In the last year, Nebraska, Texas, and other states have passed foreign influence laws requiring disclosure of lobbying and other advocacy activities on behalf of foreign actors. Although these so-called “baby FARA” laws are modeled after their federal counterpart, the Foreign Agents Registration Act (FARA), they often lack the exemptions on which businesses and other entities have long relied, and they differ in other important respects as well. These state laws are broad enough to potentially capture transactions with foreign-owned subsidiaries operating in the U.S. that would not otherwise be subject to FARA.

These laws could have significant implications for businesses, non-profits, schools, agricultural associations, and other entities that receive funding from, or are otherwise affiliated with or connected to, foreign governments or entities, particularly those deemed to be hostile to U.S. national interests. Based on this recent flurry of state legislative activity, regulated entities should closely scrutinize their financial arrangements and advocacy activities to ensure compliance with registration and disclosure obligations, and to mitigate against accompanying enforcement risks.

Background

Originally enacted in 1938, FARA is a federal statute requiring any “agent of a foreign principal” to register with the U.S. Department of Justice (DOJ) and file public reports when engaging in certain covered activities. An “agent of a foreign principal” is anyone who acts “at the order, request, or under the direction or control, of a foreign principal.” The term “foreign principal” is broadly defined to include a foreign government, political party, individual, or entity. Covered activities include those intended to influence U.S. policy or public opinion. Violations are punishable by up to five years in prison and a $10,000 fine.

Despite its breadth, FARA has various statutory exemptions. For example, FARA exempts “[a]ny person engaging . . . only in activities in furtherance of bona fide religious, scholastic, academic, or scientific pursuits or of the fine arts.” FARA’s so-called “commercial exemption” also exempts individuals or organizations engaged in “private and nonpolitical activities in furtherance of the bona fide trade or commerce of [a] foreign principal.” Under the Lobbying Disclosure Act (LDA) exemption, an agent of a foreign private sector principal may satisfy its FARA obligations by registering as a lobbyist under the LDA, provided the agent is not acting on behalf of a foreign government or political party.

Recently, Nebraska, Texas, and other states have enacted their own foreign influence laws. Although these laws resemble FARA, they often lack many if not all of the exemptions available under the federal statute. These baby FARA laws reflect a growing trend among states to regulate foreign influence more aggressively. In turn, the laws create compliance challenges for regulated entities.

Nebraska

Last summer, Nebraska passed the Foreign Adversary and Terrorist Agent Registration Act (NEFATARA), which became operative on October 1, 2025. As stated in the statute’s preamble, the purpose of NEFATARA is to “provide public transparency for the political and propaganda activities and influence operations of agents of adversary nations and foreign terror organizations in Nebraska.” NEFATARA requires any person who acts as the “agent” of a “foreign principal from an adversary nation” to complete an extensive registration statement with the Nebraska Attorney General. Among other things, this registration statement must provide detailed ownership information, employee listings, and disclosure of financial transactions involving the “foreign principal.” NEFATARA then requires the Nebraska Attorney General to publish certain information collected from these registration statements. Registered agents are also subject to special recordkeeping requirements.

NEFATARA defines an “agent” as anyone who engages in “covered activities” on behalf of a “foreign principal.”  The type of “covered activities” which can trigger registration requirements include not only “engaging in political activities for, or in the interests of, a foreign principal,” but also “soliciting, collecting, disbursing, or dispensing contributions, loans, money, or other things of value for, or in the interests of, a foreign principal.” Unlike FARA, NEFATARA does not provide an LDA exemption or an exemption for agents who engage in purely commercial activities involving “foreign principals.” NEFATARA only provides registration exemptions for diplomats, news services organized in or subject to the jurisdiction of the U.S., certain publications, and legal representatives.

With regards to business entities, FARA’s definition of a “foreign principal” applies to only business entities organized in or having a principal place of business outside the United States. NEFATARA defines a “foreign principal” to also include any domestic U.S. entity that is “at least twenty percent beneficially owned” by a foreign company or other foreign entity from the “adversary nations” of China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia, and the Nicolas Maduro regime of Venezuela (as identified via reference to rules administered by the U.S. Commerce Department’s Office of Information and Communications Technology and Services). As a result, NEFATARA’s registration requirements have the potential to extend much further than the FARA registration requirements.

NEFATARA violations are punishable by civil penalties up to $50,000. Additionally, the Nebraska Attorney General is authorized to issue civil investigative demands and initiate enforcement actions for injunctive and other relief. Violators may face expulsion or dismissal if they are affiliated with a Nebraska postsecondary educational institution, whether as a student, faculty member, researcher, or adjunct.

Texas

Texas adopted a foreign influence statute last September in an effort “to prevent foreign adversaries from exerting . . . undue influence on state policy.” The law authorizes the Texas Attorney General to bring actions for injunctive relief and to seek civil penalties up to $10,000 per violation, as well as attorney’s fees and expenses.

The Texas statute requires registration by (and imposes a lobbying compensation ban on) anyone who communicates with members of the legislative or executive branch on behalf of a “foreign adversary,” “foreign adversary client,” or “foreign adversary political party.” These terms are broadly defined to include not only so-called “adversary nations” like those covered under NEFATARA, but also entities under the “control” of a foreign adversary, meaning that the foreign adversary has the “direct or indirect power to determine, direct, dictate, or decide important matters.” The term “foreign adversary” further extends to any “subsidiary or parent” of an entity that is “wholly or partly owned or operated” by a foreign adversary. “Wholly or partly owned or operated” includes “access to any material, nonpublic, and technical information in the company’s possession.” The Texas statute also defines “foreign adversary client” to encompass entities formed by or for the benefit of current or former government officials of a foreign adversary, as well as executives of companies deemed to be foreign adversaries.

This sweeping language could be construed to cover a myriad of businesses with direct and indirect connections abroad, as well as their current and former executives and related entities. Unlike FARA, the Texas statute does not contain any exemptions, such as the commercial and LDA exemptions contained in the federal statute.

Other states

As noted above, other states have enacted baby FARA laws, including Arkansas, Indiana, Florida, Louisiana, Maine, Utah, and Oklahoma. Although some of these laws apply to a narrower set of foreign principals than federal FARA, they all generally have fewer exemptions than their federal counterpart or none at all. Several additional states have considered enacting similar laws, such as Missouri, Tennessee, and Illinois.

What this means for you

Foreign influence laws in Nebraska, Texas, and other states could have significant implications for businesses and other entities that receive funding from or are otherwise affiliated with foreign governments or entities or their domestic U.S. subsidiaries, whether directly or indirectly. To ensure compliance with disclosure obligations and to mitigate against the possibility of enforcement activity and penalties, regulated entities should identify potentially applicable state laws, evaluate their advocacy activities under those statutes, and scrutinize their connections to foreign governments, entities, and even individuals.