TITLE 1. ADMINISTRATION

PART 3. OFFICE OF THE ATTORNEY GENERAL

CHAPTER 67. FOREIGN OWNERSHIP ENFORCEMENT

1 TAC §§67.1 - 67.9

The Office of the Attorney General (OAG) proposes new Chapter 67 in Title 1, Part 3 of the Texas Administrative Code (TAC), relating to foreign ownership enforcement. The proposed rules are necessary to implement and administer Subchapter H, Chapter 5, Texas Property Code, as added by Senate Bill 17 (S.B. 17), 89th Legislature, Regular Session (2025), effective September 1, 2025. S.B. 17 established restrictions on certain purchases or acquisitions of interests in real property in this State by designated foreign persons or entities.

EXPLANATION AND JUSTIFICATION OF RULES

During its 89th Regular Session (2025), the Texas Legislature enacted S.B. 17, effective September 1, 2025. S.B. 17 added Subchapter H (Sections 5.251-5.259) to Chapter 5 of the Texas Property Code. The legislation prohibits certain foreign individuals, foreign governmental entities, and foreign-owned or foreign-controlled companies and organizations from purchasing or otherwise acquiring an interest in real property in this State, and authorizes the OAG to examine transactions, investigate potential violations, bring civil enforcement actions, and coordinate with other agencies in carrying out Subchapter H.

Proposed new Chapter 67 establishes procedures and standards to facilitate the uniform implementation and enforcement of Subchapter H. The proposed rules define key terms, including those addressing entity-level acquisitions and arrangements that, in substance, create covered real-property interests; establish duties and procedures for the submission of complaints, including obligations applicable to facilitating entities; set timelines and requirements for responding to civil investigative demands and Secretary of State (SOS) interrogatories; direct interagency coordination; and provide confidentiality standards for complaints, investigative materials, and related records. These procedures are intended to support consistent administration of Subchapter H and ensure effective investigative and enforcement processes.

SECTION-BY-SECTION SUMMARY

Proposed §67.1 describes the purpose and applicability of Chapter 67, stating that the rules implement and enforce Subchapter H, Chapter 5, Texas Property Code, and apply only to purchases or acquisitions of an interest in real property in this State occurring on or after September 1, 2025, consistent with the statutory effective date and applicability provisions of Subchapter H.

Proposed §67.2 defines terms used in Chapter 67, including "control," "facilitating entity," "foreign person or entity," "interest in real property in this State," and "purchase or otherwise acquire," and incorporates statutory definitions by reference to Subchapter H, Chapter 5, Texas Property Code. The definitions are intended to mirror and supplement statutory terms in order to provide clarity for regulated parties, including by addressing transactions involving successive short-term arrangements and acquisitions of entities that hold covered real property interests.

Proposed §67.3 requires the OAG to maintain a designated enforcement unit responsible for receiving, reviewing, investigating, and enforcing compliance with Subchapter H, Chapter 5, Texas Property Code. The section describes the unit's core functions, including accepting complaints, issuing guidance and responses to written inquiries regarding the applicability of Subchapter H to specific transactions, coordinating with state agencies and political subdivisions, and referring matters to appropriate licensing or regulatory bodies when warranted by statute.

Proposed §67.4 specifies how complaints alleging violations of Subchapter H, Chapter 5, Texas Property Code may be submitted to the OAG. The section provides that a facilitating entity that knows or should have known, after reasonable due diligence, that a purchase or acquisition of an interest in real property in this State violates Subchapter H has a duty to submit a complaint, and it also allows any person to submit a complaint. The section establishes permissible methods of filing, authorizes a standardized complaint form, and provides that the OAG may refer a facilitating entity that fails to submit a required complaint to the appropriate licensing or professional disciplinary authority; the section is intended to implement the statutory scheme and does not create any cause of action or remedy beyond those provided by law.

Proposed §67.5 sets out response requirements for civil investigative demands issued by the OAG under Subchapter H, Chapter 5, Texas Property Code and for interrogatories issued by the SOS under that subchapter. The section provides that the OAG and SOS must generally allow at least seven calendar days to respond absent exigent circumstances and authorizes extensions of time for good cause shown, thereby promoting fair notice and orderly enforcement within existing statutory authority.

Proposed §67.6 directs the OAG to consult, as necessary, with the SOS, the Texas Real Estate Commission, the Texas Department of Insurance, and other relevant regulatory agencies to promote consistent and uniform implementation and enforcement of Subchapter H, Chapter 5, Texas Property Code. This coordination provision is procedural in nature and is intended to support the effective exercise of statutory powers already granted to the OAG and other agencies.

Proposed §67.7 addresses the confidentiality of complaints, investigative demands, interrogatories, and related responses, records, and information generated in connection with the administration of Chapter 67 and Subchapter H, Chapter 5, Texas Property Code. The section provides that such materials are confidential and not subject to public disclosure except as required or otherwise authorized by law, identifies limited circumstances in which they may be disclosed to courts, the SOS, other state agencies identified in Subchapter H, and federal agencies to enforce Subchapter H or promote the objectives of S.B. 17, and requires receiving agencies to maintain confidentiality to the extent authorized by law; the section is intended to operate consistently with and not in derogation of applicable public-information and confidentiality statutes.

Proposed §67.8 is a savings clause stating that nothing in Chapter 67 limits or affects the OAG's existing authority to request, obtain, or compel the production of information under any other provision of Texas law, including the Texas Constitution, statutes, or other applicable rules. This section is intended to clarify that Chapter 67 is supplemental and does not narrow or expand the OAG's independent statutory or constitutional powers.

Proposed §67.9 is a severability provision stating that the provisions of Chapter 67 are severable so that, if any provision or application is held invalid, the remaining valid provisions and applications remain in effect. This section is consistent with general principles of statutory construction and is intended to preserve the operation of valid portions of the rules if a court invalidates any particular portion.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENTS

Justin Gordon, General Counsel, has determined that for the first five-year period the proposed rules are in effect, there are no estimated additional costs or reductions in costs to state or local government as a result of enforcing or administering the rules, beyond any costs associated with implementing Subchapter H, Chapter 5, Texas Property Code, as enacted.

PUBLIC BENEFIT AND COST NOTE

Justin Gordon, General Counsel, has determined that for the first five-year period the proposed rules are in effect, the anticipated public benefit is increased clarity, uniformity, and consistency in implementing Subchapter H, Chapter 5, Texas Property Code. The proposed rules set out definitions, complaint procedures, investigative timelines, and interagency coordination standards that support consistent administration of the statute.

Mr. Gordon has further determined that there are no anticipated additional significant economic costs to persons required to comply with the proposed rules beyond those imposed by Subchapter H, Chapter 5, Texas Property Code.

IMPACT ON LOCAL EMPLOYMENT OR ECONOMY

The OAG has determined that the proposed rules do not have a measurable impact on local employment or local economies. The rules implement procedural requirements for an existing statutory program and are not expected to affect employment levels or economic conditions. Therefore, no local employment or economy impact statement is required under Texas Government Code § 2001.022.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES

The OAG has determined that for each year of the first five-year period the proposed rules are in effect, no adverse fiscal impact on small businesses, microbusinesses, or rural communities is anticipated.

Since the proposed rules will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, is not required.

TAKINGS IMPACT ASSESSMENT

The OAG has determined that the proposed rules implement Subchapter H, Chapter 5, Texas Property Code, and do not independently restrict, limit, or impose a burden on private real property rights beyond those established by statute. Accordingly, the proposed rules do not constitute a taking and do not require a takings impact assessment under Texas Government Code § 2007.043.

GOVERNMENT GROWTH IMPACT STATEMENT

In compliance with Texas Government Code §2001.0221, the OAG has prepared a government growth impact statement. During the first five years the proposed rules are in effect, the proposed rules:

- will not create a government program;

- will not require the creation or elimination of employee positions;

- will not require an increase or decrease in future legislative appropriations to the agency;

- will not lead to an increase or decrease in fees paid to a state agency;

- will create a new rule;

- will not repeal an existing regulation;

- will not result in a decrease in the number of individuals subject to the rule; and

- will not positively or adversely affect the state's economy.

REQUEST FOR PUBLIC COMMENT

Written comments on the proposed rules may be submitted electronically to the OAG by email to OAGRuleCommentsCh67@oag.texas.gov, or by mail to General Counsel Division, Attn: Rule Comments, Office of the Attorney General, P.O. Box 12548, Austin, Texas 78711-2548. Comments will be accepted for 30 days following publication in the Texas Register.

To request a public hearing on the proposal, submit a request before the end of the comment period by email to OAGRuleCommentsCh67@oag.texas.gov, or by mail to General Counsel Division, Attn: Rule Comments, Office of the Attorney General, P.O. Box 12548, Austin, Texas 78711-2548.

STATUTORY AUTHORITY

The new 1 TAC Chapter 67 is proposed under Subchapter H, Chapter 5, Texas Property Code, which authorizes the OAG to investigate and enforce compliance with statutory restrictions on certain purchases or acquisitions of interests in real property in this State by designated foreign persons or entities, and Texas Government Code Chapter 2001, which authorizes state agencies to adopt rules necessary to carry out their statutory duties. The proposed rules implement and administer the requirements of Subchapter H.

CROSS-REFERENCE TO STATUTE.

These rules implement Subchapter H, Chapter 5, Texas Property Code. No other rule, regulation, or law is affected by this proposal.

§67.1. Purpose and Applicability.

(a) The purpose of this chapter is to implement and enforce Subchapter H, Chapter 5, Texas Property Code, relating to restrictions on certain purchases or acquisitions of interests in real property in this State by designated foreign persons or entities.

(b) This chapter applies only to purchases or acquisitions of an interest in real property in this State that occur on or after September 1, 2025.

§67.2. Definitions.

In this chapter, the following terms have the meanings assigned below:

(1) Complaint--A written or electronic statement submitted to the OAG alleging a violation of Subchapter H, Chapter 5, Texas Property Code, that includes facts sufficient to identify the transaction or conduct at issue.

(2) Control--The possession, direct or indirect, of the power to direct or cause:

(A) the direction of the management or policies of an entity; or

(B) the acquisition or disposition of an interest in real property in this State by an entity, whether through ownership, by contract, office, position, or otherwise. Without limiting the foregoing, each of the following shall be deemed to be in control of an entity:

(i) a general partner;

(ii) a managing member;

(iii) a shareholder or stockholder holding ten percent or more of voting interests;

(iv) any executive officer of an entity; and

(v) any person who has the present or future right to acquire or dispose of an interest in real property in this State by such entity.

(3) Facilitating entity--A person or entity that, in the regular course of business, assists with, brokers, insures, finances, values, or processes a purchase or acquisition of an interest in real property in this State, including, but not limited to, a mortgage lender, title insurance company, property insurer, appraiser, or licensed real estate professional.

(4) Foreign person or entity--An individual or entity described in §5.253 of the Texas Property Code.

(5) Interest in real property in this State--Has the meaning assigned by §5.251(6) of the Texas Property Code. The term does not include a leasehold interest with a duration of less than one year, as provided by §5.252(3) of the Texas Property Code. The term includes a series of licenses, leases, or other arrangements that, in substance, create a leasehold interest in real property in this State for one year or longer, even if structured as successive short-term agreements.

(6) Purchase or otherwise acquire--In addition to the direct purchase or acquisition of an interest in real property in this State, the term includes:

(A) any transaction or series of transactions by which a person or entity obtains control of an entity that owns an interest in real property in this State, including a redemption or repurchase of the entity's outstanding interests, regardless of whether the entity acquired the real property before September 1, 2025; and

(B) a series of licenses, leases, or other arrangements that, in substance, create a leasehold interest in real property in this State for one year or longer, even if structured as successive short-term agreements.

(7) Unless the context clearly indicates otherwise, a term defined in Subchapter H, Chapter 5, Texas Property Code, has the meaning assigned by that subchapter.

§67.3. OAG Enforcement Unit.

(a) The Office of the Attorney General (OAG) shall maintain a designated enforcement unit responsible for receiving, reviewing, investigating, and enforcing compliance with Subchapter H, Chapter 5, Texas Property Code.

(b) The unit shall:

(1) Accept written or electronic complaints alleging violations of Subchapter H, Chapter 5, Texas Property Code;

(2) Issue guidance and respond to written inquiries regarding the applicability of Subchapter H, Chapter 5, Texas Property Code to specific transactions;

(3) Coordinate with state agencies and political subdivisions affected by the implementation and enforcement of Subchapter H, Chapter 5, Texas Property Code; and

(4) Refer violations to the appropriate licensing or regulatory body.

§67.4. Complaint Submission.

(a) A facilitating entity that knows or should have known, after reasonable due diligence, that a purchase or acquisition of an interest in real property in this State violates Subchapter H, Chapter 5, Texas Property Code must submit a complaint to the OAG.

(b) Any person may submit a complaint under this section.

(c) Complaints must be submitted electronically through the OAG's online complaint portal or by mail to the address designated by the OAG for this purpose.

(d) The OAG may prescribe a standardized complaint form to facilitate consistent filings.

(e) If the OAG determines that a facilitating entity knew or should have known, after reasonable due diligence, of a violation but failed to file a complaint, the OAG may refer the matter to the appropriate licensing or professional disciplinary authority.

(f) The duty in this subsection includes transactions structured as post-closing transfers or assignments to affiliates, parents, subsidiaries, or entities under common ownership or control when used to effect or conceal a prohibited acquisition.

§67.5. Investigative Demands and Response Requirements.

(a) A person must respond to a civil investigative demand issued by the OAG under Subchapter H, Chapter 5, Texas Property Code by the date specified in the demand; however, the OAG must provide at least seven (7) calendar days for response unless exigent circumstances require a shorter timeframe. Upon written request and for good cause shown, the OAG may extend the response deadline.

(b) A person must respond to interrogatories issued by the Secretary of State (SOS) by the date specified in the demand; however, the SOS must provide at least seven (7) calendar days for response unless exigent circumstances require a shorter timeframe. Upon written request and for good cause shown, the SOS may extend the response deadline.

§67.6. Interagency Coordination.

The OAG shall consult, as necessary, with the SOS, Texas Real Estate Commission, Texas Department of Insurance, and other relevant regulatory agencies to ensure the uniform implementation and enforcement of Subchapter H, Chapter 5, Texas Property Code.

§67.7. Confidentiality of Records.

(a) All complaints, civil investigative demands, interrogatories, and requests for information issued by the OAG, and all responses, records, and other information submitted or generated in connection with such requests under this chapter, are confidential and not subject to public disclosure, except as required by law.

(b) Confidential records under this section may be disclosed only:

(1) pursuant to a court order;

(2) to the SOS or other state agency identified in Subchapter H, Chapter 5, Texas Property Code;

(3) to federal agencies, as necessary to enforce Subchapter H, Chapter 5, Texas Property Code, or to promote the objectives of Senate Bill 17; or

(4) as otherwise authorized by law.

(c) Any agency receiving records under this section shall maintain the confidentiality of the records to the extent authorized by law.

§67.8. Savings Clause.

Nothing in this chapter shall be construed to limit or affect the authority of the OAG to request, obtain, or compel the production of information under any other provision of Texas law, including but not limited to the Texas Constitution, statutes, or other applicable rules.

§67.9. Severability.

(a) All provisions of this chapter are severable.

(b) If any application of any provision of this chapter is held to be invalid for any reason, all valid provisions are severable from the invalid provisions and remain in effect. If any section or portion of a section is held to be invalid in one or more of its applications, in all valid applications the provisions remain in effect and are severable from the invalid applications.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 16, 2026.

TRD-202601232

Justin Gordon

General Counsel

Office of the Attorney General

Earliest possible date of adoption: April 26, 2026

For further information, please call: (512) 475-3210