84R9951 LEH-F
 
  By: Bohac H.B. No. 3346
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the accrual of penalties and interest under the
  Property Tax Code.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 1, Tax Code, is amended by adding Section
  1.14 to read as follows:
         Sec. 1.14.  INTEREST RATE. Except as otherwise provided by
  this title, for purposes of a provision of this title providing for
  the accrual of interest, interest accrues at an annual rate equal to
  the lesser of:
               (1)  12 percent; or
               (2)  the sum of two percent and the most recent prime
  rate quoted and published by the Federal Reserve Board as of the
  first day of the month in which the interest is first calculated.
         SECTION 2.  Section 11.135(c), Tax Code, is amended to read
  as follows:
         (c)  If an owner receives an exemption for property under
  Section 11.13 under the circumstances described by Subsection (a)
  and sells the property before the owner completes construction of a
  replacement qualified residential structure on the property, an
  additional tax is imposed on the property equal to the difference
  between the taxes imposed on the property for each of the years in
  which the owner received the exemption and the tax that would have
  been imposed had the owner not received the exemption in each of
  those years, plus interest at the rate provided by Section 1.14 [an
  annual rate of seven percent] calculated from the dates on which the
  differences would have become due.
         SECTION 3.  Section 11.181(e), Tax Code, is amended to read
  as follows:
         (e)  If the organization that owns improved or unimproved
  real property that has been exempted under Subsection (a) sells the
  property to a person other than an individual or family satisfying
  the organization's low-income or other eligibility requirements, a
  penalty is imposed on the property equal to the amount of the taxes
  that would have been imposed on the property in each tax year that
  the property was exempted from taxation under Subsection (a), plus
  interest at the rate provided by Section 1.14 [an annual rate of 12
  percent] calculated from the dates on which the taxes would have
  become due.
         SECTION 4.  Section 11.185(e), Tax Code, is amended to read
  as follows:
         (e)  If the organization that owns improved or unimproved
  real property that has been exempted under Subsection (a) sells the
  property to a person other than a person described by Section
  2306.786(b)(1), Government Code, a penalty is imposed on the
  property equal to the amount of the taxes that would have been
  imposed on the property in each tax year that the property was
  exempted from taxation under Subsection (a), plus interest at the
  rate provided by Section 1.14 of this code [an annual rate of 12
  percent] computed from the dates on which the taxes would have
  become due.
         SECTION 5.  Section 11.201(a), Tax Code, is amended to read
  as follows:
         (a)  If land is sold or otherwise transferred to another
  person in a year in which the land receives an exemption under
  Section 11.20(a)(6), an additional tax is imposed on the land equal
  to the tax that would have been imposed on the land had the land been
  taxed for each of the five years preceding the year in which the
  sale or transfer occurs in which the land received an exemption
  under that subsection, plus interest at the rate provided by
  Section 1.14 [an annual rate of seven percent] calculated from the
  dates on which the taxes would have become due.
         SECTION 6.  Section 23.46(c), Tax Code, is amended to read as
  follows:
         (c)  If land that has been designated for agricultural use in
  any year is sold or diverted to a nonagricultural use, the total
  amount of additional taxes for the three years preceding the year in
  which the land is sold or diverted plus interest at the rate
  provided by Section 1.14 [for delinquent taxes] becomes due. A
  determination that the land has been diverted to a nonagricultural
  use is made by the chief appraiser. For purposes of this
  subsection, the chief appraiser may not consider any period during
  which land is owned by the state in determining whether the land has
  been diverted to a nonagricultural use. The chief appraiser shall
  deliver a notice of the determination to the owner of the land as
  soon as possible after making the determination and shall include
  in the notice an explanation of the owner's right to protest the
  determination. If the owner does not file a timely protest or if
  the final determination of the protest is that the additional taxes
  are due, the assessor for each taxing unit shall prepare and deliver
  a bill for the additional taxes plus interest as soon as practicable
  after the change of use occurs. If the additional taxes are due
  because of a sale of the land, the assessor for each taxing unit
  shall prepare and deliver the bill as soon as practicable after the
  sale occurs. The taxes and interest are due and become delinquent
  and incur penalties and interest as provided by law for ad valorem
  taxes imposed by the taxing unit if not paid before the next
  February 1 that is at least 20 days after the date the bill is
  delivered to the owner of the land.
         SECTION 7.  Section 23.55(a), Tax Code, is amended to read as
  follows:
         (a)  If the use of land that has been appraised as provided by
  this subchapter changes, an additional tax is imposed on the land
  equal to the difference between the taxes imposed on the land for
  each of the five years preceding the year in which the change of use
  occurs that the land was appraised as provided by this subchapter
  and the tax that would have been imposed had the land been taxed on
  the basis of market value in each of those years, plus interest at
  the rate provided by Section 1.14 [an annual rate of seven percent]
  calculated from the dates on which the differences would have
  become due. For purposes of this subsection, the chief appraiser
  may not consider any period during which land is owned by the state
  in determining whether a change in the use of the land has occurred.
         SECTION 8.  Section 23.76(a), Tax Code, is amended to read as
  follows:
         (a)  If the use of land that has been appraised as provided by
  this subchapter changes, an additional tax is imposed on the land
  equal to the difference between the taxes imposed on the land for
  each of the five years preceding the year in which the change of use
  occurs that the land was appraised as provided by this subchapter
  and the tax that would have been imposed had the land been taxed on
  the basis of market value in each of those years, plus interest at
  the rate provided by Section 1.14 [an annual rate of seven percent]
  calculated from the dates on which the differences would have
  become due.
         SECTION 9.  Section 23.86(a), Tax Code, is amended to read as
  follows:
         (a)  If land that has been appraised under this subchapter is
  no longer subject to a deed restriction or is diverted to a use
  other than recreational, park, or scenic uses, an additional tax is
  imposed on the land equal to the difference between the taxes
  imposed on the land for each of the five years preceding the year in
  which the change of use occurs or the deed restriction expires that
  the land was appraised as provided by this subchapter and the tax
  that would have been imposed had the land not been restricted to
  recreational, park, or scenic uses in each of those years, plus
  interest at the rate provided by Section 1.14 [an annual rate of
  seven percent] calculated from the dates on which the differences
  would have become due.
         SECTION 10.  Section 23.96(a), Tax Code, is amended to read
  as follows:
         (a)  If airport property that has been appraised under this
  subchapter is no longer subject to a deed restriction, an
  additional tax is imposed on the property equal to the difference
  between the taxes imposed on the property for each of the five years
  preceding the year in which the deed restriction expires that the
  property was appraised as provided by this subchapter and the tax
  that would have been imposed had the property not been restricted to
  use as public access airport property in each of those years, plus
  interest at the rate provided by Section 1.14 [an annual rate of
  seven percent] calculated from the dates on which the differences
  would have become due.
         SECTION 11.  Sections 23.9807(a) and (b), Tax Code, are
  amended to read as follows:
         (a)  If the use of land that has been appraised as provided by
  this subchapter changes to a use that qualifies the land for
  appraisal under Subchapter E, an additional tax is imposed on the
  land equal to the sum of:
               (1)  the difference between:
                     (A)  the taxes imposed on the land for each of the
  five years preceding the year in which the change of use occurs that
  the land was appraised as provided by this subchapter; and
                     (B)  the taxes that would have been imposed had
  the land been appraised under Subchapter E in each of those years;
  and
               (2)  interest at the rate provided by Section 1.14 [an
  annual rate of seven percent] calculated from the dates on which the
  differences would have become due.
         (b)  If the use of land that has been appraised as provided by
  this subchapter changes to a use that does not qualify the land for
  appraisal under Subchapter E or under this subchapter, an
  additional tax is imposed on the land equal to the sum of:
               (1)  the difference between:
                     (A)  the taxes imposed on the land for each of the
  five years preceding the year in which the change of use occurs that
  the land was appraised as provided by this subchapter; and
                     (B)  the taxes that would have been imposed had
  the land been taxed on the basis of market value in each of those
  years; and
               (2)  interest at the rate provided by Section 1.14 [an
  annual rate of seven percent] calculated from the dates on which the
  differences would have become due.
         SECTION 12.  Section 26.09(d), Tax Code, is amended to read
  as follows:
         (d)  If a property is subject to taxation for a prior year in
  which it escaped taxation, the assessor shall calculate the tax for
  each year separately.  In calculating the tax, the assessor shall
  use the assessment ratio and tax rate in effect in the unit for the
  year for which back taxes are being imposed.  Except as provided by
  Subsection (d-1), the amount of back taxes due incurs interest
  calculated at the rate provided by Section 1.14 [33.01(c)] from the
  date the tax would have become delinquent had the tax been imposed
  in the proper tax year.
         SECTION 13.  Section 31.12(a), Tax Code, is amended to read
  as follows:
         (a)  If a refund of a tax provided by Section 11.431(b),
  26.07(g), 26.15(f), 31.11, or 31.111 is paid on or before the 60th
  day after the date the liability for the refund arises, no interest
  is due on the amount refunded. If not paid on or before that 60th
  day, the amount of the tax to be refunded accrues interest at the
  rate provided by Section 1.14 [a rate of one percent for each month
  or part of a month that the refund is unpaid], beginning with the
  date on which the liability for the refund arises.
         SECTION 14.  Section 33.01(c), Tax Code, is amended to read
  as follows:
         (c)  A delinquent tax accrues interest at the rate provided
  by Section 1.14 [a rate of one percent for each month or portion of a
  month the tax remains unpaid]. Interest payable under this section
  is to compensate the taxing unit for revenue lost because of the
  delinquency. A delinquent tax continues to accrue interest under
  this subsection as long as the tax remains unpaid, regardless of
  whether a judgment for the delinquent tax has been rendered.
         SECTION 15.  Section 33.06(d), Tax Code, is amended to read
  as follows:
         (d)  A tax lien remains on the property and interest
  continues to accrue during the period collection of taxes is
  deferred or abated under this section. The annual interest rate
  during the deferral or abatement period is the rate provided by
  Section 1.14 [eight percent instead of the rate provided by Section
  33.01]. Interest and penalties that accrued or that were incurred
  or imposed under Section 33.01 or 33.07 before the date the
  individual files the deferral affidavit under Subsection (b) or the
  date the judgment abating the suit is entered, as applicable, are
  preserved. A penalty under Section 33.01 is not incurred during a
  deferral or abatement period. The additional penalty under Section
  33.07 may be imposed and collected only if the taxes for which
  collection is deferred or abated remain delinquent on or after the
  181st day after the date the deferral or abatement period expires.
  A plea of limitation, laches, or want of prosecution does not apply
  against the taxing unit because of deferral or abatement of
  collection as provided by this section.
         SECTION 16.  Section 33.065(g), Tax Code, is amended to read
  as follows:
         (g)  A tax lien remains on the property and interest
  continues to accrue during the period collection of delinquent
  taxes is deferred or abated under this section. The annual interest
  rate during the deferral or abatement period is the rate provided by
  Section 1.14 [eight percent instead of the rate provided by Section
  33.01]. Interest and penalties that accrued or that were incurred
  or imposed under Section 33.01 or 33.07 before the date the
  individual files the deferral affidavit under Subsection (c) or the
  date the judgment abating the suit is entered, as applicable, are
  preserved. A penalty is not incurred on the delinquent taxes for
  which collection is deferred or abated during a deferral or
  abatement period. The additional penalty under Section 33.07 may
  be imposed and collected only if the delinquent taxes for which
  collection is deferred or abated remain delinquent on or after the
  91st day after the date the deferral or abatement period expires. A
  plea of limitation, laches, or want of prosecution does not apply
  against the taxing unit because of deferral or abatement of
  collection as provided by this section.
         SECTION 17.  Sections 42.42(c) and (d), Tax Code, are
  amended to read as follows:
         (c)  If the final determination of an appeal occurs after the
  property owner has paid a portion of the tax finally determined to
  be due as required by Section 42.08, the assessor for each affected
  taxing unit shall prepare and mail a supplemental tax bill in the
  form and manner prescribed by Subsection (b). The additional tax is
  due and becomes delinquent as provided by Subsection (b), but the
  property owner is liable for [penalties and] interest on the tax
  included in the supplemental bill calculated at the rate provided
  by Section 1.14 [as provided by Section 33.01] as if the tax
  included in the supplemental bill became delinquent on the original
  delinquency date prescribed by Chapter 31. The property owner and
  the chief appraiser may agree in writing to waive the interest
  provided by this subsection on the additional tax due each affected
  taxing unit for the period between the original delinquency date
  and the first day of the next month that is at least 21 days after
  the date the assessor for the taxing unit mails a supplemental tax
  bill under this subsection.
         (d)  If the property owner did not pay any portion of the
  taxes imposed on the property because the court found that payment
  would constitute an unreasonable restraint on the owner's right of
  access to the courts as provided by Section 42.08(d), after the
  final determination of the appeal the assessor for each affected
  taxing unit shall prepare and mail a supplemental tax bill in the
  form and manner prescribed by Subsection (b). The additional tax is
  due and becomes delinquent as provided by Subsection (b), but the
  property owner is liable for interest on the tax included in the
  supplemental bill calculated as provided by Section 1.14 [33.01] as
  if the tax included in the supplemental bill became delinquent on
  the delinquency date prescribed by Chapter 31.
         SECTION 18.  Section 42.43(b), Tax Code, is amended to read
  as follows:
         (b)  For a refund made under this section, the taxing unit
  shall include with the refund interest on the amount refunded
  [calculated] at the rate provided by Section 1.14 [an annual rate
  that is equal to the sum of two percent and the most recent prime
  rate quoted and published by the Federal Reserve Board as of the
  first day of the month in which the refund is made, but not more than
  a total of eight percent,] calculated from the delinquency date for
  the taxes until the date the refund is made.
         SECTION 19.   The changes in law made by this Act apply only
  to penalties and interest that accrue on or after the effective date
  of this Act. Penalties and interest that accrued before the
  effective date of this Act are governed by the law in effect when
  the penalties and interest accrued, and that law is continued in
  effect for that purpose.
         SECTION 20.   This Act takes effect September 1, 2015.