The bill amends the Texas Tax Code to revise the calculation of penalties and interest on delinquent ad valorem taxes. Specifically, it changes the penalty for a delinquent tax from six percent to three percent for the first month of delinquency, with an additional one-half percent for each subsequent month until July 1 of the year in which the tax becomes delinquent. If the tax remains unpaid by July 1, the total penalty increases to six percent, regardless of how long the tax has been delinquent. Additionally, the bill establishes that delinquent taxes will accrue simple interest at a rate of one-half percent for each month or portion of a month that the tax remains unpaid.

The bill also clarifies that the changes apply only to penalties and interest that accrue on or after the effective date of the Act, while any penalties and interest that accrued prior to this date will be governed by the previous law. The Act is set to take effect 91 days after the end of the legislative session.

Statutes affected:
Introduced: Tax Code 31.031, Tax Code 33.01 (Tax Code 33, Tax Code 31)