84(R) - 2015
Relating to installment payments of ad valorem taxes.
A fiscal note dated April 9, 2015 anticipates not fiscal implication to the State or to units of local government.
Senate Bill 624 would amend Section 31.031 of the Tax Code regarding installment payments of residence homestead taxes to allow an individual to pay property taxes owed in four installments without having to pay penalties or interests as long as the first installment is paid before the delinquency date and is accompanied by a notice that the individual will pay the remaining taxes in three equal installments, and remaining installments are paid respectively before the first day of the second month, fourth months, and sixth month after the delinquency date.
An individual would also be able to pay property taxes owed in four installments if the first installment was paid, along with the notice of payment in four installments sent, after the delinquency date but before the first day of the first month after it. If the individual failed to pay an installment in time, including the first one, a sixth percent penalty plus interest (Section 33.01 (c) of the Tax Code) would apply to the installment. The penalty provided by Section 33.01 (a) of the Tax Code would not apply to an unpaid installment.
Senate Bill 624 would also amend Section 31.032 of the Tax Code to allow the payment of property taxes in disaster areas to be paid in four equal installments in the same manner as in Section 31.031.
Senate Bill 624 would amend Section 33.02 of the Tax Code regarding installment payment of delinquent taxes. It would require a collector for a taxing unit to enter an installment plan, on request by a property owner delinquent in the payment of the tax on a residence homestead and when the property owner has been granted an exemption on the residence homestead under Section 11.13 (residence homestead exemption). It would require for the installment plan to extend for a period of at least 12 months only if the property owner has been granted an exemption under Section 11.13 of the Tax Code, with payments that need not be equal, and with the penalty not accruing as provided by Section 33.01 (a) on the unpaid balance during the period of the agreement. The collector would have to send a notice of default to a person in breach of such an installment agreement and to any other owner of an interest in the property subject to the agreement.
Senate Bill 624 would change the wording of a notice of delinquency to require that the tax collector of a taxing unit be contacted (as opposed to only having the name of the taxing unit currently).
Vote Recommendation Notes
Senate Bill 624 would amend the Tax Code relating to installment payments for residence homestead property owners as well as in disaster areas. It would allow property owners to enter into installment payments more easily and before becoming delinquent, enabling them to spread payments of taxes they owe over a period of time when they cannot pay they in one payment.
If and when a property owner would become delinquent on an installment, the bill would also allow for the delinquent installment to be subject to penalty and interest instead of the total amount of taxes due.
Senate Bill 624 would give more flexibility to property owners to avoid becoming delinquent in the payment of their taxes and having either to pay penalties and interest to the taxable unit, or to take on a loan to pay their taxes. Penalties and interest can add up pretty quickly and some property owners end up losing their homes because they may become unable to pay their taxes in time. As a consequence, Senate Bill 624 favors property rights and we support this bill.