H.B. No. 242 amends the Texas Tax Code to establish new guidelines for the collection of delinquent ad valorem taxes. The bill introduces 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 alleviating the financial burden on property owners facing delinquency.

Additionally, the bill adds 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)