89R3201 DRS-F
By: Cain H.B. No. 4597
A BILL TO BE ENTITLED
AN ACT
relating to interests in real property held or acquired by or on
behalf of certain foreign individuals or entities and the authority
of the attorney general to acquire the property by eminent domain;
establishing the homeland security review committee; creating a
criminal offense.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 64.001(a), Civil Practice and Remedies
Code, is amended to read as follows:
(a) A court of competent jurisdiction may appoint a
receiver:
(1) in an action by a vendor to vacate a fraudulent
purchase of property;
(2) in an action by a creditor to subject any property
or fund to the creditor's [his] claim;
(3) in an action between partners or others jointly
owning or interested in any property or fund;
(4) in an action by a mortgagee for the foreclosure of
the mortgage and sale of the mortgaged property;
(5) for a corporation that is insolvent, is in
imminent danger of insolvency, has been dissolved, or has forfeited
its corporate rights; [or]
(6) in an action by the attorney general under
Subchapter H, Chapter 5, Property Code; or
(7) in any other case in which a receiver may be
appointed under the rules of equity.
SECTION 2. Section 5.005, Property Code, is amended to read
as follows:
Sec. 5.005. ALIENS. Except as provided by Subchapter H, an
[An] alien has the same real and personal property rights as a
United States citizen.
SECTION 3. Chapter 5, Property Code, is amended by adding
Subchapter H to read as follows:
SUBCHAPTER H. HOLDING OR ACQUISITION OF REAL PROPERTY INTEREST BY
FOREIGN INDIVIDUAL OR ENTITY
Sec. 5.251. DEFINITIONS. In this subchapter:
(1) "Agricultural land" means land located in this
state that is suitable for:
(A) use in production of plants and fruits grown
for human or animal consumption, or plants grown for the production
of fibers, floriculture, viticulture, horticulture, or planting
seed; or
(B) domestic or native farm or ranch animals kept
for use or profit.
(2) "Committee" means the homeland security review
committee established under Section 5.252.
(3) "Control" means the direct or indirect power to
determine, direct, dictate, or decide important matters affecting
an organization, including through:
(A) the ownership of at least 20 percent of the
total outstanding voting interest in an organization;
(B) board representation;
(C) the ability to appoint or discharge a board
member, officer, director, employee, or contractor;
(D) proxy voting, a special share, a contractual
arrangement, a legal obligation, or a formal or informal
arrangement to act in concert; or
(E) another means of exercising power.
(4) "Critical infrastructure" means a facility or site
in this state for which the committee determines that possession of
the facility or site or of real property located near the facility
or site could pose a risk to the security, economy, or public health
of this state.
(5) "Foreign adversary" means:
(A) the People's Republic of China;
(B) the Russian Federation;
(C) the Islamic Republic of Iran;
(D) the Democratic People's Republic of Korea;
(E) an agency or entity under the control of the
government of a country described by Paragraphs (A) through (D); or
(F) an organization wholly or partly owned by or
under the control of an agency or entity described by Paragraph (E).
(6) "Organization" has the meaning assigned by Section
1.002, Business Organizations Code.
(7) "Real property" means:
(A) land, including agricultural land;
(B) an improvement;
(C) a mine or quarry;
(D) a mineral in place; or
(E) standing timber.
(8) "Wholly or partly owned by or under the control of"
means:
(A) for a person that is a publicly traded
company, that a person has:
(i) the ability to exercise control over
the company;
(ii) access to any material, nonpublic, and
technical information in the company's possession; or
(iii) other rights or involvement in
controlling or participating in the decision-making of the company
beyond rights or involvement available to a retail investor holding
an equivalent share of ownership; and
(B) for a person that is a privately held
company, that a person has any share of ownership of the company.
Sec. 5.252. HOMELAND SECURITY REVIEW COMMITTEE. (a) The
homeland security review committee is established and is composed
of the following members:
(1) the governor or the governor's designee;
(2) the speaker of the house of representatives or the
speaker's designee;
(3) the lieutenant governor or the lieutenant
governor's designee;
(4) the attorney general or the attorney general's
designee;
(5) the adjutant general or the adjutant general's
designee;
(6) the commissioner of agriculture or the
commissioner's designee; and
(7) any other members that the governor may appoint.
(b) The committee shall:
(1) identify the locations of critical infrastructure
in this state;
(2) determine the following:
(A) the distance in miles from the location of
critical infrastructure within which real property must be located
to make a transaction involving the property or acquisition of the
property subject to:
(i) reporting under Section 5.253(d)(1)(A)
and prior approval under Section 5.256; or
(ii) reporting under Section
5.253(d)(1)(B) and disapproval under Section 5.257;
(B) the amount of acreage of a parcel of real
property that makes a transaction or acquisition subject to the
reporting under Section 5.253(d)(2)(A) and prior approval under
Section 5.256; and
(C) the number of parcels of real property that
makes a transaction or acquisition subject to reporting under
Section 5.253(d)(2)(B) and prior approval under Section 5.256; and
(3) by majority vote approve or disapprove a real
property transaction or acquisition for which the committee's
determination is required by Section 5.256 or 5.257.
(c) For purposes of a majority vote of the committee under
Subsection (b)(3), the governor or the governor's designee is
entitled to four votes and each other member of the committee is
entitled to one vote.
(d) The governor in consultation with the committee shall
adopt rules to administer this subchapter.
Sec. 5.253. REPORT OF REAL PROPERTY TRANSACTION OR
ACQUISITION REQUIRED. (a) For purposes of this subchapter, a
transaction to acquire an interest in real property includes the
execution of a lease agreement under which a person required to
report to the committee under this section takes possession of the
property.
(b) A person described by Subsection (c) shall report to the
committee:
(1) a transaction to acquire an interest in real
property described by Subsection (d), not later than the 30th day
before the proposed closing date of the transaction; or
(2) acquisition of an interest in real property
described by Subsection (d) by any means, not later than the 30th
day after the date of the acquisition.
(c) The following persons shall submit a report to the
committee as required by Subsection (b):
(1) an individual who is:
(A) domiciled in a country that is a foreign
adversary; and
(B) not a citizen or lawful permanent resident of
the United States; or
(2) an organization that:
(A) is organized under the laws of a country that
is a foreign adversary;
(B) has its principal place of business in a
country that is a foreign adversary; or
(C) is wholly or partly owned by or under the
control of:
(i) an organization described by Section
5.251(5)(F); or
(ii) an organization wholly or partly owned
by or under the control of an individual or organization described
by this subsection.
(d) A person required by Subsection (b) to submit a report
under this section shall report a transaction or acquisition
involving real property that:
(1) is located:
(A) more than 25 miles from critical
infrastructure but within the distance determined by the committee
under Section 5.252(b)(2)(A)(i); or
(B) outside the distance determined by the
committee under Section 5.252(b)(2)(A)(i) but within the distance
determined by the committee under Section 5.252(b)(2)(A)(ii);
(2) consists of:
(A) an amount of acreage that is equal to or more
than the amount determined by the committee under Section
5.252(b)(2)(B); or
(B) a number of parcels that is equal to or more
than the number determined by the committee under Section
5.252(b)(2)(C);
(3) is zoned for commercial use; or
(4) consists of multifamily housing with three or more
residential units.
(e) A report under this section must:
(1) identify:
(A) the person holding or acquiring the interest
in real property that is the subject of the report;
(B) the countries of citizenship and domicile of
the person described by Paragraph (A); and
(C) if the person is an organization, each person
with an ownership interest in the organization; and
(2) include:
(A) a description of the real property;
(B) the location of the real property;
(C) the interest held or to be acquired; and
(D) any other relevant information required by
the committee.
Sec. 5.2531. TEMPORARY PROVISION: REPORT OF REAL PROPERTY
HELD ON SEPTEMBER 1, 2025, REQUIRED. (a) Not later than January 1,
2026, a foreign adversary shall report to the committee any
interest in real property held by the foreign adversary on
September 1, 2025.
(b) Not later than January 1, 2026, a person described by
Section 5.253(c) shall report to the committee any interest held by
the person on September 1, 2025, in real property described by:
(1) Section 5.253(d); or
(2) Section 5.255(a).
(c) This section expires September 1, 2026.
Sec. 5.254. PROHIBITION ON HOLDING OR ACQUIRING INTEREST IN
REAL PROPERTY BY FOREIGN ADVERSARY. (a) Except as provided by
Subsection (d) and notwithstanding any other law, a foreign
adversary may not hold or acquire an interest in real property in
this state.
(b) A foreign adversary that acquires an interest in real
property by any means shall:
(1) not later than the 30th day after the date of the
acquisition, report the acquisition to the committee; and
(2) not later than the 180th day after the date of the
acquisition, divest the foreign adversary's interest in the real
property.
(c) A report required by Subsection (b) must include the
information described by Section 5.253(e).
(d) Notwithstanding Subsection (a), a foreign adversary may
continue to hold an interest in real property acquired before
September 1, 2025.
Sec. 5.255. PROHIBITION ON HOLDING OR ACQUIRING INTEREST IN
CERTAIN REAL PROPERTY BY CERTAIN PERSONS. (a) Except as provided
by Subsection (d) and notwithstanding any other law, a person
described by Section 5.253(c) may not hold or acquire an interest
in:
(1) agricultural land; or
(2) real property that:
(A) contains critical infrastructure; or
(B) is located within 25 miles of critical
infrastructure.
(b) A person described by Section 5.253(c) that acquires an
interest in agricultural land or real property described by
Subsection (a)(2) shall:
(1) not later than the 30th day after the date of the
acquisition, report the acquisition to the committee; and
(2) not later than the 180th day after the date of the
acquisition, divest the person's interest in the real property.
(c) A report required by Subsection (b) must include the
information described by Section 5.253(e).
(d) Notwithstanding Subsection (a), a person described by
Section 5.253(c) may continue to hold an interest in real property
described by Subsection (b) that the person acquired before
September 1, 2025.
Sec. 5.256. ACQUISITION OF CERTAIN REAL PROPERTY BY CERTAIN
PERSONS: COMMITTEE PRIOR APPROVAL REQUIRED. (a) Except as
provided by Section 5.258, unless the person receives prior written
approval from the committee, a person described by Section 5.253(c)
may not hold or acquire an interest in real property that:
(1) is located more than 25 miles from critical
infrastructure but within the distance determined by the committee
under Section 5.252(b)(2)(A)(i); or
(2) consists of:
(A) an amount of acreage that is equal to or more
than the amount determined by the committee under Section
5.252(b)(2)(B); or
(B) a number of parcels that is equal to or more
than the number determined by the committee under Section
5.252(b)(2)(C).
(b) A person described by Section 5.253(c) that acquires an
interest in real property described by Subsection (a) shall:
(1) not later than the 30th day after the date of the
acquisition, report the acquisition to the committee; and
(2) not later than the 180th day after the date of the
acquisition, divest the person's interest in the real property.
(c) A report required by Subsection (b) must include the
information described by Section 5.253(e).
Sec. 5.257. ACQUISITION OF CERTAIN REAL PROPERTY BY CERTAIN
PERSONS: EFFECT OF COMMITTEE PRIOR DISAPPROVAL. (a) Except as
provided by Section 5.258, if before the closing date of a
transaction to acquire an interest in real property a person
described by Section 5.253(c) receives from the committee notice
that the committee has disapproved the acquisition, a person
described by Section 5.253(c) may not acquire an interest in real
property that:
(1) is located a distance from critical infrastructure
that is outside the distance determined by the committee under
Section 5.252(b)(2)(A)(i) but within the distance determined by the
committee under Section 5.252(b)(2)(A)(ii);
(2) is zoned for commercial use; or
(3) consists of multifamily housing with three or more
residential units.
(b) A person described by Section 5.253(c) that acquires an
interest in real property described by Subsection (a) shall:
(1) not later than the 30th day after the date of the
acquisition, report the acquisition to the committee; and
(2) not later than the 180th day after the date of the
acquisition, divest the person's interest in the real property.
(c) A report required by Subsection (b) must include the
information described by Section 5.253(e).
Sec. 5.258. EXCEPTION: SINGLE-FAMILY HOME HELD OR ACQUIRED
BY INDIVIDUAL. Sections 5.256, 5.257, and 5.261 do not apply to a
single-family home held or acquired by an individual described by
Section 5.253(c)(1).
Sec. 5.259. INVESTIGATION AND ENFORCEMENT BY ATTORNEY
GENERAL. (a) The attorney general shall investigate a report
alleging a violation of this subchapter.
(b) If the attorney general determines after an
investigation that a violation of this subchapter has occurred, the
attorney general shall:
(1) bring an action under Section 5.260 to enforce
this subchapter in a district court in the county where all or part
of the real property that is the subject of the violation is
located; and
(2) file a lis pendens notice describing the property
with the county clerk of each county in which the property is
located.
Sec. 5.260. DIVESTITURE; APPOINTMENT OF RECEIVER;
DISTRIBUTION OF SALE PROCEEDS. (a) If the district court finds
that the interest in real property subject to an action brought
under Section 5.259 was acquired by a person in violation of this
subchapter, the court shall enter an order that:
(1) states the court's finding;
(2) divests the person's interest in the real
property; and
(3) appoints a receiver to manage and control the real
property pending the sale or other disposition of the real
property.
(b) On appointment and qualification, a receiver appointed
under this section has the powers and duties of a receiver under
Chapter 64, Civil Practice and Remedies Code.
(c) A lienholder is entitled to a credit bid at a sale of
real property under this section.
(d) Proceeds from the sale or other disposition of real
property under an order described by Subsection (a) shall be
applied first to satisfy any existing liens on the property. The
remaining proceeds:
(1) are forfeited to this state; and
(2) shall be remitted to the comptroller for deposit
in the general revenue fund.
(e) The attorney general shall record a copy of an order of
sale or other disposition of the real property in the real property
records of each county in which any part of the real property
subject to the order is located.
Sec. 5.261. ATTORNEY GENERAL ACQUISITION OF CERTAIN REAL
PROPERTY BY EMINENT DOMAIN. The committee by majority vote may
direct the attorney general to initiate an eminent domain
proceeding under Chapter 21A to acquire real property that is:
(1) held by a foreign adversary; or
(2) except as provided by Section 5.258:
(A) described by Section 5.255, 5.256, or 5.257;
and
(B) held by a person described by Section
5.253(c).
Sec. 5.262. EVASIVE TRANSACTIONS PROHIBITED. A person may
not start or complete a transaction for the acquisition of an
interest in real property in a manner designed for the purpose of
evading this subchapter.
Sec. 5.263. OFFENSE. (a) A person commits an offense if
the person intentionally or knowingly makes a report under this
subchapter that conceals or falsely represents the identity of a
person holding or acquiring an interest in real property for the
purpose of evading this subchapter.
(b) An offense under this section is a felony of the second
degree.
Sec. 5.264. VALIDITY OF TITLE NOT AFFECTED. The validity
of title to real property in this state held by a person who is not
prohibited by this subchapter from acquiring or holding an interest
in the property is not affected by this subchapter because of a
violation of this subchapter by a former owner or holder of an
interest in the property.
Sec. 5.265. NO DUTY TO INQUIRE. This subchapter does not
require a person to determine or inquire into whether another
person is or may be subject to this subchapter.
SECTION 4. Title 4, Property Code, is amended by adding
Chapter 21A to read as follows:
CHAPTER 21A. ACQUISITION BY EMINENT DOMAIN OF CERTAIN
FOREIGN-OWNED REAL PROPERTY
Sec. 21A.001. DEFINITIONS. In this chapter:
(1) "Committee" means the homeland security review
committee established by Section 5.252.
(2) "Critical infrastructure" and "foreign adversary"
have the meanings assigned to those terms by Section 5.251.
Sec. 21A.002. APPLICABILITY. This chapter applies only to
real property in this state:
(1) that is owned by a foreign adversary; or
(2) that is:
(A) described by Section 5.255, 5.256, or 5.257;
and
(B) held by a person described by Section
5.253(c).
Sec. 21A.003. EMINENT DOMAIN; COURT PROCEEDING. (a) The
attorney general shall bring an action to obtain a court order under
Subsection (c) authorizing the attorney general to initiate an
eminent domain proceeding to acquire real property owned by a
foreign adversary or person as described by Section 21A.002 if:
(1) the attorney general has reason to believe and
shows the real property is held in violation of Subchapter H,
Chapter 5; and
(2) the committee directs the attorney general to
bring the action.
(b) An action under this section may be brought in a
district court in the county where all or part of the real property
that is the subject of the action is located.
(c) If the district court finds the attorney general has
made the showing required by Subsection (a), the court shall enter
an order stating that finding.
(d) On entry of the district court's order under Subsection
(c), the attorney general may initiate eminent domain proceedings
to acquire the real property.
(e) Chapter 21 governs the procedure for an eminent domain
proceeding initiated in accordance with this chapter. Chapter 2206,
Government Code, and Subchapter E, Chapter 21, of this code do not
apply to an eminent domain proceeding initiated in accordance with
this chapter.
Sec. 21A.004. STATE MANAGEMENT OF ACQUIRED REAL PROPERTY.
Real property acquired by eminent domain under Section 21A.003
shall be owned by this state and managed by the General Land Office.
SECTION 5. As soon as practicable after the effective date
of this Act:
(1) the governor shall adopt rules for the
implementation of Subchapter H, Chapter 5, Property Code, as added
by this Act; and
(2) the attorney general shall adopt rules for the
implementation of Chapter 21A, Property Code, as added by this Act.
SECTION 6. This Act takes effect September 1, 2025.