The Department of the Treasury has proposed amendments to the regulations concerning real estate transactions near military installations, which could significantly impact landowners in Texas. Here’s a summary of the changes and how they may affect you as a Texas landowner:
Background
This proposed rule amends the regulations that implement the provisions in Section 721 of the Defense Production Act of 1950 by:
Adding 59 military installations to parts 1 and 2 of the appendix
Moving 8 military installations from part 1 (1 mile scrutiny) to part 2 (100 mile scrutiny)
Removing 1 installation from part 1 and two installations from part 2
Updates the name of 14 installations already listed and updates the location of 7 installations already listed
This section of the Defense Production Act of 1950 authorizes the Committee on Foreign Investment in the United States to “review transactions involving real estatethat meet specified criteria…and to mitigate any risk to the national security of the United States that arises as a result of such transactions” (https://www.law.cornell.edu/cfr/text/31/802.101). Section C exempts the purchase, lease, or concession of a) a single “housing unit” or b) real estate in “urbanized areas”, both as defined by the Census Bureau. Reviews must be completed within 45 days after the investigation begins. Investigations can last up to 45 additional days if CFIUS needs additional time to complete the assessment after the review period.
Key Amendments and Their Impact
Addition of New Military Installations
The proposal adds 59 military installations to the regulatory list. Notably, for Texas, this includes the Naval Air Station Corpus Christi, Joint Base San Antonio, and the Red River Army Depot in Texarkana. If you own land near these installations, the regulations will now cover your property (if the proposal is approved as written). Any real estate transactions with foreign entities in these areas will be subject to government review.
Reclassification of Installations:
Eight installations are being moved from Part 1 to Part 2 of the appendix, extending the radius of jurisdiction from one mile to 100 miles. For Texas, this includes Joint Base San Antonio, moving it to Part 2. This reclassification means that if your property is within 100 miles of Joint Base San Antonio, real estate transactions involving foreign buyers will now require scrutiny. This could affect property values and the ease of selling or leasing land.
Removal and Updates
The regulation updates the names and locations of several installations and removes some from the list. Keeping track of these changes ensures that you are aware of whether your property is affected by the new rules.
Why These Changes Matter
The proposed amendments aim to enhance national security by regulating foreign investments in sensitive areas. Military installations are critical for national defense, and proximity to these sites can pose security risks if foreign entities acquire nearby properties.
Specific Texas Installations Affected
Army Futures Command: Remains in Part 1, subjecting the surrounding area to real estate transaction reviews within one mile of the base
Ellington Field Joint Reserve Base: Remains in Part 1, subjecting the surrounding area to real estate transaction reviews within one mile of the base
Fort Bliss: Remains in Part 1, subjecting the surrounding area to real estate transaction reviews within one mile of the base
Fort Cavazos: Remains in Part 1, subjecting the surrounding area to real estate transaction reviews within one mile of the base
Naval Air Station Corpus Christi: Newly added to Part 1, subjecting the surrounding area to real estate transaction reviews within one mile of the base.
Joint Base San Antonio: Moved to Part 2, subjecting the surrounding area to real estate transaction reviews within 100 miles of the base
Red River Army Depot: Newly added to Part 1, impacting properties within one mile of the depot.
Dyess Air Force Base: Remains in Part 2, subjecting the surrounding area to real estate transaction reviews within 100 miles of the base
Goodfellow Air Force Base: Moved to Part 2, expanding the jurisdiction to 100 miles around the base
Laughlin Air Force Base: Remains in Part 2, subjecting the surrounding area to real estate transaction reviews within 100 miles of the base
The proposed regulatory amendments are designed to protect national security but come with implications for landowners in Texas with holdings around these ten military installations.
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