SRC-TBR H.J.R. 5 77(R)   BILL ANALYSIS


Senate Research Center   H.J.R. 5
By: Solomons (Shapleigh)
Business & Commerce
5/7/2001
Engrossed


DIGEST AND PURPOSE 

The Texas Constitution currently provides that homesteads are protected
from forced sale for the payment of all debts, except in certain
situations.  One exception is for work and material used in constructing
new improvements thereon, if contracted for in writing, or work and
material used to repair or renovate existing improvements if the contract
for the work and material is not executed within a specified time after the
owner makes an application for any extension of credit for work and
material. Current law provides that the specified time is 12 days.  Many
home improvement contractors contend that the waiting period is too long,
since the extension of credit may be approved sooner, and current law also
requires that the contract be signed in the office of a lawyer, title
company, or lender.  H.J.R. 5 requires the submission to the voters of a
constitutional amendment to shorten the waiting period to five days.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 50(a), Article XVI, Texas Constitution, as
follows: 

(a)  Requires the homestead of a family, or of a single adult person, to
be, and is hereby protected from forced sale, for the payment of all debts
except: for work and material used in constructing new improvements
thereon, if contracted for in writing, or work and material used to repair
or renovate existing improvements thereon if the contract for the work and
material is not executed by the owner or the owner's spouse before the
fifth, rather than 12th, day after the owner makes written application for
any extension of credit for the work and material, unless the work and
material are necessary to complete immediate repairs to conditions on the
homestead property that materially affect the health or safety of the owner
or person residing in the homestead and the owner of the homestead
acknowledges such in writing; or the conversion and refinance of a personal
property lien secured by a manufactured home to a lien on real property,
including the refinance of the purchase price of the manufactured home, the
cost of installing the manufactured home on the real property, and the
refinance of the purchase price of the real property. 

SECTION 2.  Provides that the following temporary provision is added to the
Texas Constitution: 

TEMPORARY PROVISION.  (a)  Provides that this temporary provision applies
to the constitutional amendment proposed by the 77th  Legislature, Regular
Session, 2001: 

(1)  prescribing requirements for imposing a lien for work and material
used in the construction, repair, or renovation of improvements on
residential homestead property; and 

 (2)  including the conversion and refinance of a personal property lien
secured by a manufactured home to a lien on real property as a debt on
homestead property subject to a forced sale. 

 (b)  Provides that the constitutional amendment takes effect January 1,
2002. 

 (c)  Provides that this temporary provision expires January 2, 2002.

SECTION 3.  Requires that this proposed constitutional amendment be
submitted to the voters at an election to be held November 6, 2001.
Requires the ballot to be printed to permit voting for or against the
proposition:  "The constitutional amendment prescribing requirements for
imposing a lien for work and material used in the construction, repair, or
renovation of improvements on residential homestead property and including
the conversion and refinance of a personal property lien secured by a
manufactured home to a lien on real property as a debt on homestead
property subject to a forced sale."