Senate Rules Committee finds SB1082 in proper form amid federal preemption concerns

The Arizona Senate Rules Committee recommended Senate Bill 1082 is constitutional and in proper form after the rules attorney raised concerns that the measure, which would limit certain foreign principalsfrom acquiring substantial interests in Arizona real property, could conflict with federal law.

The rules attorney told the committee that the strike-everything amendment "prohibits a foreign principal from a designated country to purchase, own, acquire, or have a substantial interest in real property in the state, subject to some exceptions," and warned "there's always a possibility of federal law conflict because Congress and the president are empowered to make rules relating to the relations between The United States and foreign countries." The attorney concluded, "the bill is in proper form."

The attorney noted a specific federal statute, the Foreign Investment Risk Review Modernization Act of 2018, as a potential source of preemption and said a recent Eleventh Circuit decision challenging a state law that restricted property ownership by Chinese nationals resulted in an injunction. The attorney also raised equal-protection concerns about whether language that singles out nationals of particular countries could discriminate on the basis of national origin. "So far, we have no case law in the Ninth Circuit, and the bill is in proper form," the attorney said.

Vice Chairman Carter moved the committee recommendation that SB1082 is constitutional and in proper form. The committee recorded the following votes: Representative Carbone (Aye); Representative De Los Santos (Nay); Representative Mathis (Nay); Speaker Montenegro (Aye); Representative Willoughby (Aye); Vice Chairman Carter (Aye); Chairman Hendricks (Aye). The clerk reported the tally as five ayes, two nays, and one absent. The motion carried and the committee reported the bill as constitutional and in proper form.

The committeediscussion focused on federal preemption risk and equal-protection questions; no formal directions to staff or amendments were recorded during the committee's consideration. The committee proceeded next to other bills on the agenda.