SB 139-LAND; OWNERSHIP RESTRICTIONS; AG LAND  4:29:24 PM CHAIR GIESSEL announced the consideration of SPONSOR SUBSTITUTE FOR SENATE BILL NO. 139 "An Act relating to who may own or hold certain land; relating to certain agreements having to do with critical infrastructure; and providing for an effective date." 4:29:58 PM Senator Hughes, speaking as sponsor of SB 139, said her staff would give a presentation on SB 139. 4:30:25 PM CHUOL MUT, Legislative Intern, Senator Shelley Hughes, Alaska State Legislature, Juneau, Alaska, introduced himself. 4:30:33 PM SENATOR HUGHES said SB 139 is an attempt to fix the problem of foreign countries purchasing agricultural land in the US. She stated that foreign countries have purchased roughly 40 million acres of agricultural land in the Lower 48. Of these, China has purchased 384 thousand acres. She pointed out that, while this is not a large amount, the location of the land may negatively impact the US. She stated that 384 acres is roughly half of the total land in production in Alaska. SENATOR HUGHES explained that SB 139 makes 3 changes. First, it would prohibit citizens of foreign adversaries (there are 6, based on US code) from purchasing agricultural land. It would also prohibit land purchases within 100 miles of a military base. Finally, companies that are owned or controlled by foreign adversaries would not be granted access to critical infrastructure or related cyber security. She emphasized that SB 139 would ensure that Alaska's military installations remain secure, agricultural lands remain productive and unassailable, and communities remain strong and safe. 4:32:12 PM MR. MUT advanced to slide 2: [Original punctuation provided.] SB 139  Land restrictions on Foreign Adversaries Regarding Military Installations and Agricultural Lands. • Prohibits citizens of China, Cuba, Iran, North Korea, Russia and Venezuela from acquiring any land within 100 miles of military installations. • Prohibits citizens including foreign business entities from these same countries from acquiring agricultural land. • Exceptions: U.S. citizens from these countries are not restricted. Allows non-citizen to enter into a residential lease agreement. MR. MUT stated that "foreign adversaries" are identified as such by the US Secretary of Commerce under 15 C.F.R. 791.4. 4:33:49 PM MR. MUT advanced to slide 3: [Original punctuation provided.] Enforcement of Provisions  • A report is made to the Attorney General • An investigation is conducted • If violation, land is seized and sold • Funds owed are returned to lien holders and remainder goes to general fund. 4:35:03 PM MR. MUT advanced to slide 4: [Original punctuation provided.] Balancing Restrictions with Fairness  • U.S. citizens from restricted countries are exempt. • Pre-existing agricultural leases (before July 1, 2025) can continue under original terms. • Residential leases are unaffected. • Bona fide liens and mortgages remain valid post- forfeiture. 4:36:14 PM MR. MUT advanced to slide 5: [Original punctuation provided.] Why SB 139?  Foreign-owned agricultural land data points Increase in foreign-owned acres  • Over 45 million acres of U.S. farmland were foreign owned as of 2021, with continued growth. Chinese ownership  • China owns over [384,000] acres, sparking concerns over strategic land acquisitions. SENATOR HUGHES emphasized that the 45 million acres of foreign- owned US farmland are not owned solely by US adversaries. 4:37:26 PM MR. MUT advanced to slide 6: [Original punctuation provided.] Why SB 139 IS Necessary for National Security  Oregon  A Chinese company invested in a wind farm near a US naval base in Oregon used for weapons testing and training. Wyoming  A Chinese firm had holdings in a crypto mining operation in Wyoming located within a mile of Warren Air Force Base North Dakota  A Chinese Farm in North Dakota is located about twelve miles from a military site. Michigan  A Chinese electric battery plant in Michigan is located within one hundred miles of a US National Guard base that hosts joint training with the Taiwanese military. 4:39:07 PM MR. MUT advanced to slide 7: [Original punctuation provided.] Why SB 139?  Protecting Critical Infrastructure • In 2009, Chinese and Russian hackers infiltrated America's electrical grid and installed malware. • In 2010, Russia hacked NASDAQ stock exchange with "digital bomb" to damage financial networks. • In 2013, Iranian hackers infiltrated control systems of Bowman Avenue Dam in NY, almost flooding a town. • In 2022, Russian hackers attacked a food company, which temporarily closed its meatpacking plants in the US. • In 2023, China-backed hacker network Volt Typhoon accessed Guam critical infrastructure. 4:40:42 PM MR. MUT advanced to slide 8: [Original punctuation provided.] Purpose of Protection  Alaska Resource Protection  Safeguards agricultural land for local use and our domestic food supply. National Military Protection  Prevents opportunities for gathering intelligence. Geopolitical Protection  Amid global tensions, bolsters national security, economic security, and food security. This is how we, as the Alaska State Legislature, can do our small part to help ensure no tyrannical nation gains a foothold as a dominant world power. 4:42:02 PM SENATOR HUGHES shared that Mr. Mut was born in Nairobi, Kenya and attended school in England. He came to Alaska on his own at age 19. He is now a homeowner and soon-to-be graduate of the University of Alaska. She expressed appreciation for his work. 4:42:26 PM CHAIR GIESSEL announced invited testimony on SB 139. 4:42:43 PM WES WARD, Secretary of Agriculture, State of Arkansas, Little Rock Arkansas, expressed appreciation for Alaska and shared several personal anecdotes. He said Arkansas has dedicated significant time to the issue of foreign land ownership. The Arkansas governor was the first to remove Chinese landowners from agricultural land. The Arkansas State Legislature passed legislation in 2023 that further restricted foreign land ownership. He stated that 1.6 million acres of land in Arkansas is foreign owned. He said that this is not always problematic and offered Canada as one example of a good relationship between Arkansas and a foreign landowner. He explained that Arkansas restricted land ownership for the 6 countries that are adversarial to the US. He briefly described the process of removing the Chinese landowners in 2023. He noted that Arkansas is currently fine-tuning the law that restricts foreign land ownership to protect critical infrastructure. He noted several agricultural and national security concerns. He expressed support for SB 139. 4:46:18 PM [KENDELL CULP], representing self, Indianapolis, Indiana, shared that as a Representative in the Indiana General Assembly he passed legislation to limit foreign adversaries' access to farmland. He noted that this legislation had overwhelming support. He explained that the intention was to enhance food security by protecting the food supply. He indicated that the adversarial countries are China, Cuba, Iran, North Korea, Russia and Venezuela. He explained that, during its passage, the legislation was amended to include protections for military installations. This prohibited foreign adversaries from purchasing land within a ten-mile radius of a military facility. He briefly discussed how this change impacted the state. He acknowledged concerns and briefly discussed publicly traded companies for which stock ownership is unknown. To address this, the Indiana General Assembly prohibited majority ownership by adversarial countries. He briefly discussed his desire to strengthen this language in the future. He noted that the Indiana law is similar to SB 139. He opined that it is important to be vigilant. He said Indiana also protected water, mineral, and repairing rights from foreign ownership. He stated that this law was well-received in Indiana and farmers appreciate the added protection. 4:49:55 PM CHAIR GIESSEL invited Representative Scott Sharp from the Kentucky State House of Representatives to testify. 4:50:07 PM [SCOTT SHARP], representing self, Ashland, Kentucky, stated that the Kentucky General Assembly passed legislation (House Bill 315) that is similar to that passed in Indiana and Arkansas. He noted that the Kentucky legislation linked "hostile countries" to those identified in 22 CFR 126, Section 126.1. This section lists eight adversaries: Belarus, Burma, China, Cuba, Iran, North Korea, Syria, and Venezuela. He explained that linking the state law with 22 CFR 126.1 allows the state law to change as countries are added and/or removed from the list of adversaries. He opined that the Kentucky General Assembly needs to tighten the law and expressed hope that this would be done in the coming year. 4:51:25 PM CHAIR GIESSEL opened public testimony on SB 139. 4:51:46 PM DAVID KRUMM, representing self, Big Lake, Alaska, testified in support of SB 139. He said he is the former Alaskan Command Commander and former Eleventh Airforce Commander. He expressed support for SB 139. He briefly discussed national security concerns and emphasized Alaska's position in national security operations. He stated that if adversaries are able to locate themselves near or around military bases or training locations, they could potentially impede activities at those locations. He recommended securing areas in and around military operations, including airspace where advanced fighters and bombers fly. 4:53:40 PM CHAIR GIESSEL expressed appreciation for Mr. Krumm's testimony. She added that she is chair of the Special Committee on Arctic Affairs and agreed that Alaska is strategically located. 4:54:02 PM SENATOR MIKE SHOWER, District E, Alaska State Legislature, Juneau, Alaska, testified in support of SB 139. Expressed confidence in Mr. Krumm's knowledge and encouraged strong consideration of his testimony. He stated that Alaska is strategically located. He said that some countries are attempting or may attempt asymmetric warfare. He explained that those countries do not want to engage in direct conflict with the US; however, there are many methods of indirect conflict. These include purchasing land, cross-border drug sales, and obtaining jobs on the Alaska pipeline. He briefly discussed a letter Governor Dunleavey received from China regarding China- Alaska relations. He emphasized the potential for indirect conflict that may not be visible. He stated that SB 139 is important and emphasized the need to protect Alaska's residents, resources, and strategic location. He suggested that the prohibitions in SB 139 should extend to the land below military airspace. He directed attention to SB 139, page 2, and suggested that the sponsor consider amendments related to dwellings. CHAIR GIESSEL held public testimony on SB 139 open. 4:56:35 PM CHAIR GIESSEL held SB 139 in committee.