REFERENCE TITLE: state land; foreign entities; prohibition

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 4014

Introduced by

Representative Kupper

AN ACT

Amending title 37, chapter 1, article 1, Arizona Revised Statutes, by adding section 37-111; RELATING to state land.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 37, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 37-111, to read:

START_STATUTE37-111. Conveyance of state land; foreign entities; prohibition; violation; classification; civil penalty; exceptions; definitions

A. Notwithstanding any other law, the department may not convey to a foreign-CONTROLLED entity, including THROUGH indirect ACQUISITIONS and UNITED states-based PROXIES, any state land that is located within ten miles of CRITICAL INFRASTRUCTURE unless both of the following apply:

1. The ATTORNEY general in CONSULTATION with applicable federal AUTHORITIES, including the committee on foreign investment in the United States, has reviewed the conveyance.

2. The ATTORNEY general and applicable federal AUTHORITIES DETERMINE that the conveyance POSES no NATIONAL SECURITY risk.

b. Each person that SUBMITs an offer or application for a conveyance of state land that is located within ten miles of CRITICAL INFRASTRUCTURE shall do either of the following:

1. disclose any foreign AFFILIATION, INCLUDING any ownership or control by foreign nationals or FOREIGN governments.

2. SUBMIT an a SIGNED AFFIDAVIT attesting that the person does not have any foreign AFFILIATION.

c. ANy person that makes a FALSE statement or fails to DISCLOSE a foreign AFFILIATION pursuant to subsection B of this section is subject to PROSECUTION for perjury as prescribed in section 13-2702.

D. The commissioner shall forward any offer of conveyance for state land that is located within ten miles of CRITICAL INFRASTRUCTURE that may involve a foreign-CONTROLLED entity to the ATTORNEY general for review and INVESTIGATION.  The attorney general shall review the information and make a DETERMINATION of foreign affiliation or control within forty-five days after RECEIPT of the INFORMATION from the commissioner. The attorney general's review shall examine the following:

1. The OFFEROR'S ties to foreign GOVERNMENTS.

2. The POTENTIAL impact of the conveyance on supply chains or CRITICAL INFRASTRUCTURE.

3. The offeror's aLIGNMENT with federal threat assessments, including support for nonstate actors designated as international TERRORISM ORGANIZATIONS by the United States department of state.

E. A person that offers or applies for a CONVEYANCE of state land and that the attorney general determines has a foreign AFFILIATION may challenge the attorney general's DETERMINATION in superior court.

F. in ADDITION to any other applicable PENALTIES, a person that buys or RECEIVES an INTEREST in state land that is located within ten miles of CRITICAL INFRASTRUCTURE and that has a FOREIGN AFFILIATION, or purposefully circumvents the disclosure PROVISIONS of subsection B of this section, is guilty of a class 6 felony and shall pay a civil penalty of $250,000 per acre of land acquired in VIOLATION of this section.  The attorney general may INVESTIGATE VIOLATIONS of this section and WITHIN one hundred eighty days after a conviction shall seek a court order for the divestment of any affected state land. The attorney general shall deposit, pursuant to sections 35-146 and 35-147, any proceeds from divestments in the state land trust.  The attorney general shall deposit, pursuant to sections 35-146 and 35-147, any civil PENALTIES collected PURSUANT to this subsection, MINUS ADMINISTRATIVE costs, in the state general fund.

G. a person that owns an interest in state land or FORMER state land that is located within ten miles of CRITICAL INFRASTRUCTURE and that has a FOREIGN AFFILIATION shall register annually with the department.  A person that OWNS an interest in state land or FORMER state land that is located within ten miles of CRITICAL INFRASTRUCTURE and that has a foreign AFFILIATION may retain the state lands without penalty or required divestment unless the attorney general determines the ownership of the state land is a threat to NATIONAL SECURITY. 

H. THis section does not apply to the following:

1. A de MINIMiS interest in which foreign control is less than one percent.

2. A transaction that is preapproved by the committee on FOREIGN investment in the United states.

3. An eNTITy that federal law DESignates as a MAJOR non-nato ally, unless the attorney general DEtermines that the SPECIFIC TRANSACTION poses a NATIONAL SECURITY risk due to the ENTITy's ties to a DESIGNATEd terrorist ORGANIZATION or SIMILAR ORGANIZATION.

i. For the PURPOSES of this section:

1. "critical infrastructure":

(a) means systems and assets, whether physical or virtual, that are so vital to the United States that the incapacity or destruction of the systems and assets would have a debilitating impact on security, national economic security or national public health or safety, or any combination of these.

(b) Includes FACILITIES or sites DESIGNATED by the governor as vital to national SECURITY, including SEMICONDUCTOR MANUFACTURING PLANTS, MILITARY INSTALLATIONS, power grids, TRANSPORTATION hubs and other FACILITIES that produce DEFENSE-related TECHNOLOGIES.

2. "foreign-controlled entity" means any entity in which TWENTY-five percent or more of the ownership interest, voting rights or controlling interest is held by a foreign national, FOREIGN GOVERNMENT or entity DOMICILED OUTSIDE of the united states. END_STATUTE

Sec. 2. Legislative findings

The legislature finds that:

1. The critical infrastructure of this state, including semiconductor manufacturing facilities, are essential to national defense, artificial intelligence and economic security and must be protected from foreign influence that could compromise supply chains or enable espionage.

2. This act is necessary to ensure that state trust land auctions prioritize domestic interest and align with federal guidelines under the committee on foreign investment in the United States without discriminating based on national origin.