Bill Text: TX SB2198 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to interest that accrues under the Property Tax Code.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-03-29 - Referred to Finance [SB2198 Detail]
Download: Texas-2017-SB2198-Introduced.html
85R6738 LHC-F | ||
By: Campbell | S.B. No. 2198 |
|
||
|
||
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 [ |
||
|
||
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 [ |
||
|
||
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 [ |
||
|
||
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 [ |
||
Section 1.13 [ |
||
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 [ |
||
provided by Section 1.13, [ |
||
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 [ |
||
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 [ |
||
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 [ |
||
|
||
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 [ |
||
|
||
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 [ |
||
|
||
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 [ |
||
|
||
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 [ |
||
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 [ |
||
|
||
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 [ |
||
|
||
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 [ |
||
|
||
provided by Section 1.13 [ |
||
|
||
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 | ||
[ |
||
as provided by Section 1.13 [ |
||
|
||
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 [ |
||
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 [ |
||
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. |