By Ellis, et al.                                S.B. No. 1336

      75R7276 PAM-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to encumbrances that may be fixed on homestead property.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Sections 41.001(a) and (b), Property Code, are

 1-5     amended to read as follows:

 1-6           (a)  A homestead and one or more lots used for a place of

 1-7     burial of the dead are exempt from seizure for the claims of

 1-8     creditors except for encumbrances described by Subsection (b)

 1-9     [properly fixed on homestead property].

1-10           (b)  A homestead is not exempt from seizure as provided by

1-11     Subsection (a) for encumbrances that are [Encumbrances may be]

1-12     properly fixed on homestead property for:

1-13                 (1)  purchase money;

1-14                 (2)  taxes on the property;

1-15                 (3)  work and material used in constructing

1-16     improvements on the property if contracted for in writing as

1-17     provided by Sections 53.059(a), (b), and (c);

1-18                 (4)  an owelty of partition imposed against the

1-19     entirety of the property by a court order or by a written agreement

1-20     of the parties to the partition, including a debt of one spouse in

1-21     favor of the other spouse resulting from a division or an award of

1-22     a family homestead in a divorce proceeding; or

1-23                 (5)  the refinance of a lien against a homestead,

1-24     including a federal tax lien resulting from the tax debt of both

 2-1     spouses, if the homestead is a family homestead, or from the tax

 2-2     debt of the owner.

 2-3           SECTION 2.  Subchapter A, Chapter 41, Property Code, is

 2-4     amended by adding Section 41.0011 to read as follows:

 2-5           Sec. 41.0011.  CERTAIN ENCUMBRANCES FIXED ON HOMESTEAD EXEMPT

 2-6     FROM SEIZURE.  (a)  An obligation to pay property owners'

 2-7     association fees for maintenance and ownership of common facilities

 2-8     and services is a debt for which an encumbrance may be properly

 2-9     fixed on homestead property.

2-10           (b)  Homestead property is exempt from seizure for the claims

2-11     of creditors for an encumbrance described by Subsection (a).  A

2-12     property owners' association may collect on an encumbrance

2-13     described by Subsection (a) properly fixed on homestead property at

2-14     the time the homestead property is transferred.  Section 41.001(c)

2-15     does not apply to a claim of a property owners' association under

2-16     this section.

2-17           (c)  In this section, "property owners' association" has the

2-18     meaning assigned by Section 202.001.

2-19           SECTION 3.  This Act takes effect January 1, 1998, but only

2-20     if the constitutional amendment proposed by the 75th Legislature,

2-21     Regular Session, 1997,  permitting an encumbrance to be fixed on

2-22     homestead property for an obligation to pay certain property

2-23     owners' association fees without permitting the forced sale of the

2-24     homestead, takes effect.  If that amendment is not approved by the

2-25     voters, this Act has no effect.

2-26           SECTION 4.  The importance of this legislation and the

2-27     crowded condition of the calendars in both houses create an

 3-1     emergency and an imperative public necessity that the

 3-2     constitutional rule requiring bills to be read on three several

 3-3     days in each house be suspended, and this rule is hereby suspended.