Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB1597 by Gonzalez, Naomi (relating to installment payments of ad valorem taxes.), Committee Report 1st House, Substituted
No significant fiscal implication to the State is anticipated.
The bill would amend Section 33.02 of the Tax Code, regarding property taxation and delinquency, to require a collector for a taxing unit, on request by a person delinquent in the payment of the tax on a residence homestead, to enter into an agreement with the person for payment of the tax, penalties, and interest in installments if the person has not entered into an installment agreement with the collector for the taxing unit in the preceding 24 months. The installment plan must provide for equal monthly installments over at least a 12 month period. A penalty does not accrue on the unpaid balance during the agreement period if the property is a residence homestead. The bill would amend Section 33.04 of this code to require a collector to provide notice of this right in the notice of delinquency. If an individual breaches an installment agreement, a collector must deliver the notice of delinquency to the owner and to any other owner of an interest in the property subject to the agreement whose name appears on the delinquent tax roll before the collector may seize and sell the property or file a suit to collect delinquent taxes subject to the agreement.
Currently, an individual who is the unmarried surviving spouse of a disabled veteran and who qualified for an exemption under Section 11.22 of the Tax Code, relating to disabled veterans, may pay residence homestead taxes in installments. The bill would amend Section 31.031 of this code to provide that an individual who is qualified for that exemption (not just unmarried surviving spouses) may pay residence homestead taxes in installments. Under current law, an individual eligible to pay residence homestead taxes in installments must pay one-fourth of the taxes before the delinquency date and provide notice that the person will pay the remaining taxes in three equal installments. The bill would provide that an eligible individual may pay residence homestead taxes in four equal installments if the first installment is paid before the delinquency date; however, an eligible individual may pay in installments if the first installment is paid and the required notice is provided before March 1.
The bill would amend Chapter 51 of the Property Code, regarding provisions generally applicable to liens, to provide that a debtor is not in default on real property used as the debtor's residence if the debtor is protected from seizure and sale and delinquent tax suits and the debtor has given notice of the intent to enter an installment agreement to the mortgage servicer within the specified time period.
The bill's proposed notification requirements and forgiveness of delinquent tax penalties for homestead owners who have agreed to an installment plan would result in some costs for units of local government. The bill's proposed installment payment plan could, on the other hand, make it feasible for some homestead owners to pay property taxes that they would otherwise be unable to pay. The net fiscal impact would not be significant.
This bill would take effect on September 1, 2013.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.