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A BILL TO BE ENTITLED
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AN ACT
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relating to reporting requirements for certain loan and title |
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insurance transactions involving foreign companies and real |
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property located near military bases. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by |
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adding Chapter 282 to read as follows: |
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CHAPTER 282. CERTAIN LOANS FOR REAL PROPERTY NEAR MILITARY BASES |
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Sec. 282.001. DEFINITIONS. In this chapter: |
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(1) "Commission" means the Texas Military |
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Preparedness Commission. |
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(2) "Company" and "scrutinized company" have the |
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meanings assigned by Section 2270.0001, Government Code. |
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(3) "Financial institution" means: |
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(A) a bank as defined for any purpose by Section |
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201.002(a)(4), whether chartered under the laws of this state, |
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another state, the United States, or another country, including a |
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state savings bank; |
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(B) a savings and loan association chartered |
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under Chapter 62 or similar laws of another state; |
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(C) a federal savings and loan association, |
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federal savings bank, or federal credit union; or |
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(D) a credit union chartered under Chapter 122 or |
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similar laws of another state. |
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(4) "Reportable company" means a company described by |
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Section 282.003(a). |
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Sec. 282.002. APPLICABILITY. This chapter applies only to |
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a loan made by a financial institution for the purchase, lease, |
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development, or renovation of real property that: |
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(1) is located within 25 nautical miles of the |
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boundaries of a military base located in this state; and |
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(2) is not zoned or intended to be used for residential |
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use only. |
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Sec. 282.003. NOTICE AND REPORTING OF LOAN TRANSACTIONS |
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INVOLVING CERTAIN FOREIGN COMPANIES. (a) Before approving a loan |
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application to which this chapter applies, a financial institution |
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shall determine if the company applying for a loan is: |
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(1) a scrutinized company; |
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(2) owned by or the majority of stock or other |
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ownership interest of the company is held or controlled by: |
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(A) individuals who are citizens of China, Iran, |
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North Korea, or Russia; or |
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(B) a company or other entity, including a |
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governmental entity, that is owned or controlled by citizens of or |
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is directly controlled by the government of China, Iran, North |
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Korea, or Russia; or |
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(3) headquartered in China, Iran, North Korea, or |
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Russia. |
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(b) Subsection (a) applies regardless of whether: |
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(1) the reportable company's or its parent company's |
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securities are publicly traded; or |
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(2) the reportable company or its parent company is |
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listed on a public stock exchange as a Chinese, Iranian, North |
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Korean, or Russian company. |
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(c) In making a determination if a loan applicant is a |
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scrutinized company under Subsection (a), a financial institution |
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may rely on the list maintained by the comptroller under Section |
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2270.0201, Government Code. |
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(d) If a financial institution determines that the |
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applicant is a reportable company, the financial institution shall |
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promptly notify the seller or lessor of the real property of that |
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fact. |
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(e) Not later than December 31 of each year, each financial |
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institution shall submit a report to the commission that identifies |
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each loan to which this chapter applies that is made to a reportable |
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company. |
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(f) This section does not prohibit a financial institution |
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from approving an application for a loan submitted by a reportable |
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company. |
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SECTION 2. Subchapter C, Chapter 436, Government Code, is |
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amended by adding Section 436.1031 to read as follows: |
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Sec. 436.1031. TRANSACTION INFORMATION INVOLVING REAL |
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PROPERTY NEAR MILITARY BASES. (a) The commission shall include in |
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the biennial report required under Section 436.103: |
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(1) a list of the financial institutions and title |
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insurance companies that have, during each biennium, reported a |
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transaction to the commission under Section 282.003, Finance Code, |
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or Section 2704.153, Insurance Code; and |
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(2) the name of the reportable company involved in |
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each transaction. |
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(b) Information under this section is confidential and not |
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subject to disclosure under Chapter 552. |
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SECTION 3. Chapter 2704, Insurance Code, is amended by |
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adding Subchapter D to read as follows: |
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SUBCHAPTER D. TITLE INSURANCE FOR REAL PROPERTY NEAR MILITARY BASES |
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Sec. 2704.151. DEFINITIONS. In this subchapter: |
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(1) "Commission" means the Texas Military |
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Preparedness Commission. |
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(2) "Company" and "scrutinized company" have the |
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meanings assigned by Section 2270.0001, Government Code. |
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(3) "Reportable company" means a company described by |
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Section 2704.153(a). |
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Sec. 2704.152. APPLICABILITY. This subchapter applies only |
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to a title insurance policy or contract issued by a title insurance |
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company for real property that: |
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(1) is located within 25 nautical miles of the |
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boundaries of a military base located in this state; and |
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(2) is not zoned or intended to be used for residential |
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use only. |
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Sec. 2704.153. NOTICE AND REPORTING OF POLICY AND CONTRACTS |
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INVOLVING CERTAIN FOREIGN COMPANIES. (a) Before approving the |
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policy or contract application to which this subchapter applies, a |
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title insurance company shall determine if the applicant for a |
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title insurance policy or contract is: |
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(1) a scrutinized company; |
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(2) owned by or the majority of stock or other |
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ownership interest of the company is held or controlled by: |
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(A) individuals who are citizens of China, Iran, |
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North Korea, or Russia; or |
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(B) a company or other entity, including a |
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governmental entity, that is owned or controlled by citizens of or |
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is directly controlled by the government of China, Iran, North |
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Korea, or Russia; or |
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(3) headquartered in China, Iran, North Korea, or |
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Russia. |
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(b) Subsection (a) applies regardless of whether: |
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(1) the reportable company's or its parent company's |
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securities are publicly traded; or |
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(2) the reportable company or its parent company is |
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listed on a public stock exchange as a Chinese, Iranian, North |
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Korean, or Russian company. |
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(c) In making a determination if a policy or contract |
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applicant is a scrutinized company under Subsection (a), a title |
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insurance company may rely on the list maintained by the |
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comptroller under Section 2270.0201, Government Code. |
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(d) If a title insurance company determines that the policy |
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or contract applicant is a reportable company, the title insurance |
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company shall promptly notify the seller or lessor of the real |
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property of that fact. |
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(e) Not later than December 31 of each year, each title |
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insurance company shall submit a report to the commission that |
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identifies each title insurance policy or contract to which this |
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subchapter applies that is made to a reportable company. |
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(f) This section does not prohibit a title insurance company |
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from approving an application for a title insurance policy or |
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contract submitted by a reportable company. |
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SECTION 4. Chapter 282, Finance Code, and Subchapter D, |
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Chapter 2704, Insurance Code, as added by this Act, apply only to an |
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application for a loan or title insurance policy or contract |
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submitted on or after the effective date of this Act. |
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SECTION 5. This Act takes effect September 1, 2021. |