Cain’s Foreign Land Ban Has A Lease-Shaped Hole

The text as introduced · 1,133 words

89R1157 DRS-F

By: Cain
H.B. No. 402

A BILL TO BE ENTITLED

AN ACT

relating to the purchase of or acquisition of title to real property

by certain aliens or foreign entities.

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. PURCHASE OF OR ACQUISITION OF TITLE TO REAL PROPERTY

BY CERTAIN FOREIGN INDIVIDUALS OR ENTITIES

Sec. 5.251. DEFINITIONS. In this subchapter:

(1) "Agricultural land" means land that is located in

this state and 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) "Control" means ownership of at least 50 percent

of the voting ownership interest of an organization necessary to

elect a governing person or governing authority of an organization.

(3) "Designated country" means a country identified by

the United States Director of National Intelligence as a country

that poses a risk to the national security of the United States in

each of the three most recent Annual Threat Assessments of the U.S.

Intelligence Community issued pursuant to Section 108B, National

Security Act of 1947 (50 U.S.C. Section 3043b).

(4) "Governing authority," "governing person," and

"organization" have the meanings assigned by Section 1.002,

Business Organizations Code.

(5) "Real property" means:

(A) agricultural land;

(B) an improvement located on agricultural land;

(C) a mine or quarry;

(D) a mineral in place; or

(E) standing timber.

Sec. 5.252. EXCEPTIONS: UNITED STATES CITIZENS AND LAWFUL

PERMANENT RESIDENTS; RESIDENCE HOMESTEAD PROPERTY. (a) This

subchapter does not apply to:

(1) an individual who is a citizen or lawful permanent

resident of the United States, including an individual who is a

citizen of a foreign country; or

(2) a company or other entity that is owned by or under

the control of one or more individuals described by Subdivision

(1).

(b) This subchapter does not apply to real property that is

intended for use as an individual's residence homestead, as defined

by Section 11.13(j), Tax Code.

(c) This subchapter does not apply to a leasehold interest

in land or improvements constructed upon a leasehold.

Sec. 5.253. PROHIBITION ON PURCHASE OF OR ACQUISITION OF

TITLE TO REAL PROPERTY. Except as provided by Section 5.252 and

notwithstanding any other law, the following may not purchase or

otherwise acquire title to real property in this state:

(1) a governmental entity of a designated country;

(2) a company or other entity that is:

(A) headquartered in a designated country;

(B) directly or indirectly under the control of

the government of a designated country; or

(C) owned by or under the control of one or more

individuals who are citizens of a designated country;

(3) a company or other entity that is owned by or under

the control of a company or entity described by Subdivision (2); or

(4) an individual who is a citizen of a designated

country.

Sec. 5.254. ATTORNEY GENERAL ENFORCEMENT. If the attorney

general has a reasonable suspicion that the purchase of or

acquisition of title to real property in this state by an individual

or entity in violation of this subchapter creates a risk to the

health, safety, and welfare of the public, the attorney general may

bring an action 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.

Sec. 5.255. DISCOVERY; SECRETARY OF STATE INTERROGATORIES

AND RECORDS. (a) The attorney general may conduct discovery in an

action brought under Section 5.254.

(b) The secretary of state shall on request by the attorney

general:

(1) serve interrogatories on an individual or entity

as necessary to determine the ownership or control of a company or

other entity that is the subject of an action by the attorney

general under Section 5.254; and

(2) provide to the attorney general all records held

by the secretary relating to the ownership or control of a company

or other entity that is the subject of an action by the attorney

general under Section 5.254.

Sec. 5.256. DIVESTITURE; APPOINTMENT OF RECEIVER. (a) If

the district court finds that the real property subject to an action

brought under Section 5.254 was purchased or otherwise acquired by

an individual or entity in violation of Section 5.253, the court

shall enter an order that:

(1) states the court's finding;

(2) divests the individual's or entity'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.

SECTION 4. As soon as practicable after the effective date

of this Act, the attorney general shall adopt rules for the

implementation of Subchapter H, Chapter 5, Property Code, as added

by this Act.

SECTION 5. The changes in law made by this Act apply only to

the purchase of or other acquisition of title to real property on or

after the effective date of this Act. The purchase of or other

acquisition of title to real property before the effective date of

this Act is governed by the law in effect immediately before the

effective date of this Act, and that law is continued in effect for

that purpose.

SECTION 6. This Act takes effect September 1, 2025.