TEXAS LEGISLATION 2001
(Comments based in part on quoted Legislative Analysis and Legislation available at Texas Legislature Online at www.capitol.state.tx.us/
I. A. Family Law-Authorized Findings
HB 594 (effective 9/1/01). Under prior law, there was no statute that specifically authorized a person to request a court to state in writing its findings of fact and conclusions of law concerning characterization of each party’s assets, and the value or amount of community assets and claims in a suit for dissolution of a marriage in which a court has divided the estate. New Section 6.711, Family Code, "authorizes a party to request such findings of fact and conclusions of law, which can aid the review of these cases on appeal."
I. C. Appeal-Denial of Motions
HB 978 (effective 9/1/01). This bill amends Section 51.014, Civil Practice and Remedies Code, to provide that a denial of a motion for summary judgment, special appearance or plea to the jurisdiction, is not subject to automatic stay of commencement of trial, unless the motion, special appearance or plea is filed or requested no later than the date set by the trial court in a scheduling order, or 180 days after the date the defendant files an order or responsive pleading. A district court may issue an written order for interlocutory appeal in a civil action if the parties agree that the order involves a controlling question of law as to which there is substantial ground for difference of opinion, the parties agree to the order, or an immediate appeal would materially advance the termination of litigation.
I. E. Foreclosure-Notice of Receivership
SB 252 (effective 9/1/01). "Currently, during a divorce, a receiver may be appointed by the court to preserve and protect the property of the parties. In some cases, a person who holds a lien against the property may not know of the receivership. S.B. 252 amends (Section 6.502 of) the Family Code to require a receiver to notify lienholders of the appointment."
I. F. Power of Attorney-Accounting
HB 1883 (effective 9/1/01). This bill expands express obligations of the agent under a power of attorney to inform and account to the principal. New Section 489B, Probate Code, requires the attorney in fact or agent to timely inform the principal of all actions taken pursuant to the power of attorney. "Failure of the attorney in fact or agent to inform timely, as to third parties, shall not invalidate any action of the attorney in fact or agent." The attorney in fact or agent must maintain records of such action taken or decision made by the attorney in fact or agent. The principal may demand an accounting by the attorney in fact or agent. Unless directed otherwise by the principal, the attorney in fact or agent must also provide the principal all documentation regarding the principal’s property. If the attorney in fact or agent fails or refuses to inform the principal, provide documentation, or deliver the accounting within 60 days (or such time as directed by the principal or court), the principal may file suit to compel delivery of the accounting or assets, or to terminate the power of attorney. This section does not limit the right of the principal to terminate the power of attorney or make additional requirements or instructions to the attorney in fact or agent. The rights of the principal also may be exercised by a guardian of the estate of the principal or another personal representative of the principal.
I. F. Power of Attorney-Bankruptcy Effect
HB 1083 (effective 9/1/01). This bill adds new section 487A, Probate Code, to provide that the filing of a voluntary or involuntary petition in a bankruptcy by a principal does not revoke or terminate the agency. The act of the attorney is subject to the limitations and requirements of the U.S. Bankruptcy Code with respect to the principal’s property.
I. F. Probate-Assigned Judges
HB 538 (effective 9/1/01). "Prior to September 1, 1999, a judge was required to hear the proceedings of a case in the county in which the case was pending. Since a judge who sits in different counties may not return to a county in which a case is pending for extended periods of time, the parties involved in a case might have to wait to have routine court matters resolved. In 1999, the governor signed into law Senate Bill 1436, which authorizes an active, former, or retired district or statutory county court judge to hear judicial proceedings, except the trial on the merits, in a county different from the one in which the suit is pending, unless objected to by a party. Statutory probate judges were not included among such judges. House Bill 538 authorizes an assigned statutory probate court judge to conduct any proceedings, except the trial on the merits, in a county different from the one in which the suit is pending, unless a party objects."
I. F. Probate-Fee to Guardian
SB 1417 (effective 9/1/01). "Under Texas law, a guardian or temporary guardian of an estate can be paid a fee of five percent of the gross income of the ward's estate and five percent of all money paid out of the estate. If a court finds this amount to be unreasonably low, it can authorize reasonable compensation for the guardian, but there are no statutory guidelines to determine if that amount is unreasonably low or who to determine a subsequent reasonable compensation. S.B. 1417 (amends Section 665, Probate Code) regarding such determinations to authorize a court, on application of an interested person or on its own motion, to review and modify the amount of compensation if the court finds that the amount is unreasonably low when considering services rendered as guardian or temporary guardian."
I. F. Probate-Foreign Guardianship
HB 952 (effective 9/1/01). This bill adds new sections 891-893, Probate Code, to authorize the probate court to order the transfer of the guardianship of the person or estate of a ward to a court in a foreign jurisdiction, if the ward has moved permanently to the foreign jurisdiction. This bill does not grant the foreign court jurisdiction over real property located in Texas.
I. F. Probate-Guardian Windup
HB 1037 (effective 9/1/01). "Under current law, a probate court has the jurisdiction to settle the estate of a ward of the state only on the death of the ward or the attainment of majority or capacity by the ward. This provision has been construed to mean that the court can only approve a final accounting, even if assets need to be collected and liquidated, claims need to be approved or rejected, or litigation needs to be commenced, continued, or brought to an end. Such an interpretation may be inconsistent with other provisions that allow a guardian to pay other debts and expenses. (This bill amends Section 606, Probate Code and) clarifies the jurisdiction of a probate court in such guardianship matters…."
I. F. Probate-Guardianship Issues
HB 1132 (effective 9/1/01). This bill amends Section 485, Probate Code, to authorize a court to suspend the powers of a durable power of attorney until the date on which the term of the temporary guardian expires if a temporary guardian of the estate of the principal is appointed. Section 677A, Probate Code, is amended to revise the written declaration appointing an eligible person to be guardian of the person of a parent’s child. The declaration may be wholly in the handwriting of the declarant, or may be attested to in the presence of the declarant by at least two credible witnesses at least 14 years of age. Section 679, Probate Code, is amended to authorize the designation of guardian before the needs arise, to be wholly in the handwriting of the declarant, or to be attested to in the presence of the declarant by at least two credible witnesses at least 14 years of age. New Section 679A, Probate Code, authorizes a self-proving affidavit to a written declaration to designate guardian before need arises. New Section 865A, Probate Code, authorizes the court to order an in camera inspection of a will, codicil, trust, or other estate planning instrument of a ward upon the application of the guardian of the ward. Amended Section 883, Probate Code, provides that if the incapacitated spouse owns separate property, the court shall appoint the other spouse, or another person, in the order of precedence established under Section 677 as guardian of the estate to administer only the separate property of the incapacitated spouse. If a spouse who is not incapacitated is removed as community administrator or if the court finds the spouse would be disqualified or is not suitable to serve as community administrator, the court may order such spouse to deliver to the guardian of the estate of the incapacitated spouse a portion, not to exceed one-half of the community property subject to joint management and control, and shall authorize the guardian to administer the separate property of the incapacitated spouse, any community property subject to the incapacitated spouse’s sole management and the community property delivered to the guardian. Except as otherwise provided in Section 883, when a spouse is judicially declared to be incapacitated, the other spouse as surviving partner of the marital partnership has full power of management of the entire community estate as community administrator, including the part that the incapacitated spouse had toe power to manage in the absence of incapacity. The surviving spouse is presumed to be suitable and qualified to serve as community administrator. Section 3.301, Family Code, is amended to delete reference to incapacity as a basis for an order of the court to authorize the remaining spouse to sell community property subject to sole or joint management of the other spouse (and retains court authority for disappearance, abandonment, or permanent separation). Section 5.002, Family Code, is amended to state that the homestead may be sold by court order if the homestead is the separate property of the remaining spouse and the other spouse was judicially declared incapacitated by a court with original jurisdiction over probate matters. Sections 5.101, and 5.102, Family Code, are amended to delete authority for a sale of separate homestead of the remaining spouse or community homestead based on incapacity of the other spouse, and retains authority for such sale on disappearance, abandonment of the homestead, or report of missing in the military service.
I. F. Probate-Guardianship Notices; Sale Without Guardian
HB 3144 (effective 9/1/01). "(Amended Section 633, Probate Code) requires a sheriff or other officer to personally serve citation to appear and answer an application for guardianship on a proposed ward's spouse if the whereabouts of the spouse are known or can be reasonably ascertained. The… validity of a guardianship is not affected by the failure to notify all adult siblings …(Amended Section 687 provides that a) court must make a determination as to whether it is necessary to appoint physicians to examine the proposed ward at a hearing and requires an applicant, not later than the 4th day before the date of the hearing, to give to the proposed ward and the proposed ward's attorney ad litem written notice specifying the purpose, date, and time of the hearing. (Amended Section 745) increases, from $25,000 to $100,000, the maximum amount that a minor's estate may consist of in cash or cash equivalents for the guardianship of the estate to be terminated and the assets paid to the county clerk for management. (Amended Section 784) authorizes the guardian of an estate to expressly state in a notice to an unsecured creditor that the unsecured creditor must present a claim not later than the 120th day after the date on which the unsecured creditor receives notice or the claim is barred, if the claim is not barred by the general statutes of limitation…. Such notice must include the address to which claims may be presented and an instruction that the claim be filed with the clerk of the court issuing the letters of guardianship…. (Amended Section 786 provides that a) claim of an unsecured creditor for money that is not presented within the time prescribed by these provisions is barred….(Amended Section 887 increases), from $50,000 to $100,000, the maximum amount of liquidated and uncontested funds for which a resident or nonresident person is without guardianship, who is a creditor and who is entitled to such money is authorized to have the money paid to the county clerk of the county in which the creditor resides….(Amended Sections 889 and 890 increase) from $50,000 to $100,000, the maximum amount of an interest of …a minor or ward for which an application for an order to sell such interest may be made." Amended Section 889 clarifies that the court may order such sale of the net value of the interest of a minor in real or personal property, regardless of whether the interest derives from an estate of a decedent.
I. F. Probate-Heirship Proceedings
HB 2731 (effective 9/1/01). "In a proceeding to determine the heirs of a person dying intestate, a citation for determining heirship by publication is required. Although the Texas Probate Code does not explicitly require a probate judge to appoint an attorney ad litem to represent the interest of unknown heirs in an heirship proceeding, the Texas Rules of Civil Procedure require the appointment of an attorney ad litem when service has been made by publication. There is some concern that since this requirement is not explicitly found in the Texas Probate Code, a probate judge may not automatically appoint an attorney ad litem. In addition, current law does not prohibit a parent, managing conservator, guardian, attorney ad litem, or guardian ad litem of a distributee who is at least 12 years of age but younger than 19 years of age from waiving citation required to be served on the distributee. H.B. 2731 places in the Texas Probate Code the current requirement that a court appoint an attorney ad litem to represent the interest of unknown heirs (by amending Section 53, Probate Code), and prohibits a guardian of a minor from waiving citation for determining heirship required to be served on the minor (by amending Section 50, Probate Code)."
I. F. Probate-Jurisdiction
HB 536 (effective 9/1/01). "Prior to the 77th Legislature, in counties that did not have a probate court but did have a county court at law and a constitutional county court, the county court at law and the constitutional county court shared original jurisdiction over decedent's estates, guardianships, and mental health proceedings. In a county that has a statutory probate court, the statutory probate court is the only court with jurisdiction over probate, guardianship, and mental health matters. However, provisions in the Texas Probate Code indicate that in a county with a statutory probate court a person may file probate, guardianship, and mental health proceedings in the county court at law and the constitutional county court. House Bill 536 (amends Section 5, Probate Code, and) clarifies jurisdiction by establishing that in a county with a statutory probate court, the statutory probate court is the only one with probate jurisdiction."
I. F. Probate-Notice for Guardianship
SB 869 (effective 9/1/01). This bill amends Section 633, Probate Code, to provide that service in connection with the application for guardianship shall be made on a proposed ward’s spouse only if the whereabouts of the spouse are known or can be reasonably ascertained.. The failure to mail a copy of the notice to adult siblings of a proposed ward shall not affect the validity of the guardianship, but the failure to mail notice to adult children of the ward will continue to affect the validity of the guardianship.
I. F. Probate-Sale Without Guardian
HB 898 (effective 9/1/01). "Prior to the 77th Legislature, state law provided that in order for a guardian to sell property on behalf of a ward, the guardian must apply to the court for the authority to sell the property. Also, the court could only close and settle a guardianship if the cash assets were $25,000 or less, and any debts could only be received or paid if the amount of a debtor's or creditor's interest did not exceed $50,000. These limitations on guardianship proved to be burdensome to the guardian, as well as the ward. The law governing guardianship procedure in Texas involves multiple steps, and therefore, the process was considered to be expensive. In 1993, the legislature expedited the procedure for wards with a relatively small interest. An increase in the maximum value of the ward's interest to $100,000 and the ability of a court to terminate a guardianship of an estate for up to $100,000 may allow the expedited process to be used more frequently. House Bill 898 modifies the administration of certain property of incapacitated persons, wards, and former wards." HB 898 amends Sections 889 and 890, Probate Code, to provide that when the minor has an interest in real or personal property (whether or not derived from an estate of a decedent), and the net value of the minor’s interest does not exceed $100,000, then the natural or adoptive parent, or managing conservator, may seek an order to sell the minor’s interest in the property without being appointed guardian.
I. F. Probate-Transfer of Jurisdiction
HB 537 (effective 9/1/01). "Texas law authorizes a judge of a statutory probate court to transfer a case over which the court lost jurisdiction to a court located in the same county as the probate court, but did not provide for the situation in which a judge wished to transfer a case to the county from which the case originated. House Bill 537 (amends Section 25.00221, Government Code and) authorizes a judge of a statutory probate court that no longer has jurisdiction over a pending cause of action appertaining to or incident to an estate to transfer the cause of action to the originating court."
I. F. Probate-Will Prepared by Attorney
HB 2152 (effective 6/11/01). "Under current law (Section 58b, Texas Probate Code), the Texas Probate Code provides that a devise or bequest made to an attorney, an attorney's heir, or an employee of the attorney who prepares or supervises the preparation of a will is void. However, a person who makes a bequest and was related within the second degree of consanguinity or affinity to the testator is excepted from this provision. While the statute itself applies to devises or bequests, the exception only applies to bequests and could be construed to disallow any gift of real estate to the spouse or child of the attorney. In addition, gifts to great grandchildren of the testator are disallowed by current statutes, if those great grandchildren were the heirs of the attorney preparing the will because they are not within the second degree of consanguinity. H.B. 2152 (amends Section 58b and) includes the testator's spouse, an ascendant or descendant of the testator (of any degree), or (any other) person that is related within the third degree by consanguinity or affinity to the testator among persons allowed to make a valid devise or bequest to an attorney (who prepares or supervises preparation of the will or to an heir or employee of the attorney)."
II. A. Water-Floating Cabins
SB 1573 (effective 6/15/01). No pre-existing law has regulated the number of floating cabins in the bay area. This bill adopts a new Chapter 32, Parks and Wildlife Code, relating to floating cabins. Floating cabins are defined by Section 32.001 as structures securely moored in the coastal water of Texas used for habitation or shelter and not routinely used for transportation. Section 32.051 provides that a person may not own, maintain or use a floating cabin in the public coastal water unless a permit has been issued for the floating cabin. Section 32.055 provides that the department may refuse transfer an original or renewal license, permit or tag under certain circumstances. Section 32.058 provides that the commission may establish a program to purchase a floating cabin for which a permit has been issued. Section 32.101 requires a floating cabin to exhibit at least one white light that is visible from a 360-degree angle from sunset to sunrise. Section 32.102 provides that a permit holder may relocate a floating cabin, subject to department approval and the commission shall establish by rule criteria for allowing relocation.
II. A. Water-Piers
SB 1352 (effective 5/26/01). "Under law enacted in 1995, the owner of any public or private upland bordered by or contiguous to coastal public land (littoral property), without obtaining an easement from the board, is authorized to construct a pier which that is 100 feet or less in length and 25 feet or less in width. When the law was enacted, however, no grandfather clause was included providing for piers constructed before 1995 with dimensions greater than 100 feet in length and 25 feet in width, and the penalties in place for violating these current dimensions are costly. S.B. 1352 changes the maximum allowable dimensions of a pier constructed on littoral property to 115 feet or less in length and 25 feet or less in width." As amended, Section 33.115, Natural Resources Code, provides that an owner of littoral property may construct a pier without obtaining an easement from the board, if the pier (1) may be used for any purposes except commercial purposes, (2) is 115 feet (formerly 100 feet) or less in length and 25 or less feet in width, and (3) requires not filling or dredging. This change applies to any pier, including a pier constructed before the effective date of this act.
II. A. Water-Water Well Permits
HB 3587 (effective 9/1/01). "Under (preexisting) law, water wells that produce less than 25,000 gallons of water per day are exempt from the groundwater conservation district (district) permitting process. This broad exemption may be interfering with the ability of some districts to properly manage groundwater resources. H.B. 3587 reduces the scope of this permitting process exemption to include only certain water wells capable of producing less than 25,000 gallons of water per day." Amended Section 36.117, Water Code provides more specific exemptions from obtaining a drilling permit from a groundwater conservation district: those exemptions include a well on a tract of land larger than 10 acres if the water produced is used for domestic purposes or to provide water to livestock or poultry, and wells solely for specified mining, drilling or exploration operations permitted by the Railroad Commission.
II. A. Water-Water Well Spacing
HB 3037 (effective 6/15/01). Preexisting law "provides only minimum guidelines regarding the ability of groundwater conservation districts (district) to regulate the spacing and production of wells. As a result, districts must do their best to interpret what latitude they have in regard to regulating wells and enforcing those regulations." Amended Section 36.116, Water Code provides additional, explicit guidelines; it authorizes a district to control subsidence, prevent interference between wells, prevent degradation of water quality, and to prevent waste of water by promulgating rules to regulate spacing of wells and production limits.
II. A. Water-Water Wells
SB 2 (effective 9/1/01). "Texas currently faces many water challenges. The 75th Texas Legislature enacted a major water planning bill, S.B. 1, in 1999. S.B. 2 addresses the implementation and financing of the water strategies and recommendations identified in the last four years by Texas' 16 regional water planning groups." Changes include amendment to Section 36.117, Water Code, which provides more specific exemptions from obtaining a drilling permit from a groundwater conservation district: those exemptions include a well on a tract of land larger than 10 acres if the water produced is used for domestic purposes or to provide water to livestock or poultry, and wells solely for specified mining, drilling or exploration operations permitted by the Railroad Commission. The bill amends Section 36.116 to clarify authority of groundwater conservation districts to regulate spacing of water wells and production of groundwater to control subsidence, prevent interference between wells, to prevent degradation of water quality and to prevent waste. The bill also creates additional groundwater conservation districts.
II. B. Building Permit-Asbestos Survey
SB 509 (effective 9/1/01). "Currently, the Texas Department of Health regulates asbestos abatement in public and commercial buildings in Texas. The Texas Asbestos Health Protection Act and rules require a survey for asbestos containing building materials to be completed and any existing asbestos to be abated before any demolition or renovation of a public or commercial building. However, the compliance rate is low, as contractors claim to be unaware of the requirement and building permit offices do not always inform the permit applicant of the requirement. S.B. 509 (adds Section 13 to Article 4477-3 and) prohibits a municipality that issues a renovation or demolition permit for a public or commercial building from doing so unless the applicant provides acceptable evidence that an asbestos survey of the affected parts of the building has been completed by a licensed asbestos surveyor or an engineer or architect has certified the lack of asbestos in the affected parts of the building."
II. B. Environment-Brownfields
HB 1027 (effective 9/1/01). "Currently, many properties in Texas known as brownfields are abandoned or underused owing to the liability associated with contamination from old industrial activity. The Texas Natural Resource and Conservation Commission has undertaken initiatives to encourage the cleanup of these contaminated properties, but many brownfields still exit in Texas. (This bill) provides for the cleanup of these contaminated sites through the use of sales and use tax proceeds, the elimination of barriers discouraging the use of property tax breaks for contaminated sites, and encouraging the use of supplemental environmental projects."
II. B. Insurance-Burning
HB 1080 (effective 9/1/01). "Wildfires are a dangerous and costly threat throughout Texas. Texas landowners use prescribed burning as an efficient land management tool to reduce vegetative fuels that can cause wildfires. The 76th legislature established a board to certify burn managers to instruct people to properly utilize prescribed burning. Prior to the 77th Legislature, state law required a certified burn manager to purchase liability insurance of at least $1 million dollar per occurrence. House Bill 1080 (amends Section 153.082, Natural Resources Code to require) a certified burn manager to also have a minimum aggregate limit of at least $2 million dollars for a liability insurance policy."
III. A. Notices-Agricultural Development Districts
HB 1880 (effective 6/16/01). "Currently, there is no statute that allows for a district to be created for the purpose of processing an agricultural commodity. Such districts may aid the prosperity of Texas agricultural producers by enabling them to process their own products. This may allow producers to compete with corporations by providing a mechanism for producers to acquire capital to process agricultural products locally and exempting these districts from property taxes. H.B. 1880 (Chapter 60, Agriculture Code), titled the Agricultural Development Act, authorizes agricultural producers to petition the commissioners court of a county to create the Texas Agricultural Development District." Section 60.051, Agriculture Code, provides that the district may not impose ad valorem taxes, but it may impose assessments. Section 60.063 provides that any person who proposes to sell or convey real property in the district must give written notice to the purchaser that the land is located in the district. The notice must be given prior to or as an addendum or paragraph to the purchase contract. The purchaser must sign the notice. At closing, a separate copy of the notice with current information about the district and its power to impose assessments on the land shall be executed by the seller and buyer and recorded in the deed records. Notice is not required to be given unless a certified copy of the order creating the district has been recorded in the real property records. A purchaser, seller, lender, real estate broker, title insurance company, and title insurance agent may conclusively rely on the recorded certified copy of the order. Section 60.122 provides that the assessment runs with the land and successor landowners are bound to pay the district assessments, provided that notice to the purchasers was provided to the successor landowner under Section 60.063. Section 60.127 provides that the assessment is a first and prior lien against the property or agricultural product assessed, and is effective from the date of the order imposing the assessment. Section 60.132 provides that not later than the 30th day after the date on which an assessment order is issued, the district shall file a notice of the assessment in the deed records. The notice shall provide a description of the real property or the agricultural products that are subject to the assessment, state the name of the owner of the real property or agricultural products subject to the assessment, and describe how to contact the district for further information about the assessment.
III. A. Notices-Utility Service Provider
HB 2033 (effective 9/1/01). "Under current law, water and sewer utilities provide service to customers upon prepayment of certain costs, including the cost of capital projects such as extension of distribution and collection lines, the expansion of well production capability, the construction of additional overhead storage, or the adjustment of a wholesale water or sewer contract to accommodate additional service demand. In some cases, individuals purchase lots for residential or commercial purposes without realizing that the extension of water or sewer services may require additional expense on the individual's part, and that there might be a delay in the utility's ability to provide the services. This is problematic in areas served by private utilities, nonprofit water supply and sewer service corporations, and special utility districts, which typically service areas outside a municipality's jurisdiction. Current law does not require that the purchasers of property receive notice about possible additional expenditures or delay in services. H.B. 2033 (which adds new Section 13.257, Water Code) requires the notice to be provided to a purchaser of unimproved real property and gives the purchaser the option to recover certain damages if the notice is not provided by the seller." Section 13.257 defines a utility service provider as a utility, water supply or sewer service corporation, or a special utility district organized under Chapter 65, Water Code. If a person proposes to sell or convey unimproved real property in a certificated service area of a utility service provider, the person must give the purchaser a prescribed written notice. An executory contract that has a performance period of more than six months is considered a sale under this section. The section does not apply to a transfer under a lien foreclosure, a transfer by deed in lieu of foreclosure, a transfer by will or probate, a transfer to a governmental entity, a transfer within corporate limits of a municipality, a transfer of property that receives water or sewer service from a utility service provider on the date of transfer of the property, a transfer by a trustee in bankruptcy, a transfer by a mortgagee who acquired title at a foreclosure sale or deed in lieu of foreclosure, a transfer from one co-owner to the other, a transfer between spouses or to a person in the lineal line of consanguinity of the transferor, or a transfer of a mineral interest, leasehold interest or security interest.
The notice must be executed by the seller and must read as follows:
"The real property, described below, that you are about to purchase is located in the water or sewer service area of ___________________, which is the utility service provider authorized by law to provide water or sewer service to your property. No other retail public utility is authorized to provide water or sewer service to your property. There may be special costs or charges that you will be required to pay before you can receive water or sewer service. There may be a period required to construct lines or other facilities necessary to provide water or sewer service to your property. You are advised to contact the utility service provider to determine the cost that you will be required to pay and the period, if any, that is required to provide water or sewer service to your property.
"The undersigned purchaser hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real property described in the notice or at closing of purchase of the real property.
Signature of Purchaser
"(Note: Correct name of utility service provider is to be placed in the appropriate space.) Except for notices included as an addendum to or paragraph of a purchase contract, the notice must be executed by the seller and purchaser, as indicated."
The notice must be given to the prospective purchaser before the execution of the contract, separately or as an addendum or paragraph to the contract. If the seller fails to provide the notice, the purchaser may terminate the contact. If the seller provides the notice at or before closing and the purchaser elects to close even though the notice was not timely given, it is conclusively presumed that the purchaser waived all rights to terminate the contract and recover damages or other remedies. A seller, title insurance company, real estate broker, or examining attorney, or an agent, representative, or person acting on behalf of the seller, company, broker or attorney is not liable for damages for failure to provide the notice before the execution of the contract if the utility service provider did not file the map of the certificated service area in the real property records of the county and with the commission, and the commission did not maintain an accurate map, or unintentionally providing a notice that is incorrect before the execution of the contract. The purchaser must sign the notice of the contract that includes the notice. At closing a separate notice with the current information shall be executed by the seller and purchaser, acknowledged, and subsequently recorded in the real property records. In completing the notice, any seller, title insurance company, real estate broker, or examining attorney, or any agent, representative, or person acting on behalf of the seller, company, broker, or attorney may rely on the accuracy of the information that is filed in the real property records by the utility service provider and the accuracy of the map of the certificated service area. Any subsequent seller, purchaser, title insurance company, real estate broker, examining attorney, or lienholder may rely on the map filed in the real property records by the utility service provider. This section states that "An action may not be maintained against a title insurance company for the failure to disclose that the described real property is included within the certificated service area of a utility service provider if the utility service provider did not file in the real property records or with the commission the map of the certificated service area." A purchaser who subsequently sells is considered on the closing of the later sale to have waived any prior right to damages. Except as otherwise provided in this section, a purchaser may file suit for damages in the amount of all costs related to the property purchaser, interest, and attorney’s fees. In the alternative, the purchaser may file suit for damages in an amount not to exceed $5,000 plus reasonable attorney’s fees. An action for damages does not affect the validity of an existing mortgage. Suit must be brought within 90 days after discovery or four years after sale and conveyance. Suit may not be brought if the purchaser does not require proof of title by abstract, title insurance policy, or any other method.
III. A. Practice of Law-Notary Public
HB 3134 (effective 9/1/01). "Currently, there are increasing occurrences of notaries public falsely representing themselves as attorneys, particularly to immigrants and persons with little or poor English language skills." Amended Section 406.017, Government Code) adds to current provisions prohibiting representation that an notary is an attorney (unless the notary actually is an attorney), prohibition from stating or implying that the person is an attorney, soliciting or accepting compensation to prepare documents or representing a person, such as in an immigration proceeding, use of the phrase "notario" or "notario publico."
III. B. Escrow-Sale of Checks
HB 1166 (effective 9/1/01). "Selling checks can generally be characterized as the practice of accepting money in exchange for issuing a payment instrument that the purchaser can then use to make a payment, in lieu of using the purchaser's personal check or sending cash. Traditional non-bank check sellers are licensed in Texas under the Sale of Checks Act. The rapidly changing business environment due to the emerging electronic economy has raised concerns that the Sale of Checks Act does not extend its traditional protections beyond paper checks to electronic transactions that are substantively the same. (this bill amends Chapter 152, Finance Code, to provide) regulatory license requirements for check sellers and expands the definition of "check" to include electronic checks." Section 152.202 continues to exempt from licensing "a title company or attorney that issues an escrow or trust fund check."
III. C. Practice of Law-Attorney Disclosures
HB 1712 (effective 9/1/01). "Currently, some consumers experience difficulty finding certain information that is necessary in order to make informed decisions about the selection of an attorney for legal representation. (New Section 81.115, Government Code) requires the State Bar of Texas to compile a list of attorney profiles that would be made available to the public." The profile must contain the name of each law school attended, and date of graduation, the date the attorney became licensed, any specialty certification held by the attorney, the attorney’s primary practice location, any public disciplinary sanctions issued by the state bar during at least the 10-year period preceding the date of the profile, any public disciplinary sanctions issued by an entity in another state against the attorney during at least the 10-year period preceding the date of the profile, other states in which the attorney is licensed (if this information is provided by the attorney), the courts before which the attorney is admitted to practice (if this information is provided by the attorney), whether the attorney provides any language translating services, including services for impairment of hearing (if this information is provided by the attorney), and whether the attorney’s client service areas are accessible to persons with disabilities as defined by federal law (if this information is provided by the attorney). To administer this section, the state bar may collect an annual fee of not more than $10 from each member of the state bar.
IV. A. Insurance-Licensing
SB 414 (effective 9/1/01). "The Gramm-Leach-Bliley Act (Act), enacted by Congress in 1999, makes significant changes to the delivery of financial services. The Act requires increased uniformity in insurance agent licensing criteria among the various states. S.B. 414 revises the insurance agent licensing framework to allow proper implementation of the Gramm-Leach-Bliley Act in Texas." Article 21.01-2, Section 2A, Insurance Code, which relates to rebates and commissions, provides that it "does not apply to a person who is licensed under or holds a certificate of authority issued under Chapter 9 of this code." Article 21.01-2, Section 3A, which includes provisions relating to affiliated businesses and provides that an agent must hold itself out to the general public as an agent and not primarily for the purpose of soliciting, negotiating, or procuring insurance covering the license holder, member of the license holder’s family or business associate, provides that such provision (and certain other provisions) "do not apply to a person who is licensed under or holds a certificate of authority issued under Chapter 9 of this code."
IV. B. Insurance-Collateral Protection Insurance and Title Insurance
SB 707 (effective 9/1/01). This bill adds new Chapter 307, Finance Code, relating to collateral protection insurance. Collateral protection insurance is defined by Section 307.051 as insurance that "(1) is purchased by a creditor after the date of a credit agreement; (2) provides monetary protection against loss of or damage to the collateral or against liability arising out of the ownership or use of the collateral; and (3) is purchased according to the terms of a credit agreement as a result of a debtor's failure to provide evidence of insurance or failure to obtain or maintain insurance covering the collateral, with the costs of the collateral protection insurance, including interest and any other charges incurred by the creditor in connection with the placement of collateral protection insurance, payable by a debtor." It does not include title insurance, which is defined by Section 307.001 as "insurance that may be issued only by persons regulated under Chapter 9, Insurance Code, and that insures: (A) a lender or owner against loss caused by: (i) defective title held by the mortgagor or owner or insured; (ii) unknown mortgages or defective recording of mortgages or liens on real property; (iii) failure of any person to pay ad valorem taxes resulting in a lien; or (iv) failure to research properly title, taxes, liens, or other matters relative to the validity of loans or liens secured by real property or insurance; or (B) the validity, enforceability, or priority of any lien or title on real property."
IV. B. Insurance-Title Insurance Franchise Tax Exemption
SB 1689 (effective 9/1/01). This bill clarifies existing law relating to exemptions of insurance organizations performing management or accounting activities on behalf of nonadmitted insurers from franchise taxes, but makes no substantive change in the law relating to title insurers and title agents. As amended, Section 171.052, Tax Code, states: " Sec. 171.052. CERTAIN CORPORATIONS. An insurance organization, title insurance company, or title insurance agent authorized to engage in insurance business in this state now required to pay an annual tax under Chapter 4 or 9, Insurance Code, measured by its gross premium receipts is exempted from the franchise tax. An insurance organization performing management or accounting activities in this state on behalf of a nonadmitted captive insurance company under Chapter 101, Insurance Code, that is required to pay a gross premium receipts tax during a tax year is exempted from the franchise tax for that same tax year. Farm mutuals, local mutual aid associations, and burial associations are not subject to the franchise tax."
IV. B. Insurance-Title Insurance Tax Exemption
SB 1690 (effective 9/1/01). This bill amends provisions relating to taxation of certain insurers and insurance agents. It is not intended to make substantive changes to Article 9.59, concerning exemption from other taxes. As amended, Section provides that "Title insurance companies and title insurance agents subject to the tax levied by this article may not be required to pay any additional tax in proportion to their gross premium receipts levied by this state or any country or municipality except as otherwise provided by this code and the Labor Code. This exemption may not be construed to limit the applicability of other taxes, fees, and assessments that are imposed by other chapters of this code. This exemption may not be construed to prohibit the levy and collection of state, county, and municipal taxes that are imposed by other laws of this state, unless a specific exemption for title insurance companies and title insurance agents is provided in those laws The premium tax is levied on all amounts defined to be premium in this Chapter, whether paid to the title insurance company or retained by the title insurance agent, such tax being in lieu of the tax on the premium retained by the agent. The State of Texas facilitates the collection of the premium tax on the premium retained by the agent by setting the division of the premium between insurer and agent so that the insurer receives the premium tax due on the agent’s portion of the premium and remits it to the State."
IV. C. Insurance-Guaranty Associations
SB 1793 (effective 9/1/01). "There are three guaranty associations authorized by statute in the Insurance Code (including Article 9.48, Insurance Code). (Amended Section 551.079, Government Code) provides that the provisions of the Open Meetings Act do not apply to a meeting of the commissioner of insurance or the commissioner's designee with the board of directors of a guaranty association in the discharge of the commissioner's duties and responsibilities to regulate and maintain the solvency of a person regulated by the Texas Department of Insurance."
IV. C. Insurance-Limitations on Enforcement Action
HB 3254 (effective 9/1/01). "(Under preexisting law, there were) time limitations for when an investigation of a violation by the Texas Department of Insurance (department) or the commissioner of insurance (commissioner) must start. (Amended Section 81.001, Insurance Code) provides that the statute of limitations on investigations of a violation do not apply to discrimination on the basis of race or color…. (Amended) Section 81.001(c), Insurance Code, (provides) that this section does not apply to conduct that is a violation of Article 21.21-6 of this code, as added by Chapter 415, Acts of the 74th Legislature, Regular Session, 1995, or Section 4(7)(a), Article 21.21 of this code, as those provisions relate to discrimination on the basis of race or color, regardless of the time the conduct occurs."
IV. G. Recodification-Insurance
HB 2811 (effective 6/1/03). "The Texas Legislative Council is required by law (Section 323.007, Government Code) to carry out a complete nonsubstantive revision of the Texas statutes. The process involves reclassifying and rearranging the statutes in a more logical order, employing a numbering system and format that will accommodate future expansion of the law, eliminating repealed, invalid, duplicative, and other ineffective provisions, and improving the draftsmanship of the law, if practicable--all toward promoting the stated purpose of making the statutes "more accessible, understandable, and usable" without altering the sense, meaning, or effect of the law. In 1965 the council adopted a long-range plan of compiling the law into 26 codes arranged by general topics. Although some reorganization has occurred since the original proposal, the number of projected codes remains at 26. Proposed Titles 6 and 7 and Subtitle H, Title 8, Insurance Code, are a nonsubstantive revision of certain provisions of the existing Insurance Code applicable to insurers and related entities, including topics such as the licensure of insurers in general, life insurance, and certain group insurance programs for governmental employees. The included provisions of the Insurance Code are divided into three titles."
IV. M. Insurance-Banks as Insurance Agents
HB 2155 (9/1/01). "In November 1999, the United States Congress passed the Gramm-Leach-Bliley Act (GLBA), commonly referred to as the Financial Services Modernization Act. GLBA eliminates preexisting federal and state restrictions that prohibited common ownership of entities in insurance, securities, and banking activities. Additionally, GLBA preempts state agent licensing laws that prohibit or interfere with a depository institution's ability to sell insurance. State law in Texas is presently consistent with GLBA to the extent that it does not directly prohibit the types of affiliations contemplated by the Act. GLBA expands activities available to national banks and grants flexibility to federal banking regulators, but preempts certain state laws and prevents certain banks or bank affiliates from selling and underwriting insurance and securities. In an effort to ensure the future viability of the state charters, Texas state agencies with regulatory authority over financial institutions seek to address the inconsistencies between current state law and law enacted by GLBA. H.B. 2155 enhances state bank and trust company charters, authorizes activities beyond those allowed for national banks and their subsidiaries, clarifies and expands state law expressions of authority, and grants flexibility to the banking commissioner to allow state banks and trust companies to compete on a level provided to national banks with federal modernization of financial services." This bill amends Section 32.010, Finance Code, and 32.011 to provide that these laws relating to activities of Texas state banks do not alter or negate licensing or regulatory requirements by a functional regulatory agency in Texas, including licensing and regulatory requirements pertaining to insurance activities.
IV. N. Records-Online Government Information and Charges
SB 187 (effective 5/26/01). "The Electronic Government Task Force, authorized by the 76th Legislature, has successfully launched the TexasOnline Internet portal to provide a single point for citizens and businesses to access electronic government (e-government) services in Texas. Through TexasOnline, citizens can now renew their car registration and soon will be able to renew their driver's licenses. Also, Texas businesses have online access to filing and payment of sales tax, insurance agent license renewal, air conditioning and refrigeration contractors license renewal, and registration for certain events through the Texas Natural Resources Conservation Commission. TexasOnline has links to more than 200 forms and applications from 124 agencies, and many more government services are currently being developed for inclusion in TexasOnline. S.B.187 (adds new sections 2054.251, et seq, and 2054.111, et seq, Government Code, which) establishes a 15-member authority to provide vision, leadership, and operational oversight for the TexasOnline portal project and requires the authority to report to the legislature on the feasibility of allowing the sale and placement of advertising on TexasOnline." Section 2054.111 (e), Government Code, provides that a state agency or local government (including a county), which uses the TexasOnline Project (a common electronic infrastructure through which state agencies and local governments, including licensing entities), may charge a fee if "(1) the fee is necessary to recover the actual costs directly and reasonably incurred by the agency or local government because of the project; and (2) the (TexasOnline) authority approves the amount of the fee." Section 2054.111 also provides that "A local government (such as a county) may not charge a fee under Subsection (e) that is otherwise prohibited under Section 195.006 (which provides that the fee for electronic filing of documents such as real property records is the same as hardcopy filing) or 195.007 (which provides that the cost of electronic copies of electronically filed documents is subject to the limits of Section 552.262, Government Code - substantially the cost of reproduction), Local Government Code."
IV. N. Records-Electronic Filing of Reports
SB 481 (effective 9/1/01). "Under current law, most state agencies that require routine regulatory reports do not, for various reasons, accept electronic filings. S.B. 481 (adds new Section 2054.063, Government Code) requires the Department of Information Resources to advise and consult with state agencies to determine opportunities for allowing persons to electronically file required information with agencies, while identifying costs associated with electronic reporting."
IV. N. Records-Texas Online Portal
SB 1458 (effective 6/15/01). "Currently, Texas is moving forward with electronic government (e-government) in a decentralized fashion, with no one organization responsible for ensuring that e-government advances effectively and efficiently in an increasingly high-tech world. Lack of coordination between government entities concerning e-government has also resulted in increased costs to taxpayers resulting from unnecessarily replicated costs of developing and implementing systems, incompatible systems, poor interoperability, and ineffective security. S.B. 1458 (adds new Chapter 2055, Government Code, which) creates a number of new electronic services designed to benefit Texas citizens and businesses and to improve the efficiency and effectiveness of state and local government. (Sections 2055.001 and 2055.002 establish) an Electronic Government Program Management Office in the Department of Information Resources (DIR) to guide, promote, and facilitate the implementation of select e-government projects and to manage the ongoing development of the TexasOnline portal." That Office is to direct and facilitate the implementation of electronic government projects selected under the chapter.
IV. N. Records-Uniform Electronic Transactions Act
SB 393 (effective 1/1/02). This bill adopts the Uniform Electronic Transactions Act (UETA), with minor changes and supplemental provisions relating to public records in conformity with the federal E-SIGN legislation enacted in 2000. UETA has been adopted in various forms in approximately 36 states. This bill is the first comprehensive Texas law on electronic commerce, transactions, and records. New Chapter 43, Business and Commerce Code, is the Uniform Electronic Transactions Act. Section 43.002 contains definitions. Electronic record means "a record created, generated, sent, communicated, received, or stored by electronic means." Record means "information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form." Electronic signature means "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record." Transaction means "an action or set of actions occurring between two or more persons relating to the conduct of business, commercial or governmental affairs." Section 43.003 provides that UETA applies to electronic records and electronic signatures relating to a transaction. It does not apply to wills, codicils or testamentary trusts, or the UCC (except sections relating to statute of frauds). "A transaction subject to this chapter is also subject to other applicable substantive law (meaning that UETA does not generally deal with or affect substantive law or rights)." Section 43.004 provides that UETA applies only to electronic records and electronic signatures created, generated, or stored on or after January 1, 2002. Section 43.005 provides that UETA does not require that the parties use electronic signatures or electronic forms. The Chapter applies only to transactions if the parties have agreed to conduct the transaction by electronic means. "Whether the parties agree to conduct a transaction by electronic means is determined by the context and surrounding circumstances, including the parties’ conduct." Section 43.006 provides that UETA must be construed to facilitate electronic transactions. Section 43.007, which contains the essential terms of this bill, provides that "a record or signature may not be denied legal effect or enforceability solely because it is in electronic form…. A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation…. If a law requires a record to be in writing, an electronic record satisfies the law… If a law requires a signature, an electronic signature satisfies the law." Section 43.008 provides that if a law requires a person to provide, send, or deliver information in writing to another person, the requirement is satisfied if the information is provided, sent, or delivered in an electronic record "capable of retention by the recipient at the time of receipt." If another law requires a record to (1) be posted or displayed in a certain manner, or (2) be sent, communicated or transmitted in a specified manner, or (3) contain information formatted in a certain manner, then the record must be posted or displayed in the manner required by other law, and the record must be sent, communicated or transmitted as required by other law, and the record must contain the formatting required by other law. A requirement that a record be sent by first class mail may be varied by agreement, to the extent permitted by the other law. Section 43.009 provides that an electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including the efficacy of any security procedure. Section 43.010 provides that if a change or error in an electronic record occurs in a transmission between the parties to the transaction and the parties have agreed to use a security procedure, then the nonconforming party may avoid the effect of the error if the other party did not conform, and conformity would have disclosed the error. Section 43.011 provides that an acknowledgment or notarization may be satisfied if the electronic signature of the notary, together with the other information required to be included for the notary acknowledgment is "attached to or logically associated with the signature or record." A seal is not required, but any required information on the seal should be shown. Section 43.012 provides that "If a law requires that a record be retained, the requirement is satisfied by retaining an electronic record of the information in the record which… accurately reflects the information set forth in the record after it was first generated…and … remains accessible for later reference…. This section does not preclude a governmental agency of this state from specifying additional requirements for the retention of a record subject to the agency’s jurisdiction (note that this provision should authorize a governmental agency to make additional requirements for records filed with the governmental agency, not private records of a business regulated by the agency; the business should be able to avail itself of the cost savings of record retention in electronic means if it complies with this section)." Section 43.013 provides that evidence of a record or signature may not be excluded solely because it is in electronic form. Section 43.014 provides that a contract may be formed by the interaction of electronic agents. Section 43.015 provides that, unless otherwise agreed, an electronic record is sent if it enters an information processing system outside the control of the sender and is in a form capable of being processed by the recipient’s system; the electronic record is received when it enters an information processing system that the recipient has designated and is in a form capable of being processed by that system. Section 43.016 relates to transferable records, which include records that would be promissory note, if the issuer of the electronic record has expressly agreed that the electronic record is a transferable record. A person must have control of a transferable record so that there is a single authoritative copy that is unique, identifiable, and unalterable (except as permitted by this section). Any copy must be readily identifiable as a copy that is not an authoritative copy. The person having control of the transferable record is the holder. Section 43.017 provides that each state agency (which does not include local governments) shall determine whether it will send and accept electronic records. If a state agency does use electronic records and electronic signatures, the Department of Information Resources (DIR) and Texas State Library and Archives Commission may, pursuant to rulemaking the requirements and attributes for electronic records. Section 43.018 provides that DIR may encourage and promote consistency and interoperability with similar requirements of governmental agencies of Texas and other states and the federal government and nongovernmental persons. Section 43.019 provides that Chapter 43 modifies, limits or supersedes E-SIGN (15 USC Section 7001, et seq) as authorized by 15 USC 7002. Section 43.020 provides that this chapter does not authorize any activity prohibited by the Penal Code. Amended Section 191.009, Local Government Code (which previously has recognized that a county clerk may accept instruments by electronic filing if such filing and recording comply with the rules adopted by the Texas State Library and Archives Commission), provides that an instrument filed and recorded electronically is an electronic record as defined by Section 43.002. Amended Section 195.002, Local Government Code, provides that a county clerk may accept any filed electronic record and may electronically record that record if the filing and recording comply with the rules adopted by the Texas State Library and Archives Commission. This amendment authorizes electronic records, such as electronically created deeds and mortgages, to be filed and recorded. New Section 195.009, Local Government Code, provides that an instrument is filed with the county clerk when it is received by the county clerk, unless the county clerk rejects the filing within the time and manner provided by rules adopted for electronic filings (which provide for rejection within one business day). Section 6 of the bill (consistent with the exceptions in E-SIGN) provides that UETA does not supersede the provisions of 15 USC 7001(c ) [relating to affirmative consumer consent to consumer disclosures in electronic means] or 15 USC 7003(b) [which includes exemptions for wills, court orders and notices], and does not authorize electronic delivery of (1) any notice of cancellation or termination of utility services, (2) any notice of default, acceleration, repossession, foreclosure or eviction, or right to cure under a credit or rental agreement for a primary residence of an individual, (3) any notice of cancellation of health insurance or life insurance (excluding annuities), (4) any notice of recall of a product, or material failure of a product, that risks endangering health or safety, or (5) any document required to accompany transportation or handling of hazardous, toxic or dangerous materials. Section 6 of the bill states that if a federal regulatory agency exempts a specified category or type of record from the requirements relating to consent under 15 USC 7001(c ), or removes an exception from the type of document from the application of 15 USC 7001, then the applicable regulatory agency of this state may exempt the specified category or type of record. Section 7 of this bill states that it does not modify Chapter 15, Civil Practice and Remedies Code [which relates to venue], or Section 35.531, Business and Commerce Code [relating to applicable law for contract made over the internet].
IV. P. Privacy-Biometric Identifiers
HB 678 (effective 9/1/01). "It is foreseeable that transactions that now require a password or some other form of identification will utilize biometric technology in the future. Biometric technology is considered by some as the ultimate identifier. [New Section 35.50, Business and Commerce Code] prohibits a person [and new Section 559.001, Government Code prohibits a] governmental body from selling, leasing, or otherwise disclosing a person's biometric identifier--defined as a retina or iris scan, fingerprint, voiceprint, or record of hand or face geometry--unless the individual consented to the disclosure, the disclosure completed a financial transaction requested by the person, the disclosure was required or permitted under another state or federal law, or the disclosure was made by or to a law enforcement agency for a law enforcement purpose. [Section 35.50, Business and Commerce Code] also prohibits a person from capturing someone else's biometric identifier for a commercial purpose without that person's consent, and requires protective storage and transmission of that identifier to be equal to that of other confidential information."
IV. P. Privacy-Duties of Insurer; Regulation
SB 712 (effective 6/14/01). "In 1999, Congress enacted the Gramm-Leach-Bliley Act (GLBA), in part to require state insurance authorities to adopt requirements on privacy and disclosure of nonpublic personal financial information applicable to the insurance industry. Since states have to adopt privacy requirements for insurance companies, the National Association of Insurance Commissioners (NAIC) developed and adopted a model privacy regulation in an effort to aid states in adopting consistent privacy requirements for insurance companies. S.B. 712 (adds new Chapter 28A, Insurance Code, which) requires insurers and other entities regulated by the Texas Department of Insurance to comply with requirements of GLBA and requires the commissioner of insurance to adopt rules consistent with the federal requirements, based on the NAIC privacy model for GLBA." Article 28A.03 provides that such requirements do not apply to a covered entity (insurance licensees) if the entity acts solely as an insurance agent, employee or other authorized representative for another covered entity. The commissioner must adopt rules not later than 30 days after the effective date of this act. The commissioner shall attempt to keep the state privacy requirements consistent with federal regulations. Article 28A.102 provides that the commissioner may institute an action for civil penalties not to exceed $3,000 for each violation. If the court finds that the violations have occurred with a frequency as to constitute a pattern or practice, the court may assess a civil penalty not to exceed $250,000. The ALTA® Privacy memorandum and model disclosure form (with no opt-out provision) may be found at http://www.alta.org/.
IV. P. Privacy-Genetic Information Discrimination
SB 12 (effective 9/1/01). "Information about a person's genetic predispositions to certain diseases or medical conditions is increasingly available. The 75th Legislature made it illegal for employers to discriminate on the basis of genetic information or to require individuals to submit to genetic testing as a condition of employment. S.B. 12 (which amends Section 21.401, Labor Code and adds new Section 9032, Civil Code and the Insurance Code) expands the definitions of "genetic information" and "genetic test" to prevent employers, licensing authorities, and insurance companies from discriminating on the basis of certain genetic information or genetic tests. It also prevents employers from discriminating on the basis of family health information which may contain details that could be used to determine an individual's genetic predisposition to certain diseases."
IV. P. Privacy-Government Collection of Information
HB 1922 (effective 9/1/01). "Recent advances in technology have produced new ways of collecting, storing, and retrieving information with greater ease than before. However, these advances may cause individuals to feel relatively helpless in controlling how their personal information is being used by the government. H.B. 1922 (new Chapter 559, Government Code) establishes guidelines for the state in personal information collection that paces technology advances. The bill requires each state governmental body that collects information about an individual, either through a paper or electronic format, to prominently state that the individual is entitled to receive and review the information collected. H.B. 1922 mandates each state governmental body to establish a reasonable procedure for correcting personal information without imposing a charge on the individual, unless the provision conflicts with the open record requirements. H.B. 1922 also creates a state privacy task force to research privacy issues and recommend legislation to protect personal information collected by the state. "
IV. P. Privacy-Protection of Peace Officers’ Information
SB 247 (effective 9/1/01). "Currently, governmental agencies are authorized to release the personal information of peace officers, a county jailers, employees of the Texas Department of Criminal Justice, and commissioned security officers for which an agency receives an "open records" request under certain conditions. S.B. 247 (in amended Section 552.117, Government Code) prohibits state and local governmental agencies, such as a tax appraisal district, from releasing such personal information. This bill also (adopts new Section 552.1175, Government Code, which) provides that a governmental body that receives a confidentiality request in writing from certain individuals (those who are peace officers, county jailers, Texas Department of Criminal Justice employees, and commissioned security officers) may not release … record information to the public that contains the individual's name, home address, home telephone number, social security number, or whether that officer has family members." The provisions of Section 552.1175 appear to apply to real property records. The bill authorizes a confidentiality request for tax appraisal records under new Section 25.025, Tax Code, but provides that it does not prevent public disclosure of the information identifying the property by address if the information does not identify an individual who has made the election of confidentiality.
IV. P. Privacy-Security of State Agency Information
HB 2589 (effective 9/1/01). This bill requires the Department of Information Resources to administer a clearinghouse for information relating to protection of security of state agency information. Section 2054.121, Government Code, requires the department to adopt a policy that protects personal information of the public who access information from a generally accessible internet site maintained by or for a state agency. The state agency may not charge a fee for access, use or reproduction of information on its internet site, except to the extent expressly authorized by the legislature. The state agency may not sell or release an e-mail address unless the person affirmatively consents.
IV. P. Probate-Protection of Social Security Number
SB 723 (effective 9/1/01). "Currently, the Probate Code contains inconsistencies in need of clarification and update. S.B. 723 (amends Section 89A, Probate Code, and) addresses privacy concerns by removing social security numbers from the contents of an application for probate of will as muniment of title, thereby conforming it to other types of probate applications. It also substitutes a broader and more appropriate phrase (such as personal representative) for a limited one, and clarifies code regarding claims against decedents' estates."
IV. Recodification-Construction of New Law
HB 2809 (vetoed). "In Fleming Foods of Texas, Inc. v. Rylander, the Texas Supreme Court held that an omission from the 1981 Tax Code, a nonsubstantive revision, effected a substantive change in the law relating to the persons eligible to apply for a sales tax refund. The court made its holding despite repeated and clear statements in the law and on the face of the bill that no substantive change was intended. The court rejected the arguments made on rehearing in an amicus brief joined in by the Texas Legislative Council and numerous individual legislators and found that a change in a codified statute that was direct, unambiguous, and irreconcilable with prior law would be given effect as an intended, substantive change in the statute. This bill would (have established) a rule of construction to assist future courts in avoiding the result reached in Fleming and would establish a related rule of construction that any absence of legislative action in regard to the statutes at issue in Fleming does not constitute legislative acceptance of that holding. Furthermore, with most Texas statutes now codified into a topical code, a large component of statutory revision is editorial housekeeping. At each session of the legislature, the Legislative Council prepares for enactment a bill several hundred pages in length that accomplishes that housekeeping by renumbering or re-lettering sections of law, correcting cross-references, and the like. In addition, the housekeeping bill conforms code provisions to acts of the previous legislature and harmonizes multiple acts of the previous legislature affecting the same section, an action often unofficially taken by the private publisher of Vernon's Texas Codes Annotated. Because the housekeeping bill is considered by the same legislature that seeks to amend many of the statutes in need of update, each session many bills are longer and more complicated than necessary to accomplish the author's purpose because the bill must also accomplish or consider other bills accomplishing the housekeeping. H.B. 2809 gives similar powers to the Legislative council, eliminating the need for a large part of the housekeeping bill and simplifying bills that amend existing statutes." The Governor’s veto message stated "House Bill No. 2809 would fundamentally alter the manner in which Texas courts interpret the written laws of Texas. Besides implicating separation of powers concerns, this bill would tend to make it more difficult for ordinary Texans to ascertain the laws they are bound to obey."
V. A. Construction-Indemnities
SB 561 (effective 9/1/01). "Currently, Texas law provides that a contractor cannot be required to indemnify an engineer or architect from certain liability arising from the negligence of the engineer or architect. Engineers and architects, however, are often faced with contractual provisions that require the engineer or architect to indemnify an owner against liability arising from the owner's negligence. These provisions are uninsurable under the coverages typically carried by architects and engineers. S.B. 561 (amends Section 130.002, Civil Practice and Remedies Code and) provides that these provisions are void and unenforceable (in connection with a construction contract other than a contract for a single family or multifamily residence) to the extent that an engineer or architect is required to indemnify an owner against the owner's negligence. A similar provision applying to construction contracts entered into by governmental entities already exists in the Local Government Code."
V. A. Mechanics’ Liens-Prompt Payment under Bonds
HB 548 (effective 9/1/01). "Texas law requires a contractor to secure a payment bond and a performance bond on all public projects. H.B. 548 amends the Insurance Code (by adding new Article 7.20) to provide that the business of insurance includes the actions of a surety company, and sets forth provisions relating to the duties of a commercial surety." This bill applies to construction payment bonds under public or private construction projects and establishes prompt payment and response requirements. Any inconsistent term in a construction payment bond is void. This Article shall not be construed to "create a private cause of action."
V. A. Mechanics’ Liens-Statutory Bond Form
HB 409 (effective 9/1/01). This bill amends Section 53.202, Property Code, (relating to statutory payment bonds for mechanics’ liens) to require that the bond clearly and prominently display on the bond or an attachment to the bond, the name, mailing address, physical address, and telephone number, including the area code, of the surety company to which notice of a claim should be sent; or the toll-free telephone number maintained by the Texas Department of Insurance, and a statement that the address of the surety company may be obtained from the Texas Department of Insurance.
V. B. Liens-Agricultural Liens
SB 779 (effective 9/1/01). "Texas law does not provide contracted growers with a secured interest in the matter of bankruptcy cases. S.B. 779 (adds Sections 70.401, et seq relating to agricultural liens and) provides for an agricultural lien on the proceeds of grown crops produced on contract with a buyer."
V. B. Liens-Technical Corrections Relating to Abstracts of Judgment
HB 2804 (effective 9/1/01). This bill was intended to correct various statutes relating to abstracts of judgment, that may cause those abstracts of judgment recorded before September 1, 2001, to be invalid or ineffective to create liens against non-exempt real property. The bill amends Section 12.013, Property Code, which relates to perfection of a judgment lien, to delete reference to abstracts of judgment and to provide only that the judgment may be recorded. Amended Section 52.002, Property Code, "authorizes a judge or justice of the peace who rendered a judgment in favor of a person or the clerk of the court in which the judgment is rendered, on application of the person or the person's agent, attorney, or assignee, to prepare, certify, and deliver to the applicant an abstract of the judgment. (It also requires) the applicant for the abstract to pay the fee authorized by law for providing the abstract. (This amended Section authorizes) the attorney of a person in whose favor a judgment is rendered in a small claims court or a justice court or a person in whose favor a judgment is rendered in a court other than a small claims court or a justice court or that person's agent, attorney, or assignee to prepare the abstract of the judgment. (Amended Section 52.004, Property Code requires) a county clerk to immediately record in the county real property records, rather than judgment records, each properly authenticated abstract of judgment that is presented for recording.(This amended Section 52.004 deletes) text regarding the format of each recorded abstract (requiring the clerk to leave a space at the foot of the abstract of judgment). (The bill amends Section 52.005, which authorizes) satisfaction of a judgment in whole or in part to be shown by recordation of certain information."
V. B. Liens-Payment to Judgment Creditor
HB 2557 (effective 9/1/01). Existing Section 31.008, Civil Practice and Remedies Code, authorizes a judgment debtor to pay the court that rendered the judgment the amount owed to the judgment creditor if the judgment creditor does not respond to the notice and if the judgment debtor can swear in its affidavit that the location of the judgment creditor is not known to the judgment debtor. This bill amends the section to allow the judgment debtor to provide the statutory notice to the judgment creditor and secure a release if the judgment creditor refuses to accept payment of the amount under the judgment or accepts payment and refuses to execute a release. The court must set the matter for a hearing on a party’s motion or on the court’s own motion to determine whether a release should be executed. The court may direct the judgment debtor to prepare and file a recordable release with the clerk if the court finds that the amount of the judgment has been paid into the registry of the court, or the judgment creditor has accepted payment and refused to execute a release of judgment.
V. B. Liens-TWC Priority Lien
HB 2028 (effective 9/1/01). "Under the current system, if a business files bankruptcy or goes out of business and owes wages to its employees, the priority for lost wages is generally low. The Texas Workforce Commission (TWC) assists employees with claims to recover their lost wages and frequently has to file in district courts to obtain these wages, which is costly to the state. H.B. 2028 (adds new Section 61.0825, Labor Code, which) provides that a lien established by TWC against an employer indebted to the state for penalties or wages is superior to any other lien on the same property, including a lien for ad valorem taxes." Current Section 61.082 and 61.083 provide that the lien for wages and penalties paid by the Texas Employment Commission is perfected pursuant to Chapter 113, Tax Code.
V. D. Liens-Child Support
HB 1365 (effective 9/1/01). This bill makes technical corrections to provisions of the law relating to child support. Section 157.313, Family Code, is amended to provide that the child support lien notice shall include a statement that the lien attaches to all nonexempt real and personal property of the obligor that is located or recorded in the state, a statement than any ordered child support not timely paid in the future constitutes a final judgment for the amount due and owing, and a statement that the obligor is being provided a copy of the lien notice and that the obligor may dispute the arrearage. Section 157.314 is amended to provide that a copy of the child support lien notice shall be mailed to the obligor and shall be provided to another person known to have an ownership interest in the property. Section 157.317 continues to provide that the lien attaches to real property on or after the date the lien notice or abstract of judgment is filed with the county clerk. Section 157.326 is amended to provide that another person claiming an interest in property subject to the lien may file a suit to determine the extent of the person’s interest in the property. If the property is owned in part by another person, the court shall order partition of the property.
V. F. Taxes-Federal Estate
HR 1836 (Economic Growth and Reconciliation Act of 2001; 107-84). This federal legislation changes the gift taxes and estate taxes.
|Lifetime Gift Amount - $1,000,000|
|Equivalent Exemption for Federal Estate Taxes|
|2011 and thereafter (unless changed)||$1,000,000|
VI. A. Manufactured Housing-Tax Lien
HB 468 (effective 9/1/01). This bill amends Section 32.015, Tax Code, to delete the provisions regarding recording tax liens on manufactured homes, except those provisions relating to issuance of a tax certificate on payment of the taxes, penalties, and interest associated with a valid tax lien filed before September 1, 2001. The bill amends Section 32.03, Tax Code, to provide that "a bona fide purchaser for value or the holder of a lien, recorded on the manufactured home document of title, is not required to pay any taxes imposed in a tax year that begins before January 1, 2001, or penalties or interest on those taxes except for each year for which a valid tax lien was duly filed and recorded pursuant to provisions regarding recording tax liens on manufactured homes as the provisions existed on the date the lien was filed, and each year for which the owner of the manufactured home had constructive notice of the taxes pursuant to provisions regarding recording tax liens on manufactured homes as the provisions existed before September 1, 2001. The effect and priority of a tax lien that attaches to secure the payment of taxes imposed on a manufactured home in a tax year that begins on or after January 1, 2001, are those established by provisions relating to tax liens and the priority of tax liens over other property interests. A bona fide purchaser for value or the holder of a lien recorded on a manufactured home document of title is not required to pay any taxes imposed in a tax year that begins on or after January 1, 2001, or penalties or interest on those taxes, if the chief appraiser for the county in which the manufactured home is located, in connection with an application for a permit to transport the manufactured home, has issued a written statement that no unpaid taxes have been reported on the manufactured home due any taxing unit for which the appraisal district appraises property. On request of any person, the chief appraiser is required to issue a written statement as to whether the chief appraiser has received notice of any taxes on a manufactured home located in the appraisal district. The bill sets forth provisions regarding the requested statement and the duties of the chief appraiser upon receipt of the request. The bill sets forth the required duties of the chief appraiser if the information the chief appraiser receives indicates that there are unpaid taxes due to that taxing unit on the manufactured home or if the chief appraiser does not receive information that any taxes are owed on the manufactured home. A chief appraiser is authorizes to charge a person a fee not to exceed $10 for each requested statement. The bill authorizes the chief appraiser to enter into a contract that authorizes the assessor-collector to perform the same functions with regard to a requested statement."
VI. A. Taxes- Foreclosure Trustee Sale Exemption
HB 2833 (effective 7/1/01). "Prior to the 77th Legislature, state law did not explicitly exclude a non-attorney providing statutory foreclosure services from being regarded as a provider of debt collection services, which was considered a taxable event for state sales tax purposes. Due to this ambiguity in law, attorneys that were exempted from paying sales tax could have had a competitive advantage in providing foreclosure services over nonattorneys offering the same services. Many sought to make it clear that a trustee, whether an attorney or a non-attorney, would not be liable for sales tax in the trustee's role as a fiduciary for both the borrower and lender when conducting a foreclosure sale. House Bill 2833 (effects this exemption by amending Section 151.0036, Tax Code, to provide) debt collection service does not include a service provided by a person acting as a trustee in connection with the foreclosure sale of certain property."
VI. A. Taxes-Access to Appraisal Records
SB 1737 (effective 5/26/01). "The Tax Code states that property owners or their agents can view and inspect appraisal records relating to their properties. However, some appraisal firms operating under contract for appraisal districts have taken this language as permissive and not allowed full inspection or copying of appraisal documents. (Amended Section 25.195, Tax Code) clarifies and affirms that property owners or their agents are entitled to inspect and copy (the appraisal records, together with supporting data, and other material, and the records of the private appraisal firm under contract for appraisal services) all information pertaining to the property that the firm considers in appraising the property and prohibits action by an appraisal review board until the requested information has been provided."
VI. A. Taxes-Additional Taxes if Over 65 Homestead Exemption
HB 1940 (effective 1/1/02). "The 76th legislature amended the Property and Tax codes to allow a homeowner who turns 65 during a calendar year to receive the over-65 exemption on their homestead as if they were age 65 on January 1 of that year. Under this provision, the homeowner would benefit for the entire year because there was not a provision for prorating the exemption. Prior to the 77th Legislative session, if a homeowner that was receiving the over-65 exemption passed away during the year, the over-65 exemption was prorated off the property for the remainder of the calendar year. There have been concerns that this action could cause undue hardship on the estate or family of an elderly person. House Bill 1940 clarifies when to prorate because of an over-65 residence homestead exemption and modifies other provisions regarding residence homestead exemptions." Amended Section 26.10, Tax Code, provides for calculation of the additional tax against the former homestead of an owner 65 years of age or older who had the applicable residence homestead tax exemption on January 1, if the owner qualifies for different property for a residence homestead during the same year. Amended Section 26.112 provides that except as provided in Section 26.10, if the property qualifies at any time during the tax year for the exemption for a person 65 or older, the amount of taxes is calculated as if the person qualified for the exemption on January 1 and continued to qualify for the remainder of the tax year.
VI. A. Taxes-Appraisals
SB 865 (effective 5/28/01). "Under current law, if a chief appraiser discovers that property has been erroneously omitted from the tax roll in any of the five prior years, the chief appraiser is authorized to appraise the property and add it to the appraisal roll. This means that, for the 2000 tax year, the last day that a chief appraiser can add omitted property to the appraisal roll is December 31, 2005. Current law also allows the chief appraiser or a property owner to file a motion with an appraisal review board to correct certain errors in the appraisal roll for any of the prior five years, but this must be done before the end of five years from January 1 of the tax year. This means that, for the 2000 tax year, the last day that a chief appraiser or a property owner can file a motion to correct the appraisal roll is January 1, 2005. Thus, the chief appraiser time window for adding omitted property is almost one year longer than the time window for correcting the appraisal roll. S.B. 865 (amends Section 25.25, Tax Code, to provide that the appraisal review board on the motion of the chief appraiser or property owner may direct changes in the appraisal roll for any of the five preceding years and thus) changes the deadline for a property owner's motion to correct the appraisal roll to coincide with the deadline for a chief appraiser's addition of omitted property to the appraisal roll. Also under current law, property owners or chief appraisers are authorized to file motions with the appraisal review board to correct an erroneous appraised value on the appraisal roll. The law clearly states that such a motion cannot be filed if the appraised value is the result of a written agreement between the appraisal district and the property owner or the owner's agent. However, the law is silent as to whether a motion can be filed if the appraised value is the result of a hearing on a property owner's protest and a determination of that protest by the appraisal review board. Also, the ability of a chief appraiser to change the appraised value of property for the prior five years, a value that the chief appraiser originally established, detracts from the finality that property owners seek in their property tax liability. S.B. 865 limits the authority of a chief appraiser to change the appraisal roll and clarifies that a property owner cannot file a motion with the appraisal review board to correct an erroneous appraised value on the appraisal roll if the value resulted from an appraisal review board hearing or an agreement between the appraisal district and the property owner or owner's agent."
VI. A. Taxes-Charitable Exemptions
HB 1689 (effective 9/1/01). This bill adds new Section 11.184, Tax Code, to allow tax exemptions for charitable organizations, including local charitable organizations, and statewide charitable organizations. The property must be owned by the organization and used exclusively for an exemption from taxation. The exemption for incomplete construction may not exceed three years.
VI. A. Taxes-Credit Card Payment
HB 3162 (effective 6/11/01). Amended Section 132.002, Local Government Code, authorizes a municipality to accept payments of fees, fines, court costs and other charges by credit card without requiring collection of a fee.
VI. A. Taxes-Fraudulent Transfers
SB 1123 (effective 9/1/01). This bill amends existing law relating to tax collection. It adds new Section 111.024, Tax Code, providing for liability of a person who acquires a business or the assets of the business of a taxpayer through a fraudulent transfer or a sham transaction.
VI. A. Taxes-Impact Fees
SB 243 (effective 9/1/01). "Under current law, a city can charge (by an impact fee) a new development for the cost of capital improvements related to and used for the new development. S.B. 243 requires a political subdivision to credit the new development for a portion of the ad valorem tax and utility service revenues that will be generated by the new development, or 50 percent of the total projected cost of the capital improvements." Amended Section 395.016, Local Government Code, provides that, if the political subdivision has water and wastewater capacity available, the political subdivision may collect the impact fee at time of issuance of the building permit, for land outside the municipality the municipality shall collect the fee at time of application for individual meter connection for water or wastewater, of for a political subdivision that lacks authority to issue building permits in the area where the impact fee applies shall collect the fee when the application is filed for individual meter connection to the political subdivision’s water or wastewater system.
VI. A. Taxes-Overpayment
HB 2832 (effective 1/1/02). "Under current law, tax collecting authorities are not required to notify a taxpayer of an overpayment. A taxpayer who makes an overpayment of taxes may submit a written request or submit a form provided by the comptroller of public accounts within three years of making the payment; failure to do so constitutes a waiver of the right to a refund. Many taxpayers in Texas are unaware that an overpayment has occurred and thus have no reason to request a refund. Currently, most jurisdictions in Texas have a mechanism in place to notify taxpayers of overpayment, but some do not. H.B. 2832 (amends Section 31.11, Tax Code and) requires the collector for a taxing unit to notify a taxpayer of an overpayment of more than $5 and (amended Section 31.111, Tax Code) sets forth provisions regarding the refund of duplicate payments (and provides for a refunds as soon as practicable after the collector discovers the erroneous payment)."
VI. A. Taxes-Portable Over 65 Homestead Exemption
HB 506 (effective 1/1/02). "State law limits school taxes imposed on the residence homesteads of older Texans. When individuals reach the age of 65, the amount of ad valorem taxes imposed by a school district may be frozen and the tax freeze may be transferable to a subsequent homestead. However, ambiguity in the wording of the law created differing interpretations as to the ability of surviving spouses to transfer their deceased spouse's limitation to a subsequent homestead. A portable homestead exemption for surviving spouses helps them avoid being locked into homes that are too big or too expensive. House Bill 506 clarifies (Section 11.26, Tax Code) current law to guarantee that surviving spouses are entitled to the limitation of school property taxes on their subsequent homesteads." Section 11.26 already provides that "If the appraisal roll provides for taxation of appraised value for a prior year because a residence homestead exemption for persons 65 years or older was erroneously allowed, the tax assessor shall add, as back taxes due as provided by Subsection (d) of Section 26.09 of this code, the positive difference if any between the tax that should have been imposed for that year and the tax that was imposed because of the provisions of this section." Existing Section 26.10 provides for proration of the over 65 exemption if the exemption is lost during the year. Existing Section 26.112 provides that the over 65 exemption applies for the full year as if owned for that year by the qualifying person if owned at any time during that year.
VI. A. Taxes-Recapture of Abatement
SB 986 (effective 6/13/01). "Currently, Texas cities give financial incentives by way of tax abatement agreements for the purpose of job creation in their communities. However, a city has no recourse when the requisite job creation is not fulfilled. S.B. 986 (amends Section 312.205, Tax Code to give) cities the statutory authority to recapture lost property tax revenue if the owner of the commercial enterprise fails to create the number of new jobs required by the agreement or fails to meet the requirements of the agreement in any way."
VI. A. Taxes-Sale by Municipality
HB 858 (effective 6/14/01). "Current state law allows municipalities to resell tax foreclosed property. It also allows other taxing units party to a foreclosure to enter into an agreement with a municipality to sell such property for certain purposes. However, in this situation, municipalities are sometimes unable to present a clear title to the property to a purchaser. This may present a barrier to those who purchase the property; dissuade potential purchasers from attempting to buy foreclosed properties; and potentially undermine urban redevelopment efforts." House Bill 858 amends Section 34.051, Tax Code, to provide that a deed conveying property resold by a municipality for urban redevelopment purposes conveys all of the title held by each taxing unit that was a party to the judgment of foreclosure.
VI. A. Taxes-Sale Procedure to Non-Profit Cotenant
HB 3349 (effective 9/1/01). "Vacant inner city land could be used by community-based nonprofit organizations to provide safe, decent, and reasonably priced housing for low-income residents. However, the nonprofit organizations may have difficulty obtaining a clear title to the land due to complex ownership issues (such as multiple ownership of tracts of land, held in common by the nonprofit organization and other cotenants). (Amended Sections 29.001, 29.002, and 29.003, Property Code, provide) a judicial mechanism by which a community-based nonprofit organization can obtain clear title to land for the development of low-income housing." Formerly, Sections 29.001, et seq, authorized sale of property to a co-owner who held title jointly with other owners pursuant to devise, inheritance or survivorship agreement, in order to reimburse payment of taxes for three of the last five years. Amended Section 29.001 also authorizes sale to a nonprofit organization, if the nonprofit organization has paid the other owner’s share of taxes for any two years in a three-year period. New Section 29.0035 also provides that the demand for payment of reimbursement may be made to an unknown owner/defendant by publication in a newspaper for four consecutive weeks.
VI. A. Taxes-Tax Abatement
HB 3001 (effective 9/1/01). "Under current law, tax abatement agreements in reinvestment zones have a maximum term phase-in of 10 years that commences the year after the agreement is executed. However, some businesses that make capital investments may require more time to complete such investments. (Amended Section 312.204, Tax Code) authorizes tax abatement agreements in reinvestment zones to take effect on January 1 of the next year after the date the improvements or repairs are substantially completed."
VI. A. Taxes-Tax Abatement on Leasehold
SB 985 (effective 6/15/01). Amended Section 312.204, Tax Code authorizes a municipality to enter into a tax abatement agreement not to exceed ten years with an owner of a leasehold interest in real property to exempt a portion of the value of the leasehold or of the improvements or tangible personal property located on the real property, on the condition that the owner make specific improvements or repairs to the real property.
VI. A. Taxes-Tax Deferral for Disabled
HB 3364 (effective 6/14/01). Under prior law, "an individual 65 years or older may defer paying delinquent homestead property taxes by filing a tax deferral affidavit with the appraisal district. This benefits elderly individuals who may not work and who live on a fixed income. Medically disabled individuals suffer the same economic disadvantages as the elderly, but are not eligible for the same deferral. (Amended Section 33.06, Tax Code) entitles a medically disabled individual to defer or abate a suit to collect a delinquent residence homestead tax."
VI. A. Taxes-Tax Sales and Overpayment
HB 490 (generally effective 9/1/01). This bill amends various provisions of the Tax Code. It amends Section 31.11 to require the collector to mail to the taxpayer a written notice of overpayment accompanied by a refund application form, if the overpayment of taxes exceeds $5. The bill adds Section 31.111, to provide that if a person erred in making a payment of taxes because the identical taxes were paid by another person, the collector shall refund the payment to the person who erred in making payment. The bill amends Section 33.56, to provide that the taxing unit may not file a petition to cancel a tax sale unless the tax sale or resale purchaser, or purchaser’s heirs, successors or assigns, consents to the petition. The bill amends Section 34.01 to allow the commissioners court to designate the area in the county courthouse where tax sales must take place and shall record any designated area in the real property records. If the commissioners court does not designate the area, then the sale must occur in the area designated under Section 51.002, Property Code. The bill amends Section 34.04, to provide that the proceeds of sale first go to the tax sale purchaser under a prior canceled (voided) sale. This section restricts the ability of a person to take an assignment of an owner’s claim to excess proceeds.
VI. A. Taxes-Travel Trailer Exemption
HJR 44 (Vote 11/6/01; effective 1/1/02 if approved). This resolution would amend Article VIII, Section 1 to provide that the legislature may authorize a taxing unit, other than a school district, to exempt from ad valorem taxation, a travel trailer, regardless of whether the travel trailer is real or personal property, if the travel trailer is not held or used for the production of income, This amendment would expire January 1, 2004.
VI. A. Taxes-Wildlife Management Use
HB 3123 (effective 9/1/01). "Under current law, the comptroller of public accounts (comptroller) has the authority to develop guidelines for use by the chief appraiser in determining whether land qualifies for wildlife management use. However, since technical questions involving wildlife habitat are bound to arise, the Parks and Wildlife Department (department) may be best equipped to resolve issues of this nature. (New Section 23.521, Tax Code) requires the department, with the assistance of the comptroller, to develop standards for determining whether land qualifies for wildlife management use."
VI. C. Subdivisions-Authority to Regulate
HB 1445 (effective 9/1/01). "Prior to the 77th Legislature, a subdivision in the extraterritorial jurisdiction (ETJ) of a municipality was subject to both municipal and county development regulations. This may have led to unnecessary expenses and delays for property owners because municipalities and counties have different standards, requirements, and levels of authority over subdivisions. (Amended Section 242.001, Local Government Code) provides for an agreement between the county and the municipality to regulate a subdivision in the ETJ of a municipality (and the agreement may identify the governmental entity authorized to regulate subdivision plats and issue related permits or apportion the land subject to control by that governmental entity)."
VII. C. Public Property-Conveyance to NonProfit
HB 122 (effective 9/1/01). This bill adds new Section 253.011, Local Government Code. It authorizes a municipality of less than 1.9 million to transfer property to a nonprofit organization without payment or bid, if the agreement requires the nonprofit organization to use the land to primarily promote a public purpose, and if the agreement provides that the property reverts to the municipality in the event of failure to use the property in that manner.
VII. D. Building Codes-Uniform Residential Building Code
SB 365 (effective 1/1/02). "Under current law, a municipality in Texas is authorized to adopt building codes regulating construction within its jurisdiction, but the differing building codes among municipalities may confuse contractors that work in multiple municipalities, which may cause delays throughout the construction process. Establishing a uniform residential building code and a residential electrical construction code may alleviate the problem. (This bill) provides for the adoption of the International Residential Code as a municipal residential building code and the National Electrical Code as the municipal residential electrical construction code in Texas. (New Section 214.211, Local Government Code, et seq adopt) the International Residential Code (IRC), as it existed on May 1, 2001 (at Section 214.212), as a municipal residential building code in this state and the National Electrical Code (NEC), as it existed on May 1, 2001 (at Section 214.214), as the municipal residential electrical construction code in this state. The bill provides that the IRC applies to all construction, alteration, remodeling, enlargement, and repair of residential structures in a municipality and provides that the NEC applies to all residential electrical construction applications. The bill authorizes a municipality to establish procedures for the administration and enforcement of the IRC and the NEC and to adopt local amendments to the IRC and the NEC. The bill authorizes a municipality to review and consider amendments made by the International Code Council to the IRC after May 1, 2001. The bill provides that the IRC does not apply to the installation and maintenance of electrical wiring and related components. The bill amends the Insurance Code to authorize the commissioner of insurance (commissioner) by rule to supplement the building specifications in the plan of operation with the structural provisions of the IRC in geographic areas specified by the commissioner. The bill provides that to obtain a certificate of compliance, a person must submit an application for windstorm inspection at the Texas Department of Insurance before beginning to construct, alter, remodel, enlarge, or repair a structure and that failure to submit a timely application may result in a certificate of compliance not being issued unless certain conditions are met…. The provision that requires municipalities to establish rules and take other necessary actions to implement building codes before January 1, 2002, takes effect September 1, 2001. The …definition of "residential" does not apply to properties with certain characteristics (it applies only to property which is detached one or two family residential, not more than three stories high, and not of the character of a facility for transient guests)." Information about purchase of copies of the International Residential Code (which are copyrighted and are incorporated but not reproduced in SB 365) may be found at http://www.intlcode.org/codes/order.htm.
VII. E. Water-Reservoir
HB 247 (effective 6/17/01). This bill amends Section 11.142, Water Code. It authorizes a person, without obtaining a permit, to construct on the person's property a dam or reservoir with normal storage of not more than 200 acre-feet of water for domestic and livestock purposes. It provides that a person who temporarily stores more than 200 acre-feet of water in such a dam or reservoir is not required to obtain a permit for the dam or reservoir if the person can demonstrate that the person has not stored in the dam or reservoir more than 200 acre-feet of water on average in any 12-month period. It also authorizes a person, without obtaining a permit, to construct on the person's property in an unincorporated area a dam or reservoir with normal storage of not more than 200 acre-feet of water for commercial or noncommercial wildlife management, including fishing, but not including fish farming.
VIII. A. Easement-Abutting Right of Access
SB 409 (effective 6/14/01). This bill relates to Texas Turnpike Authority division of the Texas Department of Transportation. It amends Section 361.232, Transportation Code, to provide that, if feasible, the authority shall provide access to properties previously abutting a county or public road that is taken for turnpike project and shall pay the abutting owner the expenses or resulting damages for denial of access to the road.
VIII. A. Easement-Access to Gated Communities
SB 1147 (effective 9/1/01). "Current law does not address emergency services' access to multi unit housing projects in unincorporated areas. S.B. 1147 (adds Section 352.111, et seq., Local Government Code, which) authorizes counties to regulate vehicular and pedestrian gates to apartment complexes and other multi unit housing projects to ensure access for emergency vehicles. It also authorizes counties to require owners of such housing projects to obtain permits to ensure compliance and provides that noncompliance is a Class C misdemeanor."
VIII. A. Easement-Rail Lines
SB 406 (effective 9/1/01). "The abandonment of rail lines over time has forced certain industries that have traditionally depended on rail to move their product to find alternative modes of transportation. If a rail line is abandoned and the rails removed, the economic opportunity is lost, most likely forever, because of the high cost to replace the infrastructure. This has contributed to an increase in truck traffic over state highways and local roads and bridges, causing increased congestion and roadway maintenance costs. (This bill adds new Article 6550c-2, relating to preservation of rail facilities and) authorizes the Texas Department of Transportation to preserve rail facilities by acquiring rail lines and other rail facilities and leasing those facilities to other operators."
VIII. A. Easements-Access Easement in Partition
HB 2168 (effective 9/1/01). "Under current law, when a piece of property is partitioned, the allotted shares of real property are subject to the same conditions and covenants that applied to the property prior to the partition. Although the retention of prior property rights serves to protect the people subject to a court decree, it sometimes leaves a partitioned piece of property with no reasonable access to a public road. Partitioned pieces of property are often located in an area where the previous property owners would have never foreseen the need for an easement. Problems also arise after the land is partitioned and one of the tract owners decides to sell landlocked property. When these situations arise, the affected parties could find themselves caught in expensive legal proceedings to decide where and on whose property an easement will be located. These situations could be avoided by resolving these issues prior to partitioning the land. H.B. 2168 (adds new Section 23.006, Property Code, which) requires the commissioners appointed to partition property to grant an access easement on a tract of partitioned property for the purpose of providing a reasonable entrance to and exit from an adjoining partitioned tract that does not have an existing means of access." It states that "The order granting the access easement shall contain a legal description of the easement." The easement may not be a width greater than the width prescribed by a municipality or county for a right-of-way. The easement route must be the shortest route to the adjoining tract that causes the least amount of damage to the tract subject to the easement and is the greatest reasonable distance from the primary residence and related improvements on the servient estate. The owner of the easement shall maintain the easement and keep it open for public use.
VIII. A. Easements-Excavation
HB 1669 (effective 11/1/01). "Currently, an excavator is required to contact a notification center 48 hours before beginning to dig. The notification center is then required to contact any operators of underground facilities that are used to produce, store, convey, transmit, or distribute electrical energy, gas, petroleum, steam, telecommunications service, or certain liquids (operator) that may have lines in the area where an excavator plans to dig. Upon receiving notification, operators are required to mark the location of those underground facilities prior to the 48-hour deadline only if the operator believes that marking the location is necessary. The operator is not required to notify the excavator of a decision to mark or not to mark, which can delay excavation. (Amended Section 251.157, Utilities Code) requires an operator to notify an excavator of a decision not to mark the location of underground facilities no later than 48 hours after the time the excavator gives notice of intent to excavate." Amended Section 251.152 requires the excavator to include a telephone facsimile number or e-mail address at which the operator may give notice of its intent not to mark the proximate location of the underground facility.
VIII. A. Easements-Excavation Buffer Zone
HB 1838 (effective 9/1/01). "The Texas Aggregate Quarry and Pit Safety Act was enacted by the 72nd Legislature and became effective August 26, 1991. Under current law, quarry and pit operators are permitted to dig to the edge of an adjacent property line, but the erosion associated with quarry operations may encroach on a neighboring property. (This bill adds new Section 133.901, Natural Resources Code, which) creates a buffer zone of 50 feet between the edge of a pit or a quarry and an adjacent property that is not owned or leased by the operator (in a county with a population of more than 400,000 and less than 475,000)." Existing Section 133.044 provides that "From and after November 1, 1991, no person responsible may open a new pit on a site for the extraction of aggregates in this state wherein the pit perimeter will be less than 25 feet from the outer right-of-way line of any public road or highway ("the setback distance")."
VIII. A. Easements-Water Districts
HB 924 (effective 9/1/01). "Currently, a water district or water supply corporation (corporation) is not authorized to require an applicant or developer, as a condition for service, to grant or provide a permanent recorded easement to a district or corporation. Occasionally, a district or corporation is required to move lines in response to road projects, resulting in significant costs that may be passed on to customers through higher rates. H.B. 924 (amends Section 49.218, Water Code to authorize) ... a water district or (water supply) corporation to require a service applicant or developer, as a condition for service, to grant or provide a permanent recorded easement to the district or corporation for…" reasonable access and use to allow the district or water supply corporation to for system-wide services. The district or water supply corporation may not require an applicant to provide an easement for a service line for the sole benefit of another person. The district or water supply corporation may require a developer to provide permanent recorded easements in a new subdivision to service the anticipated service needs of the subdivision.
VIII. A. Easement-Water Districts
SB 1444 (effective 6/17/01). This bill makes various technical corrections relating to water districts. Amended Section 49.218, Water Code, provides that a district or water supply corporation may require a service applicant, as a condition of service, to grant a permanent recorded easement dedicated to the district or water supply corporation that will provide a reasonable right of access and use to serve that applicant in providing systemwide service. The district or water supply corporation may not require an applicant to provide an easement for service lien for the sole benefit of another applicant. A District or water supply corporation may require a developer to provide permanent recorded easements to and throughout a new subdivision to serve the subdivision’s anticipated service demands on full occupancy.
VIII. C. Practice of Law-Department on Aging
HB 1420 (effective 9/1/01). "The Texas Department on Aging (department) provides a variety of services to Texas residents 60 years of age or older. However, the department is prohibited from rendering legal advice and consultation to the people it serves under the "practice of law" provision in the statutes. (New Section 81.1011, Government Code) provides that the definition of "practice of law" does not apply to technical advice, consultation, or other legal assistance rendered by an employee or volunteer of an area agency on aging affiliated with the department." This section authorizes such advice relating to a medical power of attorney or designation of guardian.
VIII. C. Restrictions-Enforcement by Municipality
HB 2580 (effective 6/16/01). "Many Texas cities rely on zoning to plan and control land use, while others, such as the city of Houston, rely on recorded covenants or deed restrictions. Zoning is listed in the Texas Tort Claims Act as a governmental function, while deed restriction enforcement is not mentioned. A recent appellate court case, Oldfield v. City of Houston, held that the enforcement of deed restrictions is a proprietary rather than a governmental function, hindering the ability of a city to enforce such restrictions. The decision has resulted in a number of difficulties for the city of Houston regarding deed restriction violations and their enforcement. H.B. 2580 (amends Section 101.0215, Civil Practice and Remedies Code to add) the enforcement of deed restrictions and actions filed by a municipality to enforce them to the list of the governmental functions of a municipality." The bill also adopts a new Section 230.007, Local Government Code, to provide that an action under that subchapter to enforce a land use restriction is a governmental function of the municipality.
VIII. E. Minerals-Disclosure with Royalty Payment
HB 981 (effective 1/1/02). "Under current law, certain information must accompany monthly royalty checks for proceeds derived from the sale of oil or gas production. This information often does not contain enough detail and it is difficult for royalty owners to determine whether or not they are being paid correctly. H.B. 981 (amends Sections 91.501-91.506, Natural Resources Code, to) provides that additional information be included with the monthly royalty check (to include the county and state in which the lease, property, or well is located, and the telephone number at which additional information regarding the payment may be obtained)."
VIII. F. Homestead-Mechanic’s Lien Contract for Repair and Renovation; Manufactured Housing Refinance
HJR 5 (Vote 11/6/01; effective 1/1/02 if approved). "(Section 50(a), Article XVI of) 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 (before execution of a contract for repair or renovation of existing improvements). 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. (This proposed amendment would) shorten the waiting period to five days." Attorney General Opinion JC-0357, dated March 27, 2001, concluded that "Section 62.003 of the Property Code, which converts a personal property lien on a manufactured home to a purchase money lien on real property when the manufactured home is converted to real property, does not create a valid purchase money lien on homestead property under article XVI, section 50 of the Texas Constitution." In response, HJR 5 proposes to amend Article XVI, Section 50(a) of the Constitution to add a new subsection (8), which would state that the homestead may be encumbered to secure: "(8) 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."
VIII. F. Liens-Homestead Cleanup
HB 1995 (effective 9/1/01). "Current law provides that encumbrances may be properly fixed on homestead property for purchase money, taxes on property, work and material used in constructing improvements on the property, an owelty of partition imposed against the property, and for the refinance of a lien against a homestead. However, the Texas Constitution also provides additional conditions under which an encumbrance may be properly fixed on homestead property or an extension of credit constituting a reverse mortgage. House Bill 1995 (amends current Section 41.001, Property Code to conform to the constitutional provisions and provide) that an encumbrance may be properly fixed on homestead property for an extension of credit that meets the requirements of the Texas Constitution (Section 50(a)(6), Article XVI, Texas Constitution concerning home equity loans) or a reverse mortgage (Section 50(k)-(p)) that meets the requirements of the Texas Constitution."
VIII. F. Marital Property-Reimbursement and Contribution
HB 1245 (effective 9/1/01). In 1999, the Texas legislature adopted Sections 3.401, et seq., Family Code, to provide statutory guidelines for reimbursement and contributions made during the marriage. "Currently, there are some concerns regarding the application of certain legislative actions that address interest equity. Of particular concern is the equity between the community estate of a married couple and the separate estates of the husband and wife and when one of these three marital estates makes an economic contribution to another marital estate. H.B. 1245 amends provisions regarding the economic contributions involved in the transactions that take place between marital estates and clarifies the differences regarding reimbursements and economic contributions." Section 3.402, provides that economic contribution is the dollar amount of the reduction of the principal amount of a debt secured by a lien on property owned by marriage, the reduction of principal amount of a debt secured by a lien on separate property received by gift, devise or descent during marriage, the reduction of the principal amount of a debt, including a home equity loan incurred for acquisition of or for capital improvements to property, the reduction of the principal amount of that part of a debt for which the creditor agreed to look for payment solely to the separate marital estate of the spouse on whose property the lien attached, refinancing of such debts to the extent of the reduction of such debts, and capital improvements to property. Economic contribution does not include expenditures for ordinary maintenance and repair, or for taxes, interest or insurance, or contribution by a spouse of time, talent or effort. Section 3.403 provides that the claim for economic contribution by one marital estate to another marital estate (community or separate estates) is the product of (1) the equity in the benefited property on the date of dissolution of marriage, death of spouse or disposition of the property, multiplied by (2) a fraction of which the numerator is the economic contribution to the property by the contributing estate, and the denominator is an amount equal to the sum of the (i) economic contribution to the property by the contributing estate and (ii) the equity in the property as of date of marriage or date of first economic contribution by the contributing estate and (iii) the economic contribution to the property by the benefited estate during the marriage. The amount of the claim may not exceed the equity in the property on the date of dissolution of marriage, death of a spouse, or disposition of the property. Section 3.404 provides that claims for contribution or reimbursement do not affect the rule of inception of title. The claim for economic contribution does not create an ownership interest but does create a claim against the property of the benefited estate, which matures on the dissolution of marriage or death of either spouse. Section 3.405 provides that the claim for economic contribution does not affect rights of management, control or power of disposition of marital property. Section 3.406 provides that the court shall impose an equitable lien of the property of a marital estate to secure the claim for economic contribution on the dissolution of marriage. On the death of a spouse, the court shall, on application for a claim of economic contribution brought by the surviving spouse or another person, impose an equitable lien on the property of a benefited marital estate to secure the claim for economic contribution. Subject to homestead restrictions, the equitable lien may be imposed on the entirety of the spouse’s property in the marital estate and is not limited to the benefited property. Section 3.408 provides that a claim for economic contribution does not abrogate another claim for reimbursement, which may include payment by one marital estate of unsecured liabilities of another marital estate, and payment for inadequate compensation for the time and effort of a spouse by a business entity under control of that spouse. Section 3.410 provides that a marital property agreement may waive a claim for reimbursement. Section 3.006 provides that proportional ownership of property by marital estates is governed by the rule of inception of title. Section 7.007 provides that on decree of divorce or annulment, the court shall determine the rights of both spouses to a claim for economic contribution in a manner the court considers just and right.
VIII. F. Taxes-Homestead Exemption
SB 141 (effective 9/1/01). "Currently, to file for a homestead tax exemption in Texas, an individual must be living at the property as of January 1 of that year. Some companies are sending letters to individuals that offer services to file a homestead exemption for the individual. Filing with the state is free. S.B. 141(adds new Section 41.0051, Property Code, which) requires that any written advertisement offering to designate homestead property for a fee contain a disclaimer to prevent any misrepresentation or misinterpretation." The disclaimer must be conspicuous, printed in 14-point boldface or uppercase, and that says substantially as follows:
"THIS DOCUMENT IS AN ADVERTISEMENT OF SERVICES. IT IS NOT AN OFFICIAL DOCUMENT OF THE STATE OF TEXAS."
The failure to provide the disclaimer is a deceptive trade practice act.
VIII. H. Probate- Non-corporate Trustee for Management Trust
HB 628 (effective 9/1/01). Under prior law, a corporate fiduciary (trust company, state bank, national bank) was required to serve as the trustee for a management trust set up for a ward. However, the small size of these trusts often made it difficult to find a corporate fiduciary that is willing to serve as trustee. Without provisions allowing the court to appoint a noncorporate trustee when no corporate trustee is willing to serve, creating such trusts could be difficult. Amended Section 867, Probate Code, authorizes a court to appoint a person other than a financial institution as a trustee under certain conditions and Section 868B requires a noncorporate trustee to file a bond in the amount of the principal of the trust with the county clerk's office.
VIII. H. Recodification-Trust Business, etc.
HB 2812 (effective 9/1/01). "This bill conforms Title 9, Government Code, Title 2, Insurance Code, and the Occupations Code, which were enacted by the 76th Legislature, to other acts of the 76th Legislature, makes corrections to the codes, conforms other laws to the codes, and codifies other existing laws as new provisions in the codes. The bill makes various nonsubstantive amendments to enacted codes, including amendments to conform the codes to acts of previous legislatures, correct references and terminology, properly organize and number the law, and codify other law that properly belongs in those codes,), (and includes provisions relating to multistate trust business - which retains the existing exemptions from licensing of a trust business under Section 182.021, Finance Code, of acting as an attorney, acting as a trustee under a deed of trust, performing escrow or settlement services if licensed under Chapter 9, Insurance Code, and acting as a qualified intermediary in a tax-deferred exchange). The bill renumbers and reletters provisions of enacted codes and changes references to eliminate duplicated citations, relocate misplaced provisions, and correct corresponding references. The bill provides that it is a nonsubstantive revision that does not affect other acts of the 77th Legislature."
VIII. I. Brokers-Inspection Recovery Fund
HB 695 (effective 9/1/01, except as otherwise provided). This bill amends Article 6573a, Section 23, to delete any requirement that recovery from the real estate inspection recovery fund be conditioned on showing that the judgment is not subject to a stay or discharge in bankruptcy, and increases payments under the fund to $12,500 from $7,500, and to limit recovery based on judgments against a licensed inspector from $15,000 to $30,000. The bill amends Article 6573b, Section 18 to provide that the sale of a residential service contract is not a good or service governed by Chapter 39, Business and Commerce Code (relating to cancellation of consumer transactions).
VIII. J. Cemeteries-Acquisition of Adjacent Land
HB 1737 (effective 5/21/01). "Current law authorizes a cemetery organization operating a cemetery in accordance with distance requirements to acquire land that is adjacent but not necessarily contiguous to the cemetery for cemetery purposes if additional land is required. The phrasing of adjacent, but not necessarily contiguous may inhibit the completion of a transaction for the acquisition of land for use by cemeteries. (Amended Section 711.033, Health and Safety Code) allows for the acquisition of land that is, at the closest point, no more than 200 feet from an existing cemetery." Adjacent is defined as meaning that part of land to be acquired has some common boundary with the existing cemetery, or a common boundary with a public easement, a utility easement, or a railroad right-of-way, some part of which has a common boundary with the cemetery. In no event shall the closest points be more than 200 feet apart.
VIII. J. Manufactured Housing-Manufactured Home Communities
HB 557 (effective 4/1/02). "Currently, Texas has fewer laws and regulations governing the relationship between a landlord and a tenant of a manufactured home community (community) than there are for the rental of other types of properties. As a result, many Texas tenants of a community endure unfair rental practices, including surprise rent increases, unfair or retaliatory evictions, harassment of tenant organizations, and month-to-month rentals without a lease agreement. H.B. 557 (adds a new Chapter 94, Property Code, which) requires landlords to provide tenants with a lease agreement and a current copy of community rules, requires landlords to maintain a healthy, safe, and functional community, prohibits landlords from entering tenants' homes without specified justifiable reasons, prohibits landlords from interfering with tenants' meetings, and sets forth acceptable grounds for eviction…. [Section 94.002] amends the Property Code relating to the relationship between a landlord and a tenant who leases property in a manufactured home community (community) for the purpose of situating a manufactured home or recreational vehicle on the property. [Section 94.002 states that it] does not apply to the relationship between a tenant who leases a manufactured home from the landlord, a landlord and an employee or agent of the landlord, a landlord who leases property in the community and a tenant who leases the property for the placement of personal property to be used for human habitation, excluding a manufactured home or a recreational vehicle…. [Section 94.008] authorizes a landlord to adopt community rules that are not arbitrary or capricious and to add to or amend such rules, but requires that a landlord give the tenant at least 90 days to comply with the rule if the change will require the tenant to expend funds in excess of $25…. [Section 94.051 provides that, at] the time a landlord receives a prospective tenant's application, the landlord is required to provide a copy of the proposed lease agreement, any community rules, and a separate disclosure statement….[Section 94.052 provides that a] landlord is required to offer the tenant a lease agreement with an initial lease term of at least six months, unless the tenant and landlord agree on a different lease term. The … landlord must provide notice to the tenant, regardless of the term of the lease, not later than the 60th day before the date of the expiration of the lease if the landlord does not renew the lease…[Section 94.053] specifies the information a lease agreement is required to contain and requires the landlord to provide the tenant with a copy of the lease agreement and a current copy of the community rules. [This Section] … provides that any illegal or unconscionable provision in a lease is void but that the invalidity of a provision does not affect other provisions of the lease that can be given effect without reference to the invalid provision. [Section 94.057 provides that a] landlord may prohibit a tenant from assigning a lease agreement or subleasing the leased premises if the prohibition is included in the lease agreement….[Section 94.054]…requires a tenant to disclose to the landlord before the lease agreement is signed the name and address of any person holding a lien on the tenant's manufactured home. [Section 94.055] sets forth provisions regarding notice of a lease renewal… [Section 94.004] prohibits a landlord from entering a tenant's home except in a case of emergency, a tenant's abandonment of the home, or when the tenant is present and consents or provides prior written consent for a specified date and time. The tenant is authorized to revoke the consent through written notification without a penalty…. [Section 94.009 provides that the] tenant is required to notify the landlord in writing of any change in the tenant's primary residence. If the tenant makes the request at the signing of the lease agreement or renewal, the landlord is required to mail all notices required by the lease agreement to the tenant's primary residence. Provisions regarding notice by mail do not apply if the notice is hand delivered to and received by a person 16 years of age or older occupying the leased premises….[Section 94.206 provides that a] landlord is authorized to terminate the lease agreement and evict a tenant if the tenant fails to timely pay rent or other amounts due under the lease that in the aggregate equal the amount of at least one month's rent, the landlord notifies the tenant in writing that the payment is delinquent, and the tenant has not paid the delinquent payment in full before the 10th day after the date the tenant receives the notice. [Section 94.205 provides that a] landlord is also authorized to terminate the lease agreement and evict the tenant if the tenant violates a lease provision, including a community rule incorporated in the lease…. A landlord is required to refund all or a portion of the security deposit unless the tenant fails to fulfill the lease agreement or there are damages or charges for which the tenant is legally liable. [Sections 94.103-94.109 set] forth provisions regarding the liability of a landlord for such a deposit and for procedures after the cessation of a community owner's interest in the premises….[Sections 94.151-94.162 require the landlord] to maintain a healthy, safe, and functional community and to make a diligent effort to repair or remedy conditions materially affecting the health or safety of a tenant, except for a condition present in or on a tenant's manufactured home. [Sections 94.152-94.157 provide] that the tenant has the burden of proof in a judicial action to enforce a right resulting from the landlord's failure to repair such a condition, except that the landlord has the burden of proof if the landlord does not provide a written explanation for delay in performing the repair. [These sections set] forth provisions regarding a landlord's liability for maintenance and repair requirements and provides that if the landlord is liable to a tenant, the tenant is authorized to remedy the condition and deduct the cost from a subsequent rent payment unless the cost exceeds $500 or the cost of a month's rent, whichever is greater. The … repairs based on a tenant's notice must be made by a company, contractor, or repairman that advertises in a telephone directory or newspaper in the manufactured home community's municipality or county or adjacent county….[Section 94.251 provides that a] landlord is prohibited, within six months after the date a tenant exercises a remedy, from retaliating against a tenant who exercises a remedy granted by the lease agreement or by law, requests a repair, or complains to a relevant authority of the condition of the community….[Section 94.005] provides that each common area facility must be available to tenants…. [Section 94.006 provides that a] landlord is prohibited from interfering with tenants' meetings related to manufactured home living. Any limitation on meetings must be included in the community rule. [Sections 94.301-94.303 specify] penalties for a landlord who violates these provisions, and for a tenant who files a suit in bad faith or for purposes of harassment. A specific remedy provided by this [law] supersedes the general remedy provided for a tenant and is in addition to any other remedy provided by law…. [Section 94.201 provides that the] maximum amount a landlord may recover as damages for a tenant's early termination of a lease agreement is an amount equal to the amount of rent that remains outstanding for the term of the lease and any other amounts owed for the remainder of the lease under the terms of the lease, except that the maximum amount is the equal of one month's rent if the tenant's manufactured home lot is reoccupied before the 21st day after surrender. [Section 94.202 provides that a] landlord has a duty to mitigate damages if a tenant vacates the lot before the end of the lease term… [Section 94.252] authorizes the owner of a manufactured home to sell a home located on the leased premises if the purchaser is approved in writing by the landlord and a lease agreement is signed by the purchaser. [This Section] prohibits a landlord from requiring the owner to contract with the landlord to act as an agent or broker in selling the home or requiring the owner to pay a commission or fee from the sale of the home if the owner of the manufactured home has not agreed in writing… The bill also sets forth provisions regarding a landlord's disclosure of information about ownership and management, eviction procedures, a landlord's authorization to terminate a lease for a change in land use, cash payment procedures, the filing of a law suit against a landlord, as it relates to the authorized agent for service of process, nonretaliation, a tenant's remedies for retaliation by a landlord, and invalid complaints [at Secs. 94.010, 94.203, 94.204, 94.007, 94.011, and 94.253-94.255]. [Section 94.003 provides that a] provision in a lease agreement or a rule in the community that purports to waive a right or to exempt a landlord or a tenant from a duty or from liability in this bill is void."
VIII. J. Moratorium-Residential Development
SB 980 (effective 9/1/01). "Municipalities are not required to hold public hearings and provide notice before adopting a moratorium ordinance. This can cause uncertainty and potential hardship for property developers. S.B. 980 conforms the moratorium adoption procedure to the zoning application procedure. S.B. 980 (adopts new Section 212.131, et seq., Local Government Code, which) sets out certain procedures and requirements for municipalities to list the purposes of a moratorium and limits the time-frame for the moratorium and subsequent extensions." Section 212.133 requires written findings before imposing a moratorium on property development affecting only residential property. Section 212.135 requires that a municipality determine that the moratorium is justified by demonstrating a need to prevent a shortage of essential public services. A moratorium not based on a shortage of essential public services is justified only by demonstrating a significant need for other public services, including police and fire facilities. Section 212.136 provides that a moratorium expires 120 days after adopted, unless extended. Section 212.137 provides that a moratorium must allow a permit applicant to apply for a waiver by claiming a right obtained under a development agreement or vested right.
VIII. J. Plats-County Authority
SB 873 (effective 9/1/01). "Current law allows cities to make certain requirements in the development of infrastructure for subdivisions. No such provision exists for counties. S.B. 873 (by enactment of Section 232.100, Local Government Code) grants (certain) counties (with 150,000 and next to international border, or in or next to a county of 700,000) the authority to: adopt subdivision regulations, including lot size and setback limitations; enforce a major thoroughfare plan and establish right of way; require possession of a plat compliance certificate before utility hookups; and enact other regulations relevant to responsible development."
VIII. J. Plats-Dormant Subdivisions
HB 3161 (effective 6/14/01). "Preexisting) law requires counties and local governments to consider the approval of subdivision plats and permits solely upon the regulations and rules in place when the permit or application was filed. Some counties have had landowners wishing to sell lots on subdivision plats that were filed nearly 100 years ago. The original subdivisions do not meet minimal contemporary infrastructure requirements. Development of these plats would result in significant burdens on adjacent landowners and on the community. (amended Section 232.002, Local Government Code) provides that the approval of a subdivision plat by a county commissioners court expires fifty years after approval (if no portion of the land subdivided under the plat is sold or transferred before January 1 of the 51st year after the year in which the plat was approved)."
VIII. J. Plat-Utility Access for Unplatted Land
HB 3604 (effective 9/1/01). "In 1999, the legislature authorized an electric, gas, water, or sewer service utility to provide services if the utility received a certificate issued by the commissioners court. The certificate must state that the subdivided land was purchased before September 1, 1995; is located in a subdivision in which the utility has previously provided service; and is the site of construction of a residence that was begun on or before May 1, 1997. These provisions and restrictions also apply to extraterritorial jurisdictions (ETJ). The 1999 legislation may have made it difficult for persons who bought land in an ETJ between September 1, 1995, and September 1, 1999, to obtain a certificate for utility service. H.B. 3604 (amends Section 232.029, Local Government Code, to authorize) a utility to provide service to land located in a subdivision in which the utility has previously provided service if the utility is provided with a certificate issued by a commissioners court that states that the land in an ETJ was sold or conveyed to the person requesting service before September 1, 1999, and construction of a residence was begun on the land on or before May 1, 2003, if the subdivided land was located in the ETJ on August 31, 1999."
VIII. J. Restrictions-Clear Lake Forest Homeowner’s Association
SB 620 (effective 9/1/01). "Under current law, the Clear Lake Forest Homeowner's Association (association) cannot vote on the issue of extending mandatory assessments. This authority is currently granted to other subdivisions (in Chapter 206, Property Code). Senate Bill 620 (amends Section 206.002 and) extends this authority to the association."
VIII. J. Restrictions-Regulation of Property Owners’ Associations
SB 507 (effective 1/1/02). "Texas, and the nation, have witnessed the explosive growth of homeowners' associations. More than 40 million people today live in one of the more than 200,000 communities managed by homeowners' associations nationwide, an estimated 25 to 30 percent of all homeowners. In Texas, homeowners' associations operate with little statewide regulation or guidance. As a result, as the volunteer boards of these associations work to enforce their deed restrictions, conflicts often arise between the board and association homeowners. Often, these conflicts escalate into legal disputes and in extreme cases can result in home foreclosure. S.B. 507 (new Chapter 209, Property Code) adds the Texas Residential Property Owners Protection Act to the Texas Property Code, to provide guidelines for the operation of associations as well as specific protections for Texas homeowners living in association-managed communities." Section 209.003 provides that the chapter applies only to a residential subdivision subject to restrictions in a declaration authorizing a property owners’ association to collect regular or special assessments on all or a majority of the property in the subdivision. Section 209.004 requires the property owners’ association to record in the county a management certificate, stating the name of the subdivision, name of the association, recording data for the subdivision, recording data for the declarations, mailing address for the association or manager, and other information the association considers appropriate. Section 209.005 requires the property owners’ association to make the books and records of the association, including financial records, reasonably available to an owner. An attorney’s files, excluding invoices, are not available. Section 209.006 provides that the property owners’ association must give written notice to the owner before filing suit (other than for assessments), charging an owner for property damage, or levying a fine. Section 209.007 provides that the owner may submit a written request for a hearing on such issues, and may appeal to the board. Section 209.008 provides that the property owners’ association may recover attorneys’ fees from the owner in connection with enforcement of restrictions only if the owner is given written notice that such fees will be collected after a date certain. If the property owners’ association forecloses an assessment lien nonjudicially, then the attorneys’ fees are limited to the greater of one-third of the assessments and interest, or $2,500. Section 209.009 provides that the property owners’ association may not foreclose a lien solely for fines or attorneys’ fees relating to fines. Section 209.010 requires the property owners’ association must send the lot owner written notice not later than 30 days after its foreclosure sale informing the lot owner of the owner’s right to redeem. The association also must record an affidavit not later than 30 days after the date of such notice stating the date on which notice was sent and containing a legal description. "Any person is entitled to rely conclusively on the information contained in the recorded affidavit. Section 209.011 provides that the property owners’ association or other person who buys occupied property at the foreclosure of the property owners’ association lien must prosecute a forcible entry and detainer action. The property owner may redeem the property from any purchaser at the foreclosure sale not later than the 180th day after the date the association mailed the written notice to the owner informing the owner of the sale and right of redemption. If the lot owner redeems the property, the purchaser must execute and deliver a deed to the redeeming owner. If the redeeming owner fails to record the deed before the expiration of the redemption date and fails to record an affidavit stating that the lot owner has redeemed, "the lot owner’s right of redemption as against a bona fide purchaser or lender for value expires after the redemption period. The purchaser of the property at the foreclosure sale or a person to whom the person who purchased the property at the foreclosure sale transferred the property may presume conclusively that the lot owner did not redeem the property unless the lot owner files in the real property records of the county in which the property is located (1) a deed from the purchaser of the property at the foreclosure sale; or (2) an affidavit that (A) states that the lot owner has redeemed the property; and (B) contains a legal description of the property." Property that is redeemed remains subject to all liens and encumbrances on the property before foreclosure. If a lot owner sends by certified mail a written request to redeem on or before the last day for redemption, the lot owner’s right of redemption is extended until the 10th day after the date the association and any third party foreclosure purchaser provides written notice to the lot owner of the amounts that must be paid to redeem (with no maximum period otherwise established for the written notice to be sent). After the redemption period and any extended redemption period expires, the association or third party foreclosure purchaser shall record an affidavit in the real property records that the lot owner did not redeem the property.
VIII. J. Utilities-Submetering Water
HB 2404 (effective 9/1/01). "Under current law, apartments can include water charges in the rent, and allocate water bills by dividing the charges among tenants by the number of occupants and/or square footage. H.B. 2404 (amends existing Section 13.502, Water Code and Section 13.506, Water Code to require) an owner or manager of a new apartment house, manufactured home rental community, multiple use facility, or condominium (on which construction begins after January 1, 2003) to provide for the submetering of each unit and sets forth provisions regarding the installation of plumbing fixtures that meet water savings performance standards."
IX. B. UCC-Revised Article 9
SB 433 (effective 6/13/01; Revised Article 9 effective 7/1/01). "The National Conference on Commissioners of Uniform State Laws and the American Law Institute have recommended making technical amendments to the official text of Article 9 of the Uniform Commercial Code before its July 1, 2001, effective date. S.B. 433 makes the technical changes to Chapter 9, Texas Business & Commerce Code, that the National Conference on Commissioners of Uniform State Laws and the American Law Institute have recommended." Revised Article 9, which was adopted in 1999 by the Texas legislature, has now been enacted in all 50 states and the District of Columbia (although four states have delayed effective dates and in the remainder of states, Revised Article 9 is effective 7/1/01). Revised Article 9 provides for Filings in the Central Office of the state of location of the debtor (the state of registration if registered) of UCC financing statements, unless the collateral is a fixture, timber or as-extracted collateral. UCCs no longer need the signature any party. The financing statement may contain a general description such as all of the debtor’s personal property, although the security agreement must be more specific.
IX. C. Business Organizations-Changes
SB 1320 (effective 9/1/01). This bill amends various technical provisions relating to business organizations, including restated articles, and articles of merger.
IX. C. Contracts for Conveyance of Real Property
SB 198 (effective 9/1/01). "Portions of the Property Code, relating to executory contracts for the conveyance of real property, need to be restructured to make a number of changes, including making contracts for deed protections apply statewide and requiring disclosure of tax payment and insurance coverage information by sellers. S.B. 198 makes these and other changes, consolidating and restructuring Chapter 5D and E of the Property Code." Amended Section 5.061, Property Code, provides that Sections 5.061-5.080 apply to transactions involving an executory contract for conveyance of real property used or to be used as the residence of the purchaser or a person related to the purchaser within the second degree of affinity or consanguinity of the purchaser. A lot measuring one acre or less is presumed to be residential property. It does not apply to sales of state land or a sale by the Veterans’ Land Board under an executory contract. It does not apply to an executory contract that provides for delivery of a deed within 180 days of the date of the final execution of the executory contract. Sections 5.066 and 5.068-5.080 do not apply to an executory contract if the purchaser is related to the seller within the second degree of consanguinity or affinity and the purchaser has waived the applicability of those provisions in a written agreement. Section 5.063 requires that the Notice of Seller’s Remedies on Default under Section 5.064 must be delivered by registered or certified mail, return receipt requested. The notice must be conspicuous and printed in 14-point boldface or upper case and must include on a separate page the statement:
YOU ARE NOT COMPLYING WITH THE TERMS OF THE CONTRACT TO BUY YOUR PROPERTY. UNLESS YOU TAKE THE ACTION SPECIFIED IN THIS NOTICE BY (DATE) THE SELLER HAS THE RIGHT TO TAKE POSSESSION OF YOUR PROPERTY."
The notice must (1) identify and explain the remedy the seller intends to enforce, and (2) if the purchaser has failed to make a timely payment, specify the delinquent amount, itemized as to principal and interest, and any additional charges claimed, such as charges or attorney’s fees, and the period to which the delinquency and additional charges relate, and (3) if the purchaser has filed to comply with terms of the contract, identify the terms violated and the action required to cure the violation. The notice is given when it is mailed to the purchaser’s residence or place of business. Section 5.063 states that "The affidavit of a person knowledgeable of the facts to the effect that notice was given is prima facie evidence of notice in an action involving a subsequent bona fide purchaser for value if the purchaser is not in possession of the real property and if the stated time to avoid the forfeiture has expired. A bona fide subsequent purchaser for value who relies upon the affidavit under this subsection shall take title free and clear of the contract." Section 5.064 provides that the seller may enforce the remedy of rescission or of forfeiture and acceleration against a defaulting purchaser if the seller notifies the purchaser of the seller’s intent to enforce the seller’s remedies and the purchaser’s right to cure the default within the 60-day period described in Section 5.065, and the purchaser fails to cure within the 60-day period, and Section 5.066 (providing for enforcement by public sale if more than 48 monthly payments or 40% or more of amount due has been paid) does not apply. Section 5.065 provides that notwithstanding any agreement to the contrary, the purchaser may avoid forfeiture or termination of the contract by complying on or before 60 days after the date notice by the seller is given. Section 5.066 applies in event of a purchaser’s default after the purchaser has paid 40% or more of the amount due or the equivalent of 48 monthly payments. It provides that the seller is granted the power to sell the purchaser’s interest through a trustee designated by the seller. The seller must provide the purchaser a notice of default under the contract and give the purchaser at least 60 days after notice is given to cure the default. The notice must be provided as provided in Section 5.063 (identify the seller’s remedy, the delinquent amounts, and any terms violated, and mail notice to the purchaser’s residence or place of business). The notice must substitute the following statement:
YOU ARE NOT COMPLYING WITH THE TERMS OF THE CONTRACT TO BUY YOUR PROPERTY. UNLESS YOU TAKE THE ACTION SPECIFIED IN THIS NOTICE BY (DATE) A TRUSTEE DESIGNATED BY THE SELLER HAS THE RIGHT TO SELL YOUR PROPERTY AT A PUBLIC AUCTION."
The trustee or substitute trustee must post, file, and serve the notice of sale and the county clerk must record and maintain the notice of sale in accordance with Section 51.002 (related to deeds of trust). A notice of sale is not valid if it is given before the period to cure has expired. The sale must be conducted in accordance with Section 51.002. The seller must (1) convey to the purchaser at the sale by the trustee the fee simple title, and (2) warrant that the property is free from any encumbrances. If the proceeds exceed the debt owed under the contract, the seller must disburse the excess proceeds to the purchaser under the executory contract. If there is a deficiency, the seller is limited on recovery by the terms of Sections 51.003-51.005. Section 5.066 provides that "The affidavit of a person knowledgeable of the facts that states that the notice was given and the sale was conducted as provided by this section is prima facie evidence of those facts. A purchaser for value who relies on an affidavit under this subsection acquires title to the property free and clear of the executory contract." Section 5.067 provides that a purchaser under an executory contract may place a lien for reasonable value of improvements for providing utility service to the property. Section 5.068 provides that if the negotiations preceding the contract are conducted primarily in a language other than English, the seller must provide a copy of all written documents relating to the transaction, including the contract, disclosures, annual accounting statements, and notice of default, in that language. Section 5.069 provides that, before the executory contract is signed by the purchaser, the seller shall provide the purchaser with a survey, completed within the past year or a plat of a current survey, a legible copy of any document that describes an encumbrance or other claim, such as restrictions or easements, and a written notice attached to the contract substantially in the following form:
IF ANY OF THE ITEMS BELOW HAVE NOT BEEN CHECKED, YOU MAY NOT BE ABLE TO LIVE ON THE PROPERTY.
SELLER'S DISCLOSURE NOTICE
CONCERNING THE PROPERTY AT (street address or legal description and city)
THIS DOCUMENT STATES CERTAIN APPLICABLE FACTS ABOUT THE PROPERTY YOU ARE CONSIDERING PURCHASING.
CHECK ALL THE ITEMS THAT ARE APPLICABLE OR TRUE:
____ The property is in a recorded subdivision.
____ The property has water service that provides potable water.
____ The property has sewer service.
____ The property has been approved by the appropriate municipal, county, or state agency for installation of a septic system.
____ The property has electric service.
____ The property is not in a floodplain.
____ The roads to the boundaries of the property are paved and maintained by:
____ the seller;
____ the owner of the property on which the road exists;
____ the municipality;
____ the county; or
____ the state.
____ No individual or entity other than the seller:
(1) owns the property;
(2) has a claim of ownership to the property; or
(3) has an interest in the property.
____ No individual or entity has a lien filed against the property.
____ There are no restrictive covenants, easements, or other title exceptions or encumbrances that prohibit construction of a house on the property.
NOTICE: SELLER ADVISES PURCHASER TO:
(1) OBTAIN A TITLE ABSTRACT OR TITLE COMMITMENT COVERING THE PROPERTY AND HAVE THE ABSTRACT OR COMMITMENT REVIEWED BY AN ATTORNEY BEFORE SIGNING A CONTRACT OF THIS TYPE; AND
(2) PURCHASE AN OWNER'S POLICY OF TITLE INSURANCE COVERING THE PROPERTY.
(Date) (Signature of Seller)
(Date) (Signature of Purchaser)"
If the property is not in a recorded subdivision, the seller must provide the purchaser with a separate disclosure that the utilities may not be available to the property until the subdivision is recorded. If the seller advertises property for sale, the advertisement must contain a disclosure regarding availability of water, sewer and electric services. Section 5.070 provides that the seller, before the purchaser signs the contract, must provide the purchaser with a tax certificate from the collector for each taxing unit, and a legible copy of any insurance policy relating to the property. Section 5.071 requires the seller, before the contract is signed by the purchaser, to provide a written statement of the financing terms, including the purchase price, interest rate, dollar amount of interest, total amount, late charges, and prohibition on prepayment penalty. Section 5.072 prohibits oral agreements. The seller must include a disclosure in the contract or separately in 14-point boldface or uppercase that is substantially:
"THIS EXECUTORY CONTRACT REPRESENTS THE FINAL AGREEMENT BETWEEN THE SELLER AND PURCHASER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
(Date) (Signature of Seller)
(Date) (Signature of Purchaser)"
Section 5.073 prohibits certain contract terms such as certain late-payment fees, prohibitions on pledge of the purchaser’s interest to place improvements such as utility improvements or fire protection improvements, and prepayment penalties and similar fees. Section 5.074 allows the purchaser to cancel an executory contract by sending a telegram or certified or registered mail, or delivery to the seller, not later than the 14th day after the date of the contract. The contract must include in immediate proximity to the space for the purchaser’s signature in 14-point boldface or uppercase substantially the following:
"YOU, THE PURCHASER, MAY CANCEL THIS CONTRACT AT ANY TIME DURING THE NEXT TWO WEEKS. THE DEADLINE FOR CANCELING THE CONTRACT IS (DATE). THE ATTACHED NOTICE OF CANCELLATION EXPLAINS THIS RIGHT."
The seller shall provide a notice of cancellation form at the time the purchaser signs the executory contract, that is printed in 14-point boldface or uppercase, in substantially the statutory form. Section 5.075 provides that the purchaser under a contract entered before September 1, 2001, the purchaser may pledge the interest in the property which accrues pursuant to Section 5.066 (relating to protection of equity interest of over 40% or 48 monthly payments by trustee’s sale) only to obtain a loan for improving the safety of the property or any improvements on the property. Such loans include water service, wastewater systems, septic systems, structural improvements in the residence, and fire protection. Section 5.076 provides that the seller shall record the executory contract and disclosure statement under Section 5.069 (relating to the property condition) on or before the 30th day after the date the contract is executed. The seller also must record the instrument that terminates the contract if the contract is terminated. Section 5.077 requires the seller to provide the purchaser with an annual statement in January, such as by mail postmarked not later than January 31, which must include the amount paid, the amount owed, payments remaining, amounts paid to taxing authorities, amounts paid to insure the property, and an accounting of any insurance proceeds. Section 5.079 requires the seller to file the deed to the purchaser not later than the 30th day after the seller receives the purchaser’s final payment due. If title has passed by will or intestate succession pursuant to which an order of court is required, any penalties for delay may be waived by the court if the court finds that the person is pursuing the action with reasonable diligence.
IX. C. Patent-Bastrop County
HJR 52 (Vote 11/6/01). "When sovereign land is sold or disposed of to private persons and a patent is not issued from the state or the republic passing the legal title, the legal title remains with the sovereign entity. The private owner of the land is often unaware that a title without a patent is ineffective and is without legal recourse to acquire the patent because the lands of public domain are now constitutionally dedicated to the Permanent School Fund (PSF). Under the Texas Constitution, the General Land Office and the School Land Board manage and administer PSF, but prior to the 77th Legislature did not have the authority to issue the patent because state law requires them to receive the land's fair market value in full before the patent is issued. House Joint Resolution 52 (would amend Section 2A, of Article VII, of the Texas Constitution and would surrender) any claim of the State of Texas to interest in certain lands in the A.P. Nance Survey in Bastrop County….House Joint Resolution 52 amends the Texas Constitution to provide that the State of Texas relinquishes and releases any claim of sovereign ownership or title to an interest in and to the lands, excluding the minerals, in certain tracts in the A.P. Nance Survey, Bastrop County. The bill provides that title to the interest in lands, excluding the minerals, is confirmed to the owners of the remaining interests in the lands." Any funds previously paid related to an outstanding land award or land payment obligation may not be refunded. The General Land Office shall issue a patent to the holder of the record title, but no filing or patent fee may be required, and the patent shall reserve all mineral interest in the state.
IX. C. Patent-Cleanup Provision for Vacancies
HJR 53 (Vote 11/6/01; effective 1/1/02 if approved). "When sovereign land is sold or disposed of to private persons and a patent is not issued from the state or the republic passing the legal title, the legal title remains with the sovereign entity. The private owner of the land is often unaware that a title without a patent is ineffective and is without legal recourse to acquire the patent because the lands of public domain are now constitutionally dedicated to the Permanent School Fund (PSF). Under the Texas Constitution, the General Land Office and the School Land Board manage and administer PSF, but do not have the authority to issue the patent because current law requires them to receive the land's fair market value in full before the patent is issued. H.J.R. 53 (would add new Section 2B, Article VII, Texas Constitution and authorize) the legislature, under specified conditions, to provide for the surrender of interest in land belonging to the State of Texas." Those conditions under which a patent may be issued, excluding mineral rights, are:
"(1) the land is surveyed, unsold, permanent school fund land according to the records of the General Land Office;
(2) the land is not patentable under the law in effect before January 1, 2002; and
(3) the person claiming title to the land:
(A) holds the land under color of title;
(B) holds the land under a chain of title that originated on or before January 1, 1952;
(C) acquired the land without actual knowledge that title to the land was vested in the State of Texas;
(D) has a deed to the land recorded in the appropriate county; and
(E) has paid all taxes assessed on the land and any interest and penalties associated with any period of tax delinquency.
(b) This section does not apply to:
(1) beach land, submerged or filled land, or islands; or
(2) land that has been determined to be state-owned by judicial decree.
(c) This section may not be used to:
(1) resolve boundary disputes; or
(2) change the mineral reservation in an existing patent"
IX. C. Patents-Cure of Vacancies
HB 1402 (effective if HJR 53 is adopted). This bill provides a new procedure for issuance of patents on vacant land. New Section 11.084, Natural Resources Code, authorizes the School Land Board, by unanimous vote, to approve a patent or release of the state’s interest in land, excluding mineral rights, if the board finds that the land is unpatented, the land is not patentable under law in effect before January 1, 2002, and the person claiming title to the land (1) holds the land under color of title, (2) holds the land under a chain of title that originated on or before January 1, 1952, (3) acquired the land without actual knowledge that the title was vested in the State of Texas, (4) had a deed to the land recorded in the appropriate county, (5) has paid all taxes assessed on the land, and any interest and penalties. This statute does not apply to beach land, submerged land, filled land, islands, land determined to be state-owned by judicial decree. The statute may not be used to resolve boundary disputes or change mineral reservations in existing patents. Section 11.085 provides that the person claiming title may apply for the patent by filing with the commissioner an application, and by attaching a copy of supporting documentation. The commission may adopt rules to administer these sections.
IX. C. Patents-Revision of Patent Issuance Procedure
SB 1806 (effective 9/1/01). "Under the current statutory process the General Land Office (GLO) and certain applicants endure lengthy and expensive administrative hearings when determining whether certain lands are vacant. S.B. 1806 (rewrites existing Section 51.171, et seq, Natural Resources Code, which) clarifies and simplifies the procedures for determining whether land is vacant." Section 51.172 defines a good-faith claimant as one who occupies or uses, has occupied or used, or whose predecessors have occupied or used the vacancy other than for oil, gas and similar development, and who has had the vacancy enclosed or within definite boundaries for at least 10 years in a good-faith belief that the vacancy was included within the boundaries of another survey. Section 51.173 provides that vacant and unsurveyed public school land may be sold, except submerged land within tidewater limits, islands, flats, and emergent land within tidewater limits, natural lakes, and riverbeds. Section 51.176 provides that a person must file an application prescribed by the commissioner in order to purchase vacant land. The applicant must file the application with the county surveyor, or if there is no county surveyor, with the county clerk. The county surveyor or county clerk must mark the time of filing and record the original in a book for that purpose. Priority among applications is determined by the time on the application. Section 51.178 provides that the commissioner shall determine whether the claimant is a good-faith claimant, after the expiration of 60 days after the date notice of acceptance is published. A declaration of good-faith-claimant status grants a preferential right to the claimant to purchase or lease the land. Section 51.179 requires the applicant to identify each necessary party and provide the necessary party with the notice of the commissioner’s acceptance of the application, a copy of the application, and a continuance for future notices form no later than the 90th day after the applicant receives the notice of the acceptance of the application. A necessary party (as defined by Section 51.172) is an applicant, interested person, and good-faith claimant whose present legal interest in the surface or mineral estate may be adversely affected by the vacancy determination and may be determined pursuant to Section 51.179 by the applicant by review of the records of the land office and the county clerk. No later than 30 days after the notices are mailed by the applicant to necessary parties, the applicant must publish the notice of the commissioner’s acceptance of the application. Section 51.180 authorizes the commissioner to require the applicant to make a deposit to cover costs of a survey and investigation. Section 51.182 provides that the commissioner may appoint a licensed state land surveyor or county surveyor of the county to investigate the applicant’s claim. Section 51.183 provides that no later than 120 days after the surveyor is appointed, the surveyor shall file a written report of the survey, the field notes describing the land and lines and corners surveyed, a plat depicting the results of the survey, and any other information required by the commissioner. The survey report must have the name and post office address of each person who has possession of the land and of each person determined by the surveyor to have a present legal interest in the land. Section 51.184 requires the commissioner to serve a true copy of the survey report on each necessary party, including those named in the survey report. A necessary party may file objections to the survey report not later than 30 days after the date the notice of completion is received. Section 51.185 requires the commissioner to investigate the applicant’s claim and authorizes the commissioner to conduct a hearing, which is not a contested case. Section 51.186 provides that if the commissioner determines the land is vacant, the commissioner shall notify each necessary party. The order is final and may be appealed. The vacancy order must include the field note description, an accurate plat of the land, and any other matters required by law or as the commissioner considers appropriate. If the commissioner determines the land is not vacant, the commissioner shall endorse the file "Not Vacant Land" and shall notify each necessary party. The order is final and may be appealed. Section 51.187 provides for appeal to the district court of the county of the land. Section 51.191 provides that a good-faith claimant who ahs been notified by the commissioner that a vacancy exists has a preferential right to purchase or lease the vacancy after final adjudication or after the period has passed for appeal of the commissioner’s order. IF the good-faith claimant does not apply for the purchase or lease before 121 days after the preferential right may be exercised, the preferential right expires. The good-faith claimant may purchase or lease the vacant land at the price set by the board, subject to the royalty reservations provided by the board, and in accordance with existing law. Section 51.192 provides that if no good-faith claimant exercises the preferential right within the applicable period, the applicant has a preferential right for 30 days after a determination that no good-faith claimant exists or the expiration of the period for purchase by the good-faith claimant. The board shall award an applicant other than a good-faith claimant, a perpetual nonparticipating royalty of not less than 1/32 or more than 1/16 of the value of the oil, gas, and sulfur, and 1% of the value of all geothermal and other minerals produced.
IX. D. Taxes-Costs After Foreclosure
SB 256 (effective 5/22/01). "Currently, taxing units absorb many costs associated with delinquent tax auctions or sales. S.B. 256 (amends Section 34.21, Tax Code and) allows taxing units to recover costs (for personnel and overhead costs reasonably incurred by the tax entity in connection with maintaining, preserving, safekeeping, managing and reselling the property) associated with the resale of property bid off to the taxing unit at a tax foreclosure sale."
IX. E. Forfeiture-Protection of Security Interest
SB 626 (effective 9/1/01). "Under Texas law, the holder of a bona fide security interest in property other than real property may lose that lien or security to forfeiture even though the lienholder is innocent, not knowing or having reason to suspect that the property constitutes contraband. S.B. 626 (amends Section 59.02, Code of Criminal Procedure to extend such protection to an innocent interest holder and) addresses several problems that may arise in the seizure of accounts held at banks and assets that have been pledged to secure loans made by banks."
IX. E. Lender-Consumer Credit Commissioner
SB 317 (effective 9/1/01). "Periodically, state agencies undergo a review by the Sunset Advisory Commission S.B. 317 continues the Office of Consumer Credit Commissioner for 12 years and makes changes to the statutes that were recommended by the Sunset Advisory Commission…. (The bill defines sale-leaseback for personal property transactions in amended Section 341.001, Finance Code. Section 27 of the bill requires the Finance Commission and Consumer Credit Commissioner to study predatory lending and discriminatory practices."
IX. E. Lender-Manufactured Housing Board
SB 322 (effective 9/1/01). This bill authorizes continuation of the Texas Department of Housing and Community Affairs. Section 2306.6003, Government Code, establishes a Manufactured Housing Board as a division of the Department. "The bill requires the housing board to employ a division director. The bill requires the housing board rather than the director to adopt rules to administer and enforce the manufactured housing program, and rules relating to the administrative sanctions that may be enforced against a person regulated by the manufactured housing division of TDHCA, rules to adopt a system under which manufactured housing licenses expire on various dates during the year, and other rules necessary to enforce housing board provisions. The bill also prohibits the housing board from adopting rules that restrict competitive bidding or advertising, restrict the use of a trade name in advertising, and restrict or relate to specified advertising practices. The bill sets forth provisions relating to the expiration and renewal of a manufactured housing license." Amended Section 2306.431, Government Code, provides that any bonds submitted by the Department to the attorney general must include a certification by the Board that home mortgage loans made using the proceeds of the bonds do not include a mandatory arbitration requirement. This provision does not apply to other (private) loans, and arbitration clauses may be included in those other loans, not affected by this bill.
IX. E. Lender-Predatory Lending
SB 1581 (effective 9/1/01). This bill, which relates to "predatory lending," adopts a new Chapter 343, Finance Code. It applies to home loans secured by a manufactured home or real property improved by a dwelling designed for occupancy by four or fewer families. Section 343.002 provides that the chapter does not apply to a reverse mortgage or an open-end account. A high cost loan is defined by Section 343.201 consistent with federal law, and also includes purchase money loans. Section 343.101 prohibits refinance of certain low cost loans for seven years. Section 343.102 requires disclosures if the loan exceeds 12%, including the value of mortgage counseling, housing counseling agencies, a list of other resources where mortgage information may be secured, and other disclosures required by the finance commission. Section 343.104 requires a disclosure in connection with pre-paid credit life, disability or involuntary unemployment insurance, and a right to cancel the insurance. Section 343.202 prohibits balloon payments on high cost loans. Section 343.203 prohibits negative amortization on high cost loans. Section 343.204 prohibits a pattern of making loans to consumer on high costs home loans based on the collateral, without regard to the obligor’s payment ability. Section 343.205 prohibits prepayment penalties on high cost home loans. Certain of the bills provisions expire 9/1/03.
IX. E. Lenders-Finance Commission Continuation
HB 1763 (effective 9/1/01). This bill continues the Finance Commission. The Commission shall be composed of one banking executive, one savings executive, one consumer credit executive, and one mortgage broker, and five members who are representatives of the general public.
IX. E. Lenders-Mortgage Brokers
HB 1493 (effective 9/1/01). This bill adds new Section 156.105, Finance Code, to provide that the finance commission shall adopt one or more standard forms for use by mortgage brokers or loan officers in representing that an applicant for a mortgage loan is preapproved or has prequalified for the loan. The finance commission shall adopt rules requiring mortgage brokers or loan officers licensed under this chapter to use its forms. New Section 156.213 requires each licensed mortgage broker to file an annual report with the commissioner on a form approved by the commissioner.
IX. E. Lending-Appraisals
HB 1268 (effective 9/1/01). "Current law attempts to deter the practice of appraisal fixing by providing penalties for appraisers who provide or offer to provide an artificially high or low appraisal in exchange for some derived benefit from the lender requesting their services. However, without similar penalties for lenders who attempt to secure an artificial appraisal, the law only addresses half of the problem. H. B. 1268 (adds new Section 35.56, Business and Commerce Code, which) makes it a Class A misdemeanor if a lender makes or attempts to make a contract with an appraiser that is contingent on a minimum, maximum, or pre-agreed estimate of property value when securing a residential mortgage loan (or interferes with the person’s ability or obligation to provide an independent and impartial opinion of the property’s value)." Instructions by a lender to an appraiser regarding legal or other regulatory requirements for the appraisal or any other communication necessary or appropriate under law, regulation or underwriting standard do not constitute interference with the person’s ability or obligation to provide an independent and impartial opinion of the property’s value.
IX. E. Limitations-Public Institutions
SB 1419 (effective 5/22/01). This bill amends Section 3.118, Business and Commerce to provide that the general limitations relating to promissory notes (generally 6 years after maturity) do not apply to a public institution of higher education or the Texas Higher Education Coordinating Board. "In 1995, a statute of limitations of six years was enacted that limited the amount of time certain governmental entities had to file suit on an outstanding debt. As a result, the University of Texas system is owed $26.5 million in delinquent debt which cannot be collected. S.B. 1419 returns the law to the previous status by eliminating the statute of limitations for a higher education institution or the Texas Higher Education Coordinating Board."
IX. E. Loans- Non-Real Property Loans
SB 272 (effective 9/1/01). "Under current law, there is an established maximum interest charge permitted on non-real property loans which varies depending on the loan terms and borrowed amount. The maximum interest rate for consumers who qualify for larger loans is less than the maximum interest rate for consumers who qualify for smaller loans. There is concern that consumers who only qualify for the minimum loan amounts may seek alternative means to obtain additional funds, such as loans that originate outside the state. S.B. 272 (amends Section 243.201, Finance Code and) establishes an alternate maximum interest charge (30% up to base amount of $500, 24% above that amount and up to base amount of $1,050, and 18% above that using a reference base amount of $2,500) on a consumer loan contract that is not secured by real property."
IX. G. Leases-Commercial Security Deposits
HB 2803 (effective 9/1/01). "Security deposit handling requirements have been established for landlords and tenants of residential rental property. However, prior to the 77th Legislature, no liability existed for a commercial landlord that did not release a security deposit. House Bill 2803 establishes similar security deposit handling requirements for landlords and tenants of commercial rental property. House Bill 2803 amends the Property Code to establish provisions for the handling of a security deposit intended primarily to secure performance under a lease of commercial rental property equivalent to existing provisions established for residential rental property. (New Section 93.005, Property Code, provides that the landlord shall refund the security deposit not later than the 60th day after the tenant surrenders the premises and provides notice of the tenant’s forwarding address under Section 93.009. Section 93.006 provides that the landlord may not retain part of the deposit to cover normal wear and tear.) The bill (adds new Section 93.007, which) provides that a person who no longer owns an interest in the rental premises remains liable for a security deposit received while the person was the owner until the new owner delivers to the tenant a signed statement acknowledging that the new owner has received and is responsible for the tenant's security deposit and specifying the exact dollar amount of the deposit. The amount of the security deposit is the greater of: _the amount provided in the tenant's lease; or the amount provided in an estoppel certificate prepared by the owner at the time the lease was executed or prepared by the new owner at the time the commercial property is transferred." The obligation does not apply to a real estate mortgage lienholder who acquires title by foreclosure. New Section 93.011 appears to be inconsistent with the requirement for return of the deposit in 60 days; it provides that a landlord who fails to return the deposit or to provide a written description and itemized list of deductions on or before the 30th day after the tenant surrenders possession is presumed to have acted in bad faith.
IX. G. Leases-Disclosure of Fees
HB 2186 (effective 9/1/01). "Most leasing agents use standard lease contracts that list the rental costs and charges that a landlord may assess. Prior to the 77th Legislature, landlords were able to charge fees other than those listed on the standard lease agreement, and some landlords charged maintenance and filing fees without giving tenants written or oral notice at the beginning of the lease term. (New Section 93.004, Property Code) requires landlords of commercial properties to disclose all potential fees that may be assessed to a tenant prior to entering a lease agreement." The landlord may not assess a charge, excluding a charge for rent or physical damage, unless the amount of the charge or method of calculation of the charge is stated in the lease, an exhibit or an attachment to the lease.
IX. K. Insurance-Title Insurance Area and Boundary Coverage and Survey
SB 1707 (effective 6/13/01). This bill adds new Article 9.07C, Insurance Code, relating to "area and boundary" coverage. This new Article states:
"Art. 9.07C. AREA AND BOUNDARY COVERAGE. (a) In this article, "area and boundary coverage" means title insurance coverage relating to discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.
"(b) The commissioner may adopt rules allowing a title insurance company to accept an existing real property survey and not require a new survey when providing area and boundary coverage if the title insurance company is willing to accept evidence of an existing real property survey, and an affidavit verifying the existing survey, as prescribed by the commissioner, notwithstanding the age of the survey or the identity of the person for whom the survey was prepared.
"(c) A title insurance company may not discriminate in providing area and boundary coverage in connection with residential real property solely because:
(1) the real property is platted or unplatted; or
(2) a municipality did not accept a subdivision plat in relation to the real property before September 1, 1975.
"(d) A title insurance company may not require an indemnity from a seller, buyer, borrower, or lender to provide area and boundary coverage."
IX. K. Survey-Retaking Surveyor’s Test
SB 584 (effective 6/11/01). "The Professional Land Surveying Practices Act provides that persons who fail the examination for licensure as a Registered Professional Land Surveyor (RPLS) are required to wait six months before they are authorized to retake the exam. S.B. 584 (amends Article 5282c, Section 16 and) eliminates the six-month waiting period for retaking the examination for licensure."
IX. K. Surveys-Limitation Statute
HB 3136 (effective 9/1/01). "(Prior to enactment of this bill, Section 16.011, Civil Practice and Remedies Code imposed) a 10-year statute of limitations on an action for damages from injury or loss caused by an error in a survey. (That section also states that "If the claimant presents a written claim for damages to the surveyor during the 10-year limitations period, the period is extended for two years from the date the claim is presented.") (Amended Section 16.011) provides that this statute of limitations does not extend or affect a limitations period prescribed for bringing an action under any other law of this state." This will impose an additional general four-year limitation from time of discovery of an error.
X. B. Notaries-Exceptions to Administer Oaths
HB 1766 (effective 9/1/01). This bill amends Section 602.002, Government Code, to provide that oaths may be administered by current or former legislators or the attorney general. Others authorized to administer oaths under pre-existing law include notary publics, judges, clerks of courts, and retired judges of courts of record.
X. C. Forfeiture-Protection of Innocent Parties
SB 563 (effective 9/1/01). "Innocent victims of crimes are not protected from theft or burglary where seized property was either obtained by criminal means or was acquired with proceeds from property obtained by criminal means. S.B. 563 amends the Texas Code of Criminal Procedure, Article 59.02 by adding Subsection (h) to provide that an owner or interest holder's interest in property is prohibited from being forfeited if at the forfeiture hearing the owner or interest holder proves by a preponderance of the evidence that the owner or interest holder meets certain conditions (including that the owner was not a party to the offense and that the contraband was used without the effective consent of the owner)." Preexisting Section 59.02(c ) which was not changed, provided that "An owner or interest holder's interest in property may not be forfeited under this chapter if the owner or interest holder: (1) acquired and perfected the interest before or during the act or omission giving rise to forfeiture or, if the property is real property, he acquired an ownership interest, security interest, or lien interest before a lis pendens notice was filed under Article 59.04(g) of this code; and (2) did not know or should not reasonably have known of the act or omission giving rise to the forfeiture or that it was likely to occur at or before the time of acquiring and perfecting the interest or, if the property is real property, at or before the time of acquiring the ownership interest, security interest, or lien interest." Preexisting Section 59.02(f), which also was not changed, provides that "An individual, firm, corporation, or other entity insured under a policy of title insurance may not assert a claim or cause of action on or because of the policy if the claim or cause of action is based on forfeiture under this chapter and, at or before the time of acquiring the ownership of real property, security interest in real property, or lien interest against real property, the insured knew or reasonably should have known of the act or omission giving rise to the forfeiture or that the act or omission was likely to occur."
X. C. Liens-Secret Government Liens and Paving Liens
HB 1050 (effective 9/1/01). This bill adds new Section 51.008, Property Code, to provide that a lien on real property in favor of a governmental entity must be recorded in the real property records and must contain a legal description of the property, unless the lien is for ad valorem taxes (and penalties and interest), or unless the law establishing the lien expressly states that recordation is not required. This new Section does not apply to (1) a lien created under Section 89.093, Natural Resources Code (relating to costs of plugging wells), a state tax lien created under Chapter 113, Tax Code (which requires a notice of general lien to be recorded in the real property records, but does not provide for a legal description), or a lien under Chapter 61 or 213, Labor Code (Section 61.082 and 61.083 provide that the lien for wages and penalties paid by the Texas Employment Commission is perfected pursuant to Chapter 113, Tax Code; Section 213.057 provides that the lien for unemployment compensation taxes may be recorded pursuant to Section 113.004, Tax Code). The bill also amends Section 314.043, Transportation Code, to provide that the paving lien notice must give the name of "the subdivision and affected blocks if the street abuts a subdivision for which a plat has been recorded in the county clerk’s office" in addition to containing preexisting requirement of the street and the two cross streets or other approximate lengthwise limits of improvements. It also amends Section 313.042, Transportation Code, to provide that the paving lien is superior to any other lien except a claim for ad valorem taxes.
X. C. Manufactured Housing-Fines; Notice of Attachment; Tax Reporting
HB 3552 (effective 9/1/01). "The manufactured housing industry (industry) in this state is regulated by the Texas Manufactured Housing Standards Act (Act), which was modified in prior legislative sessions. The industry may benefit from improvement and refinement of the Act. House Bill 3552 modifies provisions relating to manufactured housing standards…House Bill 3552 amends the Texas Manufactured Housing Standards Act to increase from $2,000 to $4,000 the maximum fine that a person may be required to pay if the person violates the Act or any rule, regulation, or administrative order of the Texas Department of Housing and Community Affairs (TDHCA). The bill modifies the effective date of provisions regarding wind zone standards to September 1, 1997. (Amended Article 5221f, Article 14, provides that before) the issuance of a certificate of attachment…a person who surrenders the manufacturer's certificate or the original document of title to TDHCA (may) file a notice of attachment in the real property records of the county in which the home is located. (Amended Article 5221f, Section 17) sets forth provisions regarding the notice of attachment and provides that, if a notice of attachment is to be filed, a copy of the notice must be submitted with the manufacturer's certificate or the original document of title surrendered for cancellation. (Before issuance of a certificate of attachment, a person who surrenders the manufacturer’s certificate or the original document of title may file a notice of attachment in the real property records. That notice must include information sufficient to identify the home and must contain the legal description or the appropriate tract or parcel number of the real property on which the home is located. The notice is valid for all purposes until the certificate of attachment is issued and filed in the real property records. Amended Article 5221f, Section 17 also) provides that the report relating to manufactured homes that TDHCA is required to furnish each county tax assessor-collector is a monthly, rather than quarterly, report."
X. C. Manufactured Housing-Notice of Attachment; Real Estate; Closing Location; Disclosures; Deemed Mechanic’s Lien Contract; Taxation
HB 1869 (effective 1/1/02). "Manufactured housing represents a growing proportion of the homes currently being purchased in Texas. Although manufactured housing can be constructed and sold more quickly than site-built housing, some counties and school districts have experienced difficulties in keeping up with the rapid growth and the need to provide services for the community. Some consumers may be unaware of their obligation to pay county and school taxes; unaware of their duty to maintain private roads; and unaware of their need to provide for and maintain on-site sewage disposal. H.B. 1869 establishes financing and acquisition procedures for retailers and consumers of manufactured homes and provides for notification to consumers of their responsibilities before purchasing a manufactured home." Amended Article 5221f, Section 19, provides that, before issuance of a certificate of attachment, a title insurance company which surrenders the manufacturer’s certificate or the original document of title shall file a notice of improvement attachment in the real property records. The notice must state that the manufacturer’s certificate or the original document of title has been surrendered for cancellation and a request has been made for issuance of a certificate of attachment. The notice must sufficiently identify the home and a legal description or the appropriate tract or parcel number of the real property on which the home is located. The notice is valid until the certificate of attachment is recorded in the real property records. New Article 5221f, Section 19A, provides that a manufactured home that is permanently attached to the real property is classified and taxed as real property if the real property to which the home is attached is titled in the name of the consumer under a deed or contract for sale. A manufactured home is considered permanently attached if the home is secured to a foundation and connected to a utility, including a utility providing water, electric, natural gas, propane or butane gas, or wastewater services. The closing of the transaction for acquisition of the manufactured home considered to be real property must occur at the office of (1) a federally insured financial institution, (2) a title company, or (3) an attorney at law. If the real property is purchased under a contract of sale, the contract must be filed in the real property records. Installation of a manufactured home considered to be real property must occur in a manner that satisfies the lender requirements for FHA, Fannie Mae, or Freddie Mac for long-term mortgage loans or for FHA insurance. The installation of a new manufactured home must also meet applicable state standards and the manufacturer’s specifications to validate the manufacturer’s warranty. A manufactured home permanently attached to real property before January 1, 2002, or placed in a manufactured home rental community is not subject to this section 19A. New Article 5221f, Section 21, requires a written statutory disclosure by the retailer and lender prior to completion of a credit application. This disclosure recommends consideration of items such as zoning and restrictive covenants, water availability, sewer service, homeowner association fees, and taxes. A retailer may not transfer title to a manufactured home or sell such home to a consumer unless the retailer provides a written disclosure of the total purchase price and interest, responsibility of the consumer for taxes and private road maintenance and maintenance of an on-site sewage disposal system. If available, a person making a loan to the consumer to purchase a manufactured home shall also make the same disclosure. A federally insured lender or lender approved by HUD as a mortgagee with direct endorsement underwriting authority is exempt from the disclosures if it fully complies with Truth in Lending disclosures. Failure to comply with the disclosure provisions of Section 21 does not affect the validity of a conveyance or transfer of title of a manufactured home or impair a title or lien position. Amended Section 2.001, Property Code, provides that, except as otherwise provided in that section, a manufactured home is real property. A manufactured home is personal property if the home is placed (1) on a lot, temporarily or permanently, that is not titled in the consumer under a deed or contract of sale, or (2) in a manufactured home rental community. The Texas Department of Housing and Community Affairs may not issue a document of title for a new and untitled manufactured home at the first retail sale if the home is to be permanently installed by the retailer on real property titled in the consumer under a deed or contract for sale. Before installation the consumer must provide the retailer with a copy of the deed containing a legal description. A title company or attorney at law conducting the closing under Section 19A, Article 5221f, or conducting the resale by a financial institution or retailer of a manufactured home that is to be permanently installed, or the retailer or retailer’s agent shall file in the real property records a notice of installation not later than 30 working days after the date installation is complete and shall forward the certificate of origin and a copy of the notice of installation to the Texas Department of Housing and Community Affairs. The notice of installation serves as a completed cancellation application. The notice of installation must be notarized, on a form prescribed by the Texas Department of Housing and Community Affairs, contain a description of the manufactured home (including make, model, dimensions, federal label number, state seal number, and identification or serial number), include a verification of installation of the manufactured home, include a wind zone designation for the county if known, be signed by the retailer or installer. Amended Section 62.004, Property Code, which relates to refinancing of liens on manufactured housing, provides that a lien for the debt for the new improvement of a manufactured home on real property may be refinanced with another lien on the real property. New Section 62.005, Property Code, provides that if a debt for the manufactured home was contracted for in writing, that debt is considered to be for work or materials used in constructing new improvements thereon, and thus constitutes a valid lien on the homestead when the certificate of attachment is filed in the real property records. When the manufactured home converts to real property, the lien on the property exists independently of any existing lien on the real property to which the home is permanently attached. Amended Section 32.014, Tax Code, provides that if the ownership of the real property and the manufactured home are the same, the manufactured home shall be appraised and taxed as an improvement to real property, and the tax lien attaches to the real property on which the manufactured home is located, regardless of the classification of the manufactured home under the Property Code. If the ownership of the manufactured home, by deed or contract of sale, and the real property on which the manufactured home is affixed are not the same, the manufactured home shall be separately appraised and taxed, and the tax lien on the manufactured home does not attach to the real property.
X. C. Records-Notary Seals on Electronically Transmitted Certificates
SB 276 (effective 5/11/01). This bill amends Section 121.004, Civil Practice and Remedies Code, relating to the requirements of an acknowledgment, to provide that "The application of an embossed seal (for a notary acknowledgment) is not required on an electronically transmitted certificate of an acknowledgment. This bill also amends Section 406.013, Government Code, which requires that a notary public’s seal be affixed by a seal press or stamp that embosses or prints a seal that reproduces the elements of the seal under photographic methods. The bill provides that this requirement does not apply to an electronically transmitted authenticated document, except that an electronically transmitted authenticated document must legibly reproduce the required elements of the seal.
X. C. Records-Timber Deeds
HB 2246 (effective 9/1/01). "Investigating the crime of timber theft is challenging for law enforcement officials because of the potentially outdated language regarding timber harvesting. A paper trail of ownership of timber may ease the burden of investigating this crime. (Section 151.001, Natural Resources Code) requires landowners and sellers to provide a bill of sale each time timber changes ownership and (this bill also) establishes penalties." Section 151.001 requires a bill of sale before purchasing or accepting deliver of any trees, timber, logs, pulpwood, or in-wood chips. Section 151.002 provides that the bill of sale may be filed of record in the appropriate real property records. The bill of sale shall include a description of the survey or tract of land from which the trees, timber, logs, pulpwood, or in-wood chips were or are to be obtained, or information from which the identity of that tract of land may be ascertained, but in any event including the county name, and a general description of the trees, timber, logs, pulpwood, or in-wood chips conveyed, and representations and a warranty from the seller that the seller is the lawful owner free and clear of all liens, security agreements, encumbrances, claims, demands and charges. Section 151.004 requires that "At each designated point of delivery for trees, timber, logs, pulpwood, or in-woods chips, a wood yard, transfer yard, mill site, or storage yard shall post the following written notice in lettering not less than one inch:
NOTICE CONCERNING SALE OR PURCHASE OF TREES OR TIMBER
1. A seller or purchaser of trees, timber, logs, pulpwood, or in-woods chips who knowingly fails to provide, obtain, or retain a bill of sale as provided in Chapter 151, Natural Resources Code, is guilty of a misdemeanor and on conviction is subject to a fine of not more than $500 for each offense.
2. A person, firm, partnership, or corporation adjudged guilty of theft or fraud in connection with the sale or purchase of trees or timber will be punished as provided by the Penal Code.
3. The Texas Forest Service Timber Theft Hotline is 1-800-364-3470."
X. E. Records-$5 Record Archives Fee
HB 370 (effective 9/1/01). This bill amends Section 118.011, Local Government Code, to allow the commissioners court of a county adjacent to an international border to adopt a Record Archives Fee of not more than $5. That provision expires September 1, 2008.
New Section 118.025 provides that the Record Archives Fee is "for the preservation and restoration services performed by the county clerk in connection with maintaining a county clerk’s records archive." The fee must be paid at the time a person, excluding a state agency, presents a public document to the county clerk for recording or filing. A public document is any instrument, document, paper, or other record that the county clerk is authorized to accept for filing or maintaining. Records archive means public documents filed with the county clerk before January 1, 1999. Preservation of such documents includes providing public access to the public documents in a manner that reduces the risk of deterioration, "excluding providing public access to public documents indexed geographically." Subsection 118.025 (f) states that "The funds may not be used to purchase, lease, or develop computer software to geographically index public records, excluding indexing public records by lot and block description as provided by Section 193.009(b)(4)." Existing Section 193.009(b)(4) (which has not been amended) provides that, in indexing of records on microfilm, the index entry must give "a brief description of the property, if any." The fee may not be collected after the county records archive preservation and restoration is complete. Section 118.025 provides that if a county charges the Record Archives Fee, a notice must be posted in a conspicuous place in the county clerk’s office and the notice must state the amount of the fee. Section 118.025 expires September 1, 2008. According to the bill analysis, "The county clerk's office was contacted in several border counties regarding the impact of the provisions of the bill. Each county responding currently collects a $5 document management fee for maintaining and preserving current documents, although in most cases, the fee is not sufficient to also restore or preserve archived documents, an issue of concern to the smaller counties. An official with El Paso County indicated the county clerk files between 98,000 and 100,000 documents a year. If the additional records archive fee were to be charged, it would generate an additional $50,000 in revenue annually. The County Clerk in Jeff Davis County said an additional $5 fee would generate approximately $3,600 in additional revenue and would cover most of the costs for restoring and preserving older documents. The County Clerk in Val Verde County estimated that an additional $5 fee would produce an additional $24,000 per year."
X. E. Records-Cost of Copies
HB 2873 (effective 6/15/01). "Under current law, a county or district clerk is authorized to charge a fee of $1 per page for copies of public records maintained in a paper format or reproduced in a paper format. The law does not establish a clear fee for non-paper copies of records maintained in non-paper format, such as microfilm or an electronic format, since these documents may or may not consist of a number of pages. Many county and district clerks store or record public records in non-paper formats and are asked to produce copies of these records in various forms. For these reasons fees for copies of public records vary throughout the state. H.B. 2873 standardizes the fees charged for copies of public records produced in paper or other formats…(Amended Section 552.265, Government Code) "requires the charge for providing a paper copy made by a district or county clerk's office (regardless of the source of the record, whether microfilm, CD, or otherwise, if the copy is paper) to be the charge provided by Chapter 51 (Clerks) of this code, Chapter 118 (Fees Charged by County Officers), Local Government Code, or other applicable law….(Amended Section 118.011, Local Government Code, requires) a county clerk who provides a copy in a format other than paper of a record maintained by the clerk to provide the copy and charge a fee in accordance with Sections 552.231 (Responding to Requests for Information That Require Programming or Manipulation of Data) and 552.262 (Rules of the General Services Commission), Government Code (so that the copy will not be the charge made for paper copies, but generally will be the cost of producing a CD or other copy format)."