Bill Text: TX HB3346 | 2015-2016 | 84th Legislature | Introduced

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Bill Title: Relating to the accrual of penalties and interest under the Property Tax Code.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-04-28 - Left pending in committee [HB3346 Detail]

Download: Texas-2015-HB3346-Introduced.html

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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.