Senate approves Rounds amendment to block ag land purchases by adversaries

WASHINGTON — U.S. senators approved bipartisan amendments to the annual defense policy bill Tuesday night that would prohibit China, Iran, North Korea and Russia from purchasing U.S. farmland and screen American investment in high-tech ventures on foreign adversary soil.

By a 91-7 vote (including yes votes from both of South Dakota’s senators), the lawmakers approved a measure that would require review of — and direct the president to halt or waive — agricultural land transactions by the four nations.

The amendment would empower the Committee on Foreign Investment in the United States to evaluate the land deals. The committee already reviews other inbound investment transactions.

State has one record of acting on 44-year-old foreign ag land law

Of the 40 million acres of U.S. forest and farmland owned by foreign investors at the end of 2021, China accounted for 383,935 acres, or less than 1%, according to a U.S. Department of Agriculture report on foreign land holdings.

The 2022 purchase of 300 acres by a Chinese-owned corn processing company near an Air Force base in North Dakota triggered concern among some lawmakers, as did the discovery in February of a Chinese surveillance balloon hovering over Montana, home to many U.S. nuclear missiles.

The amendment was co-sponsored by Republican Sens. Mike Rounds of South Dakota, Steve Daines of Montana, John Kennedy of Louisiana, Joni Ernst of Iowa, Cynthia Lummis of Wyoming, Ted Cruz of Texas, Kevin Cramer and John Hoeven of North Dakota, Katie Britt of Alabama, and Democratic Sens. Jon Tester of Montana and Sherrod Brown of Ohio.

“In recent years, our country has seen firsthand attempts by our near peer competitors to acquire land adjacent to our military bases,” Rounds said on the Senate floor Tuesday.  “In 2020, a Chinese-led company planned to build a wind energy farm project near Del Rio, Texas, only miles away from Laughlin Air Force base, where U.S. pilots are trained.”

State lawmakers blocked the wind farm project in 2021, but recently gave it a green light after a company from Spain backed it instead.

As of 2021, Canadian investors held the largest amount of forest and farmland, followed by the Netherlands, Italy, United Kingdom and Germany, according to the USDA.

Investment abroad

Senators also voted 91-6 on an amendment to screen investment by U.S. companies in China, Iran, North Korea and Russia in high-tech sectors, including artificial intelligence, advanced semiconductors, satellite communications and quantum computing.

Democratic Sen. Bob Casey of Pennsylvania and GOP Sen. John Cornyn of Texas have been pushing legislation since 2021 that would monitor the offshoring of supply chains in industries and locations with national security implications.

The annual defense bill “tackles the toughest national security issues facing our nation,” Casey said on the Senate floor Tuesday. “And the technological competition with the People’s Republic of China is certainly at the top of that list.”

“Right now we’re in competition with a communist government that doesn’t play by the rules,” he continued in remarks before the vote. “The Chinese government employs economic espionage and it exploits the United States’ open research and innovation to build up its own capabilities.”

U.S. outbound investment totaled $6.58 trillion at the end of 2022, according to the U.S. Bureau of Economic Analysis.

Most was concentrated in the United Kingdom, the Netherlands, Luxembourg, Ireland and Canada. Just over $1 trillion landed in Latin America and the Western Hemisphere, while roughly $951 million went to Asia and the Pacific. The Middle East and Africa were near the bottom of the list with just over $80 million and $46 million respectively.

The Casey-Cornyn amendment would require U.S. corporations and other entities to notify the secretary of the Treasury prior to a deal.

Unlike foreign investment that comes into the U.S., no federal mechanism screens the dollars American companies are investing outside the nation.

Defense bill

The National Defense Authorization Act is the annual defense policy bill that continues defense policies, nuclear weapons programs and authorizes defense-related spending.

Lawmakers often use the massive bill as a vehicle for various policy matters because Congress consistently enacts the legislation each year. After the Senate bill is passed, it will go to a conference committee with a House-passed bill that targets abortion access, transgender health and racial equity.

The legislation does not appropriate money for the Department of Defense and other relevant federal agencies. Rather, the bill authorizes how the funds should be spent.

The 2022 NDAA authorized $768.2 billion.