From September 1 onwards, a Texas law targeting specific foreign nationals will prohibit them from purchasing land.
Senate Bill 17 (SB 17), a new law in Texas, is set to take effect on September 1, 2022. This legislation, authored by Republican Sen. Lois Kolkhorst of Brenham, will prohibit property purchases by people, companies, and government-linked entities from China, Iran, North Korea, and Russia.
The law applies to farmland, homes, and commercial property. Violating SB 17 could result in a state jail felony, punishable by up to two years in jail and up to $10,000 in fines. Companies or organizations that violate SB 17 could be sued for up to $250,000 or half the value of the property involved in the violation.
The Chinese companies and investors held just over 383,900 acres in the U.S. in 2021, representing less than 1% of farmland in any state where purchases occurred. This suggests that the impact of foreign ownership on Texas land may not be as significant as some might assume.
However, the law has not been without controversy. Several organizations including data protection advocates, student associations, and labor unions have filed lawsuits against SB 17. The lawsuit in Texas involves Chinese nationals living in the state as plaintiffs and seeks to block SB 17 from going into effect.
The lawsuit in Texas, as well as similar lawsuits in other states, argues that the ban violates constitutional protections. Opponents of SB 17, including the Chinese American Legal Defense Alliance, have voiced their concerns about the potential chilling effect this law could have on people trying to buy or sell property in Texas.
Jane Shim, who directs AALDEF's anti-Asian violence program, warns that SB 17 could lead to discrimination against individuals based in China due to the uncertainty of how the law applies or what its fate is. She states that people might refuse to sell to someone who might be based in China due to these uncertainties.
Gov. Greg Abbott praised SB 17 on social media after signing it into law in June, calling it the strongest protection national security bill of any state passed. However, a federal judge dismissed the case earlier this month. Sadowsky and his team have since appealed to the U.S. Fifth Circuit Court of Appeals.
It's important to note that this type of legislation limiting foreign land ownership is not unique to Texas. More than half of the states in the country already have similar laws. The law was also passed in Florida, and similar lawsuits are being filed against it, with groups like The American Civil Liberties Union (ACLU) and the Asian American Legal Defense and Education Fund (AALDEF) involved.
As the legal battle continues, there's still a possibility that SB 17 could be temporarily blocked. The outcome of this case could have significant implications for property rights and foreign relations in Texas and beyond.
