1-1 By: Stiles (Senate Sponsor - Ratliff) H.B. No. 2201
1-2 (In the Senate - Received from the House April 14, 1997;
1-3 April 18, 1997, read first time and referred to Committee on
1-4 Finance; May 5, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 10, Nays 0; May 5, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 2201 By: Ratliff
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the payment of property taxes pending appeal and to
1-11 attorney's fees and penalties in a property tax appeal.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Sections 42.08(b) and (c), Tax Code, are amended
1-14 to read as follows:
1-15 (b) Except as provided in Subsection (d), a property owner
1-16 who appeals as provided by this chapter must pay taxes on the
1-17 property subject to the appeal in the amount required by this
1-18 subsection before the delinquency date or the property owner
1-19 forfeits the right to proceed to a final determination of the
1-20 appeal. The amount of taxes the property owner must pay on the
1-21 property before the delinquency date to comply with this subsection
1-22 is the lesser of:
1-23 (1) the amount of taxes due on the portion of the
1-24 taxable value of the property that is not in dispute [or the amount
1-25 of taxes imposed on the property in the preceding year, whichever
1-26 is greater]; or
1-27 (2) the amount of taxes due on the property under the
1-28 order from which the appeal is taken.
1-29 (c) A property owner that pays an [the] amount of taxes
1-30 greater than that required by Subsection (b) does not forfeit the
1-31 property owner's right to a final determination of the appeal by
1-32 making the payment. If the property owner files a timely appeal
1-33 under this chapter, taxes paid on the property are considered paid
1-34 under protest, even if paid before the appeal is filed.
1-35 SECTION 2. Section 42.29, Tax Code, is amended to read as
1-36 follows:
1-37 Sec. 42.29. ATTORNEY'S FEES. (a) A property owner who
1-38 prevails in an appeal to the court under Section 42.25 or [Section]
1-39 42.26 [of this code] may be awarded reasonable attorney's fees.
1-40 The amount of the award may not [to] exceed the greater of:
1-41 (1) $15,000; or
1-42 (2) 20 percent of the total amount by which the
1-43 property owner's tax liability is reduced as a result of the
1-44 appeal.
1-45 (b) Notwithstanding Subsection (a), the amount of an [The]
1-46 award of attorney's fees[, however,] may not exceed the lesser of:
1-47 (1) $100,000; or
1-48 (2) the total amount by which the property owner's tax
1-49 liability is reduced as a result of the appeal.
1-50 SECTION 3. Section 42.42, Tax Code, is amended by amending
1-51 Subsections (b) and (c) and adding Subsection (d) to read as
1-52 follows:
1-53 (b) If the final determination of an appeal that increases a
1-54 property owner's tax liability occurs after the property owner has
1-55 paid his taxes, the assessor for each affected taxing unit shall
1-56 prepare and mail a supplemental tax bill in the manner provided by
1-57 Chapter 31 [of this code] for tax bills generally. The assessor
1-58 shall include with the bill a brief explanation of the reason for
1-59 and effect of the supplemental bill. The additional tax is due on
1-60 receipt of the supplemental bill and becomes delinquent if not paid
1-61 before the delinquency date prescribed by Chapter 31 [of this code]
1-62 or before the first day of the next month after the date of mailing
1-63 that will provide at least 21 days for payment of the tax,
1-64 whichever is later.
2-1 (c) If the final determination of an appeal occurs after the
2-2 property owner has paid a portion of the tax finally determined to
2-3 be due as required by Section 42.08 [of this code], the assessor
2-4 for each affected taxing unit shall prepare and mail a supplemental
2-5 tax bill in the form and manner prescribed by Subsection (b) [of
2-6 this section]. The additional tax is due and becomes delinquent as
2-7 provided by Subsection (b), but the property owner is liable for
2-8 penalties and interest on the tax included in the supplemental bill
2-9 calculated as provided by Section 33.01 as if the tax included in
2-10 the supplemental bill became delinquent on the original
2-11 delinquency date prescribed by Chapter 31 [at the rate prescribed
2-12 by this code for delinquent taxes].
2-13 (d) If the property owner did not pay any portion of the
2-14 taxes imposed on the property because the court found that payment
2-15 would constitute an unreasonable restraint on the owner's right of
2-16 access to the courts as provided by Section 42.08(d), after the
2-17 final determination of the appeal the assessor for each affected
2-18 taxing unit shall prepare and mail a supplemental tax bill in the
2-19 form and manner prescribed by Subsection (b). The additional tax
2-20 is due and becomes delinquent as provided by Subsection (b), but
2-21 the property owner is liable for interest on the tax included in
2-22 the supplemental bill calculated as provided by Section 33.01 as if
2-23 the tax included in the supplemental bill became delinquent on the
2-24 delinquency date prescribed by Chapter 31.
2-25 SECTION 4. (a) The changes in law made by Sections 1 and 2
2-26 of this Act apply only to an appeal filed under Chapter 42, Tax
2-27 Code, as amended by this Act, on or after the effective date of
2-28 this Act. An appeal filed under Chapter 42, Tax Code, as amended
2-29 by this Act, before the effective date of this Act is governed by
2-30 the law in effect when the appeal was filed, and that law is
2-31 continued in effect for that purpose.
2-32 (b) Except as provided by Subsection (c) of this section,
2-33 the change in law made by this Act to Section 42.42(c), Tax Code,
2-34 applies only to the accrual of penalties and interest on taxes on
2-35 property subject to an appeal that are paid on or after the
2-36 effective date of this Act or for which the supplemental tax bill
2-37 is mailed under Section 42.42(c), Tax Code, on or after the
2-38 effective date of this Act. For taxes on property subject to an
2-39 appeal for which the original delinquency date prescribed by
2-40 Chapter 31, Tax Code, occurred before the effective date of this
2-41 Act and that are paid on or after the effective date of this Act or
2-42 for which the supplemental tax bill is sent under Section 42.42(c),
2-43 Tax Code, on or after the effective date of this Act, penalties
2-44 imposed as provided by Section 42.42(c), Tax Code, as amended by
2-45 this Act, on the additional tax paid on or after the effective date
2-46 of this Act or included in the supplemental tax bill sent on or
2-47 after that date are calculated as provided by Section 33.01, Tax
2-48 Code, as if the delinquency date for those taxes is the first day
2-49 of the first calendar month that begins on or after the 21st day
2-50 after the effective date of this Act.
2-51 (c) The accrual of penalties and interest on taxes for which
2-52 a supplemental tax bill is sent as provided by Section 42.42(c),
2-53 Tax Code, before the effective date of this Act are governed by
2-54 Section 42.42(c), Tax Code, as that section existed when the
2-55 supplemental tax bill was mailed, and that law is continued in
2-56 effect for that purpose.
2-57 (d) Section 42.42(d), Tax Code, as added by this Act,
2-58 applies only to the accrual of interest on unpaid taxes covered by
2-59 that subsection on or after the effective date of this Act. The
2-60 accrual of penalties and interest on those taxes before the
2-61 effective date of this Act is governed by the applicable law in
2-62 effect before the effective date of this Act.
2-63 SECTION 5. The importance of this legislation and the
2-64 crowded condition of the calendars in both houses create an
2-65 emergency and an imperative public necessity that the
2-66 constitutional rule requiring bills to be read on three several
2-67 days in each house be suspended, and this rule is hereby suspended,
2-68 and that this Act take effect and be in force from and after its
2-69 passage, and it is so enacted.