By Dutton                                              H.B. No. 861
         77R2086 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 53.254(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)  In this section, "property owners' association"
 2-7     has the meaning assigned by Section 202.001.
 2-8           (b)  An obligation to pay property owners' association fees
 2-9     for maintenance and ownership of common facilities and services is
2-10     a debt for which an encumbrance may be properly fixed on homestead
2-11     property.
2-12           (c)  Homestead property is exempt from seizure for the claims
2-13     of creditors for an encumbrance described by Subsection (b).  A
2-14     property owners' association may collect on an encumbrance
2-15     described by Subsection (b) properly fixed on homestead property at
2-16     the time the homestead property is transferred.  Section 41.001(c)
2-17     does not apply to a claim of a property owners' association under
2-18     this section.
2-19           SECTION 3.  This Act takes effect January 1, 2002, but only
2-20     if the constitutional amendment proposed by the 77th Legislature,
2-21     Regular Session, 2001, 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.