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HB 191 – Relating to the purchase of or acquisition of title to real property by certain foreign entities

Summary of the Bill:

This bill, titled “An Act relating to the purchase of or acquisition of title to real property by certain foreign entities,” amends the Texas Property Code to restrict the ability of certain foreign entities to purchase or acquire real property in Texas. The bill specifically targets entities associated with countries identified as posing a risk to U.S. national security. Here are the key provisions:

Key Provisions:

1. General Property Rights for Aliens (Section 5.005):
– Affirms that aliens (non-U.S. citizens) generally have the same property rights as U.S. citizens, except as provided under the new Subchapter H.

2. New Subchapter H: Restrictions on Real Property Acquisition by Certain Foreign Entities:
– Definitions (Section 5.251):
– Defines key terms, including:
– “Control”: Owning more than 50% of an organization’s voting interests.
– “Designated country”: A country identified by the U.S. Director of National Intelligence as posing a risk to U.S. national security in the three most recent Annual Threat Assessments.
– “Real property”: Includes land, improvements, minerals, standing timber, and certain estates or interests (excluding short-term leases and security interests like mortgages).

– Prohibition on Real Property Acquisition (Section 5.252):
– Prohibits the following entities from purchasing or acquiring title to real property in Texas:
1. Governmental entities of a designated country.
2. Organizations headquartered in a designated country or under the direct or indirect control of such a government.
3. Organizations controlled by entities described above.

– Enforcement by the Attorney General (Section 5.253):
– Allows the Texas Attorney General to bring legal action in district court if there is reason to believe a violation has occurred.
– Requires the Attorney General to record notice of the action in the county where the property is located.
– If a violation is found, the court must appoint a receiver to manage, control, and sell the property.
– Clarifies that a violation does not void the purchase or acquisition, nor does it affect the validity or enforceability of related contracts or conveyances.

3. Rulemaking (Section 3):
– Requires the Attorney General to adopt rules for implementing Subchapter H as soon as practicable after the bill’s effective date.

4. Applicability (Section 4):
– Applies only to real property purchases or acquisitions occurring on or after September 1, 2025.
– Transactions before this date are governed by prior law.

5. Effective Date (Section 5):
– The bill takes effect on **September 1, 2025**.

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Impact of the Bill:
– National Security Focus: The bill targets entities from countries deemed a risk to U.S. national security, preventing them from acquiring real property in Texas.
– Enforcement Mechanism: Establishes a clear process for the Attorney General to investigate and address violations, including the appointment of a receiver to manage and sell prohibited acquisitions.
– Limited Retroactivity: Does not affect real property transactions completed before the effective date, ensuring legal certainty for past transactions.

This bill reflects growing concerns about foreign influence and national security, particularly regarding real estate acquisitions by entities tied to adversarial nations. It aims to safeguard Texas’s real property market while aligning with broader U.S. national security priorities.