DEPUTIES COLLECT DELINQUENT TAXES
Present law authorizes the county trustee to accept partial payments of delinquent property taxes. If the entire amount of delinquent taxes due is not paid prior to the date the trustee delivers the delinquent tax lists to the delinquent tax attorney, the entire property must be subject to the tax lien and enforcement by a tax sale or other legally-authorized procedures.
Present law requires, prior to any county trustee accepting partial payment of delinquent property taxes, the county trustee to file a plan with the comptroller of the treasury at least 30 days prior to the acceptance of the payments. The plan must indicate that the county trustee's office has the accounting system technology to implement a program for partial payment of delinquent property taxes. The plan must also indicate whether the program will be implemented within the existing operating resources of the office or indicate prior approval of the county legislative body if additional operating resources are needed.
Present law prohibits the delinquent date for property taxes and penalties and interest applicable to delinquent property taxes from being affected by application of a partial payment system established in the county. Penalties and interest must apply only to the amount of delinquent property taxes remaining due. If a partial payment of delinquent property taxes is accepted, then the partial payment does not release the tax lien on the property upon which the taxes were assessed.
This bill deletes these provisions entirely and replaces them with the provisions below.
This bill authorizes a county trustee, municipal tax collector, or taxing entity to accept partial payments of delinquent property taxes. If the entire amount of delinquent taxes due is not paid prior to the date the trustee, tax collector, or taxing entity delivers the delinquent tax lists to the delinquent tax attorney, then the entire property is subject to the tax lien and enforcement by a tax sale or other legally authorized procedures.
At least 30 days before the county trustee, municipal tax collector, or taxing entity seeks to begin accepting partial payments of delinquent property taxes, this bill requires the county trustee, municipal tax collector, or taxing entity to file a plan with the comptroller of the treasury. The comptroller must acknowledge the receipt of the plan prior to its implementation. This bill requires the plan to contain the following:
(1) A description of the accounting system technology or manual processes to be used to record partial payments of delinquent property taxes;
(2) A statement indicating that funds received as partial payments on delinquent property taxes reduce the amount of delinquent property tax, interest, statutory fees, and court costs, by relative amounts on the pro-rata basis as described in this bill;
(3) A statement indicating whether such a process of collecting delinquent property taxes will be implemented within the existing operating resources of the office or an indication of prior approval by the county legislative body if accounting system upgrades or additional operating resources are needed; and
(4) Documentation of the internal controls that ensure all delinquent property tax payments are being recorded and accounted for as required by law.
This bill requires partial payments of delinquent property taxes to be applied on a pro-rata basis to the delinquent property tax, interest, statutory fees, and court costs due, as follows:
(1) The delinquent property taxes due prior to the partial payment must be reduced by the amount of the partial payment multiplied by the quotient of delinquent property taxes due prior to the partial payment and the sum of the delinquent property tax, interest, statutory fees, and court costs due prior to the partial payment;
(2) The interest due prior to the partial payment must be reduced by the amount of the partial payment multiplied by the quotient of the interest due prior to the partial payment and the sum of the delinquent property tax, interest, statutory fees, and court costs due prior to the partial payment;
(3) The statutory fees due prior to the partial payment must be reduced by the amount of the partial payment multiplied by the quotient of the fees due prior to the partial payment and the sum of the delinquent property tax, interest, statutory fees, and court costs due prior to the partial payment;
(4) The court costs due prior to the partial payment must be reduced by the amount of the partial payment multiplied by the quotient of the court costs due prior to the partial payment and the sum of the delinquent property tax, interest, statutory fees, and court costs due prior to the partial payment; and
(5) A rounding difference between the total of the individual reductions of amounts due and the partial payment amount may be applied to any of the amounts due to make the total of the individual reductions equal to the partial payment amount.
This bill requires the comptroller, in consultation with the Tennessee county trustee's association, to develop guidelines for the implementation of plans for the acceptance of partial payments of delinquent property taxes.
This bill provides that the delinquent date for property taxes and interest applicable to delinquent property taxes is not affected by application of a partial payment system established in the county. After a partial payment is applied to delinquent property taxes and interest in accordance with this bill, interest applies only to the amount of delinquent property taxes remaining due. If a partial payment of delinquent property taxes is accepted, then the partial payment does not release the tax lien on the property upon which the taxes were assessed.
This bill provides that this bill applies to a county trustee, municipal tax collector, or taxing entity qualifying to accept partial payments of delinquent property taxes.
APPLICABILITY
This bill takes effect January 1, 2026, and applies to property taxes that are due and payable on or after the first Monday in October 2026.
ON MARCH 25, 2024, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 2312, AS AMENDED.
AMENDMENT #1 clarifies that the bill does not authorize a clerk of a court in which a proceeding is pending to accept a partial payment of delinquent taxes, interest, or court costs, except pursuant to the law regarding waiver relevant to property taxes, payment of a personal judgment for delinquent personal property taxes in installments, or a payment distribution plan approved in a bankruptcy proceeding.
ON APRIL 8, 2024, THE SENATE SUBSTITUTED HOUSE BILL 2312 FOR SENATE BILL 2172, ADOPTED AMENDMENT #1, AND PASSED HOUSE BILL 2312, AS AMENDED.
AMENDMENT #1 makes the following changes, in the context of partial payments of delinquent property taxes that must be applied on a pro-rata basis to the delinquent property tax, interest, statutory fees, and court costs due, as follows:
(1) Requires that the application of payment of interest on a partial payment be calculated by the amount of the partial payment multiplied by the quotient of the interest due prior to the partial payment and the sum of the delinquent property tax, interest, statutory fees, and court costs due prior to the partial payment;
(2) Requires that the application of payment of statutory fees on a partial payment be calculated by the amount of the partial payment multiplied by the quotient of the fees due prior to the partial payment and the sum of the delinquent property tax, interest, statutory fees, and court costs due prior to the partial payment;
(3) Requires that the application of payment of court costs on a partial payment be calculated by the amount of the partial payment multiplied by the quotient of the court costs due prior to the partial payment and the sum of the delinquent property tax, interest, statutory fees, and court costs due prior to the partial payment; and
(4) Authorizes a rounding difference between the total of the individual applications of amounts due and the partial payment amount to be applied to any of the amounts due to make the total of the individual applications equal to the partial payment amount.

Statutes affected:
Introduced: 67-5-2001(d), 67-5-2001
Amended with HA0674 -- 03/25/2024: 67-5-2001(d), 67-5-2001
Amended with HA0674, SA0913 -- 04/08/2024: 67-5-2001(d), 67-5-2001