Texas Proposes Enforcement Rules for the SB 17 Property-Ownership Law: What Chapter 67 Would Add, and Who It Reaches

What Changed, and When

The proposal is published in the October 9, 2026 issue of the Texas Register, under Title 1, Part 3, Chapter 67, Foreign Ownership Enforcement, sections 67.1 through 67.12. It was filed with the Secretary of State on September 28, 2026 (TRD-202604182) by Justin Gordon, General Counsel of the Office of the Attorney General. The Texas Register notice states that written comments are accepted for 30 days following publication, by email to [email protected] or by mail to the General Counsel Division, Attn: Rule Comments, Office of the Attorney General, P.O. Box 12548, Austin, Texas 78711-2548, and that a public hearing may be requested within the same period. The notice lists the earliest possible date of adoption as November 8, 2026. The Attorney General announced the proposal in an October 9, 2026 release, which describes the new version as building on rules proposed earlier in 2026.

The underlying statute is Subchapter H, Chapter 5 of the Texas Property Code, sections 5.251 through 5.259, added by Senate Bill 17, 89th Legislature, Regular Session (2025), effective September 1, 2025. Section 5 of that bill directed the Attorney General to adopt implementing rules. What the twelve proposed sections provide, by their own text:

• Applicability (§67.1). The chapter applies only to purchases or acquisitions of an interest in Texas real property that occur on or after September 1, 2025, matching the statute.
• Definitions (§67.2). “Control” covers the direct or indirect power to direct management or policies, or to acquire or dispose of a Texas real property interest, and deems a general partner, a managing member, a shareholder holding ten percent or more of voting interests, any executive officer, and any person with a present or future right to acquire or dispose of such an interest to be in control. “Facilitating entity” covers a person or business that in the regular course of business assists with, brokers, insures, finances, values or processes such a purchase, naming mortgage lenders, title insurance companies, property insurers, appraisers and licensed real estate professionals.
• Successive short-term leases (§67.2(5), (7)(B)). The statute at §5.252(3) excludes a leasehold of less than one year. The proposed definition states that an interest in real property includes a series of licenses, leases or other arrangements that, in substance, create a leasehold of one year or longer, even if structured as successive short-term agreements.
• Entity acquisitions (§67.2(7)(A)). “Purchase or otherwise acquire” is defined to include a transaction or series of transactions by which a person obtains control of an entity that owns a Texas real property interest, including a redemption or repurchase of the entity’s outstanding interests, regardless of whether the entity acquired the real property before September 1, 2025.
• An enforcement unit and task force (§67.3). The OAG would maintain a designated enforcement unit, including a task force unit, to accept complaints, issue guidance and respond to written inquiries about whether Subchapter H applies to a specific transaction, coordinate with state agencies and political subdivisions, and refer violations to licensing or regulatory bodies.
• A mandatory complaint duty, with a safe harbor (§67.4). A facilitating entity that knows or should have known, after reasonable due diligence, that a purchase violates Subchapter H must submit a complaint to the OAG. The duty is stated to include transactions structured as post-closing transfers or assignments to affiliates, parents, subsidiaries or commonly controlled entities when used to effect or conceal a prohibited acquisition. If the OAG determines a facilitating entity knew or should have known and did not file, it may refer the matter to the appropriate licensing or professional disciplinary authority. Subsection (g) provides that an entity conducting know-your-customer due diligence consistent with an applicable regulatory body’s guidelines, or with standards adopted in good faith by a recognized industry group such as a trade association or professional organization, and which does not discover a violation, is not deemed to have known or to have been obliged to know of one.
• Complaints by anyone (§67.5). Any person with reason to believe a covered acquisition violated Subchapter H may submit a complaint, with any facts, documents or information they believe may assist the OAG.
• Optional reporting of pre-statute property (§67.6). Any person, including a facilitating entity, may report a parcel believed to be owned by an individual or entity meeting the statute’s definitions but acquired before September 1, 2025. Reports are voluntary, are expressly not complaints, and the section states that filing one does not by itself indicate a violation occurred.
• A seven-day floor on investigative demands (§67.7). A person must respond to a civil investigative demand from the OAG, or to interrogatories from the Secretary of State, by the date in the demand — but the agency must allow at least seven calendar days unless exigent circumstances require less, and may extend on written request for good cause shown.
• Interagency coordination (§67.8). The OAG may consult the Secretary of State, the Texas Real Estate Commission, the Texas Department of Insurance, the Texas Department of Agriculture and other regulators.
• Confidentiality (§67.9). Complaints, demands, interrogatories and the responses and records generated under the chapter are confidential and not subject to public disclosure except as required by law, with disclosure permitted by court order, to the Secretary of State or another state agency named in Subchapter H, to federal agencies as necessary to enforce the subchapter, or as otherwise authorized by law.
• A planned public portal (§67.10). The OAG may establish a plan for a publicly accessible property search portal carrying information about finalized enforcement actions and public information about prohibited transactions. The section states the portal’s specifications may operate in a manner similar to other statewide public information registries, including the Texas sex offender registration database.
• Savings and severability (§§67.11, 67.12). The chapter does not limit the OAG’s other authority to compel information, and its provisions and applications are severable.

Two things the proposal does not do are worth stating as plainly as the things it does. It does not change who is prohibited — that is set by statute at §5.253. And the Texas Register notice records the agency’s own determination that the rules impose no anticipated additional significant economic costs beyond those already imposed by the statute, and do not independently burden private real property rights beyond the statute, so no takings impact assessment was prepared.

Who in Texas This Reaches

The statute, not the proposed rules, draws the first line, and it is narrower than the headlines suggest. Property Code §5.252 provides that Subchapter H does not apply to an individual who is a citizen or lawful permanent resident of the United States, to a company or organization owned or controlled by such individuals and by no individual described in §5.253, or to a leasehold of less than one year. With that in view, four groups sit inside the picture.

• Individuals covered by §5.253(4). The statute reaches an individual domiciled in a designated country; a citizen of a designated country domiciled outside the United States in a non-designated country whose naturalization there is not complete; a citizen of a designated country who is unlawfully present in the United States; a non-citizen acting as an agent or on behalf of a designated country; and a member of a designated country’s ruling political party or a subdivision of it. “Designated country” is defined at §5.251(3) as a country identified by the U.S. Director of National Intelligence as posing a national security risk in at least one of the three most recent Annual Threat Assessments, or a country designated by the Governor under §5.254. The legislative findings in Section 1 of SB 17 recite the 2025 Annual Threat Assessment with respect to China, Russia, Iran and North Korea.
• Individuals who may fall within the homestead exception. §5.253(4)(A) carries an exception: an individual domiciled in a designated country who is lawfully present and residing in the United States at the time of the purchase may acquire an interest in residential property intended for use as a residence homestead, as defined by Tax Code §11.13(j). Whether a given household falls inside that exception is a question about that household’s facts.
• Title companies, lenders, appraisers, insurers and licensed real estate professionals. This is the group the proposal changes most directly. §67.4 would convert a diligence practice into a filing duty backed by licensing referral, and §67.4(g) would make the content of an industry group’s or regulator’s due-diligence standard the measure of whether the duty was met.
• Owners of property acquired before September 1, 2025. The statute applies only forward, and §67.1 repeats that. But §67.6 invites voluntary reports about such parcels, §67.10 contemplates a public portal, and §67.2(7)(A) treats a later change of control over an entity holding the land as an acquisition even where the land itself was bought earlier. Those three provisions, read together, are why pre-2025 ownership is part of this story rather than outside it.

Geographically this is a statewide rule. “Real property” at §5.251(6) is defined broadly — agricultural land and improvements on it, commercial, industrial and residential property, groundwater, a mine or quarry, a mineral in place, standing timber and water rights — so ranch and farm counties, urban residential markets and mineral and water interests are all within its terms.

What This Changes Legally

Four points, each from the statute or the proposal.

1. The consequences in the statute are serious, and they are tiered by who the actor is. Under §5.258, an individual described by §5.253(4) who intentionally or knowingly purchases or acquires an interest in Texas real property in violation of the subchapter commits a state jail felony. Under §5.259, a company or entity found to have violated the subchapter is liable to the state for a civil penalty equal to the greater of $250,000 or 50 percent of the market value of the interest at issue. Under §5.257, a district court that finds a violation enters an order divesting the interest and appoints a receiver to sell or otherwise dispose of it and to manage the property in the meantime, with sale proceeds applied first to existing liens, then to the state’s enforcement costs, and the remainder remitted to the purchaser.

2. A violating purchase is generally not void. §5.255(e) provides that, except for a leasehold interest, a purchase or acquisition in violation of §5.253 is not void because of the violation, and the validity or enforceability of the contract or conveyance is not otherwise affected. The remedy runs through an in rem action and divestiture rather than through automatic invalidity — which is why title, financing and possession questions can outlive the transaction itself.

3. The investigative machinery already exists; the proposal sets its clock. §5.256 lets the Attorney General take depositions under Rule 202 and issue civil investigative demands for documents, written interrogatory answers or oral testimony, and requires the Secretary of State, on request, to serve interrogatories and hand over ownership and control records. §67.7 is the part that puts a floor under the response window: at least seven calendar days, absent exigent circumstances, with extensions for good cause on written request. Seven days is a short period in which to assemble ownership documents.

4. For a facilitating entity, the proposal creates a documented-process question. §67.4(g) is written as a safe harbor keyed to a standard someone else sets — a regulator’s guidelines, or standards adopted in good faith by a recognized industry group. Whether a firm’s current know-your-customer file matches such a standard, and whether that is evidenced in a way a regulator would recognize, is a question about that firm’s records.

And one point about the rulemaking itself: a proposed rule is not a rule. These twelve sections are open for comment for 30 days from October 9, 2026, could be adopted no earlier than November 8, 2026, and could be adopted in amended form or withdrawn. The Texas Register notice is the authoritative text.

What Kind of Option Might Apply

Nothing on this page tells a reader whether the statute covers them, and no one should read it that way. What it can do is name the questions a Texas real estate or immigration attorney is in a position to answer by reading one file against this statute and this proposal:

• Whether an individual falls within the §5.252(1) exception for United States citizens and lawful permanent residents, which takes the subchapter off the table entirely.
• Whether a planned or completed purchase of a home fits the §5.253(4)(A) residence-homestead exception, including the statute’s requirement that the person be lawfully present and residing in the United States at the time of the purchase.
• How an entity’s ownership chart measures against the ten-percent voting-interest and executive-officer tests in the proposed definition of control, and against the majority-ownership tests in §5.253(2) and (3).
• Whether a lease structure, a renewal pattern or a management arrangement would be read as a series of short-term agreements creating a one-year-or-longer leasehold under the proposed §67.2(5).
• Whether a contemplated change of control in an entity that already owns Texas land would be treated as an acquisition under the proposed §67.2(7)(A).
• For a title company, lender, appraiser, insurer or brokerage: what the §67.4 duty would require, what the §67.4(g) safe harbor would call for in a documented diligence file, and how a licensing referral under §67.4(e) would be handled.
• How to respond to a civil investigative demand or a Secretary of State interrogatory within the seven-day floor, and when an extension request for good cause is appropriate.
• Whether submitting a written inquiry to the enforcement unit under the proposed §67.3(b)(3), which would respond on the applicability of the subchapter to a specific transaction, fits a particular situation.
• How a written comment on the proposal could be submitted within the 30-day window, for a person or business that wants the rulemaking record to include their circumstances.

Attorneys who handle these matters describe the first step as assembling the file rather than reaching a conclusion: the deed and closing file, the survey and legal description, the entity formation and ownership documents and any voting agreements, lease and renewal history, the immigration record establishing status and lawful presence at the relevant date, homestead documentation, and the diligence file a facilitating firm kept on the transaction.

Why Acting Quickly Can Matter

Three clocks run in this story, and they run at different speeds.

The comment period is the shortest and the only one with a public date: 30 days from October 9, 2026, with November 8, 2026 given as the earliest possible adoption date. A request for a public hearing has to arrive before the comment period closes. That window belongs to the rulemaking record rather than to any individual case, but it closes on a date already set.

The seven-day response floor in the proposed §67.7 is short by design and is the one most likely to arrive without warning. Ownership charts, voting agreements and closing files take longer than a week to collect when nobody has collected them before; an extension depends on a written request and good cause shown.

The transaction clock is the one that cannot be restarted. The statute has been in effect since September 1, 2025, and §5.253(4)(A) is written around status at the time the interest is acquired. A question asked before a closing is a question about structure; the same question after a closing is a question about divestiture under §5.257, a civil penalty under §5.259, or, for an individual, the state jail felony in §5.258. It is best to talk to a lawyer about a planned purchase, lease or restructuring while it is still being planned.

Records matter on the ordinary timeline too. Immigration documents establishing status on a past date, homestead filings, and the diligence file a title company or brokerage kept at closing are the records these questions turn on, and they are easier to obtain while a file is open than after it closes.

Sources

1. Primary document. Office of the Attorney General, proposed new 1 TAC §§67.1–67.12, “Foreign Ownership Enforcement,” Texas Register, October 9, 2026 issue, Proposed Rules, Title 1 Part 3 (filed with the Secretary of State September 28, 2026; TRD-202604182; comments accepted for 30 days following publication at [email protected]; earliest possible date of adoption November 8, 2026; definitions of control and facilitating entity; mandatory complaint duty and due-diligence safe harbor; complaints by any person; optional reporting of pre-September 1, 2025 acquisitions; seven-calendar-day response floor; interagency coordination; confidentiality; planned public property search portal).
2. Primary document. Senate Bill 17, enrolled text, 89th Legislature, Regular Session (2025), effective September 1, 2025, adding Subchapter H, Chapter 5, Texas Property Code, §§5.251–5.259 (definitions, including “designated country” and “real property”; §5.252 exceptions for United States citizens and lawful permanent residents and for leaseholds under one year; §5.253 prohibitions; §5.254 gubernatorial designation; §5.255 Attorney General investigation and in rem action and the provision that a violating purchase is not void; §5.256 civil investigative demands and Secretary of State interrogatories; §5.257 divestiture and receiver; §5.258 state jail felony; §5.259 civil penalty of the greater of $250,000 or 50 percent of market value; Section 5 directing the Attorney General to adopt rules; legislative findings reciting the 2025 Annual Threat Assessment as to China, Russia, Iran and North Korea).
3. Office of the Attorney General of Texas, “Attorney General Ken Paxton Proposes Stronger Rules to Protect Texas Land from Foreign Adversaries, Including China”, October 9, 2026 (announcement that the rules appear in the October 9 Texas Register; complaints open to any person; a planned online registry modeled on the Texas sex offender registry including properties acquired before the statute took effect; protection for facilitating entities following industry-group standards adopted in good faith).
4. Texas Tax Code Section 11.13 (the residence homestead definition cross-referenced by Property Code §5.253(4)(A)).
5. Texas Civil Practice and Remedies Code Chapter 64 (the powers and duties of a receiver, applied by Property Code §5.257(b), and §64.001(a)(6) as amended by SB 17 to allow receiver appointment in an Attorney General action under Subchapter H).
6. Texas Scorecard, “AG Paxton Proposes Stronger Rules To Protect Texas Land From Foreign Adversaries”, October 9, 2026 (independent report that the proposal builds on rules proposed earlier in 2026, retains most of them, and adds the any-person complaint route and the planned portal; and that a task force within the office has begun work).
7. Greenberg Traurig, “Texas AG Issues Proposed Rules Implementing SB 17 Restrictions on Foreign Ownership of Texas Real Property”, 2026 (background on the earlier 2026 proposal that this version builds on).