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A BILL TO BE ENTITLED
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AN ACT
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relating to the accrual of penalties and interest under the |
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Property Tax Code. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 1, Tax Code, is amended by adding Section |
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1.14 to read as follows: |
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Sec. 1.14. INTEREST RATE. Except as otherwise provided by |
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this title, for purposes of a provision of this title providing for |
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the accrual of interest, interest accrues at an annual rate equal to |
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the lesser of: |
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(1) 12 percent; or |
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(2) the sum of two percent and the most recent prime |
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rate quoted and published by the Federal Reserve Board as of the |
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first day of the month in which the interest is first calculated. |
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SECTION 2. Section 11.135(c), Tax Code, is amended to read |
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as follows: |
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(c) If an owner receives an exemption for property under |
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Section 11.13 under the circumstances described by Subsection (a) |
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and sells the property before the owner completes construction of a |
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replacement qualified residential structure on the property, an |
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additional tax is imposed on the property equal to the difference |
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between the taxes imposed on the property for each of the years in |
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which the owner received the exemption and the tax that would have |
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been imposed had the owner not received the exemption in each of |
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those years, plus interest at the rate provided by Section 1.14 [an
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annual rate of seven percent] calculated from the dates on which the |
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differences would have become due. |
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SECTION 3. Section 11.181(e), Tax Code, is amended to read |
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as follows: |
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(e) If the organization that owns improved or unimproved |
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real property that has been exempted under Subsection (a) sells the |
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property to a person other than an individual or family satisfying |
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the organization's low-income or other eligibility requirements, a |
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penalty is imposed on the property equal to the amount of the taxes |
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that would have been imposed on the property in each tax year that |
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the property was exempted from taxation under Subsection (a), plus |
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interest at the rate provided by Section 1.14 [an annual rate of 12
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percent] calculated from the dates on which the taxes would have |
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become due. |
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SECTION 4. Section 11.185(e), Tax Code, is amended to read |
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as follows: |
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(e) If the organization that owns improved or unimproved |
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real property that has been exempted under Subsection (a) sells the |
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property to a person other than a person described by Section |
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2306.786(b)(1), Government Code, a penalty is imposed on the |
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property equal to the amount of the taxes that would have been |
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imposed on the property in each tax year that the property was |
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exempted from taxation under Subsection (a), plus interest at the |
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rate provided by Section 1.14 of this code [an annual rate of 12
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percent] computed from the dates on which the taxes would have |
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become due. |
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SECTION 5. Section 11.201(a), Tax Code, is amended to read |
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as follows: |
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(a) If land is sold or otherwise transferred to another |
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person in a year in which the land receives an exemption under |
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Section 11.20(a)(6), an additional tax is imposed on the land equal |
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to the tax that would have been imposed on the land had the land been |
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taxed for each of the five years preceding the year in which the |
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sale or transfer occurs in which the land received an exemption |
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under that subsection, plus interest at the rate provided by |
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Section 1.14 [an annual rate of seven percent] calculated from the |
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dates on which the taxes would have become due. |
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SECTION 6. Section 23.46(c), Tax Code, is amended to read as |
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follows: |
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(c) If land that has been designated for agricultural use in |
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any year is sold or diverted to a nonagricultural use, the total |
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amount of additional taxes for the three years preceding the year in |
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which the land is sold or diverted plus interest at the rate |
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provided by Section 1.14 [for delinquent taxes] becomes due. A |
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determination that the land has been diverted to a nonagricultural |
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use is made by the chief appraiser. For purposes of this |
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subsection, the chief appraiser may not consider any period during |
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which land is owned by the state in determining whether the land has |
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been diverted to a nonagricultural use. The chief appraiser shall |
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deliver a notice of the determination to the owner of the land as |
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soon as possible after making the determination and shall include |
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in the notice an explanation of the owner's right to protest the |
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determination. If the owner does not file a timely protest or if |
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the final determination of the protest is that the additional taxes |
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are due, the assessor for each taxing unit shall prepare and deliver |
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a bill for the additional taxes plus interest as soon as practicable |
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after the change of use occurs. If the additional taxes are due |
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because of a sale of the land, the assessor for each taxing unit |
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shall prepare and deliver the bill as soon as practicable after the |
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sale occurs. The taxes and interest are due and become delinquent |
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and incur penalties and interest as provided by law for ad valorem |
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taxes imposed by the taxing unit if not paid before the next |
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February 1 that is at least 20 days after the date the bill is |
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delivered to the owner of the land. |
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SECTION 7. Section 23.55(a), Tax Code, is amended to read as |
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follows: |
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(a) If the use of land that has been appraised as provided by |
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this subchapter changes, an additional tax is imposed on the land |
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equal to the difference between the taxes imposed on the land for |
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each of the five years preceding the year in which the change of use |
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occurs that the land was appraised as provided by this subchapter |
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and the tax that would have been imposed had the land been taxed on |
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the basis of market value in each of those years, plus interest at |
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the rate provided by Section 1.14 [an annual rate of seven percent] |
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calculated from the dates on which the differences would have |
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become due. For purposes of this subsection, the chief appraiser |
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may not consider any period during which land is owned by the state |
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in determining whether a change in the use of the land has occurred. |
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SECTION 8. Section 23.76(a), Tax Code, is amended to read as |
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follows: |
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(a) If the use of land that has been appraised as provided by |
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this subchapter changes, an additional tax is imposed on the land |
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equal to the difference between the taxes imposed on the land for |
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each of the five years preceding the year in which the change of use |
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occurs that the land was appraised as provided by this subchapter |
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and the tax that would have been imposed had the land been taxed on |
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the basis of market value in each of those years, plus interest at |
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the rate provided by Section 1.14 [an annual rate of seven percent] |
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calculated from the dates on which the differences would have |
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become due. |
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SECTION 9. Section 23.86(a), Tax Code, is amended to read as |
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follows: |
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(a) If land that has been appraised under this subchapter is |
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no longer subject to a deed restriction or is diverted to a use |
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other than recreational, park, or scenic uses, an additional tax is |
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imposed on the land equal to the difference between the taxes |
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imposed on the land for each of the five years preceding the year in |
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which the change of use occurs or the deed restriction expires that |
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the land was appraised as provided by this subchapter and the tax |
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that would have been imposed had the land not been restricted to |
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recreational, park, or scenic uses in each of those years, plus |
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interest at the rate provided by Section 1.14 [an annual rate of
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seven percent] calculated from the dates on which the differences |
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would have become due. |
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SECTION 10. Section 23.96(a), Tax Code, is amended to read |
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as follows: |
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(a) If airport property that has been appraised under this |
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subchapter is no longer subject to a deed restriction, an |
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additional tax is imposed on the property equal to the difference |
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between the taxes imposed on the property for each of the five years |
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preceding the year in which the deed restriction expires that the |
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property was appraised as provided by this subchapter and the tax |
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that would have been imposed had the property not been restricted to |
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use as public access airport property in each of those years, plus |
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interest at the rate provided by Section 1.14 [an annual rate of
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seven percent] calculated from the dates on which the differences |
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would have become due. |
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SECTION 11. Sections 23.9807(a) and (b), Tax Code, are |
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amended to read as follows: |
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(a) If the use of land that has been appraised as provided by |
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this subchapter changes to a use that qualifies the land for |
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appraisal under Subchapter E, an additional tax is imposed on the |
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land equal to the sum of: |
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(1) the difference between: |
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(A) the taxes imposed on the land for each of the |
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five years preceding the year in which the change of use occurs that |
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the land was appraised as provided by this subchapter; and |
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(B) the taxes that would have been imposed had |
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the land been appraised under Subchapter E in each of those years; |
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and |
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(2) interest at the rate provided by Section 1.14 [an
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annual rate of seven percent] calculated from the dates on which the |
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differences would have become due. |
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(b) If the use of land that has been appraised as provided by |
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this subchapter changes to a use that does not qualify the land for |
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appraisal under Subchapter E or under this subchapter, an |
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additional tax is imposed on the land equal to the sum of: |
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(1) the difference between: |
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(A) the taxes imposed on the land for each of the |
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five years preceding the year in which the change of use occurs that |
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the land was appraised as provided by this subchapter; and |
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(B) the taxes that would have been imposed had |
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the land been taxed on the basis of market value in each of those |
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years; and |
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(2) interest at the rate provided by Section 1.14 [an
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annual rate of seven percent] calculated from the dates on which the |
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differences would have become due. |
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SECTION 12. Section 26.09(d), Tax Code, is amended to read |
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as follows: |
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(d) If a property is subject to taxation for a prior year in |
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which it escaped taxation, the assessor shall calculate the tax for |
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each year separately. In calculating the tax, the assessor shall |
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use the assessment ratio and tax rate in effect in the unit for the |
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year for which back taxes are being imposed. Except as provided by |
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Subsection (d-1), the amount of back taxes due incurs interest |
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calculated at the rate provided by Section 1.14 [33.01(c)] from the |
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date the tax would have become delinquent had the tax been imposed |
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in the proper tax year. |
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SECTION 13. Section 31.12(a), Tax Code, is amended to read |
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as follows: |
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(a) If a refund of a tax provided by Section 11.431(b), |
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26.07(g), 26.15(f), 31.11, or 31.111 is paid on or before the 60th |
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day after the date the liability for the refund arises, no interest |
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is due on the amount refunded. If not paid on or before that 60th |
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day, the amount of the tax to be refunded accrues interest at the |
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rate provided by Section 1.14 [a rate of one percent for each month
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or part of a month that the refund is unpaid], beginning with the |
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date on which the liability for the refund arises. |
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SECTION 14. Section 33.01(c), Tax Code, is amended to read |
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as follows: |
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(c) A delinquent tax accrues interest at the rate provided |
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by Section 1.14 [a rate of one percent for each month or portion of a
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month the tax remains unpaid]. Interest payable under this section |
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is to compensate the taxing unit for revenue lost because of the |
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delinquency. A delinquent tax continues to accrue interest under |
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this subsection as long as the tax remains unpaid, regardless of |
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whether a judgment for the delinquent tax has been rendered. |
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SECTION 15. Section 33.06(d), Tax Code, is amended to read |
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as follows: |
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(d) A tax lien remains on the property and interest |
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continues to accrue during the period collection of taxes is |
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deferred or abated under this section. The annual interest rate |
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during the deferral or abatement period is the rate provided by |
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Section 1.14 [eight percent instead of the rate provided by Section
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33.01]. Interest and penalties that accrued or that were incurred |
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or imposed under Section 33.01 or 33.07 before the date the |
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individual files the deferral affidavit under Subsection (b) or the |
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date the judgment abating the suit is entered, as applicable, are |
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preserved. A penalty under Section 33.01 is not incurred during a |
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deferral or abatement period. The additional penalty under Section |
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33.07 may be imposed and collected only if the taxes for which |
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collection is deferred or abated remain delinquent on or after the |
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181st day after the date the deferral or abatement period expires. |
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A plea of limitation, laches, or want of prosecution does not apply |
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against the taxing unit because of deferral or abatement of |
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collection as provided by this section. |
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SECTION 16. Section 33.065(g), Tax Code, is amended to read |
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as follows: |
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(g) A tax lien remains on the property and interest |
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continues to accrue during the period collection of delinquent |
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taxes is deferred or abated under this section. The annual interest |
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rate during the deferral or abatement period is the rate provided by |
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Section 1.14 [eight percent instead of the rate provided by Section
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33.01]. Interest and penalties that accrued or that were incurred |
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or imposed under Section 33.01 or 33.07 before the date the |
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individual files the deferral affidavit under Subsection (c) or the |
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date the judgment abating the suit is entered, as applicable, are |
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preserved. A penalty is not incurred on the delinquent taxes for |
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which collection is deferred or abated during a deferral or |
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abatement period. The additional penalty under Section 33.07 may |
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be imposed and collected only if the delinquent taxes for which |
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collection is deferred or abated remain delinquent on or after the |
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91st day after the date the deferral or abatement period expires. A |
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plea of limitation, laches, or want of prosecution does not apply |
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against the taxing unit because of deferral or abatement of |
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collection as provided by this section. |
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SECTION 17. Sections 42.42(c) and (d), Tax Code, are |
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amended to read as follows: |
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(c) If the final determination of an appeal occurs after the |
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property owner has paid a portion of the tax finally determined to |
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be due as required by Section 42.08, the assessor for each affected |
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taxing unit shall prepare and mail a supplemental tax bill in the |
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form and manner prescribed by Subsection (b). The additional tax is |
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due and becomes delinquent as provided by Subsection (b), but the |
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property owner is liable for [penalties and] interest on the tax |
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included in the supplemental bill calculated at the rate provided |
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by Section 1.14 [as provided by Section 33.01] as if the tax |
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included in the supplemental bill became delinquent on the original |
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delinquency date prescribed by Chapter 31. The property owner and |
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the chief appraiser may agree in writing to waive the interest |
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provided by this subsection on the additional tax due each affected |
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taxing unit for the period between the original delinquency date |
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and the first day of the next month that is at least 21 days after |
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the date the assessor for the taxing unit mails a supplemental tax |
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bill under this subsection. |
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(d) If the property owner did not pay any portion of the |
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taxes imposed on the property because the court found that payment |
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would constitute an unreasonable restraint on the owner's right of |
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access to the courts as provided by Section 42.08(d), after the |
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final determination of the appeal the assessor for each affected |
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taxing unit shall prepare and mail a supplemental tax bill in the |
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form and manner prescribed by Subsection (b). The additional tax is |
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due and becomes delinquent as provided by Subsection (b), but the |
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property owner is liable for interest on the tax included in the |
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supplemental bill calculated as provided by Section 1.14 [33.01] as |
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if the tax included in the supplemental bill became delinquent on |
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the delinquency date prescribed by Chapter 31. |
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SECTION 18. Section 42.43(b), Tax Code, is amended to read |
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as follows: |
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(b) For a refund made under this section, the taxing unit |
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shall include with the refund interest on the amount refunded |
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[calculated] at the rate provided by Section 1.14 [an annual rate
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that is equal to the sum of two percent and the most recent prime
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rate quoted and published by the Federal Reserve Board as of the
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first day of the month in which the refund is made, but not more than
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a total of eight percent,] calculated from the delinquency date for |
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the taxes until the date the refund is made. |
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SECTION 19. The changes in law made by this Act apply only |
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to penalties and interest that accrue on or after the effective date |
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of this Act. Penalties and interest that accrued before the |
|
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effective date of this Act are governed by the law in effect when |
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the penalties and interest accrued, and that law is continued in |
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effect for that purpose. |
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SECTION 20. This Act takes effect September 1, 2015. |