SRC-AAA S.B. 854 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 854
By: Patterson
Economic Development
3-13-97
As Filed


DIGEST 

Currently, in order to purchase land or property in Mexico one must do so
through a trust fund set up in Mexico by a Mexican bank.  Texas law does
not allow loans to be written for use in a Mexican trust.  S.B. 854
provides that a loan, the proceeds of which are used primarily to purchase
an interest in a trust or other entity that has as its principal asset
real property located outside the United States, is not subject to Title
79(2), V.T.C.S., and the loan is subject to interest rate limitations of
Article 1.04 of this title. 

PURPOSE

As proposed, S.B. 854 provides that a loan, the proceeds of which are used
primarily to purchase an interest in a trust or other entity that has as
its principal asset real property located outside the United States, is
not subject to Title 79(2), V.T.C.S., and  the loan is subject to interest
rate limitations of Article 1.04 of this title. 

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 Title 79, Article 5069-1.07, V.T.C.S., by adding
Subsection (g), as follows: 

(g)  Provides that a loan, the proceeds of which are used primarily to
purchase an interest in a trust or other entity that has as its principal
asset real property located outside the United States, is not subject to
Subtitle 2 of this title and that the loan is subject to interest rate
limitations of Article 1.04 of this title.  Sets forth interest
requirements. Authorizes the principal amount of the loan to include any
charge permitted for a loan secured by an interest in real property that
is not classified as homestead property. 

SECTION 2. Emergency clause. 
  Effective date: upon passage.