Sections 76-3701 to 76-3717 shall be known and may be cited as the Foreign-owned Real Estate National Security Act.

(d) Has not been physically present in the United States for at least one hundred eighty-three days during a three-year period that includes the current year and the two years immediately preceding the current year; and

(a) Any person or entity identified on the sanctions lists maintained by the Office of Foreign Assets Control of the United States Department of the Treasury as such sanctions lists existed on January 1, 2025; 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. 7.4, as such regulation existed on January 1, 2025.

(1) Except as provided in the Foreign-owned Real Estate National Security Act, a nonresident alien, a foreign corporation, 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, 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, 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.

Annotations

1. Aliens

2. Foreign corporations

3. Effect of treaty

4. Miscellaneous

1. Aliens

Prior to 1963, when the method by which nonresident aliens may take land by inheritance was provided, nonresident aliens could not inherit lands in Nebraska but were to be paid the full value therefor by the state. Shames v. State, 192 Neb. 614, 223 N.W.2d 481 (1974).
An alien heir who cannot take by purchase cannot take by descent or devise. Semrad v. Semrad, 170 Neb. 911, 104 N.W.2d 338 (1960).
Religious or charitable testamentary trust will not be permitted to fail because trustee named is incompetent to take title, being a nonresident corporation, but competent trustee will be appointed. Stork v. Evangelical Lutheran Synod, 129 Neb. 311, 261 N.W. 552 (1935).
Legislature has placed restrictions on the right of nonresident aliens to acquire or hold title to land in this state. Engen v. Union State Bank of Harvard, 121 Neb. 257, 236 N.W. 741 (1931).
This section did not operate to prevent inheritance by wife and child of citizen of United States temporarily residing abroad. Nelson v. Nelson, 113 Neb. 453, 203 N.W. 640 (1925).
Land devised to nonresident aliens incapable of acquiring interest therein must be regarded as intestate property and descends as provided by law, to next of kin who are capable of taking. Metzger v. Metzger, 108 Neb. 613, 188 N.W. 229 (1922); State v. Toop, 107 Neb. 391, 186 N.W. 371 (1922), which overrules decision in State ex rel. Toop v. Thomas, 103 Neb. 147, 170 N.W. 839 (1919), so far as it conflicts with said case.
Provision giving wife and heirs of aliens a right to hold lands by devise or descent for limited period does not apply where deceased landlord was a citizen of United States. State v. Toop, 107 Neb. 391, 186 N.W. 371 (1922).
Statute was sustained as constitutional. Dougherty v. Kubat, 67 Neb. 269, 93 N.W. 317 (1903); Glynn v. Glynn, 62 Neb. 872, 87 N.W. 1052 (1901).
Statute forbidding ownership by nonresident alien is not repugnant to 14th amendment to federal Constitution, and treaty is not retroactive. Toop v. Ulysses Land Company, 237 U.S. 580 (1915).
The provision that no nonresident alien can inherit Nebraska land more than three miles from corporate limits of any city or town does not constitute an impermissible interference with federal power over foreign affairs. Shames v. State of Nebraska, 323 F.Supp. 1321 (D. Neb. 1971).

2. Foreign corporations

Foreign corporation was not prohibited from acquiring interest in real estate in manner set out. In re Estate of Sautter, 142 Neb. 42, 5 N.W.2d 263 (1942).
Fact that American Red Cross is a foreign corporation does not preclude it from becoming beneficiary under will providing for sale of land on death of life tenant and payment of proceeds to the Red Cross. May v. American Red Cross, 140 Neb. 43, 299 N.W. 272 (1941).
Public policy of Nebraska is against acquisition of title to real estate by foreign corporation, whether charitable or educational, and a devise of real estate to such corporation is subject to inheritance tax. In re Estate of Robinson, 138 Neb. 101, 292 N.W. 48 (1940).
Title of foreign corporation to land taken in settlement of debt, secured by mortgage on part of land, can be challenged only by state. Lord v. Shultz, 115 Neb. 33, 211 N.W. 210 (1926).
Foreign corporations are prohibited from taking or holding lands in this state in trust for the use and benefit of another, and power to raise the question of right to take the property is not confined to state, but may be raised by the heir or next of kin in an action to quiet title. Gould v. Board of Home Missions, 102 Neb. 526, 167 N.W. 776 (1918).
Under prior statute state alone could divest foreign corporations of title. Carlow v. Aultman & Co., 28 Neb. 672, 44 N.W. 873 (1890).

3. Effect of treaty

Nonresident aliens had right under treaty to inherit real estate situated in United States in accordance with state law, and treaty right was not abrogated by state of war. Goos v. Brocks, 117 Neb. 750, 223 N.W. 13 (1929).
Under treaty with Austria-Hungary, nonresident alien was entitled to reasonable prolongation of time prescribed in treaty to sell real estate. Fischer v. Sklenar, 101 Neb. 553, 163 N.W. 861 (1917).
Where treaty suspended operation of statute and allowed alien heirs a prescribed period in which to sell land, failure of heirs to sell within prescribed time vests title in those to whom land would have descended in absence of treaty. Pierson v. Lawler, 100 Neb. 783, 161 N.W. 419 (1917).
Title to land passed to citizen heirs, where alien heirs failed to exercise power of sale under statute as permitted by German treaty. Miller v. Clausen, 299 F. 723 (8th Cir. 1924).

4. Miscellaneous

Escheat must be established and payment made as provided in section 76-408, and under certain circumstances, section 76-409. Wilson v. State, 195 Neb. 228, 237 N.W.2d 835 (1976).

(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) Subsection (1) of this section shall not apply to a restricted entity or an agent, trustee, or fiduciary thereof. A restricted entity that violates 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.

Any nonresident alien may acquire title to lands in this state by devise or descent only, except that such nonresident alien shall be required to sell and convey such real estate within five years after the date of acquiring it, and if the nonresident alien fails to dispose of it to a bona fide purchaser for value within such time, the nonresident alien shall be in violation of the Foreign-owned Real Estate National Security Act and the real estate shall be subject to divestment as prescribed in section 76-3712. If a person no longer meets the definition of nonresident alien within five years of acquiring title to real estate by devise or descent, such person shall not be required to dispose or divest of the property.

Annotations

Sections governing escheat must be construed together and effect given to each if possible. Semrad v. Semrad, 170 Neb. 911, 104 N.W.2d 338 (1960).

No corporation organized under the laws of this state and no corporation organized under the laws of any other state or country, doing business in this state, which was organized to hold or is holding real estate, except as provided in the Foreign-owned Real Estate National Security Act, shall elect nonresident aliens as members of its board of directors or board of trustees in a number sufficient to constitute a majority of such board, nor elect nonresident aliens as executive officers or managers nor have a majority of its capital stock owned by nonresident aliens.

Any corporation described in section 76-3706 violating such section shall be construed and held to be a nonresident alien and within the provisions of the Foreign-owned Real Estate National Security Act applicable to nonresident aliens. Any such domestic corporation violating section 76-3706 shall forfeit its charter and be dissolved. Any such foreign corporation violating section 76-3706 shall forfeit its right to do business in the State of Nebraska.

(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.

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

(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 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.

(3) A restricted entity 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.

(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, 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 that violates this subsection shall be subject to divestment as prescribed under section 76-3712.

Annotations

Lands involved were not within the exception created by this section. Semrad v. Semrad, 170 Neb. 911, 104 N.W.2d 338 (1960).
This section and others referred to herein in conjunction with it do not deny equal protection of the law as guaranteed by the equal protection clause of the Fourteenth Amendment to the Constitution of the United States. Shames v. State of Nebraska, 323 F.Supp. 1321 (D. Neb. 1971).

(1) The Attorney General shall establish a process by which any person may submit information or concerns to the Attorney General regarding real estate transactions in Nebraska.

(2) The Attorney General may submit a report concerning real estate transactions that the Attorney General has identified in Nebraska to the Committee on Foreign Investment in the United States.

(3) The Attorney General shall (a) retain a copy of any documents submitted to the Committee on Foreign Investment in the United States that are included with any report submitted under subsection (2) of this section and (b) notify the Legislature and the Governor as soon as practicable after submitting such report and included documents to the Committee on Foreign Investment in the United States.

(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 any restricted entity believed to be committing such violation that such entity may voluntarily divest any interest in real estate that is the subject of the violation.

(b) The restricted entity shall indicate to the Attorney General or retained outside counsel whether such entity is voluntarily divesting any interest in 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 restricted entity indicates that it is voluntarily divesting any interest in real estate that is the subject of the violation, 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 of the thirty-day period under subdivision (4)(b) of this section.

(e) The restricted entity shall not sell or otherwise transfer the real estate to a person or entity prohibited under the act. 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 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 restricted entity fails to indicate to the Attorney General or retained outside counsel that the entity is voluntarily divesting any interest in real estate that is the subject of the violation within the thirty-day period under subdivision (4)(b) of this section; or

(b) The restricted entity fails to voluntarily divest 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:

(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 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:

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

(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:

(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.

The receiver shall sell any real estate ordered to be divested pursuant to section 76-3712 at public auction no later than one year after the date such divestment is ordered by the court. The receiver shall execute the sale of the real estate in the manner provided for in the Nebraska Trust Deeds Act. The purchaser at any sale conducted by the receiver pursuant to the Foreign-owned Real Estate National Security Act shall receive title to the real estate purchased, free from all claims of the owner or prior holder thereof and of all persons claiming through or under the owner or prior holder. The receiver shall execute all documents necessary to complete the transfer of title.

Cross References

Nebraska Trust Deeds Act, see section 76-1018.

No title to an interest in real estate shall be invalid, voided, or subject to divestiture by reason of a violation of the Foreign-owned Real Estate National Security Act by any former owner or other person who held a former interest in such real estate.

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 act.

Any penalties collected pursuant to the Foreign-owned Real Estate National Security Act shall be remitted to the State Treasurer for distribution in accordance with Article VII, section 5, of the Constitution of Nebraska.

The Director of Agriculture and the Attorney General may adopt and promulgate rules and regulations necessary to carry out the Foreign-owned Real Estate National Security Act.