| 1 | 1 | | By: Williams, West S.B. No. 551 |
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| 2 | 2 | | (Otto) |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to liability for interest on ad valorem taxes on |
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| 8 | 8 | | improvements that escaped taxation in a previous year. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 26.09, Tax Code, is amended by amending |
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| 11 | 11 | | Subsection (d) and adding Subsections (d-1) and (d-2) to read as |
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| 12 | 12 | | follows: |
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| 13 | 13 | | (d) If a property is subject to taxation for a prior year in |
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| 14 | 14 | | which it escaped taxation, the assessor shall calculate the tax for |
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| 15 | 15 | | each year separately. In calculating the tax, the assessor [he] |
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| 16 | 16 | | shall use the assessment ratio and tax rate in effect in the unit |
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| 17 | 17 | | for the year for which back taxes are being imposed. Except as |
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| 18 | 18 | | provided by Subsection (d-1), [To] the amount of back taxes due |
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| 19 | 19 | | incurs[, he shall add] interest calculated at the rate provided by |
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| 20 | 20 | | [Subsection (c) of] Section 33.01(c) [33.01 of this code] from the |
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| 21 | 21 | | date the tax would have become delinquent had the tax been imposed |
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| 22 | 22 | | in the proper tax year. |
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| 23 | 23 | | (d-1) For purposes of this subsection, an appraisal |
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| 24 | 24 | | district has constructive notice of the presence of an improvement |
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| 25 | 25 | | if a building permit for the improvement has been issued by an |
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| 26 | 26 | | appropriate governmental entity. Back taxes assessed under |
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| 27 | 27 | | Subsection (d) on an improvement to real property do not incur |
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| 28 | 28 | | interest if: |
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| 29 | 29 | | (1) the land on which the improvement is located did |
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| 30 | 30 | | not escape taxation in the year in which the improvement escaped |
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| 31 | 31 | | taxation; |
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| 32 | 32 | | (2) the appraisal district had actual or constructive |
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| 33 | 33 | | notice of the presence of the improvement in the year in which the |
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| 34 | 34 | | improvement escaped taxation; and |
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| 35 | 35 | | (3) the property owner pays all back taxes due on the |
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| 36 | 36 | | improvement not later than the 120th day after the date the tax bill |
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| 37 | 37 | | for the back taxes on the improvement is sent. |
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| 38 | 38 | | (d-2) For purposes of Subsection (d-1)(3), if an appeal |
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| 39 | 39 | | under Chapter 41A or 42 relating to the taxes imposed on the omitted |
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| 40 | 40 | | improvement is pending on the date prescribed by that subdivision, |
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| 41 | 41 | | the property owner is considered to have paid the back taxes due by |
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| 42 | 42 | | that date if the property owner pays the amount of taxes required by |
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| 43 | 43 | | Section 41A.10 or 42.08, as applicable. |
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| 44 | 44 | | SECTION 2. Section 31.01, Tax Code, is amended by adding |
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| 45 | 45 | | Subsection (c-2) to read as follows: |
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| 46 | 46 | | (c-2) For a tax bill that includes back taxes on an |
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| 47 | 47 | | improvement that escaped taxation in a prior year, the tax bill or |
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| 48 | 48 | | separate statement described by Subsection (c) must state that no |
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| 49 | 49 | | interest is due on the back taxes if those back taxes are paid not |
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| 50 | 50 | | later than the 120th day after the date the tax bill is sent. |
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| 51 | 51 | | SECTION 3. The change in law made by this Act applies only |
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| 52 | 52 | | to an omitted improvement included in a tax bill that is first sent |
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| 53 | 53 | | to the property owner on or after the effective date of this Act. |
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| 54 | 54 | | SECTION 4. This Act takes effect September 1, 2011. |
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