Cain’s Foreign Land Bill Lets Existing Adversary Holdings Stay Put

The text as introduced · 3,258 words

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.