{ "id": "tx-sb17", "version": "1.0.10", "state": "TX", "status": "active", "$id": "https://www.parcelclear.com/agents/ruleset.json", "title": "Texas SB 17: prohibition on acquisition of real property interests by certain foreign persons and entities", "effective_date": "2025-09-01", "rules_status": "proposed", "rules_proposed_date": "2026-03-27", "rules_effective_date": null, "last_verified": "2026-09-10", "outputs": [ "evidence_pack_pdf", "sb17_representation_pdf", "oag_complaint_packet_pdf_when_REPORT", "audit_event" ], "sources": [ { "id": "statute", "url": "https://capitol.texas.gov/tlodocs/89R/billtext/html/SB00017F.htm", "cite": "Tex. Prop. Code ch. 5, subch. H, secs. 5.251-5.259, as added by SB 17, 89th Leg., R.S., ch. 956. Enrolled text read 2026-09-10." }, { "id": "oag_rules", "url": "https://www.texasattorneygeneral.gov/proposed-and-adopted-rules", "cite": "Tex. Admin. Code ch. 67 (Office of the Attorney General), proposed 2026-03-27, not adopted as of 2026-09-07" }, { "id": "dni", "url": "https://www.dni.gov/index.php/newsroom/reports-publications", "cite": "DNI Annual Threat Assessment (three-year lookback for designated countries)" }, { "id": "ofac", "url": "https://ofac.treasury.gov/", "cite": "31 CFR ch. V; OFAC SDN and Consolidated lists" } ], "claims_gate": { "allowed": [ "Records what a party attested and what the OFAC SDN and Consolidated lists said on the date of the screen.", "Evaluates those facts against a named, versioned Texas SB 17 rule set.", "Produces a time-stamped, hashed evidence pack.", "Screens parties and control persons against the OFAC SDN and Consolidated lists." ], "forbidden": [ "Makes you SB 17 compliant.", "Guarantees no prohibited buyer.", "Certifies eligibility.", "Replaces underwriter or counsel review." ] }, "definitions": { "control": "Proposed, not adopted. Under proposed 1 TAC 67.2(2), the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of an entity, or 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. Subchapter H uses ownership and control without defining either.", "interest": "Section 5.253 prohibits purchasing or otherwise acquiring an interest in real property. Section 5.251(6) defines real property to include agricultural land, an improvement located on agricultural land, commercial property, industrial property, groundwater, residential property, a mine or quarry, a mineral in place, standing timber, and water rights. Section 5.252(3) excepts a leasehold interest with a duration of less than one year, so a leasehold of one year or more is inside the subchapter.", "prohibited_person": "Section 5.253 names four groups. (1) A governmental entity of a designated country. (2) A company or organization that is headquartered in a designated country, directly or indirectly held or controlled by the government of a designated country, owned by or the majority of whose stock or other ownership interest is held or controlled by individuals described by Subdivision (4), or designated by the governor under Section 5.254. (3) A company or organization owned by or the majority of whose stock or other ownership interest is held or controlled by a company described by Subdivision (2). (4) An individual who is domiciled in a designated country; or is a citizen of a designated country domiciled outside the United States in a country other than a designated country for which the individual has not completed naturalization; or is a citizen of a designated country unlawfully present in the United States; or is a citizen of a country other than the United States acting as an agent or on behalf of a designated country; or is a member of the ruling political party or any subdivision of the ruling political party in a designated country. A transnational criminal organization is not listed in Section 5.253. It is defined at Section 5.251(7) and becomes subject to the subchapter only if the governor designates it under Section 5.254(a)(2)(A).", "facilitating_entity": "Proposed, not adopted. Under proposed 1 TAC 67.2(3), 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 a mortgage lender, title insurance company, property insurer, appraiser, or licensed real estate professional. Subchapter H does not use the term and places no duty on such a person." }, "result_semantics": { "HOLD": "Human reviewer must confirm facts or disposition a hit before the file is final.", "CLEAR": "No rule in this version of the rule set fired on the facts entered. Identity was not verified. This is not a determination that a transaction is lawful.", "REPORT": "The facts entered match a prohibited-acquisition pattern in this rule set. Texas AG Chapter 67, which would define a facilitating entity's complaint duty, was proposed 2026-03-27 and is not adopted. Escalate to counsel and to your underwriter. ParcelClear does not file anything with the Attorney General." }, "control_person_tests": [ { "id": "CP-GP", "test": "General partner of a partnership", "source": "oag_rules" }, { "id": "CP-MM", "test": "Managing member of an LLC", "source": "oag_rules" }, { "id": "CP-10", "test": "Holder of 10% or more of voting interests", "source": "oag_rules" }, { "id": "CP-EO", "test": "Executive officer", "source": "oag_rules" }, { "id": "CP-RIGHT", "test": "Any person with a present or future right to acquire or dispose of the entity's Texas real property interest", "source": "oag_rules" }, { "id": "CP-TRUST", "note": "Subchapter H defines no trust test. Section 5.251(5) gives organization the meaning assigned by Section 1.002, Business Organizations Code, and stops there. Proposed Chapter 67 left trust treatment open. Collect all three and return Hold if any is a prohibited person.", "test": "Trustee, settlor with revocation power, and beneficiaries of a trust buyer", "source": "internal" } ], "designated_countries": { "initial": ["CN", "RU", "IR", "KP"], "expansion_rule": "Section 5.251(3): a country identified by the United States Director of National Intelligence as posing a risk to the national security of the United States in at least one of the three most recent Annual Threat Assessments of the U.S. Intelligence Community, or a country designated by the governor under Section 5.254.", "engine_behavior": "The initial list is the working list this version evaluates against. The statute prints no list. Any other country of domicile returns Hold with reason DC-EXPAND so a reviewer checks the current designations." }, "questionnaire_fields": [ "party_role", "party_type", "legal_name", "aliases", "dob_or_formation_date", "us_citizen", "lawful_permanent_resident", "lawfully_present_in_us", "domicile_country", "citizenship_countries", "entity_hq_country", "entity_formation_country", "government_country", "control_persons", "control_tree_attested", "interest_type", "lease_term_months", "intended_homestead", "interest_held_before_2025_09_01", "post_closing_transfer_planned", "transferee_details" ], "penalties_for_display": { "civil": "On an action by the state against a company or entity, a civil penalty of the greater of $250,000 or 50 percent of the market value of the interest in real property that is the subject of the violation (5.259).", "leases": "A lease made in violation is not void by operation of law. Section 5.255(e) withholds the anti-voidness saving clause from an acquisition of a leasehold interest, and 5.257(a)(1)(C)(i) lets a court-appointed receiver divest through sale, termination of a leasehold, or other disposition.", "criminal": "A state jail felony where an individual described by 5.253(4) intentionally or knowingly purchases or otherwise acquires an interest in real property in violation of the subchapter (5.258). The offense reaches individuals, not companies.", "divestiture": "On a court finding of a violation the court shall order divestment and appoint a receiver to divest the interest and manage the property pending disposition (5.257(a)). Proceeds satisfy existing liens, then the state's enforcement costs, and the remainder is remitted to the party that acquired in violation (5.257(c)).", "facilitating_entity": "Proposed, not adopted. Under proposed 1 TAC 67.4(a) and 67.4(e), a facilitating entity that knows or should have known of a violation after reasonable due diligence submits a complaint, and the OAG may refer a failure to file to the appropriate licensing or professional disciplinary authority. Subchapter H itself imposes no duty on a facilitating entity." }, "rules": [ { "id": "EXC-LEASE-SHORT", "when": { "interest_type": "leasehold", "lease_term_months_lt": 12 }, "order": 10, "reason": "Leasehold of less than one year is outside SB 17.", "result": "CLEAR", "source": "statute" }, { "id": "EXC-USC", "when": { "party_type": "individual", "us_citizen": true }, "order": 20, "reason": "US citizen is exempt.", "result": "CLEAR", "source": "statute" }, { "id": "EXC-LPR", "when": { "party_type": "individual", "lawful_permanent_resident": true }, "order": 21, "reason": "Lawful permanent resident is exempt.", "result": "CLEAR", "source": "statute" }, { "id": "EXC-PRIOR", "when": { "transaction_is_new_acquisition": false, "interest_held_before_2025_09_01": true }, "order": 30, "reason": "SECTION 6 of the Act applies the prohibition only to a purchase or acquisition on or after 2025-09-01 and leaves an earlier acquisition under the law in effect before it. It governs the original acquisition only: a later sale, or a lease of one year or more, is a new acquisition by the counterparty. Confirm the current transaction is not a new acquisition.", "result": "CLEAR", "source": "statute" }, { "id": "PP-GOV", "when": { "party_type": "government", "government_country_in": "designated_countries" }, "order": 40, "reason": "Government of a designated country is a prohibited person.", "result": "REPORT", "source": "statute", "override_by": ["EXC-LEASE-SHORT", "EXC-PRIOR"] }, { "id": "PP-IND-DOM", "when": { "party_type": "individual", "us_citizen": false, "domicile_country_in": "designated_countries", "lawful_permanent_resident": false }, "order": 50, "reason": "Individual domiciled in a designated country who is not a US citizen or LPR is a prohibited person.", "result": "REPORT", "source": "statute", "override_by": ["EXC-HOMESTEAD", "EXC-LEASE-SHORT", "EXC-PRIOR"] }, { "id": "EXC-HOMESTEAD", "when": { "party_type": "individual", "interest_type": "fee", "intended_homestead": true, "lawfully_present_in_us": true }, "order": 51, "reason": "Section 5.253(4)(A) lets an individual who is lawfully present and residing in the United States at the time of the acquisition acquire an interest in a residential property intended for use as an individual's residence homestead, as defined by Section 11.13(j), Tax Code. It is a carve-out inside the prohibition, not an exception in Section 5.252. Reviewer confirms lawful presence, residence, and homestead intent against the documents.", "result": "HOLD", "source": "statute", "verify_live": true, "override_by": ["EXC-USC", "EXC-LPR", "EXC-PRIOR"] }, { "id": "PP-IND-CIT", "when": { "party_type": "individual", "us_citizen": false, "domicile_country_not_in": "designated_countries", "lawful_permanent_resident": false, "citizenship_countries_any_in": "designated_countries" }, "order": 55, "reason": "Citizen of a designated country domiciled elsewhere. Section 5.253(4)(B) reaches a citizen of a designated country domiciled outside the United States in a country other than a designated country for which the individual has not completed naturalization, and Section 5.253(4)(C) reaches one unlawfully present in the United States. This rule set does not collect naturalization or lawful-presence facts, so it holds for a reviewer rather than deciding.", "result": "HOLD", "source": "statute", "verify_live": true, "override_by": ["EXC-LEASE-SHORT", "EXC-PRIOR"] }, { "id": "PP-ENT-HQ", "when": { "party_type_in": ["entity", "trust"], "entity_hq_country_in": "designated_countries" }, "order": 60, "reason": "Entity headquartered in a designated country is a prohibited person.", "result": "REPORT", "source": "statute", "override_by": ["EXC-LEASE-SHORT", "EXC-PRIOR"] }, { "id": "PP-ENT-CONTROL", "when": { "party_type_in": ["entity", "trust"], "any_control_person_result_in": ["REPORT"] }, "order": 61, "reason": "A person in this entity's control tree is a prohibited person. The tree is built on the proposed Chapter 67 control tests, which are not adopted, and nothing this file collects shows ownership or majority control, which is what Section 5.253(2)(B), (C) and (3) turn on. So this holds for a reviewer and the underwriter; it does not report on a proposed-rule relationship alone.", "result": "HOLD", "source": "oag_rules", "override_by": ["EXC-LEASE-SHORT", "EXC-PRIOR"] }, { "id": "PP-ENT-CONTROL-HOLD", "when": { "party_type_in": ["entity", "trust"], "any_control_person_result_in": ["HOLD"] }, "order": 62, "reason": "One or more control persons require reviewer confirmation.", "result": "HOLD", "source": "oag_rules" }, { "id": "PP-ENT-INCOMPLETE", "when": { "party_type_in": ["entity", "trust"], "control_persons_complete": false }, "order": 63, "reason": "Control-person tree incomplete. Reasonable due diligence requires the full tree. Fail closed.", "result": "HOLD", "source": "oag_rules" }, { "id": "PP-ENT-NO-ATTEST", "when": { "party_type_in": ["entity", "trust"], "control_tree_attested_not": true }, "order": 64, "reason": "The control-person tree has not been attested as complete by the reviewer. Fail closed.", "result": "HOLD", "source": "oag_rules" }, { "id": "PP-ENT-REVIEW", "when": { "party_type_in": ["entity", "trust"] }, "order": 65, "reason": "Entity and trust buyers route to a human reviewer. Neither the statute nor the proposed Chapter 67 rules define when an entity is outside the prohibition, so this rule set does not make that determination. Confirm the ownership documents and the control-person tree, then decide with your underwriter.", "result": "HOLD", "source": "internal", "reviewer_note": true, "verify_live": true }, { "id": "SCREEN-HIT", "when": { "any_party_screen_result_in": ["POTENTIAL_MATCH"] }, "order": 70, "reason": "Potential match on OFAC SDN or Consolidated list. Reviewer dispositions the hit before any other result is final.", "result": "HOLD", "source": "ofac" }, { "id": "SCREEN-STALE", "when": { "list_age_days_gt": 7 }, "order": 71, "reason": "Screening list older than 7 days. Fail closed until ingest succeeds.", "result": "HOLD", "source": "internal" }, { "id": "POST-CLOSE", "when": { "post_closing_transfer_planned": true }, "order": 80, "reason": "OAG ch. 67 extends the complaint duty to post-closing transfers to affiliates structured to effect or conceal a prohibited acquisition. Evaluate transferee as a party.", "result": "HOLD", "source": "oag_rules" }, { "id": "DC-EXPAND", "when": { "party_type": "individual", "us_citizen": false, "domicile_country_not_in": "designated_countries", "domicile_country_not_in_2": ["US"], "lawful_permanent_resident": false }, "order": 90, "reason": "Domicile outside the countries this version treats as designated. Section 5.251(3) prints no list and defines a designated country by reference to the three most recent DNI Annual Threat Assessments and to a designation by the governor under Section 5.254, so confirm the current designations. Section 5.253(4)(D) and (E) also reach a person acting as an agent of a designated country and a member of its ruling political party, whatever their domicile; this rule set does not collect those facts.", "result": "HOLD", "source": "dni", "reviewer_note": true, "override_by": ["EXC-LEASE-SHORT", "EXC-PRIOR"] }, { "id": "DEFAULT", "when": {}, "order": 999, "reason": "No rule produced a determination. Fail closed.", "result": "HOLD", "source": "internal" } ] }