BILL ANALYSIS


                                                    C.S.S.J.R. 46
                                                       By: Harris
                                                    Jurisprudence
                                                          4-19-95
                                   Committee Report (Substituted)
BACKGROUND

Historically, Texans have been able to secure third party financing
to satisfy federal taxes secured by a lien perfected against their
homestead.  Federal law provides that a lien will attach to real
estate of the taxpayer, regardless of whether that property is
exempt under state law.  Texans in the past have frequently
partitioned their homestead property in divorce proceedings or
separate agreements by transferring the homestead to one spouse or
cotenant and imposing a lien against the entire property to secure
the owelty of partition.  This practice was recognized as a valid
means of encumbering the homestead and facilitated the availability
of third party financing.

Recent litigation in state and bankruptcy courts has cast doubt on
the validity of a lien on homestead securing refinancing of federal
tax debt and of an owelty lien on the entire property.  Without
clarification of the law on refinancing of federal tax liens,
taxpayers may be unable to pay their tax debt and face the
possibility of the loss of their homestead.  Without clarification
of the effect of an agreement on financing of a partition of the
homestead, the agreement in divorce and cotenant partitions to
partition the homestead by sale to one of the owners will not be
adequately secured by a lien on the full homestead; consequently,
the spouse who retains a lien will face further expenses and the
other spouse will not be able to secure third party financing to
satisfy this debt.

PURPOSE

As proposed, C.S.S.J.R. 46 requires the submission to the voters of
a constitutional amendment authorizing an encumbrance to be fixed
on a homestead property for a debt of a spouse resulting from a
division or award of a homestead in a divorce proceeding and for
the refinance of a lien against a homestead.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 50, Article XVI, Texas Constitution, to
include in the list of debts for which a homestead may be sold
forcibly an owelty of partition imposed against the entirety of the
property designated as a homestead by a court order or by a written
agreement of the parties to the partition, including the payment of
a debt of one spouse in favor of the other spouse resulting from a
division or an award of a family homestead in a divorce proceeding,
the refinance of a lien against a homestead, including a federal
tax lien resulting from the tax debt of both spouses, if the
homestead is a family homestead, or from the tax debt of the owner. 
Authorizes a purchaser or lender for value without actual knowledge
to rely on an affidavit that designates other property as the
homestead of the affiant and that states that the property to be
conveyed or encumbered is not the homestead of the affiant. 
Deletes a provision requiring this amendment to become effective
upon its adoption.  Makes a conforming change.

SECTION 2. Requires this proposed constitutional amendment to be
submitted to the voters at an election to be held November 7, 1995. 
Sets forth the required language for the ballot.