87R12934 SRA-F
By: Bonnen, Morales of Maverick, Cyrier H.B. No. 2825
Substitute the following for H.B. No. 2825:
By: Buckley C.S.H.B. No. 2825
A BILL TO BE ENTITLED
AN ACT
relating to reporting requirements for certain loan and title
insurance transactions involving foreign companies and real
property located near military bases.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by
adding Chapter 282 to read as follows:
CHAPTER 282. CERTAIN LOANS FOR REAL PROPERTY NEAR MILITARY BASES
Sec. 282.001. DEFINITIONS. In this chapter:
(1) "Commission" means the Texas Military
Preparedness Commission.
(2) "Company" and "scrutinized company" have the
meanings assigned by Section 2270.0001, Government Code.
(3) "Financial institution" means:
(A) a bank as defined for any purpose by Section
201.002(a)(4), whether chartered under the laws of this state,
another state, the United States, or another country, including a
state savings bank;
(B) a savings and loan association chartered
under Chapter 62 or similar laws of another state;
(C) a federal savings and loan association,
federal savings bank, or federal credit union; or
(D) a credit union chartered under Chapter 122 or
similar laws of another state.
(4) "Reportable company" means a company described by
Section 282.003(a).
Sec. 282.002. APPLICABILITY. This chapter applies only to
a loan made by a financial institution for the purchase, lease,
development, or renovation of real property that:
(1) is located within 25 nautical miles of the
boundaries of a military base located in this state; and
(2) is not zoned or intended to be used for residential
use only.
Sec. 282.003. NOTICE AND REPORTING OF LOAN TRANSACTIONS
INVOLVING CERTAIN FOREIGN COMPANIES. (a) Before approving a loan
application to which this chapter applies, a financial institution
shall determine if the company applying for a loan is:
(1) a scrutinized company;
(2) owned by or the majority of stock or other
ownership interest of the company is held or controlled by:
(A) individuals who are citizens of China, Iran,
North Korea, or Russia; or
(B) a company or other entity, including a
governmental entity, that is owned or controlled by citizens of or
is directly controlled by the government of China, Iran, North
Korea, or Russia; or
(3) headquartered in China, Iran, North Korea, or
Russia.
(b) Subsection (a) applies regardless of whether:
(1) the reportable company's or its parent company's
securities are publicly traded; or
(2) the reportable company or its parent company is
listed on a public stock exchange as a Chinese, Iranian, North
Korean, or Russian company.
(c) In making a determination if a loan applicant is a
scrutinized company under Subsection (a), a financial institution
may rely on the list maintained by the comptroller under Section
2270.0201, Government Code.
(d) If a financial institution determines that the
applicant is a reportable company, the financial institution shall
promptly notify the seller or lessor of the real property of that
fact.
(e) Not later than December 31 of each year, each financial
institution shall submit a report to the commission that identifies
each loan to which this chapter applies that is made to a reportable
company.
(f) This section does not prohibit a financial institution
from approving an application for a loan submitted by a reportable
company.
SECTION 2. Subchapter C, Chapter 436, Government Code, is
amended by adding Section 436.1031 to read as follows:
Sec. 436.1031. TRANSACTION INFORMATION INVOLVING REAL
PROPERTY NEAR MILITARY BASES. (a) The commission shall include in
the biennial report required under Section 436.103:
(1) a list of the financial institutions and title
insurance companies that have, during each biennium, reported a
transaction to the commission under Section 282.003, Finance Code,
or Section 2704.153, Insurance Code; and
(2) the name of the reportable company involved in
each transaction.
(b) Information under this section is confidential and not
subject to disclosure under Chapter 552.
SECTION 3. Chapter 2704, Insurance Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. TITLE INSURANCE FOR REAL PROPERTY NEAR MILITARY BASES
Sec. 2704.151. DEFINITIONS. In this subchapter:
(1) "Commission" means the Texas Military
Preparedness Commission.
(2) "Company" and "scrutinized company" have the
meanings assigned by Section 2270.0001, Government Code.
(3) "Reportable company" means a company described by
Section 2704.153(a).
Sec. 2704.152. APPLICABILITY. This subchapter applies only
to a title insurance policy or contract issued by a title insurance
company for real property that:
(1) is located within 25 nautical miles of the
boundaries of a military base located in this state; and
(2) is not zoned or intended to be used for residential
use only.
Sec. 2704.153. NOTICE AND REPORTING OF POLICY AND CONTRACTS
INVOLVING CERTAIN FOREIGN COMPANIES. (a) Before approving the
policy or contract application to which this subchapter applies, a
title insurance company shall determine if the applicant for a
title insurance policy or contract is:
(1) a scrutinized company;
(2) owned by or the majority of stock or other
ownership interest of the company is held or controlled by:
(A) individuals who are citizens of China, Iran,
North Korea, or Russia; or
(B) a company or other entity, including a
governmental entity, that is owned or controlled by citizens of or
is directly controlled by the government of China, Iran, North
Korea, or Russia; or
(3) headquartered in China, Iran, North Korea, or
Russia.
(b) Subsection (a) applies regardless of whether:
(1) the reportable company's or its parent company's
securities are publicly traded; or
(2) the reportable company or its parent company is
listed on a public stock exchange as a Chinese, Iranian, North
Korean, or Russian company.
(c) In making a determination if a policy or contract
applicant is a scrutinized company under Subsection (a), a title
insurance company may rely on the list maintained by the
comptroller under Section 2270.0201, Government Code.
(d) If a title insurance company determines that the policy
or contract applicant is a reportable company, the title insurance
company shall promptly notify the seller or lessor of the real
property of that fact.
(e) Not later than December 31 of each year, each title
insurance company shall submit a report to the commission that
identifies each title insurance policy or contract to which this
subchapter applies that is made to a reportable company.
(f) This section does not prohibit a title insurance company
from approving an application for a title insurance policy or
contract submitted by a reportable company.
SECTION 4. Chapter 282, Finance Code, and Subchapter D,
Chapter 2704, Insurance Code, as added by this Act, apply only to an
application for a loan or title insurance policy or contract
submitted on or after the effective date of this Act.
SECTION 5. This Act takes effect September 1, 2021.