1-1 By: Ratliff S.B. No. 1321
1-2 (In the Senate - Filed March 11, 1999; March 15, 1999, read
1-3 first time and referred to Committee on Finance; March 29, 1999,
1-4 reported favorably by the following vote: Yeas 11, Nays 0;
1-5 March 29, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the settlement and collection of taxes and penalties
1-9 and interest on taxes, refunds, and credits.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 111.060, Tax Code, is amended to read as
1-12 follows:
1-13 Sec. 111.060. INTEREST ON DELINQUENT TAX. (a) The yearly
1-14 interest rate on all delinquent taxes imposed by this title is at
1-15 the rate of 12 percent for report periods originally due on or
1-16 before December 31, 1999, after which the rate of interest is
1-17 variable and determined as provided in Subsection (b).
1-18 (b) The rate of interest to be charged to the taxpayer is
1-19 the prime rate plus one percent, as published in the Wall Street
1-20 Journal on the first day of each calendar year that is not a
1-21 Saturday, Sunday, or legal holiday.
1-22 (c) Except as provided by Subsection (d) [(c) of this
1-23 section], delinquent taxes draw interest beginning 60 days after
1-24 [from] the date due.
1-25 (d) [(c)] Subsection (c) [(b) of this section] does not
1-26 apply to the taxes imposed by Chapters 152 and 211 [of this code]
1-27 or under an agreement made under Section 153.017 [of this code].
1-28 SECTION 2. Subchapter B, Chapter 111, Tax Code, is amended
1-29 by adding Section 111.064 to read as follows:
1-30 Sec. 111.064. INTEREST ON REFUND OR CREDIT. (a) Except as
1-31 provided by Subsections (b) and (c), in a comptroller's final
1-32 decision on a claim for refund or in an audit, interest is at the
1-33 rate set in Section 111.060 on the amount found to be erroneously
1-34 paid for a period:
1-35 (1) beginning on the later of 60 days after the date
1-36 of payment or the due date of the tax report; and
1-37 (2) ending on, as determined by the comptroller,
1-38 either the date of allowance of credit on account of the
1-39 comptroller's final decision or audit or a date not more than 10
1-40 days before the date of the refund warrant.
1-41 (b) A credit taken by a taxpayer on the taxpayer's return
1-42 does not accrue interest.
1-43 (c) For a refund granted for a report period due on or after
1-44 January 1, 2000, the rate of interest is the rate set in Section
1-45 111.060. A refund for a report period due before January 1, 2000,
1-46 does not accrue interest.
1-47 (d) This section does not apply to an amount paid to the
1-48 comptroller under Title 6, Property Code, or under an agreement
1-49 made under Section 153.017.
1-50 (e) All warrants for interest payments shall be drawn
1-51 against the fund or account into which the erroneously paid tax was
1-52 deposited. The interest shall be paid from funds appropriated for
1-53 that purpose.
1-54 SECTION 3. Section 111.101, Tax Code, is amended to read as
1-55 follows:
1-56 Sec. 111.101. SETTLEMENT [BEFORE REDETERMINATION]. (a) The
1-57 [After the comptroller examines a taxpayer's records and before a
1-58 petition for redetermination of the tax is filed, the] comptroller
1-59 may settle a claim for a tax, penalty, or interest imposed by this
1-60 title if the total costs [cost] of collection, as conclusively
1-61 determined by the comptroller, of the total amount due would exceed
1-62 the total amount [of tax] due [and if the amount due is not more
1-63 than $300].
1-64 (b) The comptroller may settle a claim for a refund of tax,
2-1 penalty, or interest imposed by this title if the total costs of
2-2 defending a denial of the claim, as conclusively determined by the
2-3 comptroller, would exceed the total amount claimed.
2-4 SECTION 4. Section 111.102, Tax Code, is amended to read as
2-5 follows:
2-6 Sec. 111.102. SETTLEMENT ON REDETERMINATION. As a part of a
2-7 redetermination order, the comptroller may settle a claim for a
2-8 tax, penalty, or interest imposed by this title if:
2-9 (1) [the cost of collection of the amount of tax due
2-10 would exceed the amount of tax due and the amount of tax due is not
2-11 more than $1,000;]
2-12 [(2)] collection of the total amount [of tax] due
2-13 would make the taxpayer insolvent and the taxpayer has submitted to
2-14 the comptroller all financial records, including income tax reports
2-15 and an inventory of all property owned wherever located; or
2-16 (2) [(3)] the taxpayer is insolvent, is in
2-17 liquidation, or has ceased to do business and:
2-18 (A) the taxpayer has no property that may be
2-19 seized by the courts of this or another state; or
2-20 (B) the value of the taxpayer's property is less
2-21 than the total amount [of tax] due and the amount of debts against
2-22 the property.
2-23 SECTION 5. The comptroller of public accounts may adopt
2-24 rules and take other actions before January 1, 2000, as the
2-25 comptroller considers necessary or advisable to prepare for
2-26 Sections 3 and 4 of this Act taking effect.
2-27 SECTION 6. (a) Sections 3, 4, and 5 of this Act take effect
2-28 on the first date on which they may take effect under Section 39,
2-29 Article III, Texas Constitution.
2-30 (b) Sections 1 and 2 of this Act take effect January 1,
2-31 2000.
2-32 SECTION 7. The importance of this legislation and the
2-33 crowded condition of the calendars in both houses create an
2-34 emergency and an imperative public necessity that the
2-35 constitutional rule requiring bills to be read on three several
2-36 days in each house be suspended, and this rule is hereby suspended,
2-37 and that this Act take effect and be in force according to its
2-38 terms, and it is so enacted.
2-39 * * * * *