H.B. No. 242 amends the Texas Tax Code to enhance the process of collecting delinquent ad valorem taxes. The bill introduces a new section, 31.074, which 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.

Additionally, the bill adds a new subsection (g) to Section 33.01, which limits the total amount of penalties and interest that a person can be liable for 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 relief to property owners facing delinquent taxes by capping the additional financial liabilities they may incur. The new provisions will take effect 91 days after the conclusion of the legislative session.

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