Texas senators are considering a measure that would establish a committee to review certain foreign land purchases in the state.
Senate Bill 2117, filed by State Sen. Tan Parker (R-Flower Mound), was taken up Thursday before the Senate Committee on State Affairs.
Parker’s measure would create the Texas Committee on Foreign Investment, composed of representatives from the governor’s office, the attorney general’s office, and other major agencies.
The committee would be tasked with reviewing abnormally high-dollar foreign transactions that could affect critical infrastructure, agricultural land, sensitive personal data of residents, or a strategic industry or asset.
Parker acknowledged that SB 2117 would not be a complete restriction, telling senators that any such effort could be “vulnerable to implied federal preemption that conflicts with or frustrates federal objectives.”
The potential conflict surrounds the Committee on Foreign Investment in the United States (CFIUS), a federal inter-agency panel that reviews certain transactions involving foreign investment in the country.
Since senators passed SB 17 in March, a measure that would totally prohibit certain countries from owning critical Texas land, legal questions surrounding how CFIUS and state jurisdiction relate to each other have become increasingly relevant.
“This underscores the importance of crafting a framework here in Texas that complements the federal process,” said Parker. “And that is precisely why Senate Bill 2117 is structured as a state-level protective measure that aligns with the spirit of cooperative federalism.”
Under Parker’s proposal, foreigners seeking a transaction potentially relevant to national security must notify the Texas attorney general, who could determine whether an investigation is warranted.
The attorney general could then open mitigation agreements with potential foreign investors to establish data protection protocols and security clearance requirements or restrict access to certain hostile entities.
Members of the Texas Committee on Foreign Investment would review the attorney general’s investigations and be the final arbiter of any potential mitigation agreements.
Foreigners found in violation of the measure would be liable for a state civil penalty of up to $50,000 for each violation and could have their purchases divested.
The Texas Committee on Foreign Investment would also be required to submit annual reports detailing information on reviewed transactions and national security recommendations to the governor and Legislature.
After being considered by lawmakers, SB 2117 was left pending in committee.
Parker’s proposal and SB 17 are not the only pieces of legislation seeking to prevent potentially detrimental foreign land purchases near critical infrastructure.
In the Texas House, State Reps. Briscoe Cain (R-Deer Park) and David Spiller (R-Jacksboro) have proposed legislation targeting land purchases by hostile foreign entities.
And federally, U.S. Rep. Brandon Gill, a Republican from Texas’ 26th Congressional District, filed a measure that would prohibit the purchasing of land in the U.S. by certain hostile foreign countries.
The Republican Party of Texas officially opposes Parker’s measure, as well as SB 17 and Spiller’s proposal. However, the party does support Cain’s House Bill 402, which is the toughest of the bunch.
