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."