1-1 AN ACT
1-2 relating to the payment of property taxes pending appeal and to
1-3 attorney's fees and penalties in a property tax appeal.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 42.08(b) and (c), Tax Code, are amended
1-6 to read as follows:
1-7 (b) Except as provided in Subsection (d), a property owner
1-8 who appeals as provided by this chapter must pay taxes on the
1-9 property subject to the appeal in the amount required by this
1-10 subsection before the delinquency date or the property owner
1-11 forfeits the right to proceed to a final determination of the
1-12 appeal. The amount of taxes the property owner must pay on the
1-13 property before the delinquency date to comply with this subsection
1-14 is the lesser of:
1-15 (1) the amount of taxes due on the portion of the
1-16 taxable value of the property that is not in dispute [or the amount
1-17 of taxes imposed on the property in the preceding year, whichever
1-18 is greater]; or
1-19 (2) the amount of taxes due on the property under the
1-20 order from which the appeal is taken.
1-21 (c) A property owner that pays an [the] amount of taxes
1-22 greater than that required by Subsection (b) does not forfeit the
1-23 property owner's right to a final determination of the appeal by
2-1 making the payment. If the property owner files a timely appeal
2-2 under this chapter, taxes paid on the property are considered paid
2-3 under protest, even if paid before the appeal is filed.
2-4 SECTION 2. Section 42.29, Tax Code, is amended to read as
2-5 follows:
2-6 Sec. 42.29. ATTORNEY'S FEES. (a) A property owner who
2-7 prevails in an appeal to the court under Section 42.25 or [Section]
2-8 42.26 [of this code] may be awarded reasonable attorney's fees.
2-9 The amount of the award may not [to] exceed the greater of:
2-10 (1) $15,000; or
2-11 (2) 20 percent of the total amount by which the
2-12 property owner's tax liability is reduced as a result of the
2-13 appeal.
2-14 (b) Notwithstanding Subsection (a), the amount of an [The]
2-15 award of attorney's fees[, however,] may not exceed the lesser of:
2-16 (1) $100,000; or
2-17 (2) the total amount by which the property owner's tax
2-18 liability is reduced as a result of the appeal.
2-19 SECTION 3. Section 42.42, Tax Code, is amended by amending
2-20 Subsections (b) and (c) and adding Subsection (d) to read as
2-21 follows:
2-22 (b) If the final determination of an appeal that increases a
2-23 property owner's tax liability occurs after the property owner has
2-24 paid his taxes, the assessor for each affected taxing unit shall
2-25 prepare and mail a supplemental tax bill in the manner provided by
3-1 Chapter 31 [of this code] for tax bills generally. The assessor
3-2 shall include with the bill a brief explanation of the reason for
3-3 and effect of the supplemental bill. The additional tax is due on
3-4 receipt of the supplemental bill and becomes delinquent if not paid
3-5 before the delinquency date prescribed by Chapter 31 [of this code]
3-6 or before the first day of the next month after the date of mailing
3-7 that will provide at least 21 days for payment of the tax,
3-8 whichever is later.
3-9 (c) If the final determination of an appeal occurs after the
3-10 property owner has paid a portion of the tax finally determined to
3-11 be due as required by Section 42.08 [of this code], the assessor
3-12 for each affected taxing unit shall prepare and mail a supplemental
3-13 tax bill in the form and manner prescribed by Subsection (b) [of
3-14 this section]. The additional tax is due and becomes delinquent as
3-15 provided by Subsection (b), but the property owner is liable for
3-16 penalties and interest on the tax included in the supplemental bill
3-17 calculated as provided by Section 33.01 as if the tax included in
3-18 the supplemental bill became delinquent on the original
3-19 delinquency date prescribed by Chapter 31 [at the rate prescribed
3-20 by this code for delinquent taxes].
3-21 (d) If the property owner did not pay any portion of the
3-22 taxes imposed on the property because the court found that payment
3-23 would constitute an unreasonable restraint on the owner's right of
3-24 access to the courts as provided by Section 42.08(d), after the
3-25 final determination of the appeal the assessor for each affected
4-1 taxing unit shall prepare and mail a supplemental tax bill in the
4-2 form and manner prescribed by Subsection (b). The additional tax
4-3 is due and becomes delinquent as provided by Subsection (b), but
4-4 the property owner is liable for interest on the tax included in
4-5 the supplemental bill calculated as provided by Section 33.01 as if
4-6 the tax included in the supplemental bill became delinquent on the
4-7 delinquency date prescribed by Chapter 31.
4-8 SECTION 4. (a) The changes in law made by Sections 1 and 2
4-9 of this Act apply only to an appeal filed under Chapter 42, Tax
4-10 Code, as amended by this Act, on or after the effective date of
4-11 this Act. An appeal filed under Chapter 42, Tax Code, as amended
4-12 by this Act, before the effective date of this Act is governed by
4-13 the law in effect when the appeal was filed, and that law is
4-14 continued in effect for that purpose.
4-15 (b) Except as provided by Subsection (c) of this section,
4-16 the change in law made by this Act to Section 42.42(c), Tax Code,
4-17 applies only to the accrual of penalties and interest on taxes on
4-18 property subject to an appeal that are paid on or after the
4-19 effective date of this Act or for which the supplemental tax bill
4-20 is mailed under Section 42.42(c), Tax Code, on or after the
4-21 effective date of this Act. For taxes on property subject to an
4-22 appeal for which the original delinquency date prescribed by
4-23 Chapter 31, Tax Code, occurred before the effective date of this
4-24 Act and that are paid on or after the effective date of this Act or
4-25 for which the supplemental tax bill is sent under Section 42.42(c),
5-1 Tax Code, on or after the effective date of this Act, penalties
5-2 imposed as provided by Section 42.42(c), Tax Code, as amended by
5-3 this Act, on the additional tax paid on or after the effective date
5-4 of this Act or included in the supplemental tax bill sent on or
5-5 after that date are calculated as provided by Section 33.01, Tax
5-6 Code, as if the delinquency date for those taxes is the first day
5-7 of the first calendar month that begins on or after the 21st day
5-8 after the effective date of this Act.
5-9 (c) The accrual of penalties and interest on taxes for which
5-10 a supplemental tax bill is sent as provided by Section 42.42(c),
5-11 Tax Code, before the effective date of this Act is governed by
5-12 Section 42.42(c), Tax Code, as that section existed when the
5-13 supplemental tax bill was mailed, and that law is continued in
5-14 effect for that purpose.
5-15 (d) Section 42.42(d), Tax Code, as added by this Act,
5-16 applies only to the accrual of interest on unpaid taxes covered by
5-17 that subsection on or after the effective date of this Act. The
5-18 accrual of penalties and interest on those taxes before the
5-19 effective date of this Act is governed by the applicable law in
5-20 effect before the effective date of this Act.
5-21 SECTION 5. The importance of this legislation and the
5-22 crowded condition of the calendars in both houses create an
5-23 emergency and an imperative public necessity that the
5-24 constitutional rule requiring bills to be read on three several
5-25 days in each house be suspended, and this rule is hereby suspended,
6-1 and that this Act take effect and be in force from and after its
6-2 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2201 was passed by the House on April
11, 1997, by the following vote: Yeas 133, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 2201 on May 14, 1997, by the following vote: Yeas 141, Nays 0,
3 present, not voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2201 was passed by the Senate, with
amendments, on May 12, 1997, by the following vote: Yeas 31, Nays
0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor