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A BILL TO BE ENTITLED
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AN ACT
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relating to interest that accrues under the 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 |
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Sections 1.13 and 1.14 to read as follows: |
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Sec. 1.13. INTEREST RATE. (a) Except as otherwise provided |
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by this title, for purposes of a provision of this title providing |
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for the accrual of interest, interest accrues during a calendar |
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year at an annual rate equal to the lesser of: |
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(1) 12 percent; or |
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(2) the sum of two percent and the prime rate quoted |
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and published by the Federal Reserve Board on the first business day |
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of the calendar year for which interest is being calculated. |
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(b) Interest that accrues at an annual rate determined under |
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Subsection (a) must be computed as simple interest for each |
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calendar year or part of a calendar year in which the interest |
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accrues. If interest accrues in more than one calendar year, the |
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total amount of interest that accrues is equal to the sum of the |
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interest that accrues in each calendar year for which the interest |
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is calculated. |
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(c) The comptroller shall post and maintain on the |
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comptroller's Internet website the interest rate determined under |
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Subsection (a) for each calendar year. |
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Sec. 1.14. WAIVER OF INTEREST BY AGREEMENT. (a) |
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Notwithstanding any other provision of this title, the parties to a |
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motion, effort, or appeal described by this subsection may agree to |
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waive or reduce the interest that accrues on a tax, penalty, or |
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refund regarding property that is the subject of: |
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(1) a motion to correct an error in the appraisal roll |
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under Section 25.25; |
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(2) an effort to collect a delinquent tax under |
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Chapter 33, including a suit to collect a delinquent tax under that |
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chapter; or |
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(3) an appeal under Chapter 42. |
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(b) An agreement to waive or reduce interest under this |
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section must: |
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(1) be in writing; |
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(2) be signed by the parties to the motion, effort, or |
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appeal; and |
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(3) if the agreement regards property that is the |
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subject of a suit to collect a delinquent tax under Chapter 33 or an |
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appeal under Chapter 42, be signed by the parties before the date |
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the court in which the suit or appeal is pending issues an order |
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that includes the interest as part of a judgment against any party |
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to the suit. |
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(c) A district court in a suit filed under Chapter 33 or an |
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appeal filed under Chapter 42 may waive or reduce interest that has |
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accrued as part of a final judgment to the extent the interest is |
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waived or reduced by an agreement under this section. |
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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 as provided by Section 1.13 [at an annual
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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 as provided by Section 1.13 [at 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 as |
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provided by Section 1.13 of this code [at 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 subdivision [subsection], plus interest as provided by |
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Section 1.13 [at an annual rate of seven percent] calculated from |
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the 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 as [at the rate] |
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provided by Section 1.13, [for delinquent taxes] becomes due. |
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Subject to Subsection (f), a determination that the land has been |
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diverted to a nonagricultural use is made by the chief appraiser. |
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For purposes of this subsection, the chief appraiser may not |
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consider any period during which land is owned by the state in |
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determining whether the land has been diverted to a nonagricultural |
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use. The chief appraiser shall deliver a notice of the |
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determination to the owner of the land as soon as possible after |
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making the determination and shall include in the notice an |
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explanation of the owner's right to protest the determination. If |
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the owner does not file a timely protest or if the final |
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determination of the protest is that the additional taxes are due, |
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the assessor for each taxing unit shall prepare and deliver a bill |
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for the additional taxes plus interest as soon as practicable after |
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the change of use occurs. If the additional taxes are due because |
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of a sale of the land, the assessor for each taxing unit shall |
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prepare and deliver the bill as soon as practicable after the sale |
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occurs. The taxes and interest are due and become delinquent and |
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incur penalties and interest as provided by law for ad valorem taxes |
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imposed by the taxing unit if not paid before the next February 1 |
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that is at least 20 days after the date the bill is delivered to the |
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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 as |
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provided by Section 1.13 [at 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 as |
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provided by Section 1.13 [at 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 as provided by Section 1.13 [at an annual rate of seven
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percent] calculated from the dates on which the differences would |
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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 as provided by Section 1.13 [at an annual rate of seven
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percent] calculated from the dates on which the differences would |
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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 as provided by Section 1.13 [at an annual
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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 as provided by Section 1.13 [at an annual
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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 as [at the rate] provided by Section 1.13 [33.01(c)] |
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from the date the tax would have become delinquent had the tax been |
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imposed 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 as |
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provided by Section 1.13 [at a rate of one percent for each month or
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part of a month that the refund is unpaid], beginning with the date |
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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 as provided by Section |
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1.13 [at a rate of one percent for each month or portion of a month
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the tax remains unpaid]. Interest payable under this section is to |
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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. Interest accrues [The
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annual interest rate] during the deferral or abatement period as |
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provided by Section 1.13 [is eight percent instead of the rate
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provided by Section 33.01]. Interest and penalties that accrued or |
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that were incurred or imposed under Section 33.01 or 33.07 before |
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the date the individual files the deferral affidavit under |
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Subsection (b) or the date the judgment abating the suit is entered, |
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as applicable, are preserved. A penalty under Section 33.01 is not |
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incurred during a deferral or abatement period. The additional |
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penalty under Section 33.07 may be imposed and collected only if the |
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taxes for which collection is deferred or abated remain delinquent |
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on or after the 181st day after the date the deferral or abatement |
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period expires. A plea of limitation, laches, or want of |
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prosecution does not apply against the taxing unit because of |
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deferral or abatement of 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. Interest accrues |
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[The annual interest rate] during the deferral or abatement period |
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as provided by Section 1.13 [is eight percent instead of the rate
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provided by Section 33.01]. Interest and penalties that accrued or |
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that were incurred or imposed under Section 33.01 or 33.07 before |
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the date the individual files the deferral affidavit under |
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Subsection (c) or the date the judgment abating the suit is entered, |
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as applicable, are preserved. A penalty is not incurred on the |
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delinquent taxes for which collection is deferred or abated during |
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a deferral or abatement period. The additional penalty under |
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Section 33.07 may be imposed and collected only if the delinquent |
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taxes for which collection is deferred or abated remain delinquent |
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on or after the 91st day after the date the deferral or abatement |
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period expires. A plea of limitation, laches, or want of |
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prosecution does not apply against the taxing unit because of |
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deferral or abatement of 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 as provided by Section |
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33.01 and interest on the tax included in the supplemental bill |
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calculated as provided by Section 1.13 as if the tax included in the |
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supplemental bill became delinquent on the original delinquency |
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date prescribed by Chapter 31. |
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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 1.13 [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. The comptroller shall post and maintain on the |
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comptroller's Internet website as required by Section 1.13(c), Tax |
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Code, as added by this Act, the interest rates determined under |
|
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Section 1.13(a), Tax Code, as added by this Act, beginning with the |
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2018 calendar year. |
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|
SECTION 19. The changes in law made by this Act apply only |
|
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to interest that accrues on or after the effective date of this Act. |
|
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Interest that accrued before the effective date of this Act is |
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governed by the law in effect when the interest accrued, and that |
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law is continued in effect for that purpose. |
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SECTION 20. This Act takes effect September 1, 2017. |