LB 7 — Change provisions relating to real estate and the Foreign-owned Real Estate National Security Act

or (b) Any person or foreign government or entity determined by the United States Secretary of Commerce to have engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States pursuant to 15 C.F.R.

791.4 7.4, as such regulation existed on February 7 January 1, 2025.

Sec.

3.

Section 76-3703, Revised Statutes Cumulative Supplement, 2024, is amended to read:

76-3703 (1) Except as provided in the Foreign-owned Real Estate National Security Act, a nonresident alien, a foreign corporation, or foreign a government other than the United States Government or a government of its states, political subdivisions, territories, or possessions, or an agent, a trustee, or a fiduciary thereof:

(a) Shall not purchase, acquire title to, or take any real estate or any leasehold interest extending for a period for more than five years or any other greater interest less than fee in any real estate in this state by descent, devise, purchase or otherwise on or after January 1, 2025 , except as provided in the Foreign-owned Real Estate National Security Act;

and (b) Shall be in compliance with the federal Agricultural Foreign Investment Disclosure Act of 1978, 7 U.S.C.

3501 et seq., with respect to any real estate in Nebraska.

(2) Except as provided in the Foreign-owned Real Estate National Security Act, a restricted entity, a nonresident alien, a foreign corporation, foreign a government other than the United States Government or a government of its states, political subdivisions, territories, or possessions, or an agent, a trustee, or a fiduciary thereof, who that on or after January 1, 2025, purchases, acquires title to, or takes any real estate or any leasehold interest in violation of the Foreign-owned Real Estate National Security Act shall be subject to divestment as prescribed under section 76-3712.

(3) Any person, nonresident alien, foreign corporation, or foreign government, or agent, trustee, or fiduciary thereof, of an excepted real estate foreign state as determined by the Committee on Foreign Investment in the United States pursuant to 31 C.F.R.

802.1001(a) and 802.214, as such regulations existed on January 1, 2025, is exempt from the Foreign-owned Real Estate National Security Act except for any restricted entity, or agent, trustee, or fiduciary thereof.

Sec.

4.

Section 76-3704, Revised Statutes Cumulative Supplement, 2024, is amended to read:

76-3704 (1) Except as provided in subsection (2) of this section, corporations incorporated under the laws of the United States of America, or under the laws of any state of the United States of America, or any foreign corporation or any nonresident alien, doing business in this state, may acquire, own, hold, or operate leases for oil, gas, or other hydrocarbon substances, for a period as long as ten years and as long thereafter as oil, gas, or other hydrocarbon substances shall or can be produced in commercial quantities.

(2) A Subsection (1) of this section shall not apply to a restricted entity or an agent, trustee, or fiduciary thereof may not acquire, own, hold, or operate leases for oil, gas, or other hydrocarbon substances pursuant to subsection (1) of this section.

A restricted entity, or an agent, trustee, or fiduciary thereof, who that violates this section subsection (1) of this section shall be in violation of the Foreign-owned Real Estate National Security Act and subject to divestment as prescribed under section 76-3712.

Sec.

5.

Section 76-3708, Revised Statutes Cumulative Supplement, 2024, is amended to read:

76-3708 (1) Except as provided in subsection (2) of this section, the provisions of sections 76-3703, 76-3706, and 76-3707 shall not apply to the real estate necessary for the construction and operation of railroads, public utilities, and common carriers.

(2) The provisions of sections 76-3703, 76-3706, and 76-3707 Subsection (1) of this section shall not apply to the real estate of a restricted entity or an agent, trustee, or fiduciary thereof.

A restricted entity, or an agent, trustee, or fiduciary thereof, who that violates this section subsection (1) of this section shall be in violation of the Foreign-owned Real Estate National Security Act and subject to divestment as prescribed under section 76-3712.

Sec.

6.

Section 76-3709, Revised Statutes Cumulative Supplement, 2024, is amended to read:

76-3709 (1) Except as provided in subsection (2) of this section, any nonresident alien, foreign corporation, or foreign government other than the United States Government or a government of its states, political subdivisions, territories, or possessions, or an agent, trustee, or fiduciary thereof:

(a) May purchase, acquire, hold title to, or be a lessor or lessee of as much real estate as shall be necessary for the purpose of (i) erecting on such real estate manufacturing or industrial establishments, and in addition thereto such real estate as may be required for facilities incidental to such establishments, or (ii) erecting and maintaining establishments primarily operated for the storage, sale, and distribution of petroleum products or -2- LB7 LB7 2025 hydrocarbon substances, commonly known as filling stations or bulk stations;

and (b) Shall not expand establishments or facilities purchased, acquired, held, or leased pursuant to subdivision (1)(a) of this section or build new such establishments or facilities if such nonresident alien, foreign corporation, or foreign government is a restricted entity, or an agent, trustee, or fiduciary thereof.

(2)(a) (2) A restricted entity, or an agent, trustee, or fiduciary thereof, shall not purchase, acquire, hold title to, or be a lessor or lessee of real estate pursuant to subdivision (1)(a) of this section unless such restricted entity, or an agent, trustee, or fiduciary thereof, has received:

has a national security agreement with the Committee on Foreign Investment in the United States as of January 1, 2025, maintains such national security agreement, and certifies the validity of such national security agreement annually to the Department of Agriculture within thirty days after January 1, 2025, and on or before January 15 of each year thereafter.

(i) A determination from the Committee on Foreign Investment in the United States that there are no unresolved national security concerns with respect to the real estate transaction and such restricted entity has not undergone a change in control constituting a covered control transaction, as defined in 31 C.F.R.

800.210, as such regulation existed on January 1, 2025, since such determination;

or (ii) A national security agreement with the Committee on Foreign Investment in the United States and maintains the validity of such national security agreement.

(b) A restricted entity, or an agent, trustee, or fiduciary thereof, who complies with the requirements of subdivision (2)(a)(i) or (ii) of this section shall annually certify such compliance to the Department of Agriculture on or before January 15, 2026, and on or before January 15 of each year thereafter.

(3) A restricted entity, or an agent, trustee, or fiduciary thereof, who that violates this section shall be in violation of the Foreign-owned Real Estate National Security Act and subject to divestment as prescribed under section 76-3712.

Sec.

7.

Section 76-3710, Revised Statutes Cumulative Supplement, 2024, is amended to read:

76-3710 (1) Except as provided in subsection (2) of this section, the provisions of the Foreign-owned Real Estate National Security Act shall not apply to any real estate lying within the corporate limits of cities and villages, or within three miles of such corporate limits, nor to any manufacturing or industrial establishment described in section 76-3709.

(2) A restricted entity, or an agent, trustee, or fiduciary thereof, who that purchases, acquires, holds title to, or is the lessor or lessee of any real estate lying within the corporate limits of cities and villages, or within three miles of such corporate limits, or any manufacturing or industrial establishment described in section 76-3709 shall be subject to sections 76-3703 and 76-3709.

A restricted entity, or an agent, trustee, or fiduciary thereof, who that violates this subsection shall be subject to divestment as prescribed under section 76-3712.

Sec.

8.

Section 76-3712, Revised Statutes Cumulative Supplement, 2024, is amended to read:

76-3712 (1) Any person may notify the Department of Agriculture or the Attorney General of a violation or potential violation of the Foreign-owned Real Estate National Security Act.

(2) The Department of Agriculture shall investigate violations of the Foreign-owned Real Estate National Security Act.

If the Director of Agriculture has reasonable suspicion to believe that a violation of the act has occurred, the director shall refer the suspected violation to the Attorney General or outside counsel retained by the Department of Agriculture for enforcement.

(3) The Attorney General or retained outside counsel, upon a referral by the Director of Agriculture or upon the receipt of any information from any person that gives the Attorney General or retained counsel reasonable suspicion to believe that a violation of the Foreign-owned Real Estate National Security Act has occurred, may issue subpoenas requiring the appearance of witnesses, the production of documents, and the giving of relevant testimony.

Service of any subpoena shall be made in the same manner as a subpoena issued by any court in this state.

(4)(a) After investigation, if the Attorney General or retained outside counsel believes that a violation of the Foreign-owned Real Estate National Security Act has occurred, the Attorney General or retained outside counsel shall notify the person any restricted entity believed to have committed or be committing such violation that such person entity may voluntarily divest the any interest in the real estate that is the subject of the violation.

(b) The person believed to have committed or be committing a violation restricted entity shall indicate to the Attorney General or retained outside counsel whether such person entity is voluntarily divesting the any interest in the real estate that is the subject of the violation within thirty days of receiving the notice under subdivision (4)(a) of this section.

(c) If the person believed to have committed or to be committing a violation restricted entity indicates that such person it is voluntarily divesting the any interest in the real estate that is the subject of the violation, such person the restricted entity shall be entitled to a grace period of one hundred eighty days to voluntarily divest the interest.

(d) The grace period of one hundred eighty days shall begin upon the end -3- LB7 LB7 2025 of the thirty-day period under subdivision (4)(b) of this section.

(e) No person The restricted entity shall not sell or otherwise transfer the real estate to another a person or entity prohibited under the act.

Any person A restricted entity who violates this subdivision shall be subject to a civil penalty not to exceed fifty thousand dollars per parcel of real estate sold or otherwise transferred to another a person or entity prohibited under the act.

(5) The Attorney General or retained outside counsel shall commence an action in either the district court in the county in which all or part of the real estate is located or in the district court of Lancaster County if:

(a) The person described in subdivision (4)(a) of this section restricted entity fails to indicate to the Attorney General or retained outside counsel that such person the entity is voluntarily divesting the any interest in the real estate that is the subject of the violation within the thirty-day period under subdivision (4)(b) of this section;

or (b) Such person The restricted entity fails to voluntarily divest the any interest in the real estate that is the subject of the violation within the grace period of one hundred eighty days.

(6) Upon commencement of an action under this section, the Attorney General or retained counsel shall:

(a) Promptly record a notice of the pendency of the action in records with the register of deeds in each county in which all or part of the real estate is located;

and (b) Serve a copy of the petition by service of process in the same manner as in civil cases as follows on:

(i) The owner of the real estate if the owner's address is known;

(ii) Any secured party who has registered or filed a lien, mortgage, or trust deed against the real estate or filed a financing statement against the real estate as provided by law if the identity of the secured party can be ascertained by the person entity filing the petition by making a good faith effort to ascertain the identity of the secured party;

(iii) Any other bona fide lienholder or secured party or other person holding an interest in the real estate if such party is known;

and (iv) Any person residing on the real estate subject to divestment at the time the petition is filed.

(7) The court shall have power to hear and determine the questions presented in such case and to declare such real estate to be divested.

The burden is on the state to prove by clear and convincing evidence that the real estate is subject to divestment under the Foreign-owned Real Estate National Security Act.

If the court finds that the real estate that is the subject of an action commenced under the act was purchased, acquired, taken, or held in violation of the act, the court shall enter an order that:

(a) States the findings of the court;

(b) Orders the divestment of the interest in the real estate of the person or entity that violated the act;

(c) Orders the Attorney General or retained outside counsel to promptly notify Notifies the Governor and the Clerk of the Legislature that the title to such real estate is ordered divested by the decree of the court;

(d) Orders the Attorney General or retained outside counsel to promptly record a copy of such divestment order with the register of deeds of each county in which all or part of the real estate is located;

(e) Appoints a receiver subject to sections 25-1081 to 25-1092 to manage and control the real estate through the final disposition of the real estate;

and (f) Authorizes the proceeds of the divestment to be disbursed in the following order:

(i) The payment of any taxes and assessments due;

(ii) The payment of court costs related to the action or actions commenced under the Foreign-owned Real Estate National Security Act;

(iii) The payment of authorized costs of the sale, including all approved fees and pending sale expenses and expenses of the referee;

(iv) Reimbursement of investigation and litigation costs and expenses, in an amount approved by the court, to the Attorney General or retained outside counsel;

(v) Payment to bona fide lienholders of the real estate, in order of lien priority, except for liens which under the terms of the divestment are to remain on the real estate;

and (vi) Remittance of any remaining proceeds to the State Treasurer for distribution in accordance with Article VII, section 5, of the Constitution of Nebraska.

(8) If the interest is a lease, easement, or interest other than fee title, the court shall have power to declare such interest terminated.

(9) If the respondent fails to answer or appear for the action commenced pursuant to this section, the court may enter default judgment.

Sec.

9.

Section 76-3715, Revised Statutes Cumulative Supplement, 2024, is amended to read:

76-3715 Nothing in the Foreign-owned Real Estate National Security Act shall be construed to require any person or entity to determine or inquire whether another person or entity is subject to or in violation of the act, and such person or entity shall bear no civil or criminal liability under the act for the failure to make such determination or inquiry.

The Attorney General, retained outside counsel, and Director of Agriculture are responsible for determining whether a person or entity is subject to or in violation of the -4- LB7 LB7 2025 act.

Sec.

10.

If any section in this act or any part of any section is declared invalid or unconstitutional, the declaration shall not affect the validity or constitutionality of the remaining portions.

Sec.

11.

Original sections 76-2,141, 76-3702, 76-3703, 76-3704, 76-3708, 76-3709, 76-3710, 76-3712, and 76-3715, Revised Statutes Cumulative Supplement, 2024, are repealed.

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