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.