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  H.B. No. 3674
 
 
 
 
AN ACT
  relating to the operation of property owners' associations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 551.0015(a), Government Code, is amended
  to read as follows:
         (a)  A property owners' association is subject to this
  chapter in the same manner as a governmental body:
               (1)  if:
                     (A) [(1)]  membership in the property owners'
  association is mandatory for owners or for a defined class of owners
  of private real property in a defined geographic area in a county
  with a population of 2.8 million or more or in a county adjacent to a
  county with a population of 2.8 million or more;
                     (B) [(2)]  the property owners' association has
  the power to make mandatory special assessments for capital
  improvements or mandatory regular assessments; and
                     (C) [(3)]  the amount of the mandatory special or
  regular assessments is or has ever been based in whole or in part on
  the value at which the state or a local governmental body assesses
  the property for purposes of ad valorem taxation under Section 20,
  Article VIII, Texas Constitution; or
               (2)  if the property owners' association:
                     (A)  provides maintenance, preservation, and
  architectural control of residential and commercial property
  within a defined geographic area in a county with a population of
  2.8 million or more or in a county adjacent to a county with a
  population of 2.8 million or more; and
                     (B)  is a corporation that:
                           (i)  is governed by a board of trustees who
  may employ a general manager to execute the association's bylaws
  and administer the business of the corporation;
                           (ii)  does not require membership in the
  corporation by the owners of the property within the defined area;
  and
                           (iii)  was incorporated before January 1,
  2006.
         SECTION 2.  Section 552.0036, Government Code, is amended to
  read as follows:
         Sec. 552.0036.  CERTAIN PROPERTY OWNERS' ASSOCIATIONS
  SUBJECT TO LAW. A property owners' association is subject to this
  chapter in the same manner as a governmental body:
               (1)  if:
                     (A) [(1)]  membership in the property owners'
  association is mandatory for owners or for a defined class of owners
  of private real property in a defined geographic area in a county
  with a population of 2.8 million or more or in a county adjacent to a
  county with a population of 2.8 million or more;
                     (B) [(2)]  the property owners' association has
  the power to make mandatory special assessments for capital
  improvements or mandatory regular assessments; and
                     (C) [(3)]  the amount of the mandatory special or
  regular assessments is or has ever been based in whole or in part on
  the value at which the state or a local governmental body assesses
  the property for purposes of ad valorem taxation under Section 20,
  Article VIII, Texas Constitution; or
               (2)  if the property owners' association:
                     (A)  provides maintenance, preservation, and
  architectural control of residential and commercial property
  within a defined geographic area in a county with a population of
  2.8 million or more or in a county adjacent to a county with a
  population of 2.8 million or more; and
                     (B)  is a corporation that:
                           (i)  is governed by a board of trustees who
  may employ a general manager to execute the association's bylaws
  and administer the business of the corporation;
                           (ii)  does not require membership in the
  corporation by the owners of the property within the defined area;
  and
                           (iii)  was incorporated before January 1,
  2006.
         SECTION 3.  Section 201.001(b), Property Code, is amended to
  read as follows:
         (b)  The provisions of this chapter relating to extension of
  the term of, renewal of, or creation of restrictions do not apply to
  a subdivision if, by the express terms of the instrument creating
  existing restrictions, some or all of the restrictions affecting
  the real property within the subdivision provide:
               (1)  for automatic extensions of the term of the
  restrictions for an indefinite number of successive specified
  periods of at least 10 years subject to a right of waiver or
  termination, in whole or in part, by a specified percentage of less
  than 50 percent plus one of the owners of real property interests in
  the subdivision, as set forth in the instrument creating the
  restrictions; or
               (2)  for an indefinite number of successive extensions
  of at least 10 years of the term of the restrictions by written and
  filed agreement of a specified percentage of less than 50 percent
  plus one of the owners of real property interests in the
  subdivision, as authorized by the instrument creating the
  restrictions.
         SECTION 4.  Section 201.004(a), Property Code, is amended to
  read as follows:
         (a)  A petition may be filed under this chapter to:
               (1)  extend or renew an unexpired restriction;
               (2)  [, to] create a restriction;
               (3)  [, or to] add to or modify an existing restriction;
  or
               (4)  modify an existing provision in an instrument
  creating a restriction that provides for extension of those
  restrictions.
         SECTION 5.  Section 204.003, Property Code, is amended to
  read as follows:
         Sec. 204.003.  APPLICATION OF PROVISIONS OF RESTRICTIVE
  COVENANTS [PREVAIL] IN CERTAIN CIRCUMSTANCES. (a) An express
  designation in a document creating restrictions applicable to a
  residential real estate subdivision that provides for the extension
  of, addition to, or modification of existing restrictions by a
  designated number of owners of real property in the subdivision
  prevails over the provisions of this chapter.
         (b)  A document creating restrictions that provides for the
  extension or renewal of restrictions and does not provide for
  modification or amendment of restrictions may be modified under
  this chapter, including modifying the provision that provides for
  extension or renewal of the restrictions.
         SECTION 6.  Section 209.005, Property Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  A property owners' association described by Section
  552.0036(2), Government Code, shall make the books and records of
  the association, including financial records, reasonably available
  to any person requesting access to the books or records in
  accordance with Chapter 552, Government Code. Subsection (a) does
  not apply to a property owners' association to which this
  subsection applies.
         SECTION 7.  Section 209.003(b), Property Code, is amended to
  read as follows:
         (b)  Except as otherwise provided by this chapter, this
  [This] chapter applies only to a property owners' association that
  requires mandatory membership in the association for all or a
  majority of the owners of residential property within the
  subdivision subject to the association's dedicatory instruments.
         SECTION 8.  Chapter 209, Property Code, is amended by adding
  Section 209.0055 to read as follows:
         Sec. 209.0055.  VOTING. (a)  This section applies only to a
  property owners' association that:
               (1)  provides maintenance, preservation, and
  architectural control of residential and commercial property
  within a defined geographic area in a county with a population of
  2.8 million or more or in a county adjacent to a county with a
  population of 2.8 million or more; and
               (2)  is a corporation that:
                     (A)  is governed by a board of trustees who may
  employ a general manager to execute the association's bylaws and
  administer the business of the corporation;
                     (B)  does not require membership in the
  corporation by the owners of the property within the defined area;
  and
                     (C)  was incorporated before January 1, 2006.
         (b)  A property owners' association described by Subsection
  (a) may not bar a property owner from voting in an association
  election solely based on the fact that:
               (1)  there is a pending enforcement action against the
  property owner; or
               (2)  the property owner owes the association any
  delinquent assessments, fees, or fines.
         SECTION 9.  (a) Section 551.0015, Government Code, as
  amended by this Act, applies only to a property owners' association
  meeting that is held on or after September 1, 2007. A property
  owners' association meeting that is held before September 1, 2007,
  is governed by the law in effect at the time the meeting was held,
  and that law is continued in effect for that purpose.
         (b)  Section 552.0036, Government Code, as amended by this
  Act, applies only to a request for records or information made to a
  property owners' association on or after September 1, 2007. A
  request for records or information that is made before September 1,
  2007, is governed by the law in effect at the time the request was
  made, and that law is continued in effect for that purpose.
         (c)  Section 209.005, Property Code, as amended by this Act,
  applies only to a request for access to records or information made
  to a property owners' association on or after September 1, 2007. A
  request for access to records or information that is made before
  September 1, 2007, is governed by the law in effect at the time the
  request was made, and that law is continued in effect for that
  purpose.
         SECTION 10.  This Act takes effect September 1, 2007.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3674 was passed by the House on May 4,
  2007, by the following vote:  Yeas 144, Nays 0, 2 present, not
  voting; that the House refused to concur in Senate amendments to
  H.B. No. 3674 on May 25, 2007, and requested the appointment of a
  conference committee to consider the differences between the two
  houses; and that the House adopted the conference committee report
  on H.B. No. 3674 on May 27, 2007, by the following vote:  Yeas 142,
  Nays 1, 2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 3674 was passed by the Senate, with
  amendments, on May 23, 2007, by the following vote:  Yeas 31, Nays
  0; at the request of the House, the Senate appointed a conference
  committee to consider the differences between the two houses; and
  that the Senate adopted the conference committee report on H.B. No.
  3674 on May 27, 2007, by the following vote:  Yeas 30, Nays 0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor