agent, trustee, or any person acting in a fiduciary capacity for a business or government.

(c) “Interest” means any estate, remainder, or reversion enumerated in Chapter 1 (commencing with Section 761) of Title 2 of Part 2, or portion of the estate, remainder, or reversion, or an option pursuant to which one party has a right to cause legal or equitable title to agricultural land to be transferred.

(d) “Prohibited foreign actor” means a ~~business,~~ government, state-controlled enterprise, or fiduciary from a country that is either of the following:

(1) Designated as a nonmarket economy country pursuant to Section 771(18) of the Tariff Act of 1930 (19 U.S.C. Sec. 1677(18)).

(2) Identified as a country that poses a risk to the national security of the United States in the most recent annual report on worldwide threats issued by the Director of National Intelligence pursuant to Section 108B of the National Security Act of 1947 (50 U.S.C. Sec. 3043b), commonly known as the “Annual Threat Assessment.”

(e) “Sensitive land” means any land within the state that is located within 50 miles of a United States Military base or California National Guard base.

(f) “State-controlled enterprise” means a business enterprise, however denominated, in which the government of another country has a controlling interest.

747.5.

(a) Notwithstanding any other law, on and after January 1, 2024, a prohibited foreign actor shall not purchase, acquire, lease, or hold any interest in sensitive land in the State of California.

(b) This section does not apply to any interest in sensitive land held by a prohibited foreign actor before January 1, 2024.

(d) A transfer of an interest in land in violation of this section is ~~void.~~ shall be subject to divestiture pursuant to Section 747.6.

(e) This section shall not be applied in a manner inconsistent with any provision of any treaty between the United States and another country.

747.6.
(a) The Attorney General, upon the request of any person or upon receipt of any information which leads the Attorney General to believe that a violation of Section 747.5 may have occurred, may issue subpoenas requiring the appearance of witnesses, the production of relevant records and the giving of relevant testimony.
(b) (1) If after examining the evidence, the Attorney General concludes that a violation of Section 747.5 has occurred, the Attorney General shall order the prohibited foreign actor to divest itself of all interests in the land within 90 days after service of the order upon the foreign actor.
(2) The order of divestiture, described in paragraph (1), shall be served personally or by mail.
(c) (1) If the holder of the interest that is ordered to be divested disputes the determination of the Attorney General that a violation of Section 747.5 occurred, the holder may submit a written request for a judicial determination to the Attorney General.
(2) The written request, described in paragraph (1), shall be delivered to the Attorney General within 60 days after service of the order of divestiture. If no written request is received within this time, the determination of the Attorney General shall become final.
(d) (1) If the prohibited foreign actor fails to divest itself of all interests pursuant to subdivision (b), or if a holder of the interest submits a written request pursuant to subdivision (c), the Attorney General shall bring an action to divest the interest.
(2) Venue for the action, described in paragraph (1), shall either be the County of Sacramento or a county where a portion of the land is located, as determined by the Attorney General.
(3) The Attorney General shall record with the county recorder of each county in which any portion of the land is located a notice of pendency of the action pursuant to Title 4.5 (commencing with Section 405) of Part 2 of the Code of Civil Procedure.
(e) If the holder of the interest in land has submitted a written request pursuant to subdivision (c), the court shall conduct an evidentiary hearing to determine, by a preponderance of the evidence, if a violation of Section 747.5 occurred, prior to taking any other action. If the court determines that there has been no violation, the court shall dismiss the action and expunge the notice of pending action.
(f) (1) If the court determines that a violation of Section 747.5 occurred, the court shall order that the land be sold. Unless the court determines for good cause that another procedure for conducting the sale is appropriate, the court shall appoint a referee pursuant to Article 1 (commencing with Section 873.010) of Chapter 4 of Title 10.5 of Part 2 of the Code of Civil Procedure.
(2) The referee shall make a sale of the property and convey the interest to the purchaser.
(3) The proceeds from the sale shall be distributed in the following order:
(A) The payment of authorized costs of the sale, including all approved fees and expenses of the referee and any taxes and assessments due.
(B) The payment, in an amount approved by the court, to the Attorney General for reimbursement of investigation and litigation costs and expenses.
(C) The payment to lien holders who did not have actual knowledge of a violation of Section 747.5 in their order of priority, except for liens which under the terms of the sale are to remain on the property.
(D) The payment of penalty, in an amount determined by the court, not to exceed 10 percent of the sales price of the property, to be paid to the fund designated by the Attorney General for enforcement of this chapter.
(E) The payment to any lien holders not included in subparagraph (C) in their order of priority.
(F) All remaining proceeds to the prohibited foreign actor, payable to the person or entity that held the interest.
(g) A title to sensitive land shall not be invalid or subject to divestiture by reason of a violation of Section 747.5 by any former owner or other person holding or owning a former interest in the sensitive land.