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.