Gov. Kristi Noem's farmland protection proposal goes down in lopsided Senate vote
“I know we need American security, but at what cost?” one lawmaker said during the floor debate. “At what cost of private ownership and private property rights?”
PIERRE, S.D. — Still nursing wounds from the rejection of the grocery tax by a budget committee earlier in the day, Gov. Kristi Noem’s legislative agenda took another hit on Feb. 21, with the Senate voting 23-11 to reject her proposal to improve the state’s oversight system on foreign agricultural land purchases.
“This bill is born with good intention,” said Sen. David Wheeler, of Huron. “But good intentions do not make a good bill.”
If enacted, Senate Bill 185 would create a seven-member board called the Committee on Foreign Investment in the United States - South Dakota (CFIUS-SD), modeled after the federal agency tasked with reviewing foreign purchases that could impact national security.
The committee would review any transfer of agricultural land involving a foreign entity, offering a recommendation to the governor within 90 days, or sooner under an expedited process.
Part of Wheeler’s concerns during floor debate stemmed from the unilateral authority the bill would hand any governor.
“It doesn’t have any standards, any particular reasons for the governor to approve or deny the application,” Wheeler said.
The reference during floor debate to a Chinese purchase of land near Grand Forks Air Base in North Dakota, which the federal CFIUS allowed to proceed, indicated that some lawmakers were unconvinced that the presence of federal oversight was enough, especially considering the key position of Ellsworth Air Force Base in maintaining national security.
“If Chinese purchase of strategic farmland doesn't warrant CFIUS intervention, what does?” Sen. Erin Tobin, of Winner, the prime sponsor of the legislation, said during her remarks. “State governments need to step up.”
Yet concerns about the effects on property rights — and whether the actual efficacy of the proposal matched the talk of beating back Chinese expansion — torpedoed the bill.
Sen. Lee Schoenbeck, of Watertown, first pointed out that the bill required the committee to parse out whether a purchasing entity had ties to foreign governments, entities or persons, “whether directly or indirectly.”
“You have no way looking at [a company] to know who the members are, and is one of them another LLC then that LLC is 5% controlled or something by a foreign person or foreign entity,” Schoenbeck said to underscore the difficulty in implementing the bill.
Furthermore, Schoenbeck added that, in terms of defending national security, foreign governments keen on spying on integral pieces of national security within the state could simply choose to buy something other than farmland.
“As for Ellsworth, you can buy a double-wide in Box Elder and put up all the spy equipment you want and you're not covered by this bill,” he said. “You can do it cheaper and nobody's gonna see it.”
Opponents to the bill during committee included a lengthy parade of nearly every agricultural interest group in the state: The Farm Bureau; The Farmers Union; the South Dakota Bankers Association; the South Dakota Realtors Association; and speakers from state groups representing corn, soybeans, wheat, dairy, cattle, pork and more.
Many of these opponents expressed that they shared Noem’s desire to defend important American resources, especially farmland. But they also feared that even an expedited review period would create delays in a time-sensitive industry.
Responding to some criticisms related to the actual implementation of the bill, Tobin moved an amendment to make the process simpler for county registers of deeds.
Yet the change now appears to put the onus on the purchaser of the land to report the purchase to the committee, creating a similar self-reporting mechanism to the one currently in law that has been criticized as ineffective.
Even among some members of the Senate Agriculture and Natural Resources committee, which advanced the proposal by a 7-0 vote largely as a way to continue the conversation and allow for amendments, those changes weren’t enough.
“I know we need American security, but at what cost?” Sen. Randy Deibert, the committee’s vice chair, said during the floor debate. “At what cost of private ownership and private property rights?”
Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or firstname.lastname@example.org.