H.B. No. 138 introduces amendments to the Texas Tax Code concerning the collection of delinquent ad valorem taxes. A new section, 31.074, mandates that tax collectors apply payments made by property owners first to the amount of tax due, before addressing any penalties or interest, unless the property owner specifies otherwise in writing. This change aims to prioritize the reduction of the principal tax owed, potentially easing the financial burden on property owners facing delinquency.

Additionally, the bill adds a new subsection (g) to Section 33.01, which limits the total amount of penalties and interest a person can incur on delinquent taxes to no more than five percent of the delinquent tax amount, regardless of the actual penalties and interest accrued. This provision seeks to provide further protection for property owners by capping the financial repercussions of delinquent tax payments. The new provisions will apply only to payments received after the bill's effective date, which is set for the 91st day following the end of the legislative session.

Statutes affected:
Introduced: Tax Code 33.01 (Tax Code 33)