BILL ANALYSIS H.B. 2197 By: Stiles April 21, 1995 Committee Report (Amended) BACKGROUND Section 31.031, Tax Code, allows persons 65 years of age and older to pay property taxes in installments without penalty or interest. The property must be owned and occupied as a residence homestead by the person, and one fourth of the taxes must be paid by the due date and accompanied by a notice that the remainder will be paid in three equal installments. The three installments are due April 1, June 1 and before August 1. Section 31.07 authorizes a tax collector to adopt a policy of accepting partial payments of property taxes, but specifies that acceptance of a partial payment does not affect the date the tax becomes delinquent, and penalties and interest accrue on the unpaid balance. Section 418.004, Government Code, defines "disaster" as "the occurrence or imminent threat of widespread or severe damage, injury, or loss of life or property resulting from any natural or man-made cause, including fire, flood, earthquake, wind, storm, wave action, oil spill or other water contamination, volcanic activity, epidemic, air contamination, blight, drought, infestation, explosion, riot, hostile military or paramilitary action, other public calamity requiring emergency action, or energy emergency." Under Chapter 418, the Governor by executive order or proclamation may declare a state of disaster. Section 151.350, Tax Code, defines "disaster area" as an area declared a disaster by the Governor under Chapter 418, Government Code, or an area declared a disaster area by the president of the United States under 42 U.S.C Section 5141. In October of 1994, extensive flooding occurred in Southeast Texas. Because this disaster occurred late in the year, property owners were faced with paying their property taxes in full or, if the tax collector accepted partial payment, paying penalty and interest on the unpaid balance. PURPOSE This bill would allow persons to pay property taxes in installments without penalty or interest for residential property with fewer than five units located in a disaster area, that was damaged by the disaster. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 31, Tax Code, by adding Section 31.032 INSTALLMENT PAYMENTS OF TAXES ON PROPERTY IN DISASTER AREA. (a) Applies this section to real property that is homestead property or used for residential purposes with fewer than five units, located in a disaster area, and has been damaged by the disaster. Also specifies that taxes are imposed before the first anniversary of the disaster. (b) Provides for payment of one-fourth of the taxes accompanied by notice that the remaining payments will be made in installments (without penalty or interest); requires payment in three equal installments by the specified dates. (c) Provides that if the installment payments are not paid in time, the unpaid amount becomes delinquent, and penalty and interest will be charged. (d) Allows overpayments to be made and applied to the next installment; authorizes the collector to accept partial payment of installments, and impose penalty and interest on the unpaid balance. (e) Provides for later installment deadlines if the delinquency date is postponed to May 1 or a later date. (f) Requires the comptroller to adopt rules to implement this section. (g) Defines "disaster" and "disaster area" for the purposes of this section. SECTION 2. Emergency clause. EXPLANATION OF AMENDMENTS COMMITTEE AMENDMENT #1 would provide that extended installment deadlines may not extend beyond December 31. SUMMARY OF COMMITTEE ACTION Public notice was posted in accordance with the rules, and a public hearing was held on March 28, 1995. Representative Wolens explained the bill. Without objection, H.B. 2197 was left pending before the committee. On April 18, 1995, the committee met in a public hearing, and H.B. 2197 was laid out on pending business. The committee considered amendment #1 by Representative Heflin. Without objection, the committee adopted committee amendment #1. By a record vote of 8 ayes, 0 nays, 0 present not voting and 3 absent, the committee voted to report H.B. 2197 to the House with amendment with the recommendation that it do pass.