HBA-NLM S.B. 496 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 496
By: Harris
Financial Institutions
4/20/1999
Engrossed



BACKGROUND AND PURPOSE 

Currently, Texas law prohibits home equity loans from being made on lots
that are more than one acre in urban areas.  S.B. 496  increases the
maximum size of an urban homestead to 10 acres and prescribes permissible
uses of rural and urban homesteads. In addition, this bill provides that a
homestead is considered to be urban, rather than rural, if at the time the
designation is made, the property is located within a municipality and is
provided certain services by the municipality. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 41.002(a), Property Code, to require the
homestead of a family or a single, adult person, not otherwise entitled to
a homestead, to consist of not more than 10 acres, rather than one acre, of
land which may be in one or more contiguous lots, if used for the purposes
of an urban home or as both an urban home and a place to exercise a calling
or business.  Makes a nonsubstantive change. 

SECTION 2. Amends Section 41.002(c), Property Code, to provide that a
homestead is considered to be urban, rather than rural, if at the time the
designation is made, the property is located within and provided certain
services by a municipality, rather than not served by municipal utilities
and fire and police protection.  Makes a nonsubstantive change. 

SECTION 3. Amends Section 41.005(b), Property Code, to make conforming
changes. 

SECTION 4. Amends Section 5.042(a), Property Code, to include among the
common-law rules that do not apply in this state,  the doctrine or rule
prohibiting an existing lien upon part of a homestead from extending to
another part of the homestead not charged with the debts secured by the
existing lien upon part of the homestead.  

SECTION 5. Provides that Sections 2 and 4 of this act take effect September
1, 1999. 

SECTION 6. Provides that Sections 1,3,and 6 of this Act take effect January
1, 2000, but  only if a constitutional amendment proposed by the 76th
Legislature, Regular Session, 1999, relating to increasing the maximum size
of an urban homestead to 10 acres, prescribing permissible uses of urban
homesteads, and preventing the overburdening of a homestead, is approved by
the voters. Makes application of Sections 1 and 3 of this Act prospective
to January 1, 2000. 

SECTION 7. Emergency clause.