BILL ANALYSIS

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

H.B. 1547 amends current law relating to claims for reimbursement between marital estates.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 3.401, Family Code, by adding Subdivisions (1) and (2) to define "benefited estate" and "conferring estate."

SECTION 2. Amends Section 3.402, Family Code, as follows:

Sec. 3.402.  CLAIM FOR REIMBURSEMENT; OFFSETS. (a) Provides that a claim for reimbursement exists when one or both spouses use property of one marital estate to confer on the property of another marital estate a benefit which, if not repaid, would result in unjust enrichment to the benefited estate. Deletes existing text relating to the various claims for reimbursement for purposes of Subchapter E (Claims For Reimbursement).

(b)  Requires a spouse seeking reimbursement to a marital estate to prove:

(1)  that the spouse or both spouses used property of the marital estate to confer a benefit on the property of another marital estate;

(2)  the value of the benefit described by Subdivision (1); and

(3)  that unjust enrichment of the benefited estate will occur if the benefited estate is not required to reimburse the conferring estate.

(c)  Provides that the property of a marital estate confers a benefit on another marital estate's property, for purposes of this subchapter, if:

(1)  one or both spouses used property of the conferring estate to pay a debt, liability, or expense that in equity and good conscience should have been paid from the benefited estate's property;

(2)  one or both spouses used property of the conferring estate to make improvements on the benefited estate's real property, and the improvements resulted in an enhancement in the value of the benefited estate's real property; or

(3)  one or both spouses used time, toil, talent, or effort to enhance the value of property of a spouse's separate estate beyond that which was reasonably necessary to manage and preserve the spouse's separate property, and for which the community marital estate did not receive adequate compensation.

(d) Provides that the value of the benefit conferred by the property of one marital estate on the property of another marital estate is determined, for purposes of this subchapter, as of the date of the trial's commencement and:

(1)  if the benefit resulted from the use of the conferring estate's property to pay a debt, liability, or expense that in equity and good conscience should have been paid from the benefited estate's property, then the value of the benefit conferred is measured by the amount of the debt, liability, or expense paid by the conferring estate;

(2)  if the benefit resulted from the use of the conferring estate's property to make improvements on the benefited estate's real property, then the value of the benefit conferred is measured by the enhancement in the value of the benefited estate's real property that resulted from the improvements; or

(3)  if the benefit resulted from the use of time, toil, talent, or effort to enhance the value of property of a spouse's separate estate, then the value of the benefit conferred is measured by the value of the time, toil, talent, or effort beyond that which was reasonably necessary to manage and preserve the spouse's separate property.

(e)  Provides that the determination of whether unjust enrichment will occur if one marital estate is not required to reimburse another marital estate is a question for the court to decide.

(f) Creates this subsection from existing text.

(g)  Authorizes a claim for reimbursement of a marital estate by one spouse to be offset by the value of any related benefit that the other spouse proves that the conferring estate received from the benefited estate, including:

(1)  the value of the use and enjoyment of the property by the conferring estate, except that the separate marital estate of a spouse is prohibited from claiming an offset for use and enjoyment of a primary or secondary residence owned wholly or partly by the separate marital estate against contributions made by the community marital estate to the separate marital estate;

(2)  income received by the conferring estate from the property of the benefited estate; or

(3)  any reduction in the amount of any income tax obligation of the conferring estate by virtue of the conferring estate claiming tax-deductible items relating to the property of the benefited estate, such as depreciation, interest, taxes, maintenance, or other deductible payments.

(h) Creates this subsection from existing text. Deletes existing text authorizing benefits for the use and enjoyment of property to be offset against a claim for reimbursement for expenditures to benefit a marital estate, except that the separate estate of a spouse is prohibited from claiming an offset for use and enjoyment of a primary or secondary residence owned wholly or partly by the separate estate against contributions made by the community estate to the separate estate. Deletes existing text requiring that reimbursement for funds expended by a marital estate for improvements to another marital estate be measured by the enhancement in value to the benefited marital estate.

SECTION 3. Amends Section 3.404(b), Family Code, to provide that a claim for reimbursement under this subchapter does not create an ownership interest in property, but does create a claim against the property of the benefited estate by the conferring, rather than contributing, estate.

SECTION 4. Amends Section 3.406, Family Code, as follows:

Sec. 3.406.  EQUITABLE LIEN.� (a) Authorizes the court, on dissolution of a marriage, to impose an equitable lien on the property of a benefited estate to secure a claim for reimbursement against that property by a conferring estate. Deletes existing text providing that on dissolution of a marriage, the court is authorized to impose an equitable lien on the property of a benefited marital estate to secure a claim for reimbursement against that property by a contributing marital estate.

(b) Makes a conforming change to this subsection.

SECTION 5. Amends Subchapter E, Chapter 3, Family Code, by adding Section 3.411, as follows:

Sec. 3.411.  CUMULATIVE REMEDIES. Provides that the remedies provided by this subchapter are not exclusive and are in addition to any other remedy provided by law.

SECTION 6. Provides that the change in law made by this Act applies to a claim for reimbursement that is pending in a trial court on the effective date of this Act or that is filed on or after that date.

SECTION 7. Effective date: September 1, 2023.