By: Williams, West	S.B. No. 551
	(Otto)

	A BILL TO BE ENTITLED
	AN ACT
	relating to liability for interest on ad valorem taxes on
	improvements that escaped taxation in a previous year.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 26.09, Tax Code, is amended by amending
	Subsection (d) and adding Subsections (d-1) and (d-2) 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 [he]
	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), [To] the amount of back taxes due
	incurs[, he shall add] interest calculated at the rate provided by
	[Subsection (c) of] Section 33.01(c) [33.01 of this code] from the
	date the tax would have become delinquent had the tax been imposed
	in the proper tax year.
	(d-1)  For purposes of this subsection, an appraisal
	district has constructive notice of the presence of an improvement
	if a building permit for the improvement has been issued by an
	appropriate governmental entity.  Back taxes assessed under
	Subsection (d) on an improvement to real property do not incur
	interest if:
	(1)  the land on which the improvement is located did
	not escape taxation in the year in which the improvement escaped
	taxation;
	(2)  the appraisal district had actual or constructive
	notice of the presence of the improvement in the year in which the
	improvement escaped taxation; and
	(3)  the property owner pays all back taxes due on the
	improvement not later than the 120th day after the date the tax bill
	for the back taxes on the improvement is sent.
	(d-2)  For purposes of Subsection (d-1)(3), if an appeal
	under Chapter 41A or 42 relating to the taxes imposed on the omitted
	improvement is pending on the date prescribed by that subdivision,
	the property owner is considered to have paid the back taxes due by
	that date if the property owner pays the amount of taxes required by
	Section 41A.10 or 42.08, as applicable.
	SECTION 2.  Section 31.01, Tax Code, is amended by adding
	Subsection (c-2) to read as follows:
	(c-2)  For a tax bill that includes back taxes on an
	improvement that escaped taxation in a prior year, the tax bill or
	separate statement described by Subsection (c) must state that no
	interest is due on the back taxes if those back taxes are paid not
	later than the 120th day after the date the tax bill is sent.
	SECTION 3.  The change in law made by this Act applies only
	to an omitted improvement included in a tax bill that is first sent
	to the property owner on or after the effective date of this Act.
	SECTION 4.  This Act takes effect September 1, 2011.