For reasons that range from supply chain and food security to national security, and reducing financial speculation among investors, current Iowa law restricts the amount of Iowa farmland that foreign individuals and companies can buy to 320 acres. Iowa has always been one of the most restrictive states when it comes to allowing foreign ownership of land. Will we soon see laws in Iowa that allow for purchases of 1,000 acres agricultural land for MEGA development sites that allow foreign ownership for development of industrial sites? Should this be a concern to Iowans? Here is some history that may help answer these questions:
In 2022, Fufeng Group, a food and bioenergy company from the People’s Republic of China, purchased 300 acres of land near Grand Forks Airforce Base in North Dakota. This land purchase fueled nationwide concern on who is buying one of our nation’s most precious resources — productive farmland.
In February 2023, Congress took action to prohibit purchases of agricultural real estate in the United States by individuals or companies of the Republic of China. This action was supported by all four of Iowa’s Congressional delegation.
In Iowa, a similar conversation took place during the session. In addition to these discussions for restrictions – House Bill 147 would allow foreign companies to buy contiguous farmland tracts of 1,000 acres to build factories. A company would need to spend at least $1 billion on its project to qualify, and a state consultant would need to declare the property a certified site for industrial development.
This bill also would create tax credits and rebates to lure foreign and domestic businesses through a new Major Economic Growth Attraction, or MEGA, program.
The bill failed to progress through to session — but in the final hours of the session there was an effort to revive it as HF 642, which also failed.
As currently written and supported by Iowa’s economic director, Debi Durham, and other pro-business groups in Iowa – any U.S. owned company locating on a certified site of at least 250 acres would be eligible for the MEGA incentives, while the 1,000 acres requirement only applies to foreign-owned entities. Companies must be involved in advanced manufacturing, bioscience or research and development.
If the 2023 Iowa legislative session taught us anything, it is that failed bills from past sessions will be met with renewed emphasis by the Governor Kimberly Reynolds. It is highly likely this bill to create tax credits and rebates to lure foreign and domestic businesses will be a renewed effort in the 2024 session.
There is a loophole that exists today for foreign ownership of land in Iowa. Easements are not currently considered as land ownership, so this legally opens up land to foreign investment. CO2 pipelines that are being negotiated in Iowa gain access to land through easements from landowners. We see many foreign investment partners lining up for investment in CO2 Pipelines that will ultimately make a great amount of money from U.S. taxpayers via the government payments to sequester CO2.
Discussions should take place between rural and urban on land use, including ownership protection to ensure we protect one of Iowa’s most valuable resources — our land. Landus will continue to monitor and weigh in on this issue and other rural matters.
Let us know your concerns about this issue or other issues on your mind by contacting, Sue at sue.tronchetti@landus.ag.
Working together on rural matters.
