An act relating to the split-payment of ad valorem taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.03,
Tax Code, is amended by amending
Subsection (a) and adding Subsection (a-1) to read as follows:
(a) The governing body of a taxing unit that collects its
own taxes may provide, in the manner required by law for official
action by the body, that a person who pays one-half of the taxing
unit’s taxes before December 1 or, if applicable, the date provided
by Subsection (a-1) may pay the remaining one-half of the taxes
without penalty or interest before July 1 of the following year.
(a-1) If a taxing unit that has adopted the split-payment
option provided by Subsection (a) mails its tax bills after
November 30, the first one-half of the taxing unit’s taxes must be
paid before the first day of the next month following the first full
calendar month following the date the tax bills are mailed.
SECTION 2. Section 31.04(c), Tax Code, is amended to read as
follows:
(c) A discount adopted under Section 31.05(b) does
not apply to taxes that are calculated too late for it to be
available.
SECTION 3. Section 42.08(c), Tax Code, is amended to read as
follows:
(c) A property owner that pays an amount of taxes greater
than that required by Subsection (b) does not forfeit the property
owner’s right to a final determination of the appeal by making the
payment. The property owner may pay an additional amount of taxes
at any time. If the property owner files a timely appeal under this
chapter, taxes paid on the property are considered paid under
protest, even if paid before the appeal is filed. If the taxes are
subject to the split-payment option provided by Section 31.03, the
property owner may comply with Subsection (b) of this section by
paying one-half of the amount otherwise required to be paid under
that subsection before December 1 or, if applicable, the date
provided by Section 31.03(a-1) and paying the remaining one-half of
that amount before July 1 of the following year.
SECTION 4. The changes in law made by this Act apply only to
ad valorem taxes imposed for an ad valorem tax year that begins on
or after the effective date of this Act.
SECTION 5. This Act takes effect January 1, 2026.

______________________________ ______________________________
President of the Senate Speaker of the House

I certify that H.B. No. 2742 was passed by the House on April
29, 2025, by the following vote: Yeas 146, Nays 0, 1 present, not
voting.

______________________________
Chief Clerk of the House

I certify that H.B. No. 2742 was passed by the Senate on May
16, 2025, by the following vote: Yeas 31, Nays 0.

______________________________
Secretary of the Senate
APPROVED: _____________________
Date

_____________________
Governor