HBA-TYH, MAJ H.B. 763 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 763 By: Dutton Financial Institutions 3/31/1999 Introduced BACKGROUND AND PURPOSE Current law exempts homesteads from seizure for the claims of creditors except for encumbrances that are properly fixed on homestead property for purchase money, taxes on property, work and material used in construction improvements, owelty of partition against the property, and the refinance of a lien against a homestead, including federal tax liens. While it is not legal to place a lien on a homestead for assessment fees, some homeowners associations are circumventing the law by acquiring the right to place a lien on a homestead for assessment fees by having a contract for lien included in the deed restriction. H.B. 763 provides for an encumbrance to be properly fixed on homestead property for property owners' association fees and that the encumbrance may be collected at the time the property is transferred. 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 Sections 41.001 (a) and (b), Property Code, as follows: (a) Provides that the encumbrances described by Subsection (b), rather than encumbrances properly fixed on homestead property, are not allowed the exemption from seizure for the claims of creditors provided to a homestead and one or more lots used for a place of burial of the dead. (b) Makes conforming changes. SECTION 2. Amends Subchapter A, Chapter 41, Property Code, by adding Section 41.0011, as follows: Sec. 41.0011. CERTAIN ENCUMBRANCES FIXED ON HOMESTEAD EXEMPT FROM SEIZURE. Provides that an obligation to pay property owners' association fees for maintenance and ownership of common facilities and services is a debt for which an encumbrance may be properly fixed on homestead property. Exempts homestead property from seizure for the claims of creditors for such an encumbrance. Authorizes a property owners' association to collect on such an encumbrance properly fixed on homestead property at the time the homestead property is transferred. Provides that Section 41.001 (c) (Interests in Land Exempt from Seizure) does not apply to a claim of a property owners' association under this section. Provides that "property owners' association" has the meaning assigned by Section 202.001 (Definitions). SECTION 3. Provides that this Act takes effect January 1, 2000, but only if the constitutional amendment proposed by the 76th Legislature, Regular Session, 1999, permitting an encumbrance to be fixed on homestead property for an obligation to pay certain property owners' association fees without permitting the forced sale of the homestead, takes effect. Provides that this Act has no effect if that amendment is not approved by the voters. SECTION 4. Emergency clause.