House Economic and Workforce Development — Senate Bill 226 (December 3, 2024)

Summary

Interested party written testimony on Senate Bill 226 from Ohio REALTORS to the House Economic and Workforce Development Committee, dated December 3, 2024. Ohio REALTORS says it was formed in 1910 and is the state’s largest professional trade association, with approximately 36,000 members. The testimony thanks the sponsors for the personal liability protection for brokers, agents, and real estate professionals and raises concerns about Florida’s FSB 264 litigation, which is pending before the U.S. Court of Appeals for the Eleventh Circuit. It says that under the broad definition of “protected property,” nearly all property in the state of Ohio would be considered protected, and it encourages exclusions for permanent legal residents. It closes over the name Scott Williams, Chief Executive Officer.

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                     House Economic and Workforce Development Commiftee
                                  Interested Party Tesfimony
                                        Senate Bill 226
                                      December 3, 2024

Chair Lorenz, Vice Chair Santucci, Ranking Member Upchurch, and members of the House Economic
and Workforce Development Committee, thank you for the opportunity to submit written testimony
today on behalf of the Ohio REALTORS®.

Formed in 1910, Ohio REALTORS® is the state's largest professional trade association, with
approximately 36,000 members representing both residential and commercial practitioners. Ohio
Realtors® pride themselves on helping not only Ohioans but also individuals from all around the globe
navigate the complexity of buying or selling property in this great state.

We appreciate the sponsors of SB 226's engagement with us during the legislation's development,
and we share their concerns about the need to protect Ohio against entities seeking to purchase
property with the intent to jeopardize our national security.

We are also grateful for the personal liability protection provided in SB 226 to brokers, agents, and
real estate professionals in ORC 5301.256. This protection, modeled after legislation passed in other
states, will allow our members to continue to serve clients without the burden of conducting
background checks and without fear of liability.

As the sponsors noted in their testimony, numerous other states have implemented policies aimed
at restricting land purchases by foreign adversaries. The laws passed in those states vary substantially.
Some states limit restrictions to only agricultural land, and others impose them on foreign
governments and state-controlled enterprises, excluding individuals who are legally allowed in the
country.

As the committee reviews SB 226, we would encourage members to consider the following:

Florida Senate Bill 264 (“FSB 264”)

While many states have introduced or passed legislation prohibiting foreign real estate purchases,
the one that has garnered the most national attention has been in Florida. In May 2023, Florida
enacted a ‘foreign buyer law’ that prohibits covered foreign persons from acquiring or owning an
interest in agricultural land and property within a ten-mile radius of a military installation or critical
infrastructure. In response to FSB 264, a real estate firm and a group of Chinese citizens (together as
“plaintiff”) who reside and work in Florida filed suit in federal district court to prevent its
enforcement. The plaintiffs claimed that FSB 264: 1) violates the federal Fair Housing Act; 2) violates
the Equal Protection Clause of the 14th Amendment to the U.S. Constitution; and 3) is preempted by
federal laws governing foreign affairs, foreign investment, and national security, including the
Committee for Foreign Investment in the United States (CFIUS) and the Foreign Investment Risk
Review Modernization Act of 2018. That case is currently pending before the U.S. Court of Appeals
for the Eleventh Circuit.

As indicated in the LSC analysis for SB 226, if this legislation is enacted in Ohio, it could meet similar
legal challenges to those faced by FSB 264 in Florida.

Broad Definitions of “Protected Property” & “Critical Infrastructure Facility”

“Protected Property” as used in SB 226 means the following: (a) agriculture land; (b) real property
located within a twenty-five-mile radius of any installation under the jurisdiction of the armed forces;
or (c) real property located within a twenty-five-mile radius of a "critical infrastructure facility."
"Critical infrastructure facility" is broadly defined in ORC 2911.21 to include several types of facilities,
provided that the facility is "completely enclosed by a fence or other physical barrier that is obviously
designed to exclude intruders, or if clearly marked with signs that are reasonably likely to come to
the attention of potential intruders and that indicate entry is forbidden without site authorization."
This would include, for example, an electric generating facility, substation, distribution lines, water
and wastewater treatment plant, wireline or wireless telecommunication infrastructure, and
federally licensed radio or television transmission facilities. Under such a broad definition of
"protected property," nearly all property in the state of Ohio would be considered protected under
SB 226.

Identification of “Protected Property”

Due to the sheer quantity of the types of facilities that are classified as critical infrastructure, it is
unclear how a restricted person is expected to identify whether a particular property is within 25
miles of a critical infrastructure facility. While SB 226 requires the Secretary of State to compile a
registry of foreign adversaries and restricted persons, the legislation does not require the creation of
a publicly accessible map or database of protected property or critical infrastructure facilities.
Without such a map or database, how is:

    1) A restricted person expected to know whether a particular property is within the 25-mile
       radius of a “critical infrastructure facility”?
    2) A county auditor or sheriff responsible for reviewing real estate transactions is expected to
       determine compliance with SB 226.

Legal Resident Exemptions

We appreciate the Senate making changes to SB 226 that exclude U.S. citizens with dual citizenship
from restrictions on property ownership within 25 miles of protected property. While that change
was a significant step in the right direction, we remain concerned about the bill’s impact on legal
permanent residents, such as green card holders, who are not exempt from the restrictions outlined
in the bill. Such a policy would prohibit law-abiding residents who are productive members of our
society from owning a home in the state in which they work. This could also prevent Ohio’s employers
and universities from attracting the best talent from across the globe. We would encourage the
members of this committee to consider expanding the exclusions to include permanent legal
residents, which would help Ohio remain and inclusive and competitive state for global talent and
investment.

Thank you for considering our testimony. Ohio REALTORS® looks forward to working with the bill’s
sponsors and this committee as it continues to review SB 226.

Sincerely,



Scott Williams
Chief Executive Officer
Ohio REALTORS®


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