H.B. No. 242 amends the Texas Tax Code to enhance the process of collecting delinquent ad valorem taxes. A new section, 31.074, is added, 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 introduces a cap on the total amount of penalties and interest that can be charged on delinquent taxes. Under the new subsection 33.01(g), the total liability for penalties and interest cannot exceed five percent of the delinquent tax amount, regardless of the actual penalties and interest accrued. This provision is designed to provide relief to taxpayers facing delinquent tax situations. The bill will take effect 91 days after the end of the legislative session and applies only to payments received after its effective date.

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