The Texas Office of the Attorney General (OAG) has proposed new rules to implement and enforce Senate Bill 17 (SB 17), which restricts certain individuals and entities connected to designated foreign adversaries from purchasing or acquiring interests in Texas real property.
Earlier this year, the OAG proposed rules to implement SB 17, prompting IBAT and its industry partners to submit comments opposing several provisions. Those rules ultimately expired without being adopted. Now, the OAG has returned with a substantially similar proposal, including new language that raises additional concerns and that IBAT again cannot support.
Among the notable provisions, the newly proposed rules would:
- Expand complaint reporting: Allow anyone who believes they have information indicating a potential SB 17 violation to submit a complaint to the OAG, rather than limiting reporting to individuals or entities involved in facilitating real estate transactions.
- Establish industry standards: Call for “facilitating entities,” including community banks, to adopt regulatory guidelines or standards developed by an association or industry group.
- Create a public property registry: Require the OAG to develop a plan for an online registry identifying Texas properties owned by entities covered under SB 17, including properties acquired before the law took effect. Modeled after the Texas Sex Offender Registry, the website would feature searchable property information and mapping capabilities to provide greater transparency into covered foreign ownership of Texas real estate.
- Allow reporting of prior acquisitions: Establish a mechanism for individuals to report property acquisitions predating SB 17 to the OAG.
For Texas community banks, the proposed requirements for facilitating entities are particularly concerning, especially given the industry’s previously expressed objections and the potential implications for institutions involved in real estate transactions.
The proposed rules were published in the October 9 issue of the Texas Register. IBAT continues to oppose the objectionable provisions and will remain engaged in the rulemaking process to advocate for an implementation framework that appropriately recognizes the role of community banks without imposing unreasonable regulatory obligations.
