GEC S.B. 754 75(R)    BILL ANALYSIS


BUSINESS & INDUSTRY
S.B. 754
By: Harris (Pitts)
4-23-97
Committee Report (Unamended)


BACKGROUND 

Currently, Sections 16.035 and 16.036, Civil Practice and Remedies Code,
relate to the statute of limitations in regard to a "lien debt" on real
property.  Section 3.118, Business and Commerce Code, relating to statute
of limitations under the Uniform Commercial Code, may create a conflict
with those sections and, thus, lead to uncertainty relating to such lien
debts.  This bill would amend those sections in the Civil Practice and
Remedies Code to provide that they are not affected by Section 3.118,
Business and Commerce Code, relating to the statute of limitations for
real property liens.      
  
PURPOSE

As proposed, S.B. 754 amends Sections 16.035 and 16.036, Civil Practice
and Remedies Code, to provide that they are not affected by Section 3.118,
Business and Commerce Code, relating to the statute of limitations for
real property liens. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 16.035, Civil Practice and Remedies Code, as
follows:  

Sec. 16.035.  New heading:  LIEN ON REAL PROPERTY.  Requires a person to
bring suit for the recovery of real property under a real property lien,
rather than debt, or the foreclosure of a real property lien, rather than
a debt, no later than four years after the day the cause of action
accrues.  Requires a sale of real property under a power of sale in a
mortgage or deed of trust that creates a real property lien, rather than
secures a debt, to be made no later than four years after the day the
cause of action accrues.  Provides that the running of the statute of
limitations is not suspended against certain persons who have no notice or
knowledge of the suspension of the limitations period and who acquire an
interest in the property when a cause of action on an outstanding real
property lien has accrued for more than four years, except as provided for
in this section.  Provides that one of the two exceptions is provided for
in Section 16.036, Civil Practice and Remedies Code, providing for record
extensions of real property lines, rather than lien debts.  Provides that
on the expiration of the four-year limitations period, the real property
lien and a power of sale to enforce the real property lien become void.
Provides that the limitations period under this section is not affected by
Section 3.118, Business and Commerce Code.  Defines "real property lien,"
rather than "lien debt."  Makes conforming changes.  

SECTION 2. Amends Section 16.036, Civil Practice and Remedies Code, as
follows: 

Sec. 16.036.  New heading:  EXTENSION OF REAL PROPERTY LIEN.  Authorizes
the party or parties primarily liable for a debt or obligation secured by
a real property lien to suspend the running of the four-year limitations
period for real property liens, rather than lien debts, through a written
extension provided by this section.  Makes conforming changes.  

SECTION 3. Amends Section 16.037, Civil Practice and Remedies Code, as
follows:  
 
Sec. 16.037.  New heading:  EFFECT OF EXTENSION OF REAL PROPERTY LIEN ON
THIRD PARTIES.  Makes a conforming change.   

SECTION 4. Amends Section 3.118, Business and Commerce Code, by adding
Subsection (h), to provide that this section does not apply to an action
involving a real property lien covered by Section 16.035 or 16.036, Civil
Practice and Remedies Code.   

SECTION 5. Emergency clause.
  Effective date: upon passage.