South Dakota bills seek new regulations on foreign business

March 2, 2023

PIERRE, S.D. (AP) — South Dakota lawmakers have passed a pair of bills that would set new regulations for the state’s business relationship with foreign entities.

The bills, which are now on their way to Republican Gov. Kristi Noem’s desk, were proposed in response to lawmakers’ fears that foreign countries have maligned intentions.

One bill that passed would require agricultural landowners to report whether their businesses are owned by foreign entities to help legislators tally how much land is owned by foreign countries. And the other approved will prohibit government partnerships with businesses owned or controlled overseas.

These bills fall into Noem’s agenda that targets Chinese economic influence. Already, she’s banned TikTok from state technology over concerns about surveillance and has reported that the state has no direct investments in that country. Some of her legislative ambitions have been curtailed by the legislature.

“I’m happy that we took this first step,” Republican House Majority Leader Will Mortenson said following his bill’s final hearing.

In a Senate hearing last week, Republican Sen. Jim Stalzer said his experience in military and government cybersecurity roles have shaped his concerns that foreign countries, namely China, could profit from U.S. data.

“It’s an incremental step towards protecting our state from external threats, either cybersecurity, food security or economic security,” Stalzer said. “Public funds should not be used as a revenue stream for foreign entities.”

An additional proposal to ward off foreign influence died last week. Had it passed, it would have created a committee to determine whether certain countries could purchase over 160 acres (64 hectares) of land. Lawmakers pointed out the flaws in its mechanics. It was also unpopular among stock growers, who said it pitted national security against their business viability and property rights.

“We cannot support legislation that may lead to unintended consequences,” South Dakota Farm Bureau President Scott VanderWal testified in opposing that bill.

Foreign entities and individuals control less than 3% of U.S. farmland, according to the U.S. Department of Agriculture, and of that, less than 1%, or roughly 600 square miles (1,500 square kilometers) is owned by entities with ties to China. Lawmakers say it is unknown what percentage of South Dakota land is owned by overseas interests.