Texas Senate Bill SB2198

Texas 2017 - 85th Regular

Caption

Relating to interest that accrues under the Property Tax Code.

Impact

The adjustments proposed by SB2198 could substantially impact property owners, especially those dealing with delinquent taxes. By standardizing the interest rate that accrues during delinquency, property owners may find a more manageable approach to tax liabilities. The bill also includes a provision allowing for the waiver of interest under specific conditions. This waiver could provide relief for property owners engaged in disputes over property tax assessments or those seeking to rectify errors in their appraisal rolls. Overall, the bill's implications are geared toward both supporting property owners and improving tax collection processes for local governments.

Summary

Senate Bill 2198 introduces significant amendments to the Texas Tax Code relating to the accrual of interest on property taxes. The bill sets a specific annual interest rate for property tax-related calculations, which will be the lesser of 12 percent or two percent above the prime rate set by the Federal Reserve. This change aims to provide a more predictable framework for assessing interest on property taxes, which could enhance financial planning for property owners and tax authorities alike. The bill mandates that the interest must be calculated as simple interest on a yearly basis, promoting transparency in how interest rates affect tax liabilities.

Contention

Some controversy surrounding SB2198 could arise from the provisions that allow parties to negotiate the waiver of interest accrual on property taxes. Critics may argue that this could lead to inconsistencies or perceptions of unfairness in the application of tax liabilities, specifically benefiting those with better negotiation power. Additionally, while the fixed interest rate could simplify calculations for property owners, stakeholders may debate whether it is beneficial enough in an economic climate influenced by fluctuating federal rates. Striking the right balance between easing burdens on property owners while ensuring fair tax revenues will likely be a points of contention during discussions.