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A BILL TO BE ENTITLED
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AN ACT
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relating to the calculation of the penalty and interest incurred on |
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a delinquent ad valorem tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 31.031(b), Tax Code, is amended to read |
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as follows: |
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(b) If the individual fails to make a payment, including the |
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first payment, before the applicable date provided by Subsection |
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(a-1), the unpaid installment is delinquent and incurs [a] penalty |
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[of six percent] and interest as provided by Section 33.01(c). The |
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penalty provided by Section 33.01(a) does not apply to the unpaid |
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installment. |
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SECTION 2. Section 31.032(c), Tax Code, is amended to read |
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as follows: |
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(c) If the person fails to make a payment before the |
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applicable date provided by Subsection (b), the unpaid installment |
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is delinquent and incurs [a] penalty [of six percent] and interest |
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as provided by Section 33.01(c). |
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SECTION 3. Sections 33.01(a), (b), and (c), Tax Code, are |
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amended to read as follows: |
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(a) A delinquent tax incurs a penalty of three [six] percent |
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of the amount of the tax for the first calendar month it is |
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delinquent plus one-half [one] percent for each additional month or |
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portion of a month the tax remains unpaid prior to July 1 of the year |
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in which it becomes delinquent. However, a tax delinquent on July 1 |
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incurs a total penalty of six [twelve] percent of the amount of the |
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delinquent tax without regard to the number of months the tax has |
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been delinquent. A delinquent tax continues to incur the penalty |
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provided by this subsection as long as the tax remains unpaid, |
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regardless of whether a judgment for the delinquent tax has been |
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rendered. |
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(b) If a person who exercises the split-payment option |
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provided by Section 31.03 [of this code] fails to make the second |
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payment before July 1, the second payment is delinquent and incurs a |
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penalty of six [twelve] percent of the amount of unpaid tax. |
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(c) A delinquent tax accrues simple interest at a rate of |
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one-half [one] percent for each month or portion of a month the tax |
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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 4. The changes in law made by this Act apply only to |
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penalties and interest that accrue on or after the effective date of |
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this Act. Penalties and interest that accrued before the effective |
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date of this Act are governed by the law in effect when the |
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penalties and interest accrued, and that law is continued in effect |
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for that purpose. |
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SECTION 5. This Act takes effect on the 91st day after the |
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last day of the legislative session. |