Texas Senate Bill SB2544

Texas 2019 - 86th Regular

Caption

Relating to deferred collection of ad valorem taxes on certain residence homesteads.

Impact

The impact of SB2544 is significant as it modifies existing laws related to tax collection, particularly for vulnerable populations such as the elderly and disabled. Under the bill, property taxes on qualifying residences can be deferred, alleviating the financial burden on these groups, especially during times when they may face fixed or limited incomes. Additionally, it adjusts the interest rate on deferred taxes to a lower fixed rate of 2.5%, thus providing further financial relief to homeowners who qualify. However, tax liens remain on the properties, and interest continues to accrue during the deferral period, which may pose future financial challenges for property owners once they are required to settle their tax debts.

Summary

Senate Bill 2544 amends the Texas Tax Code to allow the deferred collection of ad valorem taxes on certain residence homesteads. Specifically, this bill expands the existing provisions under Section 33.06, which enables eligible individuals—those aged 65 or older, disabled persons, or those who qualify for certain tax exemptions—to defer tax collection on their homesteads. The proposed amendments clarify the procedures for deferral, outlining the conditions under which the collection of taxes can be abated and the implications for tax liens during deferral.

Contention

There may be contention surrounding the implications of deferring tax collection for local governments and their revenue flow. Some stakeholders, particularly those concerned with municipal financing, might argue that while the bill provides relief to homeowners, it could adversely affect local government's ability to fund essential services reliant on steady tax revenues. Critics may raise concerns that deferred tax obligations could lead to larger burdens in the future, as homeowners will eventually need to pay accrued taxes and associated interests, potentially leading to higher economic strain at that time.