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 it is unpaid, with an additional one-half percent for each subsequent month until July 1, when the total penalty increases to six percent, regardless of how long the tax has been delinquent. The bill also establishes that a delinquent tax will accrue simple interest at a rate of one-half percent for each month it remains unpaid.

Additionally, the bill clarifies that the penalty provisions of Section 33.01(a) will apply to unpaid installments, while the previous six percent penalty is removed from the language. The changes in law will only apply to penalties and interest that accrue on or after the effective date of the Act, with prior accrued penalties and interest governed by the law in effect at that time. 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)