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Texas has already decided to restrict foreign adversaries from owning land. The real question now is how that restriction will actually be enforced. That answer is starting to take shape.
The Office of the Attorney General has proposed the rules that will govern how Senate Bill 17 (SB 17), authored by State Sen. Lois Kolkhorst (R-Brenham) during the 89th Legislative Session (2025), is applied in the real world, laying out the process for identifying violations, investigating transactions, and enforcing the law.
What SB 17 Does
SB 17 prohibits certain individuals, companies, and government-linked entities tied to designated foreign adversaries from purchasing or acquiring real property in Texas. Those designations include countries identified in national security assessments such as China, Russia, Iran, and North Korea.
The law applies broadly to real property, including residential, agricultural, commercial, and industrial land, along with associated interests like mineral and water rights. It includes exceptions for U.S. citizens and lawful permanent residents, as well as limited allowances for certain residential uses.
The statute also establishes civil penalties, potential criminal liability, and court-ordered divestment for violations.
The Key Development Is How It Will Be Enforced
The proposed rules are the most important development at this stage. They establish the mechanics of enforcement by answering three core questions:
- How violations are identified
- Who is responsible for reporting them
- How investigations are carried out
This is the operational framework that turns SB 17 into an enforceable system.
Enforcement Will Rely On Reporting
The rules create a complaint-driven system. Any person can submit a complaint alleging a violation. More notably, certain businesses involved in real estate transactions may be required to report suspected violations if they knew or should have known through reasonable due diligence.
These “facilitating entities” include lenders, title companies, real estate professionals, and similar actors. Failure to report could result in referrals to licensing or regulatory authorities.
Investigations And State Authority
Once a potential violation is identified, the Attorney General is authorized to investigate. That includes reviewing transactions, issuing civil investigative demands, coordinating with other agencies, and referring cases for prosecution.
The rules also establish response timelines, generally requiring compliance within a defined period, often at least seven days. This creates a structured and relatively fast-moving enforcement process.
Broad Definitions Expand The Law’s Reach
The rules reinforce how broadly SB 17 applies. They clarify that ownership is not limited to direct purchases. Indirect control, layered corporate structures, and arrangements that function like long-term ownership can fall within scope.
This approach is intended to prevent circumvention through technical or contractual workarounds.
Consequences For Violations
If a violation is confirmed, courts may order the divestment of the property. Civil penalties can reach the greater of $250,000 or 50 percent of the property’s market value. Criminal penalties may also apply in cases involving knowing violations.
The proposed rules do not change these penalties, but they establish how cases reach that point.
Much Of The Process Will Be Confidential
The rules specify that complaints and investigative materials are generally confidential and not subject to public disclosure. They may be shared with courts or other agencies when necessary, but most enforcement activity will not be publicly visible.
Texas Policy Research Perspective
Texas Policy Research (TPR) opposed SB 17 during the 89th Legislative Session (2025), citing concerns about the scope of the law and its potential impact on private property rights and economic activity.
Those concerns remain relevant as the enforcement framework takes shape.
The proposed rules rely heavily on private sector reporting, expand investigative authority, and apply broad definitions of ownership and control. Together, these elements increase the reach of the law beyond straightforward land purchases and into more complex transactions.
While the rules are limited to implementing the statute as passed, they highlight how the structure of SB 17 may create compliance burdens and raise questions about how broadly enforcement will be applied in practice.
The Bottom Line
The Attorney General’s office has now proposed the rules that will determine how SB 17 is enforced. The proposed rules are currently subject to a public comment period before they can be finalized. After that process, the Attorney General may adopt the rules, making them the official framework for enforcing SB 17.
Those rules establish how violations are reported, how investigations are conducted, and how the law will be applied in real-world transactions.
SB 17 is no longer just a policy on paper. It is moving toward full implementation, with enforcement defined by the framework now under consideration.
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