85R6738 LHC-F
 
  By: Campbell S.B. No. 2198
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to interest that accrues 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
  Sections 1.13 and 1.14 to read as follows:
         Sec. 1.13.  INTEREST RATE. (a) Except as otherwise provided
  by this title, for purposes of a provision of this title providing
  for the accrual of interest, interest accrues during a calendar
  year at an annual rate equal to the lesser of:
               (1)  12 percent; or
               (2)  the sum of two percent and the prime rate quoted
  and published by the Federal Reserve Board on the first business day
  of the calendar year for which interest is being calculated.
         (b)  Interest that accrues at an annual rate determined under
  Subsection (a) must be computed as simple interest for each
  calendar year or part of a calendar year in which the interest
  accrues. If interest accrues in more than one calendar year, the
  total amount of interest that accrues is equal to the sum of the
  interest that accrues in each calendar year for which the interest
  is calculated.
         (c)  The comptroller shall post and maintain on the
  comptroller's Internet website the interest rate determined under
  Subsection (a) for each calendar year.
         Sec. 1.14.  WAIVER OF INTEREST BY AGREEMENT. (a)
  Notwithstanding any other provision of this title, the parties to a
  motion, effort, or appeal described by this subsection may agree to
  waive or reduce the interest that accrues on a tax, penalty, or
  refund regarding property that is the subject of:
               (1)  a motion to correct an error in the appraisal roll
  under Section 25.25;
               (2)  an effort to collect a delinquent tax under
  Chapter 33, including a suit to collect a delinquent tax under that
  chapter; or
               (3)  an appeal under Chapter 42.
         (b)  An agreement to waive or reduce interest under this
  section must:
               (1)  be in writing;
               (2)  be signed by the parties to the motion, effort, or
  appeal; and
               (3)  if the agreement regards property that is the
  subject of a suit to collect a delinquent tax under Chapter 33 or an
  appeal under Chapter 42, be signed by the parties before the date
  the court in which the suit or appeal is pending issues an order
  that includes the interest as part of a judgment against any party
  to the suit.
         (c)  A district court in a suit filed under Chapter 33 or an
  appeal filed under Chapter 42 may waive or reduce interest that has
  accrued as part of a final judgment to the extent the interest is
  waived or reduced by an agreement under this section.
         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 as provided by Section 1.13 [at 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 as provided by Section 1.13 [at 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 as
  provided by Section 1.13 of this code [at 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 subdivision [subsection], plus interest as provided by
  Section 1.13 [at 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 as [at the rate]
  provided by Section 1.13, [for delinquent taxes] becomes due.
  Subject to Subsection (f), 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 as
  provided by Section 1.13 [at 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 as
  provided by Section 1.13 [at 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 as provided by Section 1.13 [at 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 as provided by Section 1.13 [at 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 as provided by Section 1.13 [at 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 as provided by Section 1.13 [at 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 as [at the rate] provided by Section 1.13 [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 as
  provided by Section 1.13 [at 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 as provided by Section
  1.13 [at 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. Interest accrues [The
  annual interest rate] during the deferral or abatement period as
  provided by Section 1.13 [is 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. Interest accrues
  [The annual interest rate] during the deferral or abatement period
  as provided by Section 1.13 [is 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 as provided by Section
  33.01 and interest on the tax included in the supplemental bill
  calculated as provided by Section 1.13 as if the tax included in the
  supplemental bill became delinquent on the original delinquency
  date prescribed by Chapter 31.
         (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 1.13 [33.01] as
  if the tax included in the supplemental bill became delinquent on
  the delinquency date prescribed by Chapter 31.
         SECTION 18.  The comptroller shall post and maintain on the
  comptroller's Internet website as required by Section 1.13(c), Tax
  Code, as added by this Act, the interest rates determined under
  Section 1.13(a), Tax Code, as added by this Act, beginning with the
  2018 calendar year.
         SECTION 19.   The changes in law made by this Act apply only
  to interest that accrues on or after the effective date of this Act.
  Interest that accrued before the effective date of this Act is
  governed by the law in effect when the interest accrued, and that
  law is continued in effect for that purpose.
         SECTION 20.   This Act takes effect September 1, 2017.