Kolkhorst Bill’s Foreign Land Ban Needs A Proven Risk First

The text as introduced · 1,462 words

89R5273 DRS-F

By: Kolkhorst, et al.
S.B. No. 307

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) "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).

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

"organization" have the meanings assigned by Section 1.002,

Business Organizations Code.

(4) "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. ORGANIZATION UNDER CONTROL OF INDIVIDUAL OR

ANOTHER ORGANIZATION. (a) For purposes of this subchapter, an

organization is under the control of an individual or another

organization if the controlling individual or organization is

authorized to:

(1) direct the activities of the controlled

organization;

(2) make or direct others to make legal commitments on

behalf of the controlled organization; or

(3) hire and fire a principal decision maker of the

controlled organization.

(b) The authority of the controlling individual or

organization under Subsection (a) may derive from:

(1) exercise of a voting ownership interest of the

controlled organization sufficient to elect a governing person or

governing authority of the controlled organization to exercise on

the controlling individual's or organization's behalf the authority

described by Subsection (a); or

(2) a financial, legal, practical, contractual, or

other arrangement that functionally enables the controlling

individual or organization to exercise the authority described by

Subsection (a).

Sec. 5.253. EXCEPTIONS: UNITED STATES CITIZENS AND LAWFUL

PERMANENT RESIDENTS; RESIDENCE HOMESTEAD PROPERTY; LEASEHOLD.

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;

(2) an organization that is owned by or under the

control of one or more individuals described by Subdivision (1);

(3) real property that is intended for use as an

individual's residence homestead, as defined by Section 11.13(j),

Tax Code; or

(4) a leasehold interest in land or improvements

constructed on a leasehold if the duration of the interest is less

than 100 years.

Sec. 5.254. PROHIBITION ON PURCHASE OF OR ACQUISITION OF

TITLE TO REAL PROPERTY. (a) In this section, "risk to the health,

safety, and welfare of the public" includes a likelihood that an

individual, organization, or governmental entity will engage in an

act that:

(1) constitutes:

(A) a violation of state or federal criminal law;

(B) corporate espionage; or

(C) a public nuisance; or

(2) causes or threatens to cause bodily injury to a

person, including the introduction of a dangerous disease or

dangerous substance into an area.

(b) Except as provided by Section 5.253 and notwithstanding

any other law, the following may not purchase or otherwise acquire

title to real property in this state if the purchase of or

acquisition of title to the property by the individual,

organization, or governmental entity would create a risk to the

health, safety, and welfare of the public:

(1) a governmental entity of a designated country;

(2) an organization 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 domiciled in a designated country;

(3) an organization that is owned by or under the

control of an organization described by Subdivision (2); or

(4) an individual who is domiciled in a designated

country.

Sec. 5.255. 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, organization, or governmental entity in violation of

this subchapter creates a risk to the health, safety, and welfare of

the public, as defined by Section 5.254, 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. 5.256. ATTORNEY GENERAL INVESTIGATION AND DISCOVERY;

SECRETARY OF STATE INTERROGATORIES AND RECORDS. (a) The attorney

general may conduct discovery to investigate a potential action

under Section 5.255 or in an action brought under Section 5.255,

including by:

(1) petitioning for an order authorizing the taking of

a deposition under Rule 202, Texas Rules of Civil Procedure; or

(2) if the attorney general has reason to believe that

a person may be in possession, custody, or control of any

documentary material or other evidence or may have any information

relevant to an investigation of a suspected violation of Section

5.254, issuing in writing and serving on the person a civil

investigative demand requiring the person to:

(A) produce any of the documentary material for

inspection and copying;

(B) answer in writing any written

interrogatories;

(C) give oral testimony; or

(D) provide any combination of civil

investigative demands under Paragraph (A), (B), or (C).

(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 an

organization that is the subject of an action by the attorney

general under Section 5.255; and

(2) provide to the attorney general all records held

by the secretary relating to the ownership or control of an

organization that is the subject of an action by the attorney

general under Section 5.255.

Sec. 5.257. APPOINTMENT OF RECEIVER. (a) If the district

court finds that the real property subject to an action brought

under Section 5.255 was purchased or otherwise acquired by an

individual, organization, or governmental entity in violation of

Section 5.254, the court shall enter an order that:

(1) states the court's finding; and

(2) appoints a receiver to:

(A) manage and control the real property pending

the sale or other disposition of the real property; and

(B) return to the individual, organization, or

governmental entity any proceeds of 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. 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 5. This Act takes effect September 1, 2025.