Iowa Legislature may tighten law over foreign farmland ownership

Iowa lawmakers say they expect to see bills in the upcoming legislative session to tighten state law on foreign ownership of farmland.

Whether those proposals would remove exemptions for some foreign land buys, require more reporting by foreign and corporate entities or push state agencies for more enforcement of farmland transactions still is uncertain.

“We don’t have a caucus bill we’re starting Day 1 with,” said Iowa Senate Majority Leader Jack Whitver, R-Grimes. “But I do believe that is an issue our caucus is interested in and I would suspect we’ll see a bill at some point about foreign ownership of land.”

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The Gazette interviewed legislative leaders, environmental groups and other Statehouse watchers about natural resources and agricultural legislation they expect to see when the 2024 legislative session starts Monday in Des Moines.

According to them, the hottest topics are about energy, pipelines and farmland ownership. The issue of water quality may get limited exposure through a bill that seeks to relax restrictions on developers. Because Republicans have majorities in the Iowa Senate and House, GOP lawmakers will set the agenda on what bills will be considered.

Foreign land

Foreign investment in Iowa farmland more than doubled in the last 10 years, to nearly 514,000 acres in 2022, but Iowa still ranks in the bottom half of states for acres with foreign investment.

Iowa’s law governing foreign ownership of agricultural land is one of the strictest in the nation. More than 90 percent of foreign investment in Iowa farmland is for long-term leases — not land purchases — for wind projects, a Gazette investigation showed.

The top countries with investors who own or lease Iowa farmland are Canada, Italy, Portugal and France, but that hasn’t stopped fears about Chinese investors taking advantage of exceptions in Iowa law.

“If our law has loopholes in it as far as foreign ownership and things like that we’d be willing to look at that,” said Iowa House Speaker Pat Grassley, R-New Hartford.

House File 642, introduced last year, would let investors from “allied” foreign countries to buy agricultural land and get tax credits if they are willing to invest at least $1 billion to build a manufacturing or research facility in an approved MEGA — or Major Economic Growth Attraction — site.

“When I first heard this about a year ago, I was thinking ‘over my dead body’,” said Sen. Ken Rozenboom, R-Oskaloosa, who is vice chair of the Senate Agriculture Committee.

He’s been concerned for nearly two years about foreign and corporate ownership of farmland and the shell companies that can be used to conceal ownership. “Now that I know a little bit more about it (HF 642), there’s an economic development component that has value.”

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Rep. J.D. Scholten, D-Sioux City, said he plans to introduce legislation to require more transparency of all agricultural land transactions.

A Gazette investigation last year showed an investment arm of the Church of Jesus Christ of Latter-day Saints owns at least 22,000 acres of Iowa farmland, and a Tennessee family has bought at least 5,000 acres in Northwest Iowa using at least 10 different names.

Energy

On June 1, Gov. Kim Reynolds signed House File 617 into law, which requires an independent review of the Iowa Utilities Board’s responsibilities and procedures. The process would ensure the board furthers “safe, adequate, reliable and affordable utility services” with non-discriminatory, just and reasonable rates for Iowans.

The utilities board hired a consulting company to do research, gather public comments and produce a report to the Legislature, which it delivered Dec. 14.

Among its findings, the 200-plus-page review calls for utilities to regularly update their long-term resource plans as markets, technology and policies change — which would ultimately better inform the Iowa Utilities Board during rate-making decisions. It also recommends utilities periodically update their rates to reflect fluctuating costs of service.

The consultant questioned the need for Iowa’s advance rate-making principles, in which the utilities board preapproves new energy projects and their costs to incentivize more energy generation. Most recently, board preapproved two Alliant Energy solar projects.

The review also proposes the board evaluate how spending caps enacted by the Legislature in 2018 may limit utilities’ energy efficiency and demand response programs. If invested in more, the programs could help customers control their energy consumption and costs.

During the upcoming session, the consultant will present its findings to the House Commerce Committee.

“We want to make sure that the Iowa Utilities Board has the tools that they need to make good decisions for the ratepayer,” said Rep. Shannon Lundgren, R-Peosta and House commerce committee chair who first initiated HF 617. “We want to make sure we have reliable service here in the state of Iowa, that it's affordable for Iowans and that we're not paying for energy being shipped out of our state.”

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CO2 pipelines

The Iowa House last March passed a bill that would require companies wanting to build a carbon dioxide pipeline to get voluntary easements for 90 percent of the pipeline’s route before being granted the right to force sale through eminent domain.

Rep. Jennifer Konfrst, D-Des Moines, the House minority leader, said many Democrats would like to see the Iowa Senate consider House File 565 this session. “Some of us were comfortable with the compromise bill passed in the House because it’s a start,” she said.

But Whitver said he doubts there is consensus among Republicans.

“We have some of the strongest eminent domain laws in the country right now.” he said. “...There are people in our caucus all over the board. Some are very supportive of the pipeline. Some that aren't as supportive of the pipeline."

The utilities board now is considering a permit application by Summit Carbon Solutions to build a 2,000-mile CO2 pipeline, with nearly 700 miles of it in Iowa, to transport carbon dioxide from ethanol plants to underground sequestration sites in North Dakota.

Navigator Heartland Greenway decided in October to abandon its plan to build another CO2 pipeline because of an uncertain regulatory path in several states. Wolf Carbon Solutions, which has proposed a pipeline from ADM plants in Cedar Rapids and Clinton to a sequestration site in Illinois, continues to try to secure voluntary leases in Iowa and Illinois, the company said.

Pipeline opponents on the political right and left have been vocal about their concerns about safety and the use of eminent domain for a private project.

Environment

Last year marked the 10th anniversary of Iowa’s Nutrient Reduction Strategy, a two-pronged plan addressing nitrogen and phosphorous pollution in state waterways. Last spring, legislators slashed funding for a statewide network of water quality monitoring sensors.

It’s unclear what laws the Legislature’s Republican majority may enact this year related to water quality.

Sen. Annette Sweeney, R-Alden, who is chair of the Senate’s natural resources and environment committee, said she wants to continue funding water quality improvement projects like saturated buffers and bioreactors — but only if they’re making an impact.

“First of all, I want to see progress,” she said. “What have we been doing with the money that we have been given?”

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Have 10 years of efforts made a difference in Iowa’s water quality?

Sweeney also is re-proposing a bill that would require any property abstract, or the history of a property, to include if it lies in a drainage district. Drainage districts are areas that agricultural lands drain into, often complete with infrastructure like tile lines, levees or ditches.

Senate File 455, introduced last year by Sen. Scott Webster, R-Bettendorf, would limit the ordinances that counties or cities can enact for topsoil preservation and stormwater runoff mitigation at construction sites.

“In places where there's a lot of development pressures, there can be real issues with erosion, stream degradation and flash flooding,” said Alicia Vasto, water program manager of the Iowa Environmental Council. “To say that developers are not required to do any kind of stormwater management upfront puts the city and therefore all of the citizens of that community responsible for that new expansion and development.”

Caleb McCullough of The Gazette-Lee Des Moines Bureau contributed to this report.

Comments: (319) 339-3157; erin.jordan@thegazette.com