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Title 1. Property Tax Code
Subtitle E. Collections and Delinquency

Chapter 33. Delinquency
Subchapter A. General Provisions

Sec. 33.01. Penalties and Interest.
Sec. 33.011. Waiver of Penalties and Interest.
Sec. 33.02. Installment Payment of Delinquent Taxes.
Sec. 33.03. Delinquent Tax Roll.
Sec. 33.04. Notice of Delinquency.
Sec. 33.05. Limitation on Collection of Taxes.
Sec. 33.06. Deferred Collection of Taxes on Residence Homestead of Elderly or Disabled Person.
Sec. 33.065. Deferred Collection of Taxes on Appreciating Residence Homestead.
Sec. 33.07. Additional Penalty for Collection Costs for Taxes Due Before June 1.
Sec. 33.08. Additional Penalty for Collection Costs for Taxes Due on or After June 1.
Sec. 33.09. Transfer of Delinquent County Education District Taxes in Certain Counties.

[Sections 33.10 to 33.20 reserved for expansion]

Sec. 33.01. Penalties and Interest.

(a) A delinquent tax incurs a penalty of six percent of the amount of the tax for the first calendar month it is delinquent plus one percent for each additional month or portion of a month the tax remains unpaid prior to July 1 of the year in which it becomes delinquent. However, a tax delinquent on July 1 incurs a total penalty of twelve percent of the amount of the delinquent tax without regard to the number of months the tax has been delinquent. A delinquent tax continues to incur the penalty provided by this subsection as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered.

(b) If a person who exercises the split-payment option provided by Section 31.03 of this code fails to make the second payment before July 1, the second payment is delinquent and incurs a penalty of twelve percent of the amount of unpaid tax.

(c) A delinquent tax accrues interest at a rate of one percent for each month or portion of a month the tax remains unpaid. Interest payable under this section is to compensate the taxing unit for revenue lost because of the delinquency. A delinquent tax continues to accrue interest under this subsection as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered.

(d) In lieu of the penalty imposed under Subsection (a), a delinquent tax incurs a penalty of 50 percent of the amount of the tax without regard to the number of months the tax has been delinquent if the tax is delinquent because the property owner received an exemption under:

(1) Section 11.13 and the chief appraiser subsequently cancels the exemption because the residence was not the principal residence of the property owner and the property owner received an exemption for two or more additional residence homesteads for the tax year in which the tax was imposed;

(2) Section 11.13(c) or (d) for a person who is 65 years of age or older and the chief appraiser subsequently cancels the exemption because the property owner was younger than 65 years of age; or

(3) Section 11.13(q) and the chief appraiser subsequently cancels the exemption because the property owner was younger than 55 years of age when the property owner's spouse died.

(e) A penalty imposed under Subsection (d) does not apply if:

(1) the exemption was granted by the appraisal district or board and not at the request or application of the property owner or the property owner's agent; or

(2) at any time before the date the tax becomes delinquent, the property owner gives to the chief appraiser of the appraisal district in which the property is located written notice of circumstances that would disqualify the owner for the exemption.

Amended by 1981 Tex. Laws (1st C.S.), p. 168, ch. 13, Sec. 127; amended by 1991 Tex. Laws, p. 2893, ch. 836, Sec. 5.3; amended by 1997 Tex. Laws, p. 2854, ch. 906, Sec. 3, and p. 3913, ch. 1039, Sec. 33.

Cross References:

Delinquency date, see Sec. 31.02.
Annual interest rate for rollback taxes on agricultural, timber and recreational lands, see Secs. 23.46, 23.55, 23.76, 23.86 & 23.96.
Interest added for omitted property, see Sec. 26.09(d).
Penalty and interest on balance after partial payments, see Sec. 31.07.
Tax lien secures payment of penalty and interest, see Sec. 32.01.
Additional collection cost penalty allowed, see Sec. 33.07.
Penalties and interest waived or cancelled, see Secs. 33.011 & 33.04.

Notes:

FDIC was required to pay the delinquent ad valorem taxes and statutory interest but not attorney's fees, costs, and special assessments on properties held in federal receivership. Travis County v. Resolution Trust Corporation, 61 F. Supp.2d 581 (W.D. Tex 1999).

The Federal Deposit Insurance Corporation (FDIC) is not liable for penalties owed on taxes that become delinquent while the FDIC owns the property. Penalties and interest that accrued before the FDIC became the property's owner cannot be collected while the FDIC owns the property; however, a lien for penalties and interest remains on the property and may be enforced after the FDIC disposes of the property. Irving Independent School District v. Packard Properties; Carrollton-Farmer's Branch Independent School District v. Johnson & Cravens 13911, Inc., 970 F.2d 58 (5th Cir. 1992).

The FDIC is not liable for penalties, interest, and collection costs on delinquent taxes owed by failed savings and loan associations. Irving Independent School District v. Packard Properties, Ltd., 741 F.Supp. 120 (N.D. Tex. 1990).

The FDIC is exempt from foreclosure, sale, fines, and/or penalties in connection with taxes on real estate when it acts as receiver. Ft. Bend County MUD No. 30 v. Gayle, 755 F. Supp. 746 (S.D. Tex. 1990).

The statutory requirement of Section 26.15(d) of preparing and mailing a corrected tax bill did not include postponing the delinquency date in Section 31.04(a), and the corrected tax bill did not void the original tax bill. Richardson Independent School District v. GE Capital Corporation, 58 S.W.3d 290 (Tex. App. - Dallas 2001, no pet.).

Partial tender of assessed taxes prior to the delinquency date was sufficient to preclude imposing penalty and interest on the unpaid balance and to avoid any effort to collect the balance due pending the resolution of the property valuation suit. House Bill 2201 (1997) deleted the unconstitutional portion of Section 42.08(b) and amended Section 42.42 for the due date of a post-appeal supplemental tax bill and the penalty and interest on such bill. By changing the delinquency date for pending valuation cases not yet reduced to judgment, the Legislature did no more than remit a penalty, not release an indebtedness or liability owed to a political subdivision of the State. HB 2201 is not an unconstitutional release of an indebtedness under Article III, Section 55, Texas Constitution. Jefferson County, et. al v. Clark Refining & Marketing, Inc., 7 S.W.3d 324 (Tex. App. - Beaumont 1999, no pet.).

Penalties and interest that accrued as a matter of law while a previous owner of property was in bankruptcy were only voidable, not void, because of the automatic stay provisions in the bankruptcy code. Therefore, only the bankruptcy court had power to invalidate the penalties and interest. Since the bankruptcy court did not do so, the lien for the penalties and interest were still valid, so the new owner could not obtain a refund of the amounts. Walker Country Place v. Central Appraisal Dist. of Taylor County, 867 S.W.2d 111 (Tex. App.-Eastland 1993, no writ).

Summary judgment should not have been granted to a taxpayer where there was an unresolved question of fact regarding how much the taxpayer owed the taxing unit under an earlier delinquent tax suit. Nueces County v. Com Four, 865 S.W.2d 538 (Tex. App.-Corpus Christi 1993, writ requested).

A water recreation district may not waive penalties and interest due on delinquent taxes because it does not have the specific authority to do so. Tex. Att'y Gen. LO-03-58 (1993).

Sec. 33.011. Waiver of Penalties and Interest.

(a) The governing body of a taxing unit:

(1) shall waive penalties and interest on a delinquent tax if an act or omission of an officer, employee, or agent of the taxing unit or the appraisal district in which the taxing unit participates caused or resulted in the taxpayer's failure to pay the tax before delinquency and if the tax is paid not later than the third anniversary of the date the taxpayer knows or should know of the delinquency; and

(2) may waive penalties and provide for waiver of interest on a delinquent tax if the property for which the tax is owed is acquired by a religious organization that qualifies the property for exemption under Section 11.20 before the first anniversary of the date the religious organization acquires the property.

(b) If a tax bill is returned undelivered to the taxing unit by the United States Postal Service, the governing body of the taxing unit shall waive penalties and interest if:

(1) the taxing unit does not send another tax bill on the property in question at least 21 days before the delinquency date to the current mailing address furnished by the property owner and the property owner establishes that a current mailing address was furnished to the appraisal district by the property owner for the tax bill before September 1 of the year in which the tax is assessed; or

(2) the tax bill was returned because of an act or omission of an officer, employee, or agent of the taxing unit or the appraisal district in which the taxing unit participates and the taxing unit or appraisal district did not send another tax bill on the property in question at least 21 days before the delinquency date to the proper mailing address.

(c) For the purposes of this section, a property owner is considered to have furnished a current mailing address to the taxing unit or to the appraisal district if the current address is expressly communicated to the appraisal district in writing or if the appraisal district received a copy of a recorded instrument transferring ownership of real property and the current mailing address of the new owner is included in the instrument or in accompanying communications or letters of transmittal.

(d) A request for a waiver of penalties and interest under this section must be made before the 181st day after the delinquency date.

(e) Penalties and interest do not accrue during the period that a bill is not sent under Section 31.01(f).

(f) A property owner is not entitled to relief under Subsection (b) of this section if the property owner or the owner's agent furnished an incorrect mailing address to the appraisal district or the taxing unit or to an employee or agent of the district or unit.

(g) Taxes for which penalties and interest have been waived under Subsection (b) of this section must be paid within 21 days of the property owner having received a bill for those taxes at the current mailing address.

(h) The governing body of a taxing unit shall waive penalties and interest on a delinquent tax if:

(1) the tax is payable by electronic funds transfer under an agreement entered into under Section 31.06(a); and

(2) the taxpayer submits evidence sufficient to show that:

(A) the taxpayer attempted to pay the tax by electronic funds transfer in the proper manner before the delinquency date;

(B) the taxpayer's failure to pay the tax before the delinquency date was caused by an error in the transmission of the funds; and

(C) the tax was properly paid by electronic funds transfer or otherwise not later than the 21st day after the date the taxpayer knew or should have known of the delinquency.

Added by 1985 Tex. Laws, p. 5503, ch. 769, Sec. 1; amended by 1989 Tex. Laws, p. 3600, ch. 796, Sec. 31; amended by 1991 Tex. Laws, p. 2893, ch. 836, Sec. 5.1; amended by 1995 Tex. Laws, p. 3376, ch. 579, Sec. 11; amended by 1999 Tex. Laws., p. 3146, ch. 606, Sec. 2; amended by 1999 Tex. Laws, p. 3450, ch. 817, Sec. 1; amended by SB 1736, 77th Tex. Leg., 2001, eff. June 30, 2001.

Cross References:

Legislature has no power to authorize taxing unit to extinguish liability, see art. III, Sec. 55, Tex. Const.
Penalty and interest accrual, see Sec. 33.01.
Delinquency date of tax bill, see Sec. 31.02.
Delivery of tax bill to fiduciary, see Sec. 1.11.
Delivery of tax bill in mail, see Sec. 1.07.
Electronic funds transfer, see Sec. 31.06(a).
Property owner's agent, see Sec. 1.111.
Postponement of delinquency date, see Sec. 31.04.

Notes:

Impositions made for delinquency for failure to pay taxes, whether these impositions are denominated "penalties," "interest," or "forfeitures," or whether prescribed without definition or name, are all in reality penalties imposed for delinquency that are not part of the tax proper and thus subject to legislative control and remittance. Jones v. Williams, 45 S.W.2d 130 (Tex. 1931).

Sec. 33.011 is discretionary only; taxing units are not required to forgive penalties and interest. Amoroso v. Aldine Independent School District, 808 S.W.2d 118 (Tex. App.-Houston 1991).

Where school board refused to waive penalties and interest, taxpayer had no claim for refund under Sec. 31.01. Even if penalty and interest were illegally assessed, the voluntary payment rule barred right to refund. Sheldon v. Jasper Independent School District, 768 S.W.2d 884 (Tex. App.-Beaumont 1989).

The discretion for waiving penalty and interest on a delinquent tax rests with a taxing unit's governing body and not the court; and, for consideration of such waiver, the taxpayer must pay within 21 days of learning of the delinquency. Bryan Independent School District v. Lamountt, 726 S.W.2d 192 (Tex. App.-Houston 1987, no writ).

A county may not waive taxes, penalties, and interest on real property owned by an individual that houses a nonprofit organization. Op. Tex. Att'y Gen. No. JC-0134 (1999).

The central appraisal district acts as the agent of a taxing unit, and the unit's governing body may waive penalties and interest on a delinquent tax because of an error made by the central appraisal district. Op. Tex. Att'y Gen. No. JM-919 (1988).

Sec. 33.02. Installment Payment of Delinquent Taxes.

(a) The collector for a taxing unit that collects its own taxes may enter an agreement with a person delinquent in the payment of the tax for payment of the tax, penalties, and interest in installments. The agreement must be in writing and may not extend for a period of more than 36 months.

(b) Interest and a penalty accrue as provided by Subsections (a) and (c) of Section 33.01 on the unpaid balance during the period of the agreement.

(c) A property owner's execution of an installment agreement under this section is an irrevocable admission of liability for all taxes, penalties, and interest that are subject to the agreement.

(d) Property may not be seized and sold and a suit may not be filed to collect a delinquent tax subject to an installment agreement unless the property owner:

(1) fails to make a payment as required by the agreement;

(2) fails to pay other property taxes collected by the unit when due as required by the collector; or

(3) breaches any other condition of the agreement.

(e) Execution of an installment agreement tolls the limitation periods provided by Section 33.05 of this code for the period during which enforced collection is barred by Subsection (d) of this section.

Amended by 1997 Tex. Laws, p. 2855, ch. 906, Sec. 5.

Cross References:

Statute of limitations, see Sec. 33.05.
Delinquent tax suits, see Sec. 33.41.
Personal property seizure, see Sec. 33.21.
Delinquent tax receipt information, see Rule Sec. 9.1001.

Notes:

A contract for installment payment of delinquent taxes, penalties and interest by a county commissioner is not subject to Local Government Code Section 81.002, and the county commissioner has not violated the written oath that he or she will not be interested in a contract with or claim against the county. The county commissioner - as a taxpayer - has entered into the contract for installment payment of delinquent taxes, exercising a payment option available to other delinquent taxpayers. The terms of the agreement are established by statute and not by negotiations between the tax collector and taxpayer. Tex. Att'y Gen. LO-96-135 (1996).

A delinquent tax penalty adopted by a taxing unit under Sec. 33.07 does not apply to delinquent taxes subject to installment agreements entered into under Sec. 33.02 before July 1 of the year the taxes became delinquent. Since the purpose of Sec. 33.02 is to allow a taxpayer formally to agree to pay delinquent taxes and avoid the imposition of further penalties or a collection suit, the taxpayer would have little incentive to enter into an installment agreement if penalties continued to accrue or suit could be filed against him or her. Op. Tex. Att'y Gen. No. DM-235 (1993).

Sec. 33.03. Delinquent Tax Roll.

Each year the collector for each taxing unit shall prepare a current and a cumulative delinquent tax roll for the unit.

Cross References:

Electronic and physical document, see Sec. 1.10.
Notices of delinquency, see Sec. 33.04.
Delinquency date, see Sec. 31.02.
Delinquent tax roll, see Rule Sec. 9.3008.

Notes:

The county assessor-collector is not entitled to retain fees in either a public or private capacity for work performed in aiding the attorney hired by the county to collect delinquent taxes. Op. Tex. Att'y Gen. No. JM-264 (1984).

Sec. 33.04. Notice of Delinquency.

At least once each year the collector for a taxing unit shall deliver a notice of delinquency to each person whose name appears on the current delinquent tax roll. However, the notice need not be delivered if:

(1) a bill for the tax was not mailed under Section 31.01(f); or

(2) the collector does not know and by exercising reasonable diligence cannot determine the delinquent taxpayer's name and address.

Amended by 1981 Tex. Laws (1st C.S.), p. 168, ch. 13, Sec. 128; amended by 1985 Tex. Laws, p. 5446, ch. 761, Sec. 1; amended by 1999 Tex. Laws, p. 5101, ch. 1481, Sec. 16; amended by HB 490, 77th Tex. Leg., 2001, eff. September 1, 2001.

Cross References:

Certified appraisal roll, see Sec. 26.01.
Delivery of notice, see Sec. 1.07.
Delinquency date, see Sec. 31.02.
Accrual of penalty and interest, see Sec. 33.01.

Notes:

Amendments by HB 490, 77th Tex. Leg., effective September 1, 2001, do not apply to taxes subject to a delinquent tax suit pending before this effective date. They apply to all other taxes that became delinquent before the effective date of this Act or that become delinquent on or after that date. Penalties and interest on a delinquent tax are not canceled under Section 33.04, Tax Code, for failure to deliver any notice under that section as it existed immediately before this effective date. A delinquent tax that is the subject of a collection suit filed before this effective date is governed by Section 33.04, Tax Code, as that section existed immediately before this effective date, and the former law is continued in effect for that purpose.

A taxpayer who owes property taxes that are delinquent more than five years but who has not received proper notice is not responsible to pay any penalty and interest. The taxpayer has until the first day of the first month that begins at least 21 days after the tax collector delivers proper notice. Any accrued penalty and interest between the time the tax became delinquent and the first day of the first month that begins at least 21 days after proper notice delivery is canceled. Op. Tex. Att'y Gen. No. JC-328 (2001).

Sec. 33.05. Limitation on Collection of Taxes.

(a) Personal property may not be seized and a suit may not be filed:

(1) to collect a tax on personal property that has been delinquent more than four years; or

(2) to collect a tax on real property that has been delinquent more than 20 years.

(b) A tax delinquent for more than the limitation period prescribed by this section and any penalty and interest on the tax is presumed paid unless a suit to collect the tax is pending.

(c) If there is no pending litigation concerning the delinquent tax at the time of the cancellation and removal, the collector for a taxing unit shall cancel and remove from the delinquent tax roll:

(1) a tax on real property that has been delinquent for more than 20 years;

(2) a tax on personal property that has been delinquent for more than 10 years; and

(3) a tax on real property that has been delinquent for more than 10 years if the property has been owned for at least the preceding eight years by a home-rule municipality in a county with a population of more than two million.

Amended by 1991 Tex. Laws, p. 2893, ch. 836, Sec. 5.4; amended by 1997 Tex. Laws, p. 132, ch. 63, Sec. 1.

Cross References:

Personal property defined, see Sec. 1.04(4).
Real property defined, see Sec. 1.04(2).
Installment payment of delinquent taxes, see Sec. 33.02.

Notes:

Limitation statute does not release or extinguish the debt, but merely affects the remedy when its enforcement is sought. Sam Bassett Lumber Co. v. City of Houston, 198 S.W.2d 879 (Tex. 1947).

Because the tax liens properly attached to the properties at issue during the period of time when the Federal Deposit Insurance Corporation held only a lien interest, the owner of the properties through a foreclosure sale was responsible for paying taxes upon its foreclosure and also responsible for paying penalties the lien secured to the extent that the proceeds from the foreclosure were greater than the amount of the tax liens. Tax Code Section 33.05 did not bar collecting the 1991 and 1992 taxes. PNL Asset Management Company v. Kerrville Independent School District, 37 S.W.3d 80 (Tex. App. - San Antonio [4th Dist.] 2000, pet. denied).

A court's dismissal of property tax collection suits for want of prosecution did not prevent taxing units from refiling them, subject to the 20-year statute of limitations period. City of Houston v. Robinson, 837 S.W.2d 262 (Tex. App.-Houston [1st Dist.] 1992, no writ).

This section bars a taxing unit from filing suit to recover taxes more than four years delinquent. Flowers v. Lavaca County, 766 S.W.2d 825 (Tex. App.-Corpus Christi 1989, writ denied).

Statute of limitations provided by this section is an affirmative defense. Taxpayer may not use it as the basis for a cause of action. Salvaggio v. Houston ISD, 752 S.W.2d 189 (Tex. App.-Houston 1988, writ denied).

Mineral production equipment must be appraised separately from the mineral leasehold interest. Land, improvements to land, and interests in land must be appraised separately, even though they are all included within the code's definition of "real property." The appraisals may be in one taxpayer account, but the account must reflect separate appraisals for each property. No authority supports a view that mineral production equipment to be indispensable to the production of oil and gas on the leasehold estate, and therefore taxable as an improvement, fixture, or appurtenance to the realty. Three factors determine whether a property is affixed as an improvement and considered real property: (1) the intention of the person making the annexation (the preeminent factor), (2) the mode and sufficiency of the annexation to the real estate, and (3) the adoption of the property to the real estate's uses or purposes. Determining if mineral production equipment is real or personal property for tax collection purposes must be made on a case-by-case basis. Op. Tex. Att'y Gen. No. DM-438 (1997).

Only a court may enforce statutes of limitation as the collector has no authority to forgive or forego the collection of taxes lawfully assessed. Op. Tex. Att'y Gen. No. WW-107 (1957).

Sec. 33.06. Deferred Collection of Taxes on Residence Homestead of Elderly or Disabled Person.

Note: HB 3364, 77th Tex. Leg., 2001, eff. June 14, 2001, amended Subsection (a) to read as follows:

(a) An individual is entitled to defer or abate a suit to collect a delinquent tax if the individual:

(1) is 65 or older or is disabled as defined by Section 11.13(m); and

(2) owns and occupies as a residence homestead the property on which the tax subject to the suit is delinquent.

Note: HB 490, 77th Tex Leg., 2001, eff. September 1, 2001, amended Subsection (a) to read as follows:

(a) An individual is entitled to defer or abate a suit to collect a delinquent tax if the individual is 65 years of age or older and the tax was imposed against property that the individual owns and occupies as a residence homestead.

(b) To obtain a deferral, an individual must file with the chief appraiser for the appraisal district in which the property is located an affidavit stating the facts required to be established by Subsection (a) of this section. The chief appraiser shall notify each taxing unit participating in the district of the filing. After an affidavit is filed under this subsection, a taxing unit may not file suit to collect delinquent taxes on the property until the individual no longer owns and occupies the property as a residence homestead.

(c) To obtain an abatement, the individual must file in the court in which suit is pending an affidavit stating the facts required to be established by Subsection (a) of this section. If no controverting affidavit is filed by the taxing unit filing suit or if, after a hearing, the court finds the individual is entitled to the deferral, the court shall abate the suit until the individual no longer owns and occupies the property as a residence homestead. The clerk of the court shall deliver a copy of the judgment abating the suit to the chief appraiser of each appraisal district that appraises the property.

(d) A tax lien remains on the property and interest continues to accrue during the period collection of taxes is deferred or abated under this section. The annual interest rate during the deferral or abatement period is eight percent instead of the rate provided by Section 33.01. Interest and penalties that accrued or that were incurred or imposed under Section 33.01 or 33.07 before the date the individual files the deferral affidavit under Subsection (b) or the date the judgment abating the suit is entered, as applicable, are preserved. A penalty under Section 33.01 is not incurred during a deferral or abatement period. The additional penalty under Section 33.07 may be imposed and collected only if the taxes for which collection is deferred or abated remain delinquent on or after the 91st day after the date the deferral or abatement period expires. A plea of limitation, laches, or want of prosecution does not apply against the taxing unit because of deferral or abatement of collection as provided by this section.

(e) Each year the chief appraiser for each appraisal district shall publicize in a manner reasonably designed to notify all residents of the district or county of the provisions of this section and, specifically, the method by which eligible persons may obtain a deferral or abatement.

Amended by 1981 Tex. Laws (1st C.S.), p. 168, ch. 13, Sec. 129; amended by 1989 Tex. Laws, p. 3586, ch. 793, Sec. 1; amended by 1997 Tex. Laws, p. 3913, ch. 1039, Secs. 34 and 35; amended by HB 3364, 77th Tex Leg., 2001, eff. June 14, 2001; amended by HB 490, 77th Tex. Leg., 2001, eff. September 1, 2001.

Cross References:

Tax lien, see Sec. 32.01.
Residence homesteads, see Sec. 11.13.
Suit to collect delinquent taxes, see Sec. 33.41.
Statute of limitations, see Sec. 33.05.

Notes:

Amendments by HB 490, 77th Tex. Leg., 2001, apply to penalties and interest that accrued on a delinquent tax before September 1, 2001, or that accrue on or after that date, regardless of whether the deferral or abatement period under the applicable section of that code began before September 1, 2001, or begins on or after that date.

Pursuant to Section 33.06, a taxpayer was entitled to an abatement of a delinquent tax lawsuit and the tax authorities were not entitled to execute upon the judgment while the property continued to be the homestead of the elderly taxpayer. The provisions of this section provide for a stay of all proceedings. Kubovy v. Cypress-Fairbanks Independent School District, 972 S.W.2d 130 (Tex. App. - Houston [14th District] 1998).

Taxpayers who filed required affidavit as provided by statute deferring or abating taxes on homesteads owned by persons 65 or older were protected from a unit's suit to enforce collection of delinquent taxes on their homestead. Hale v. City of Los Fresnos, 623 S.W.2d 745 (Tex. App.-Houston 1981).

Sec. 33.065. Deferred Collection of Taxes on Appreciating Residence Homestead.

(a) An individual is entitled to defer or abate a suit to collect a delinquent tax imposed on the portion of the appraised value of property the individual owns and occupies as the individual's residence homestead that exceeds the sum of:

(1) 105 percent of the appraised value of the property for the preceding year; and

(2) the market value of all new improvements to the property.

(b) An individual may not obtain a deferral or abatement under this section, and any deferral or abatement previously received expires, if the taxes on the portion of the appraised value of the property that does not exceed the amount provided by Subsection (a) are delinquent.

(c) To obtain a deferral, an individual must file with the chief appraiser for the appraisal district in which the property is located an affidavit stating the facts required to be established by Subsection (a). The chief appraiser shall notify each taxing unit participating in the district of the filing. After an affidavit is filed under this subsection, a taxing unit may not file suit to collect delinquent taxes on the property for which collection is deferred until the individual no longer owns and occupies the property as a residence homestead.

(d) To obtain an abatement, the individual must file in the court in which the delinquent tax suit is pending an affidavit stating the facts required to be established by Subsection (a). If the taxing unit that filed the suit does not file a controverting affidavit or if, after a hearing, the court finds the individual is entitled to the deferral, the court shall abate the suit until the individual no longer owns and occupies the property as the individual's residence homestead. The clerk of the court shall deliver a copy of the judgment abating the suit to the chief appraiser of each appraisal district that appraises the property.

(e) A deferral or abatement under this section applies only to ad valorem taxes imposed beginning with the tax year following the first tax year the individual entitled to the deferral or abatement qualifies the property for an exemption under Section 11.13. For purposes of this subsection, the owner of a residence homestead that is qualified for an exemption under Section 11.13 on January 1, 1998, is considered to have qualified the property for the first time in the 1997 tax year.

(f) If the collection of delinquent taxes on the property was deferred in a prior tax year and the sum of the amounts described by Subsections (a)(1) and (2) exceeds the appraised value of the property for the current tax year, the amount of taxes the collection of which may be deferred is reduced by the amount calculated by multiplying the taxing unit's tax rate for the current year by the amount by which that sum exceeds the appraised value of the property.

(g) A tax lien remains on the property and interest continues to accrue during the period collection of delinquent taxes is deferred or abated under this section. The annual interest rate during the deferral or abatement period is eight percent instead of the rate provided by Section 33.01. Interest and penalties that accrued or that were incurred or imposed under Section 33.01 or 33.07 before the date the individual files the deferral affidavit under Subsection (c) or the date the judgment abating the suit is entered, as applicable, are preserved. A penalty is not incurred on the delinquent taxes for which collection is deferred or abated during a deferral or abatement period. The additional penalty under Section 33.07 may be imposed and collected only if the delinquent taxes for which collection is deferred or abated remain delinquent on or after the 91st day after the date the deferral or abatement period expires. A plea of limitation, laches, or want of prosecution does not apply against the taxing unit because of deferral or abatement of collection as provided by this section.

(h) Each year the chief appraiser for each appraisal district shall publicize in a manner reasonably designed to notify all residents of the county for which the appraisal district is established of the provisions of this section and, specifically, the method by which an eligible person may obtain a deferral.

(i) In this section:

(1) "New improvement" means an improvement to a residence homestead that is made after the appraisal of the property for the preceding year and that increases the market value of the property. The term does not include ordinary maintenance of an existing structure or the grounds or another feature of the property.

(2) "Residence homestead" has the meaning assigned that term by Section 11.13.

Added by 1997 Tex. Laws, p. 3914, ch. 1039, Sec. 36; amended by HB 490, 77th Tex. Leg., 2001, eff. September 1, 2001.

Cross References:

Tax lien, see Sec. 32.01.
Residence homesteads, see Sec. 11.13.
Suit to collect delinquent taxes, see Sec. 33.41.
Statute of limitations, see Sec. 33.05.

Notes:

Amendments by HB 490, 77th Tex. Leg., 2001, apply to penalties and interest that accrued on a delinquent tax before September 1, 2001, or that accrue on or after that date, regardless of whether the deferral or abatement period under the applicable section of that code began before September 1, 2001, or begins on or after that date.

Sec. 33.07. Additional Penalty for Collection Costs for Taxes Due Before June 1.

(a) A taxing unit or appraisal district may provide, in the manner required by law for official action by the body, that taxes that become delinquent on or after February 1 of a year but not later than May 1 of that year and that remain delinquent on July 1 of the year in which they become delinquent incur an additional penalty to defray costs of collection, if the unit or district or another unit that collects taxes for the unit has contracted with an attorney pursuant to Section 6.30. The amount of the penalty may not exceed the amount of the compensation specified in the contract with the attorney to be paid in connection with the collection of the delinquent taxes.

(b) A tax lien attaches to the property on which the tax is imposed to secure payment of the penalty.

(c) If a penalty is imposed pursuant to this section, a taxing unit may not recover attorney's fees in a suit to collect delinquent taxes subject to the penalty.

(d) If a taxing unit or appraisal district provides for a penalty under this section, the collector shall deliver a notice of delinquency and of the penalty to the property owner at least 30 and not more than 60 days before July 1.

Added by 1981 Tex. Laws (1st C.S.), p. 168, ch. 13, Sec. 130; amended by 1999 Tex. Laws, p. 5101, ch. 1481, Sec. 17; amended by HB 490, 77th Tex. Leg., 2001, eff. September 1, 2001.

Cross References:

Delivery of notice, see Sec. 1.07.
Attorney's fees in suit to collect tax, see Sec. 33.48(a)(4).
Contract with attorney, see Sec. 6.30.
Taxes due on after June 1, see Sec. 33.08.

Notes:

The FDIC is not liable for penalties, interest, and collection costs on delinquent taxes owed by failed savings and loan associations. Irving Independent School District v. Packard Properties, Ltd., 741 F. Supp. 120 (N.D. Tex. 1990).

The Tax Code provisions for collecting attorney's fees in a suit by a water control and improvement district prevail over Texas Water Code Section 51.591, and attorney's fees were recoverable under Tax Code Section 33.48 since the district did not take official action to adopt Tax Code Section 33.07 or timely notify the taxpayer of the tax delinquency. Harris County Water Control and Improvement District #99 v Duke, 59 S.W.3d 333 (Tex. App. - Houston [1st Dist.] 2001, no pet.).

A taxing unit may initiate a delinquent tax collection proceeding even when subsequent lawsuits are filed against the appraisal district if the first lawsuit was dismissed. A court may not undertake a reasonableness review for tax collection fees. Siracusa v. Nueces County, 890 S.W.2d 884 (Tex. App.-Corpus Christi 1994, no writ).

Penalties and interest that accrued as a matter of law while a previous owner of property was in bankruptcy were only voidable, not void, because of the automatic stay provisions in the bankruptcy code. Therefore, only the bankruptcy court had power to invalidate the penalties and interest. Since the bankruptcy court did not do so, the lien for the penalties and interest were still valid, so the new owner could not obtain a refund of the amounts. Walker Country Place v. Central Appraisal Dist. of Taylor County, 867 S.W.2d 111 (Tex. App.-Eastland 1993, no writ).

Section 33.07 is designed to pay the taxing units' collection costs. Collection for fee penalties under this section is not recoverable where attorney's fees are allowed for any tax year and visa versa. To provide otherwise would permit a double recovery of costs. City of Houston v. First City, Texas, 827 S.W.2d 462 (Tex. App.-Houston [1st Dist.] 1992, writ denied).

Where the taxing units were seeking to recover under Sec. 33.07, Tax Code, the court found that the only costs that the units expended after the taxpayer paid its taxes were in connection with the dispute over the amount of collection costs and attorney's fees, and the application of the proceeds of the checks that the taxpayer had paid with. Expenses related to the dispute over the amount of collections costs and attorney's fees were not "collection costs" that Sec. 33.07 was intended to cover, since the legislature did not intend for a delinquent taxpayer to pay collection costs for the cost of collecting costs. Id.

To recover collections costs under Sec. 33.07, a taxing unit must prove that it contracted with an attorney, that its board authorized that the penalty be imposed, and that it sent proper notice to the property owner. Id.

Taxing units' acceptance and cashing of taxpayer's check, even though the taxing units understood the condition that funds were to be applied only to undisputed debt, not disputed penalties, costs and/or fees under Sec. 33.07, constituted "accord and satisfaction" and application of funds to disputed debt was a breach of contract, despite absences of express language of contract on taxpayer's remittances. Id. (Note: In 1993, the Legislature added Sec. 31.073, which voids any restriction placed on a check used to pay taxes if the restriction limits the amount of taxes owed to an amount less than that stated on the tax bill unless such restriction is authorized by the Tax Code. However, Sec. 31.073 appears only to pertain to current taxes rather than to the delinquent taxes.)

"Voluntary payment rule" prevents taxpayers from recovering repayment of Sec. 33.07 penalties, even if the penalties are illegally imposed. Salvaggio v. Houston ISD, 752 S.W.2d 189 (Tex. App.-Houston 1988, writ denied).

Where appraisal district addressed notice to previous owner of property, fact that previous owner was still listed as owner in district's records didn't name the notice valid. Sec. 1.07 requires delivery to the current owner, at the most recent address listed in the appraisal records. New v. Dallas Appraisal Review Board, 734 S.W.2d 712 (Tex. App.-Dallas 1987, no writ).

A county that imposes the 15% collection penalty cannot seek attorney's fees in a delinquent tax suit. Taxpayer's testimony that he didn't receive a notice of imposition of the Sec. 33.07 penalty combined with evidence that the district had an incorrect address listed for taxpayer was enough to support trial court's finding that notice was not delivered. Uvalde CAD v. Parker, 733 S.W.2d 609 (Tex. App.-San Antonio 1987, writ ref'd n.r.e.).

Taxpayers brought class action complaining that school district's action in imposing retroactive penalty on taxes delinquent as early as 1977 was illegal. Common law rule that any tax payment voluntarily paid may not be refunded applies to penalty under Sec. 33.07. Refund is proper only if there was duress, fraud, or mutual mistake of fact. Trial court did not abuse its discretion by refusing to certify the suit as a class action. Each taxpayer's payment must be reviewed to determine if a refund is proper under the common law rule, a level of proof that extinguishes the reason for the class action. Salvaggio v. Houston Independent School District, 709 S.W.2d 306 (Tex. App.-Houston 1986, writ dismissed).

A contract attorney compensated under Tax Code Section 33.07 may not make a donation to the county if the donation in effect refunds part of the compensation to the county. Op. Tex. Att'y Gen. No. JC-443 (2001).

Construction of Section 33.07 that allows the penalty to be imposed against taxes delinquent on or after July 1 is contrary to the legislative will expressed by the plain language of Section 33.07 and ignores the rule that a statute imposing penalties must be strictly construed. A notice of delinquency must be sent no later than June 1 (30 days before July 1) to meet the 30-day notice requirement. Section 33.07 additional penalty may not be imposed against taxes that become delinquent on or after June 1 under Tax Code Sections 31.03, 31.031, 31.032, or 31.04. Op. Tex. Att'y Gen. No. DM-491 (1998). (In 1999, the 76th Texas Legislature passed HB 3549, adding Section 33.08 to provide for the penalty on taxes that go delinquent on or after June 1.)

A delinquent tax penalty adopted by a taxing unit under Sec. 33.07 does not apply to delinquent taxes subject to installment agreements entered into under Sec. 33.02 before July 1 of the year the taxes became delinquent. Since the purpose of Sec. 33.02 is to allow a taxpayer formally to agree to pay delinquent taxes and avoid the imposition of further penalties or a collection suit, the taxpayer would have little incentive to enter into an installment agreement if penalties continued to accrue or suit could be filed against him or her. Op. Tex. Att'y Gen. No. DM-235 (1993).

The Sec. 33.07 penalty is a substitute for court-ordered attorney fees and can be collected even if no delinquent tax lawsuit is filed. A taxing unit may not apply any of the Sec. 33.07 penalty to cover costs of collection that it incurs; it must use all of the penalty solely to compensate the attorney with whom it has contracted. The maximum penalty under Sec. 33.07 is 15 percent, but the unit may adopt a lower penalty if it chooses to do so. Op. Tex. Att'y Gen. No. JM-857 (1988).

The penalty applies to all taxes currently delinquent in the year in which the penalty is imposed. Application of the penalty is limited to the years including and subsequent to the adoption of this code provision by the appropriate taxing unit or appraisal district. The July l date set forth in Sec. 33.07 is the date on which the penalty attaches and that date is mandatory. Section 33.07 does not authorize a taxing unit or appraisal district to extend the July 1 date or select a different date on which the penalty attaches. Op. Tex. Att'y Gen. No. JM-285 (1984).

The county assessor-collector is not entitled to retain fees in either a public or private capacity for work performed in aiding the attorney hired by the county to collect delinquent taxes. Op. Tex. Att'y Gen. No. JM-264 (1984).

Neither a county attorney nor a city attorney has the contractual capacity to contract for the enforcement of delinquent tax collection while acting in his official capacity. A taxing unit that contracts with either a county or a city for delinquent tax collection may not impose the additional penalty when the county attorney or the city attorney represents the county or city in the enforcement of delinquent tax collection. Op. Tex. Att'y Gen. No. JM-135 (1984).

Commissioners court may not contract for the collection of delinquent taxes with the county attorney pursuant to Sec. 6.30, Property Tax Code. If the county attorney represents the county in enforcing the collection of delinquent taxes, the commissioners court may not impose an additional penalty to defray collection costs. Op. Tex. Att'y Gen. No. JM-14 (1983).

Sec. 33.08. Additional Penalty for Collection Costs for Taxes Due on or After June 1.

(a) This section applies to a taxing unit or appraisal district only if:

(1) the governing body of the taxing unit or appraisal district has imposed the additional penalty for collection costs under Section 33.07; and

(2) the taxing unit or appraisal district, or another taxing unit that collects taxes for the unit, has entered into a contract with an attorney under Section 6.30 for the collection of the unit's delinquent taxes.

(b) The governing body of the taxing unit or appraisal district, in the manner required by law for official action, may provide that taxes that become delinquent on or after June 1 under Section 26.07(f), 26.15(e), 31.03, 31.031, 31.032, or 31.04 incur an additional penalty to defray costs of collection. The amount of the penalty may not exceed the amount of the compensation specified in the applicable contract with an attorney under Section 6.30 to be paid in connection with the collection of the delinquent taxes.

(c) After the taxes become delinquent, the collector for a taxing unit or appraisal district that has provided for the additional penalty under this section shall send a notice of the delinquency and the penalty to the property owner. The penalty is incurred on the first day of the first month that begins at least 21 days after the date the notice is sent.

(d) A tax lien attaches to the property on which the tax is imposed to secure payment of the additional penalty.

(e) A taxing unit or appraisal district that imposes the additional penalty under this section may not recover attorney's fees in a suit to collect delinquent taxes subject to the penalty.

Added by 1999 Tex. Laws, p. 5102, ch. 1481, Sec. 18; amended by HB 490, 77th Tex. Leg., 2001, eff. September 1, 2001.

Cross References:

Delivery of notice, see Sec. 1.07.
Attorney's fees in suit to collect tax, see Sec. 33.48(a)(4).
Contract with attorney, see Sec. 6.30.
Taxes due before June 1, see Sec. 33.07.

Sec. 33.09. Transfer of Delinquent County Education District Taxes in Certain Counties.

(a) This section applies only to a county with a population of less than 22,000.

(b) In this section, "county education district taxes" means ad valorem taxes imposed by a county education district under former Section 20.945, Education Code.

(c) The successor-in-interest to a county education district may transfer to the component school districts of the county education district all delinquent county education district taxes. The amount transferred to each school district must be in proportion to the ratio that the school district's weighted average daily attendance for the 1992-1993 school year bears to the weighted average daily attendance of all school districts in the county education district for that year. For purposes of this section, "weighted average daily attendance" is determined in the manner provided by former Section 16.302, Education Code, as that section existed September 1, 1992.

(d) A school district to which delinquent county education district taxes are transferred under this section is responsible for:

(1) collecting or contracting for the collection of the taxes; and

(2) preparing and submitting any report required by the commissioner of education or the comptroller of the amount of delinquent county education taxes collected.

(e) This section expires February 1, 2014.

Added by HB 490, 77th Tex. Leg., 2001, eff. September 1, 2001.

[Sections 33.10 to 33.20 reserved for expansion]