By Marchant H.J.R. No. 72
75R6071 DWS-F
A JOINT RESOLUTION
1-1 proposing a constitutional amendment authorizing a voluntary,
1-2 consensual encumbrance on homestead property for the purpose of an
1-3 equity loan.
1-4 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 50, Article XVI, Texas Constitution, is
1-6 amended to read as follows:
1-7 Sec. 50. (a) The homestead of a family, or of a single
1-8 adult person, shall be, and is hereby protected from forced sale,
1-9 for the payment of all debts except for:
1-10 (1) the purchase money thereof, or a part of such
1-11 purchase money;
1-12 (2) [,] the taxes due thereon;
1-13 (3) [,] an owelty of partition imposed against the
1-14 entirety of the property by a court order or by a written agreement
1-15 of the parties to the partition, including a debt of one spouse in
1-16 favor of the other spouse resulting from a division or an award of
1-17 a family homestead in a divorce proceeding;
1-18 (4) [,] the refinance of a lien against a homestead,
1-19 including a federal tax lien resulting from the tax debt of both
1-20 spouses, if the homestead is a family homestead, or from the tax
1-21 debt of the owner;
1-22 (5) [, or for] work and material used in constructing
1-23 improvements thereon, if [and in this last case only when] the work
1-24 and material are contracted for in writing, with the consent of
2-1 both spouses, in the case of a family homestead, given in the same
2-2 manner as is required in making a sale and conveyance of the
2-3 homestead; or
2-4 (6) an equity loan.
2-5 (b) The [nor may the] owner or claimant of the property
2-6 claimed as a homestead, if married, may not sell or abandon the
2-7 homestead without the consent of the other spouse, given in such
2-8 manner as may be prescribed by law.
2-9 (c) No mortgage, trust deed, or other lien on the homestead
2-10 shall ever be valid, except for a debt described by this section,
2-11 whether such mortgage, or trust deed, or other lien, shall have
2-12 been created by the owner alone, or together with his or her
2-13 spouse, in case the owner is married. All pretended sales of the
2-14 homestead involving any condition of defeasance shall be void. A
2-15 purchaser or lender for value without actual knowledge may
2-16 conclusively rely on an affidavit that designates other property as
2-17 the homestead of the affiant and that states that the property to
2-18 be conveyed or encumbered is not the homestead of the affiant.
2-19 (d) In this section, "equity loan" means an extension of
2-20 credit under a written agreement that is:
2-21 (1) secured in whole or in part by a voluntary lien on
2-22 or other consensual security interest in a homestead; and
2-23 (2) created with the consent of each owner and the
2-24 spouse of each owner, in accordance with applicable statutory
2-25 requirements.
2-26 SECTION 2. This proposed constitutional amendment shall be
2-27 submitted to the voters at an election to be held November 4, 1997.
3-1 The ballot shall be printed to permit voting for or against the
3-2 proposition: "The constitutional amendment extending homeowners'
3-3 rights to borrow voluntarily against the equity in, and establish a
3-4 valid lien on, their homesteads according to specific guidelines
3-5 for purposes in addition to those currently provided for under
3-6 state law without affecting homestead tax exemptions or eliminating
3-7 existing homestead protections against involuntary liens and
3-8 judgment creditors."