SRC-AXB H.B. 734 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 734
76R9977  JMM-FBy: Goodman (Harris)
Jurisprudence
5/5/1999
Engrossed


DIGEST 

Currently, a spouse or fianc_ is authorized to enter into a marital
agreement converting community property to separate property;  however, the
property conversion cannot go from communal to separate.  Upon death,
separate property is taxed more heavily than community property by the
federal government.  H.B. 734 authorizes spouses to agree to convert
separate property to community property.  

PURPOSE

As proposed, H.B. 734 authorizes spouses to agree to convert separate
property to community property. 

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 Chapter 4, Family Code, by adding Subchapter C, as
follows: 

SUBCHAPTER C.  AGREEMENT TO CONVERT SEPARATE PROPERTY TO COMMUNITY PROPERTY

 Sec.  4.201.  DEFINITION.  Defines "property."

Sec.  4.202.  AGREEMENT TO CONVERT TO COMMUNITY PROPERTY.  Authorizes
spouses to convert certain property to community property. 

Sec.  4.203.  FORMALITIES OF AGREEMENT.  Sets forth requirements of an
agreement to convert separate property to community property.  Provides
that transferring property ownership between spouses is not sufficient to
convert the property to community property. 

Sec.  4.204.  MANAGEMENT OF CONVERTED PROPERTY.  Sets forth provisions to
which property converted to community property is subject. 

Sec. 4.205.  ENFORCEMENT.  Provides that a conversion to community property
is not enforceable if the spouse against whom enforcement is sought proves
that the spouse did not take certain actions.  Sets forth language which
provides fair and reasonable disclosure of the legal effect of converting
property. 

Sec.  4.206.  RIGHTS OF CREDITORS; RECORDING.  Provides that a property
conversion does not affect the rights of a preexisting creditor of the
spouse whose separate property is being converted.  Authorizes the
conversion in county deed records.  Provides that the conversion is
constructive notice to a good faith purchaser for value or creditor without
actual notice, if certain conditions are met. 

SECTION 2.  Effective date:  January 1, 2000, if a certain constitutional
amendment is approved; otherwise, this Act has no effect. 
 
SECTION 3.  Emergency clause.