Relating to the establishment of the Texas Committee on Foreign Investment to review certain transactions involving certain foreign entities in coordination with the attorney general; creating a civil penalty.
SB 2117 creates the Texas Committee on Foreign Investment within state government to review certain foreign transactions that could affect Texas interests. The bill is aimed at mergers, acquisitions, and similar transactions involving “scrutinized foreign entities” when those transactions would give such entities control over Texas business assets, real property, or other assets. The review framework is tied to transactions affecting critical infrastructure, agricultural land, or sensitive personal data of Texas residents, and the secretary of state is directed to adopt rules setting the criteria for which transactions are covered.
Under the bill, a person intending to enter a covered transaction must notify the attorney general at least 45 days before closing. The attorney general then conducts an initial review and, if needed, a secondary investigation, and reports to the committee. If the attorney general determines a mitigation agreement is needed, the committee may approve or reject it, and the agreement can impose conditions such as data protections, security clearance requirements, access restrictions, and compliance reporting. The bill also makes information gathered during review confidential and authorizes the attorney general to enforce the chapter through civil penalties and injunctions.
The bill adds a new Chapter 426 to the Government Code and creates a state-level foreign investment review process modeled in part on federal CFIUS-style screening. It affects transactions involving foreign entities and can reach Texas business assets, agricultural land, critical infrastructure, and sensitive personal data, while excluding certain federally governed transactions, passive ownership interests, residential real estate, and certain public security interests. It also creates enforcement authority for the attorney general, including civil penalties of up to $50,000 per violation, injunctive relief, and attorney’s fees, and requires annual reporting to state leaders. The new chapter applies only to transactions governed by contracts entered into on or after January 1, 2026, with the act taking effect September 1, 2025.
The available voting history suggests the bill had generally strong support, with the Senate advancing it by wide margins on procedural and third-reading votes. The absence of committee transcript material limits direct insight into debate, but the bill’s movement through the process indicates that a majority viewed it as a national security and state security measure worth adopting. The final House action shown is a committee report sent to Calendars, indicating continued legislative progress.
The main points of contention likely center on the scope of state review over foreign investment, especially the definitions of “scrutinized foreign entity,” the breadth of covered transactions, and the potential effect on real estate, agriculture, and business deals. Privacy and confidentiality issues may also be debated because the bill authorizes review of sensitive personal data and allows the attorney general to collect confidential information outside public disclosure laws. Another likely concern is administrative and economic burden on transaction parties, though the bill attempts to limit that burden by excluding passive interests, residential property, and certain federally reviewed transactions, and by stating that some third parties such as title companies and lenders are not liable merely by participating in a transaction.