1-1     By:  Oliveira, Williams, Seaman                       H.B. No. 1266

 1-2          (Senate Sponsor - Patterson)

 1-3           (In the Senate - Received from the House April 1, 1997;

 1-4     April 2, 1997, read first time and referred to Committee on

 1-5     Economic Development; April 25, 1997, reported favorably by the

 1-6     following vote:  Yeas 10, Nays 0; April 25, 1997, sent to printer.)

 1-7                            A BILL TO BE ENTITLED

 1-8                                   AN ACT

 1-9     relating to a loan the proceeds of which are used to purchase an

1-10     interest in a certain trust or entity that owns real property

1-11     located outside the United States.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Article 1.07, Title 79, Revised Statutes (Article

1-14     5069-1.07, Vernon's Texas Civil Statutes), is amended by adding

1-15     Subsection (g) to read as follows:

1-16           (g)  A loan, the proceeds of which are used primarily to

1-17     purchase an interest in a trust or other entity that has as its

1-18     principal asset real property located outside the United States, is

1-19     not subject to Subtitle 2 of this Title.  The loan is subject to

1-20     the interest rate limitations of Article 1.04 of this Title.  The

1-21     loan must comply with the laws of this state governing collateral

1-22     that may be used to secure the loan.  For the purpose of

1-23     determining the rate of interest on the loan, all interest

1-24     contracted for, charged, or received shall be amortized, prorated,

1-25     allocated, and spread over the full stated term of the loan.  The

1-26     principal amount of the loan may include any charge permitted for a

1-27     loan secured by an interest in real property that is not classified

1-28     as homestead property.

1-29           SECTION 2.  The importance of this legislation and the

1-30     crowded condition of the calendars in both houses create an

1-31     emergency and an imperative public necessity that the

1-32     constitutional rule requiring bills to be read on three several

1-33     days in each house be suspended, and this rule is hereby suspended,

1-34     and that this Act take effect and be in force from and after its

1-35     passage, and it is so enacted.

1-36                                  * * * * *