HBA-LJP H.B. 1580 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1580 By: Coleman Land & Resource Management 3/23/2001 Introduced BACKGROUND AND PURPOSE A property owners' association is formed to perform certain municipal functions with revenue from assessments on property owners in the subdivision. Under current law, a property owners' association is authorized to enforce existing restrictions incorporated in a map or plat filed in the county real property records, map records, or deed records, but is not authorized to create or reimpose restrictions. House Bill 1580 authorizes a property owners' association to create or reimpose restrictions on applicable subdivisions. 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. ANALYSIS House Bill 1580 amends the Property Code to provide that a residential real estate subdivision includes an unrestricted subdivision and a subdivision that created, modified, or extended restrictions under restrictive covenants applicable to certain subdivisions that burden only a portion of the subdivision (Sec. 204.002). The bill adds the creation of restrictions by petition to a property owners' association authority (Sec. 204.005). The bill provides that provisions relating to the creation of property owners' association do not apply to an unrestricted subdivision or a subdivision that created, modified, or extended restrictions under applicable provisions that burden only a portion of the subdivision (Sec. 204.006). The bill provides that for the purpose of creating restrictions in an unrestricted subdivision, an entity is considered a property owners' association under specified conditions (Sec. 204.0065). The bill authorizes the voting rights created with the formation of a formal property owner's association to be contingent on the payment of association dues or assessments and prohibits the association from imposing mandatory assessments (Sec. 240.012). The bill authorizes an unrestricted subdivision to reinstate expired restrictions, effective for ten years, by petition if an eligible petition committee is formed, the petition is approved by certain owners of at least 60 percent of the real property in the subdivision, and the procedure used in the circulation and approval of the petition to reinstate the expired restrictions complies with certain requirements. The bill provides that restrictions may only be reinstated to cause certain modifications. If the petition is not approved, then bill provides that the petition is void and another petition committee may be formed, but if the petition is approved, then the petition is binding on all properties in the subdivision or section, as applicable. The bill authorizes a subdivision that created, modified, or extended restrictions with property that is not affected by petition to use applicable procedures to reinstate the former restrictions before the former restrictions expire. The bill provides that unless the petition to reinstate the former restrictions provides otherwise, restrictions created, extended, or modified under applicable provisions continue to have effect (Sec. 240.012). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.