TITLE 1. ADMINISTRATION
PART 1. OFFICE OF THE GOVERNOR
CHAPTER 4. TEXAS MILITARY PREPAREDNESS COMMISSION
The Texas Military Preparedness Commission (Commission), within the Office of the Governor, proposes amendments to 1 TAC §4.1, concerning Introduction and Purpose; §4.2, concerning Military Value/Redevelopment Value Review and Pre-Application Assessment for Funds; §4.3, concerning Processing and Review of Applications; §4.4, concerning Application for Funds; §4.5, concerning Availability of Funds; §4.7, concerning Office and Commission Responsibilities; and §4.8, concerning Reporting Responsibilities, in Subchapter A, concerning the Texas Military Value Revolving Loan Fund Program. The Commission also proposes the repeal of §4.6, concerning Awardee Responsibilities, in Subchapter A.
The Commission further proposes amendments to §4.30, concerning Introduction and Purpose; §4.32, concerning Eligibility for Funds; §4.33, concerning Documentation; §4.36, concerning Processing and Review of Application; §4.37, concerning Availability of Funds; §4.38, concerning Awardee Responsibilities; §4.39, concerning Commission and Office Responsibilities; and §4.40, concerning Reporting Responsibilities, in Subchapter B, concerning the Defense Economic Adjustment Assistance Grant Program.
The proposed amendments and the proposed repeal are being made as a result of the Commission's review of Chapter 4 under Texas Government Code §2001.039. The proposed amendments conform the rules to Chapter 436 of the Texas Government Code as amended by House Bill 2564, 89th Legislature, Regular Session (2025), remove requirements that are duplicative of contract terms, remove unused defined terms, conform defined terms to the form in which they are defined, and improve the clarity and readability of the rules.
EXPLANATION OF PROPOSED AMENDMENTS AND PROPOSED REPEAL
Chapter 4 implements Chapter 436 of the Texas Government Code. Subchapter A governs the Texas Military Value Revolving Loan Fund (TMVRLF), which offers loans to defense communities for projects that enhance the military or defense value of a military base or defense facility, that minimize the negative effects of a defense base reduction on the defense community, or that accommodate new or expanded military missions assigned to a military base or defense facility. Subchapter B governs the Defense Economic Adjustment Assistance Grant (DEAAG) program, which offers grants to eligible local governmental entities that the Commission determines may be adversely or positively affected by an anticipated, planned, announced, or implemented action of the United States Department of Defense to close, reduce, increase, or otherwise realign defense worker jobs or facilities.
As part of the rule review conducted under Texas Government Code §2001.039, the Commission has determined that the reasons for initially adopting Chapter 4 continue to exist. The Commission has also determined that amendments are appropriate to conform the rules to current statute, to remove provisions that are unnecessary or duplicative, and to modernize and clarify the rules.
House Bill 2564, 89th Legislature, Regular Session (2025), effective September 1, 2025, abolished the defense economic adjustment assistance panel. That legislation repealed the definition of "panel" in Texas Government Code §436.001, repealed the provision that established the panel, and revised Texas Government Code §§436.205 and 436.206 to place the evaluation and scoring of DEAAG applications with the commissioners. The proposed amendments to §4.30 and §4.36 conform the rules to those statutory changes.
The proposed amendments to §4.1 repeal the definitions of "Financial Partners," "Military Installation," and "Project Costs," which are not used elsewhere in Subchapter A, and renumber the remaining definitions accordingly. The proposed amendments also conform defined terms to the form in which they are defined and make clarifying revisions to the description of the loan program.
The proposed amendments to §4.2 revise the section caption for readability and conform defined terms to the form in which they are defined.
The proposed amendments to §4.3 repeal subsection (a)(2), concerning quick assessment project considerations, which does not describe a discernible review criterion, and renumber the remaining paragraphs. The proposed amendments also revise subsection (a)(6) to state the financial analysis summary criterion as a complete phrase rather than as a hyphenated list, and conform defined terms to the form in which they are defined.
The proposed amendments to §§4.4, 4.5, and 4.8 conform defined terms to the form in which they are defined.
The Commission proposes the repeal of §4.6, concerning Awardee Responsibilities. The ten obligations listed in §4.6 are imposed on an Awardee by contract. Section 4.7(a)(4) requires the Commission to develop contracts with Awardees that include sufficient performance measures, audit requirements, and reporting requirements to ensure prudence and due diligence in the expenditure of state funds, and §4.6 itself operates only through the contract between the Awardee and the Commission. The Commission has determined that restating contract terms in rule is unnecessary and that the repeal will not diminish the obligations imposed on an Awardee under its loan agreement.
The proposed amendments to §4.7 conform the reference to the Director of the Commission to the term defined in §4.1, replace gendered language with the defined term, and conform other defined terms to the form in which they are defined.
The proposed amendments to §4.30 repeal the definition of "Review Panel," which refers to a body abolished by House Bill 2564 and to a statutory provision that no longer exists. The proposed amendments add definitions of "Awardee" and "Chief of Staff," both of which are used in Subchapter B but were defined only in Subchapter A, and repeal the definitions of "Defense Community" and "Financial partners," which are not used in Subchapter B. The proposed amendments also conform the defined terms to a consistent form, replace gendered language, and renumber the definitions accordingly.
The proposed amendments to §4.32 and §4.33 conform defined terms to the form in which they are defined. The proposed amendments to §4.33 also correct the cross-reference to §4.32 of this title, which is captioned Eligibility for Funds.
The proposed amendments to §4.36 conform the rule to House Bill 2564. Subsection (e) is revised to provide that the commissioners will score each grant application based on criteria that include the significance of the adverse or positive effect on the local governmental entity, the number of jobs lost, gained, or retained in relation to the workforce in the local governmental entity's jurisdiction, the added military value of the project, and any other criteria established by the Commission in a grant solicitation. Subsection (f) is revised to provide that the Commission will use the scores assigned under subsection (e) to determine whether to make a grant and will approve or disapprove the award by majority vote. The provisions requiring the Commission to score applications using the same criteria as the review panel, to ensure that the review panel does not show bias, to weigh the recommendations of the review panel against the Commission's own score, and to provide a statement of explanation for approved applications that are not in agreement with the review panel's recommendations are repealed because the panel no longer exists. The proposed amendments also conform defined terms to the form in which they are defined.
The proposed amendments to §§4.37, 4.38, 4.39, and 4.40 conform defined terms to the form in which they are defined and replace gendered language in §4.39.
Section 4.35, concerning Application for Funds, will be readopted without changes as a result of the Commission's review and is not proposed for amendment.
FISCAL NOTE
Keith Graf, Director of the Texas Military Preparedness Commission, has determined that for each year of the first five years in which the proposed amendments and proposed repeal are in effect, there are no foreseeable fiscal implications for state or local governments as a result of enforcing or administering the proposed amendments and proposed repeal.
PUBLIC BENEFIT AND COSTS
Mr. Graf has also determined that for each year of the first five years in which the proposed amendments and proposed repeal are in effect, the public benefit anticipated as a result of the proposal will be rules that are consistent with current statute, clearer, and easier to apply for defense communities and local governmental entities that participate in the TMVRLF and DEAAG programs.
Mr. Graf has determined that there are no anticipated economic costs to persons who are required to comply with the proposed amendments and proposed repeal.
There will be no adverse economic effect on small businesses, micro-businesses, or rural communities. Because the Commission has determined that the proposed amendments and proposed repeal will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an economic impact statement and a regulatory flexibility analysis, as detailed under Texas Government Code §2006.002, is not required.
LOCAL EMPLOYMENT IMPACT STATEMENT
Mr. Graf has determined that the proposed amendments and proposed repeal will not affect a local economy. Therefore, a local employment impact statement is not required under Texas Government Code §2001.022.
GOVERNMENT GROWTH IMPACT STATEMENT
Mr. Graf has determined that for each year of the first five years in which the proposed amendments and proposed repeal are in effect, the proposal:
- will not create or eliminate a government program;
- will not require the creation of new employee positions or the elimination of existing employee positions;
- will not require an increase or decrease in future legislative appropriations to the Commission;
- will not require an increase or decrease in fees paid to the Commission;
- does not create a new regulation;
- will repeal one existing regulation and will expand or limit existing regulations only to the extent the amendments conform the rules to statute, remove unnecessary provisions, and clarify existing requirements;
- will not increase or decrease the number of individuals subject to the applicability of the rules; and
- will not positively or adversely affect this state's economy.
TAKINGS IMPACT ASSESSMENT
The Commission has determined that no private real property interests are affected by the proposed amendments and proposed repeal, and that the proposal does not restrict, limit, or impose a burden on an owner's rights to the owner's private real property that would otherwise exist in the absence of government action. As a result, the proposal does not constitute a taking and does not require a takings impact assessment under Texas Government Code §2007.043.
REQUIREMENT FOR RULE INCREASING COSTS TO REGULATED PERSONS
The proposed amendments and proposed repeal do not impose a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, Texas Government Code §2001.0045 does not require the Commission to repeal or amend another rule.
SUBMISSION OF COMMENTS
Written comments regarding the proposed amendments and proposed repeal may be submitted for 30 days following the date of publication of this notice by mail to Keith Graf, Office of the Governor, Texas Military Preparedness Commission, P.O. Box 12428, Austin, Texas 78711, or by email to TMPC@gov.texas.gov with the subject line "Chapter 4 Proposed Rules." The deadline for receipt of comments is 5:00 p.m., Central Time, on November 9, 2026.
SUBCHAPTER
A.
STATUTORY AUTHORITY
The amendments are proposed under Texas Government Code §436.101(f), which directs and authorizes the Commission to adopt rules necessary to implement its duties.
The amendments are also proposed as a result of the Commission's review of Chapter 4 under Texas Government Code §2001.039.
CROSS REFERENCE TO STATUTE
Subchapter D, Chapter 436, Government Code. No other statutes, articles, or codes are affected by the proposed amendments.
§4.1.
(a)
The Texas Military Value Revolving Loan Fund provides a low-cost [low cost] source of revenue to eligible communities who meet the application criteria. The minimum amount of a loan is $1,000,000, while the maximum amount of a loan is determined by the availability of funds and the creditworthiness of the Applicant [applicant]. State funding will be obtained through the sale of general obligation bonds. The State may provide up to 100 percent of the cost of the Project [described project], dependent upon the creditworthiness of the Applicant [applicant].
(b) Definitions. The following words and terms, when used in this subchapter, shall have the following meanings unless otherwise indicated.
(1) Applicant--A Defense Community, as defined in paragraph (5) of this subsection, applying for a loan from the Fund.
(2) Awardee--The Defense Community whose loan application is approved by the Commission.
(3) Chief of Staff--The Chief of Staff of the Office of the Governor.
(4) Commission--The Texas Military Preparedness Commission. The Commission is attached for administrative purposes to the Office of the Governor.
(5) Defense Community--A "Defense community" as defined in §397.001 of the Local Government Code.
(6) Defense Facility--A "Defense facility" as defined in §397.001 of the Local Government Code.
(7) Director of the Commission--Director of the Texas Military Preparedness Commission.
(8) Economic Redevelopment Value Statement--A statement that illustrates specific ways funds are to be used to promote economic development in the community to include that information as provided for in §397.0021 of the Local Government Code.
[(9) Financial Partners--Federal and state agencies, private and public nonprofit foundations, local taxing authorities, and private investors who agree to provide money for projects eligible for funding under this program.]
(9) [(10)] Fund or TMVRLF--The Texas Military Value Revolving Loan Fund or account established under §436.156 of the Government Code.
[(11) Military Installation--An activity under the jurisdiction of the Department of Defense, including leased space, that is controlled by, or primarily supports, Department of Defense activities.]
(10) [(12)] Military Value Enhancement Statement--A military base or Defense Facility [defense facility] value enhancement statement that illustrates specific ways funds are to be used to enhance the military or defense value of the military base or Defense Facility [defense facility] to include that information as provided for in §397.002 of the Local Government Code.
(11) [(13)] Project--The construction, renovation, or acquisition for which a TMVRLF loan is requested.
[(14) Project Costs--The Defense Community's total costs for completing the project, including any and all costs of financing and administration assessed by the Commission.]
(12) [(15)] Redevelopment Value--The extent to which an economic development project will minimize the negative effects of a defense base reduction, or an infrastructure project will assist the Defense Community [defense community] in accommodating the new or expanded military missions that are assigned to the military facility.
§4.2.
/]Redevelopment Value Review and Pre-Application Assessment for Funds.
(a) The Defense Community shall submit the following information, as applicable, to the Director of the Commission:
(1) with respect to a Defense Community applying for a loan under §436.153 of the Government Code, a Military Value Enhancement Statement;
(2) with respect to a Defense Community applying for a loan under §436.1531 or §436.1532 of the Government Code, an Economic Redevelopment Value Statement; and
(3) with respect to any Defense Community applying for a TMVRLF loan, a pre-application assessment.
(b) The Commission shall review the Military Value Enhancement Statement or Economic Redevelopment Value Statement, as applicable, and perform:
(1)
an analysis of the Project [project] feasibility; and
(2)
an analysis of alternative funding for each Project [project] listed.
(c)
The Commission shall review the Applicant's [applicant's] pre-application assessment.
(d) The Commission shall take into consideration the Military or Defense Value or Redevelopment Value, as applicable, and, by a majority vote, make its recommendation to approve or disapprove the Military Value Enhancement Statement or Economic Redevelopment Value Statement, as applicable.
§4.3.
(a)
The Commission shall conduct its review of the Applicant's [applicant's] creditworthiness based on standard due diligence practices and procedures that are consistent with other Office of the Governor programs including, but not limited to:
(1)
review of Project [project] description to assess whether it satisfies program criteria requirements;
[(2) quick assessment project considerations;]
(2) [(3)] economic/financial analysis;
(3) [(4)] revenue analysis;
(4) [(5)] credit rating review; and
(5) [(6)] a financial analysis summary identifying [-] strengths, weaknesses, and exceptions.
(b) In addition, the Commission, in consultation with the Texas Public Finance Authority, shall also be responsible for developing the loan and security structure including:
(1) the loan term sheet;
(2) the loan agreement; and
(3) the bond sale activities.
§4.4.
(a) The Commission, in consultation with the Texas Public Finance Authority, shall develop and adopt a formal loan application form to be included in the formal application process to assist in the evaluation of a loan submission. The application may require certain attachments and certifications.
(b)
Successful Applicants [applicants] may be required to pay, upon financing, all closing costs.
§4.5.
(a)
Funds Commitment. If the Project [project] is approved by the Commission, funds become committed to the Awardee [awardee] subject to the sale of the general obligation bonds by the state.
(b)
Letter of Commitment. The Applicant [applicant] will be required to submit a letter of commitment after the final approval of the Project [project] by the Commission.
(c)
Upon sale of state-issued bonds, funds are disbursed to the Awardee [awardee] by the Comptroller of Public Accounts.
§4.7.
(a) In carrying out its duties and responsibilities under this subchapter, the Commission shall:
(1)
publicize the loan program to potential Applicants [applicants];
(2)
work closely with loan Applicants [applicants] to ensure the application is complete and all relevant material is provided;
(3) establish and conduct the evaluation process in a responsive manner to maximize the opportunity to acquire federal and other funding;
(4)
develop contracts with Awardees [awardees] that include sufficient performance measures, audit requirements, and reporting requirements to ensure prudence and due diligence in the expenditure of state funds; and
(5) minimize reporting requirements that may be repetitive of reporting required by federal grant agencies or that may be unnecessary for the effective monitoring of the program.
(b)
The Director of the Commission, on behalf of the Commission and[,] in consultation with the Chief of Staff or the Chief of Staff's [his] designee, may waive any provision of this chapter upon a finding that the public interest would be furthered by granting the waiver.
§4.8.
(a)
After completion of the Project [project], the Awardee [awardee] will provide milestones and updates as required by the contract.
(b)
Throughout the Project [project] period, the Awardee [awardee] must provide copies of all reports required by federal agencies pursuant to the terms of individual federal grants received, within 30 days of their submission to the granting agencies.
(c)
Failure to submit reports in a timely and satisfactory manner may result in the withholding of funds due or requested by the Awardee [awardee]. Failure to document post-completion requirements may result in the return of funds to Commission as set forth in the contract.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on September 25, 2026.
TRD-202604170
Keith Graf
Director
Office of the Governor
Earliest possible date of adoption: November 8, 2026
For further information, please call: (512) 463-2000
1 TAC §4.6
STATUTORY AUTHORITY
The repeal is proposed under Texas Government Code §436.101(f), which directs and authorizes the Commission to adopt rules necessary to implement its duties.
The repeal is also proposed as a result of the Commission's review of Chapter 4 under Texas Government Code §2001.039.
CROSS REFERENCE TO STATUTE
Subchapter D, Chapter 436, Government Code. No other statutes, articles, or codes are affected by the proposed repeal.
§4.6.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on September 25, 2026.
TRD-202604171
Keith Graf
Director
Office of the Governor
Earliest possible date of adoption: November 8, 2026
For further information, please call: (512) 463-2000
SUBCHAPTER
B.
STATUTORY AUTHORITY
The amendments are proposed under Texas Government Code §436.101(f), which directs and authorizes the Commission to adopt rules necessary to implement its duties.
The amendments are also proposed as a result of the Commission's review of Chapter 4 under Texas Government Code §2001.039.
CROSS REFERENCE TO STATUTE
Subchapter E, Chapter 436, Government Code. No other statutes, articles, or codes are affected by the proposed amendments.
§4.30.
(a)
Background. The Texas Defense Economic Adjustment Assistance Grant Program (DEAAG) provides state funds to assist eligible local governmental entities that may be adversely or positively impacted by an anticipated, planned, announced, or implemented action of the United States Department of Defense to close, reduce, increase, or otherwise realign Defense Worker Jobs [defense worker jobs] or facilities.
(b) Definitions. The following words and terms, when used in this subchapter, shall have the following meanings unless indicated otherwise.
(1) Application Deadline--Not later than 5:00 P.M. Central Time on the closing date indicated in the grant solicitation.
(2) Awardee--The local governmental entity whose grant application is approved by the Commission.
(3) Chief of Staff--The Chief of Staff of the Office of the Governor.
(4) [(2)] Commission--The Texas Military Preparedness Commission. The Commission is attached to the Office of the Governor for administrative purposes.
[(3) Defense Community--A "Defense community" as defined in §397.001 of the Local Government Code.]
(5) [(4)] Defense Worker [worker]--A "Defense worker" as defined in §436.001 of the Government Code.
(6) [(5)] Defense Worker Job [worker job]--A "Defense worker job" as defined in §436.001 of the Government Code.
(7) [(6)] Director--The Director of the Texas Military Preparedness Commission or the Director's [his] designee.
[(7) Financial partners--Federal and state agencies, private and public non-profit foundations, local taxing authorities, and private investors who agree to provide money for a project eligible for funding under this grant.]
[(8) Review Panel--The Defense Economic Adjustment Assistance Panel established pursuant to §436.205(a) of the Government Code to evaluate grant applications and make grant award recommendations to the Commission.]
§4.32.
The local governmental entity making application for the grant must provide adequate documentation of actual, anticipated, planned, or announced Defense Worker Job [defense worker job] loss or Defense Worker Job [defense worker job] gain.
§4.33.
Appropriate documentation required under §4.32 of this title (relating to Eligibility for [of] Funds) verifying actual, anticipated, planned, or announced Defense Worker Job [defense worker job] loss or Defense Worker Job [defense worker job] gain must be submitted with the application, including documentation from, but not limited to:
(1) Information from Department of Defense manpower or personnel records, socio-economic impact studies and Environmental Impact Statements; or
(2) United States Census Bureau, Department of Labor, or Texas Workforce Commission reports or statistics.
§4.36.
(a) The applicant will submit a grant application to the Commission.
(b)
Applications or additional information received after the Application Deadline [application deadline] will not be considered.
(c) The Commission will:
(1) Publicize the DEAAG program to potential applicants and provide grant solicitation information; and
(2) Evaluate each application for completeness.
(d) The Commission may assist a local government entity in applying for a grant.
(e) The Commission will score each grant application based on, but not limited to, the following criteria:
(1) The significance of the adverse or positive effect on the local governmental entity;
(2) The number of jobs lost, gained, or retained in relation to the workforce in the local governmental entity's jurisdiction;
(3) The added military value of the project; and
(4) Any other criteria established by the Commission as set forth in a grant solicitation.
[(e) The Review Panel will:]
[(1) Review applications, score, and make recommendations to the Commission;]
[(2) Provide evaluations and recommendations for grant awards for all grant applications received based on, but not limited to, the following criteria:]
[(A) If the effect on the local governmental entity is adverse or positive;]
[(B) The significance of the number of jobs lost, gained or retained in relation to the workforce in the local governmental entity's jurisdiction;]
[(C) The added military value of the project; and]
[(D) Any other criteria established by the Commission as set forth in a grant solicitation.]
(f)
The Commission will use the scores assigned under subsection (e) of this section to determine whether to make a grant to an applicant. The Commission will review and approve or disapprove the award of the grant by a majority vote.[:]
[(1) Review and score applications using the same criteria as the Review Panel;]
[(2) Ensure that the Review Panel does not show bias in scoring applications;]
[(3) Review and take into consideration those recommendations of the Review Panel and the Commission's own score;]
[(4) Review and approve or disapprove the award of the grant by a majority vote; and]
[(5) Provide a statement of explanation for the funding round of the approved applications that are not in agreement with the Review Panel recommendations.]
§4.37.
(a) Funds commitment. Once approved by the Commission for an award, program money becomes encumbered, subject to the availability of funds.
(b)
If the Commission determines that a qualified Defense Economic Adjustment Assistance Grant Program Awardee [awardee] has a deviation from the project scope or other financial commitments set out in the Awardee's [awardee's] grant application, the commitment of funding previously committed may be withdrawn and the funding amount re-allocated to other applicants.
(c) The Commission may offer less funding than is requested by the applicant.
§4.38.
In order to receive reimbursement of grant program funds that have been committed to them, Awardees [awardees] will be required to enter into a grant contract with the Office of the Governor.
§4.39.
(a) In carrying out its duties and responsibilities under this subchapter, the Commission shall:
(1)
Solicit grant applications and publicize Application Deadlines [application deadlines];
(2) Establish and conduct the evaluation and award process in a responsive manner to maximize the opportunity to acquire federal and other funding;
(3)
Develop contracts with Awardees [awardees] that include sufficient performance measures, audit requirements, and reporting requirements to ensure prudence and due diligence in the expenditure of state funds; and
(4) Minimize reporting requirements that may be repetitive of reporting required by federal grant agencies or that may be unnecessary for the effective monitoring of the program.
(b)
The Director on behalf of the Commission, in consultation with the Chief of Staff or the Chief of Staff's [his] designee, may waive any provision of this subchapter upon a finding that the public interest would be furthered by granting the waiver.
§4.40.
(a) Reimbursement of funds will be made in accordance with the terms of the contract.
(b)
After completion of the project, the Awardee [awardee] will provide [the following] milestones and updates as required by the contract.
(c)
Throughout the project period, the Awardee [awardee] must provide copies of all reports required by federal agencies pursuant to the terms of individual federal grants received, within 30 days of their submission to the granting agencies.
(d)
The Awardee [awardee] must provide all reports to the Commission as required by the terms of the grant contract, including, but not limited to, reports on any performance measures, milestone reports, and project completion reports.
(e)
Failure to submit reports in a timely and satisfactory manner may result in the withholding of funds due or requested by the Awardee [awardee]. Failure to document post-completion requirements may result in the return of funds to the Commission as set forth in the contract.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on September 25, 2026.
TRD-202604172
Keith Graf
Director
Office of the Governor
Earliest possible date of adoption: November 8, 2026
For further information, please call: (512) 463-2000
PART 3. OFFICE OF THE ATTORNEY GENERAL
CHAPTER 67. FOREIGN OWNERSHIP ENFORCEMENT
1 TAC §§67.1 - 67.12The Office of the Attorney General (OAG) proposes new Chapter 67 in Title 1, Part 3 of the Texas Administrative Code (TAC), relating to foreign ownership enforcement. The proposed rules are necessary to implement and administer Subchapter H, Chapter 5, Texas Property Code, as added by Senate Bill 17 (S.B. 17), 89th Legislature, Regular Session (2025), effective September 1, 2025. S.B. 17 established restrictions on certain purchases or acquisitions of interests in real property in this State by designated foreign persons or entities.
EXPLANATION AND JUSTIFICATION OF RULES
During its 89th Regular Session (2025), the Texas Legislature enacted S.B. 17, effective September 1, 2025. S.B. 17 added Subchapter H (Sections 5.251-5.259) to Chapter 5 of the Texas Property Code. The legislation prohibits certain foreign individuals, foreign governmental entities, and foreign-owned or foreign-controlled companies and organizations from purchasing or otherwise acquiring an interest in real property in this State, and authorizes the OAG to examine transactions, investigate potential violations, bring civil enforcement actions, and coordinate with other agencies in carrying out Subchapter H.
Proposed new Chapter 67 establishes procedures and standards to facilitate the uniform implementation and enforcement of Subchapter H. The proposed rules define key terms, including those addressing entity-level acquisitions and arrangements that, in substance, create covered real-property interests; establish duties and procedures for the submission of complaints, including obligations applicable to facilitating entities; set timelines and requirements for responding to civil investigative demands and Secretary of State (SOS) interrogatories; direct interagency coordination; and provide confidentiality standards for complaints, investigative materials, and related records. These procedures are intended to support consistent administration of Subchapter H and ensure effective investigative and enforcement processes.
SECTION-BY-SECTION SUMMARY
Proposed §67.1 describes the purpose and applicability of Chapter 67, stating that the rules implement and enforce Subchapter H, Chapter 5, Texas Property Code, and apply only to purchases or acquisitions of an interest in real property in this State occurring on or after September 1, 2025, consistent with the statutory effective date and applicability provisions of Subchapter H.
Proposed §67.2 defines terms used in Chapter 67, including "control," "facilitating entity," "foreign person or entity," "interest in real property in this State," and "purchase or otherwise acquire," and incorporates statutory definitions by reference to Subchapter H, Chapter 5, Texas Property Code. The definitions are intended to mirror and supplement statutory terms to provide clarity for regulated parties, including by addressing transactions involving successive short-term arrangements and acquisitions of entities that hold covered real property interests.
Proposed §67.3 requires the OAG to maintain a designated enforcement unit responsible for maintaining a task force, receiving, reviewing, investigating, planning, carrying out necessary planning, ensuring and enforcing compliance with Subchapter H, Chapter 5, Texas Property Code. The section describes the unit's core functions, including accepting complaints, issuing guidance and responses to written inquiries regarding the applicability of Subchapter H to specific transactions, coordinating with state agencies and political subdivisions, and referring matters to appropriate licensing or regulatory bodies when warranted by statute.
Proposed §67.4 specifies how complaints alleging violations of Subchapter H, Chapter 5, Texas Property Code may be submitted to the OAG. The section provides that a facilitating entity that knows or should have known, after reasonable due diligence, that a purchase or acquisition of an interest in real property in this State violates Subchapter H has a duty to submit a complaint. The section establishes permissible methods of filing complaints, authorizes a standardized complaint form, and provides that the OAG may refer a facilitating entity that fails to submit a required complaint to the appropriate licensing or professional disciplinary authority; the section is intended to implement the statutory scheme and does not create any cause of action or remedy beyond those provided by law. This section establishes a due-diligence safe harbor for facilitating entities that follow industry-standard practices. It provides that good-faith reliance on customary and recognized due-diligence procedures may demonstrate that an entity did not know, and should not have known, of a violation of Subchapter H.
Proposed §67.5 allows any person who has reason to believe that a purchase or acquisition of interests in real property in this State by designated foreign persons or entities violates Subchapter H to submit a complaint.
The proposed §67.6 establishes an optional reporting mechanism through which any person, including facilitating entities, may submit to the OAG with information concerning certain real property that would be subject to Property Code Section 5.253, but that was acquired before the effective date of Subchapter H, Chapter 5, Texas Property Code. The reporting mechanism is informational only and neither constitutes a complaint or, by itself, nor indicates that any violation has occurred. A report will assist the OAG in identifying potential foreign ownership patterns, supporting outreach, and maintaining an accurate public registry.
Proposed §67.7 sets out response requirements for civil investigative demands issued by the OAG under Subchapter H, Chapter 5, Texas Property Code and for interrogatories issued by the SOS under that subchapter. The section provides that the OAG and SOS must generally allow at least seven calendar days to respond absent exigent circumstances and authorizes extensions of time for good cause shown, thereby promoting fair notice and orderly enforcement within existing statutory authority.
Proposed §67.8 provides that the OAG will consult, as appropriate, with the SOS, the Texas Real Estate Commission, the Texas Department of Insurance, Texas Department of Agriculture, and other relevant regulatory agencies to promote consistent and uniform implementation and enforcement of Subchapter H, Chapter 5, Texas Property Code. This coordination provision is procedural in nature and is intended to support the effective exercise of statutory powers already granted to the OAG and other agencies.
Proposed §67.9 addresses the confidentiality of complaints, investigative demands, interrogatories, and related responses, records, and information generated in connection with the administration of Chapter 67 and Subchapter H, Chapter 5, Texas Property Code. The section provides that such materials are confidential and not subject to public disclosure except as required or otherwise authorized by law, identifies limited circumstances in which they may be disclosed to courts, the SOS, other state agencies identified in Subchapter H, and federal agencies to enforce Subchapter H or promote the objectives of S.B. 17, and requires receiving agencies to maintain confidentiality to the extent authorized by law; the section is intended to operate consistently with and not in derogation of applicable public-information and confidentiality statutes.
Proposed §67.10 provides that the OAG may establish a plan to maintain a publicly accessible property search portal containing information about finalized enforcement actions and public information concerning prohibited real property transactions under Subchapter H, Chapter 5, Texas Property Code. The portal is intended to promote transparency and public awareness, to support deterrence of violations, decrease the likelihood of false or redundant reports, and clarify applicable dates. The OAG may coordinate with other state and local governmental entities to promote the accuracy, reliability, and timely updating of information available through the portal.
Proposed §67.11 is a savings clause stating that nothing in Chapter 67 limits or affects the OAG's existing authority to request, obtain, or compel the production of information under any other provision of Texas law, including the Texas Constitution, statutes, or other applicable rules. This section is intended to clarify that Chapter 67 is supplemental and does not narrow or expand the OAG's independent statutory or constitutional powers.
Proposed §67.12 is a severability provision stating that the provisions of Chapter 67 are severable so that, if any provision or application is held invalid, the remaining valid provisions and applications remain in effect. This section is consistent with general principles of statutory construction and is intended to preserve the operation of valid portions of the rules if a court invalidates any particular portion.
FISCAL IMPACT ON STATE AND LOCAL GOVERNMENTS
Justin Gordon, General Counsel, has determined that for the first five-year period the proposed rules are in effect, there are no estimated additional costs or reductions in costs to state or local government as a result of enforcing or administering the rules, beyond any costs associated with implementing Subchapter H, Chapter 5, Texas Property Code, as enacted.
PUBLIC BENEFIT AND COST NOTE
Justin Gordon, General Counsel, has determined that for the first five-year period the proposed rules are in effect, the anticipated public benefit is increased clarity, uniformity, and consistency in implementing Subchapter H, Chapter 5, Texas Property Code. The proposed rules set out definitions, complaint procedures, investigative timelines, and interagency coordination standards that support consistent administration of the statute.
Mr. Gordon has further determined that there are no anticipated additional significant economic costs to persons required to comply with the proposed rules beyond those imposed by Subchapter H, Chapter 5, Texas Property Code.
IMPACT ON LOCAL EMPLOYMENT OR ECONOMY
The OAG has determined that the proposed rules do not have a measurable impact on local employment or local economies. The rules implement procedural requirements for an existing statutory program and are not expected to affect employment levels or economic conditions. Therefore, no local employment or economy impact statement is required under Texas Government Code §2001.022.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSINESSES, AND RURAL COMMUNITIES
The OAG has determined that for each year of the first five-year period the proposed rules are in effect, no adverse fiscal impact on small businesses, microbusinesses, or rural communities is anticipated.
Since the proposed rules will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, is not required.
TAKINGS IMPACT ASSESSMENT
The OAG has determined that the proposed rules implement Subchapter H, Chapter 5, Texas Property Code, and do not independently restrict, limit, or impose a burden on private real property rights beyond those established by statute. Accordingly, the proposed rules do not constitute a taking and do not require a takings impact assessment under Texas Government Code §2007.043.
GOVERNMENT GROWTH IMPACT STATEMENT
In compliance with Texas Government Code §2001.0221, the OAG has prepared a government growth impact statement. During the first five years the proposed rules are in effect, the proposed rules:
- will not create a government program;
- will not require the creation or elimination of employee positions;
- will not require an increase or decrease in future legislative appropriations to the agency;
- will not lead to an increase or decrease in fees paid to a state agency;
- will create a new rule;
- will not repeal an existing regulation;
- will result in an increase in the number of individuals subject to the rule because Chapter 67 is new; and
- will not positively or adversely affect the state's economy.
REQUEST FOR PUBLIC COMMENT
Written comments on the proposed rules may be submitted electronically to the OAG by email to OAGRuleCommentsCh67@oag.texas.gov, or by mail to General Counsel Division, Attn: Rule Comments, Office of the Attorney General, P.O. Box 12548, Austin, Texas 78711-2548. Comments will be accepted for 30 days following publication in the Texas Register.
To request a public hearing on the proposal, submit a request before the end of the comment period by email to OAGRuleCommentsCh67@oag.texas.gov, or by mail to General Counsel Division, Attn: Rule Comments, Office of the Attorney General, P.O. Box 12548, Austin, Texas 78711-2548.
STATUTORY AUTHORITY
The new 1 TAC Chapter 67 is proposed to comply with S.B. 17 Section 5, which requires the OAG to adopt rules to implement Subchapter H, Chapter 5, Texas Property Code.
CROSS-REFERENCE TO STATUTE
These rules implement Subchapter H, Chapter 5, Texas Property Code. Property Code section 5.005 references Subchapter H when discussing an alien's property rights. See Tex. Prop. Code §5.005. Likewise, Civil Practice and Remedies Code subsection 64.001(a)(6) references Subchapter H when discussing receiver appointment. See Tex. Civ. Prac. & Rem. Code §64.001(a)(6). No other rule, regulation, or law is affected by this proposal.
§67.1.
(a) The purpose of this chapter is to implement and enforce Subchapter H, Chapter 5, Texas Property Code, relating to restrictions on certain purchases or acquisitions of interests in real property in this State by designated foreign persons or entities.
(b) This chapter applies only to purchases or acquisitions of an interest in real property in this State that occur on or after September 1, 2025.
§67.2.
In this chapter, the following terms have the meanings assigned below:
(1) Complaint--A written or electronic statement submitted to the OAG alleging a violation of Subchapter H, Chapter 5, Texas Property Code, that includes facts sufficient to identify the transaction or conduct at issue.
(2) Control--The possession, direct or indirect, of the power to direct or cause:
(A) the direction of the management or policies of an entity; or
(B) 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. Without limiting the foregoing, each of the following shall be deemed to be in control of an entity:
(i) a general partner;
(ii) a managing member;
(iii) a shareholder or stockholder holding ten percent or more of voting interests;
(iv) any executive officer of an entity; and
(v) any person who has the present or future right to acquire or dispose of an interest in real property in this State by such entity.
(3) Facilitating entity--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, but not limited to, a mortgage lender, title insurance company, property insurer, appraiser, or licensed real estate professional.
(4) Foreign person or entity--An individual or entity described in §5.253 of the Texas Property Code.
(5) Interest in real property in this State--Has the meaning assigned by §5.251(6) of the Texas Property Code. The term does not include a leasehold interest with a duration of less than one year, as provided by §5.252(3) of the Texas Property Code. The term includes a series of licenses, leases, or other arrangements that, in substance, create a leasehold interest in real property in this State for one year or longer, even if structured as successive short-term agreements.
(6) OAG--Office of the Attorney General.
(7) Purchase or otherwise acquire--In addition to the direct purchase or acquisition of an interest in real property in this State, the term includes:
(A) any transaction or series of transactions by which a person or entity obtains control of an entity that owns an interest in real property in this State, including a redemption or repurchase of the entity's outstanding interests, regardless of whether the entity acquired the real property before September 1, 2025; and
(B) a series of licenses, leases, or other arrangements that, in substance, create a leasehold interest in real property in this State for one year or longer, even if structured as successive short-term agreements.
(8) Unless the context clearly indicates otherwise, a term defined in Subchapter H, Chapter 5, Texas Property Code, has the meaning assigned by that subchapter.
§67.3.
(a) The OAG shall maintain a designated enforcement unit including a task force unit responsible for receiving, reviewing, investigating, planning, carrying out necessary planning, ensuring and enforcing compliance with Subchapter H, Chapter 5, Texas Property Code.
(b) The enforcement unit shall:
(1) Maintain a task force unit to ensure compliance and carry out necessary planning specified under this subchapter;
(2) Accept written or electronic complaints alleging violations of Subchapter H, Chapter 5, Texas Property Code;
(3) Issue guidance and respond to written inquiries regarding the applicability of Subchapter H, Chapter 5, Texas Property Code to specific transactions;
(4) Coordinate with state agencies and political subdivisions affected by the implementation and enforcement of Subchapter H, Chapter 5, Texas Property Code; and
(5) Refer violations to the appropriate licensing or regulatory body.
§67.4.
(a) A facilitating entity that knows or should have known, after reasonable due diligence, that a purchase or acquisition of an interest in real property in this State violates Subchapter H, Chapter 5, Texas Property Code must submit a complaint to the OAG.
(b) Any person or facilitating entity, who has reason to believe that a purchase or acquisition of interests in real property in this State by designated foreign persons or entities violates Subchapter H, Chapter 5, Texas Property Code, may submit a complaint to the OAG.
(c) Complaints must be submitted electronically through the OAG's online complaint portal or by mail to the address designated by the OAG for this purpose.
(d) The OAG may prescribe a standardized complaint form to facilitate consistent filings under this section.
(e) If the OAG determines that a facilitating entity knew or should have known, after reasonable due diligence, of a violation but failed to file a complaint, the OAG may refer the matter to the appropriate licensing or professional disciplinary authority.
(f) The duty in this subsection includes transactions structured as post-closing transfers or assignments to affiliates, parents, subsidiaries, or entities under common ownership or control when used to effect or conceal a prohibited acquisition.
(g) A facilitating entity that conducts know-your-customer due diligence consistent with guidelines promulgated by an applicable regulatory body or that conducts such due diligence consistent with standards adopted in good faith by a recognized industry group, including but not limited to an official trade association or professional organization, and does not discover a violation of Subchapter H, Chapter 5, Texas Property Code, shall not be deemed to have "known or should have known" of a violation of Subchapter H, Chapter 5, Texas Property Code.
§67.5.
Notwithstanding §67.4 of this chapter (relating to Complaint Submission) any person who has reason to believe that a purchase or acquisition of an interest in real property in this State has occurred in violation of Subchapter H, Chapter 5, Texas Property Code, may submit a complaint to the OAG. A complaint submitted under this section may include any facts, documents, or information the person believes may assist the OAG in determining whether a violation has occurred.
§67.6.
(a) The OAG may establish an optional reporting mechanism, accessible through a designated form or section of the OAG's online portal.
(b) Any person, including facilitating entities, who has reason to believe that a parcel of real property in this State is owned by an individual or entity that meets the definitions set forth in Subchapter H, Chapter 5, Texas Property Code, but that was acquired prior to the statute's effective date of September 1, 2025 may file a report with the OAG.
(c) Reports submitted under this section are voluntary and do not constitute a complaint under §67.4 of this chapter (relating to Complaint Submission). Submission of a report under this section does not, by itself, indicate that a violation of Subchapter H has occurred.
§67.7.
(a) A person must respond to a civil investigative demand issued by the OAG under Subchapter H, Chapter 5, Texas Property Code by the date specified in the demand; however, the OAG must provide at least seven (7) calendar days for response unless exigent circumstances require a shorter timeframe. Upon written request and for good cause shown, the OAG may extend the response deadline.
(b) A person must respond to interrogatories issued by the Secretary of State (SOS) by the date specified in the demand; however, the SOS must provide at least seven (7) calendar days for response unless exigent circumstances require a shorter timeframe. Upon written request and for good cause shown, the SOS may extend the response deadline.
§67.8.
The OAG may consult, as appropriate, with the SOS, Texas Real Estate Commission, Texas Department of Insurance, Texas Department of Agriculture, and other relevant regulatory agencies to ensure the uniform implementation and enforcement of Subchapter H, Chapter 5, Texas Property Code.
§67.9.
(a) All complaints, civil investigative demands, interrogatories, and requests for information issued by the OAG, and all responses, records, and other information submitted or generated in connection with such requests under this chapter, are confidential and not subject to public disclosure, except as required by law.
(b) Confidential records under this section may be disclosed only:
(1) pursuant to a court order;
(2) to the SOS or other state agency identified in Subchapter H, Chapter 5, Texas Property Code;
(3) to federal agencies, as necessary to enforce Subchapter H, Chapter 5, Texas Property Code, or to promote the objectives of Senate Bill 17; or
(4) as otherwise authorized by law.
(c) Any agency receiving records under this section shall maintain the confidentiality of the records to the extent authorized by law.
§67.10.
(a) The OAG may prepare and propose a plan to develop and maintain a publicly accessible property search portal to assist the public in identifying certain real property interests in this State.
(b) The purpose of a portal is to provide a searchable interface concerning prohibited purchases or acquisitions of interests in real property by designated foreign persons or entities. The portal specifications may operate in a manner similar to other statewide public information registries, including but not limited to the Texas sex offender registration database. The portal will be designed to promote transparency, assist public awareness, and support deterrence of violations of Subchapter H.
(c) The OAG may coordinate with the federal, state, and local governmental entities, as necessary, in planning the portal and to ensure the accuracy, reliability, and timely update of information displayed in the portal.
§67.11.
Nothing in this chapter shall be construed to limit or affect the authority of the OAG to request, obtain, or compel the production of information under any other provision of Texas law, including but not limited to the Texas Constitution, statutes, or other applicable rules.
§67.12.
(a) All provisions of this chapter are severable.
(b) If any application of any provision of this chapter is held to be invalid for any reason, all valid provisions are severable from the invalid provisions and remain in effect. If any section or portion of a section is held to be invalid in one or more of its applications, in all valid applications the provisions remain in effect and are severable from the invalid applications.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on September 28, 2026.
TRD-202604182
Justin Gordon
General Counsel
Office of the Attorney General
Earliest possible date of adoption: November 8, 2026
For further information, please call: (512) 475-4291