Relating to the payment of certain ad valorem tax refunds.

89(R) SB 850 - Enrolled version - Bill Text

S.B. No. 850

AN ACT

relating to the payment of certain ad valorem tax refunds.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 1, Tax Code, is amended by adding Section

1.072 to read as follows:

Sec.

1.072.

APPLICATION FOR TAX REFUND. A person may but is

not required to apply for a refund of taxes due to the person under

this title if the amount of the refund is at least $20.

SECTION 2. Section 11.35(j), Tax Code, is amended to read as

follows:

(j) If a person qualifies for the exemption authorized by

this section after the amount of the tax due on the qualified

property is calculated and the effect of the qualification is to

reduce the amount of the tax due on the property, the assessor for

each applicable taxing unit shall recalculate the amount of the tax

due on the property and correct the tax roll. If the tax bill has

been mailed and the tax on the property has not been paid, the

assessor shall mail a corrected tax bill to the person in whose name

the property is listed on the tax roll or to the person's authorized

agent. If the tax on the property has been paid, the tax collector

for the taxing unit shall refund to the person who paid the tax the

amount by which the payment exceeded the tax due. [
No interest is

due on an amount refunded under this subsection.
]

SECTION 3. Section 11.431(b), Tax Code, is amended to read

as follows:

(b) If a late application is approved after approval of the

appraisal records by the appraisal review board, the chief

appraiser shall notify the collector for each
taxing
unit in which

the residence is located not later than the 30th day after the date

the late application is approved. The collector shall deduct from

the person's tax bill the amount of tax imposed on the exempted

amount if the tax has not been paid. If the tax has been paid, the

collector shall refund to the person who was the owner of the

property on the date the tax was paid the amount of tax imposed on

the exempted amount. [
The collector shall pay the refund not later

than the 60th day after the date the chief appraiser notifies the

collector of the approval of the exemption.
] A person is not

required to apply for a refund under this subsection to receive the

refund.

SECTION 4. Section 11.438(c), Tax Code, is amended to read

as follows:

(c) If a late application is approved after approval of the

appraisal records for a year for which the exemption is granted, the

chief appraiser shall notify the collector for each taxing unit in

which the property was taxable in that year. The collector shall

deduct from the organization's tax bill the amount of tax imposed on

the property for that year and any penalties and interest relating

to that tax if the tax and related penalties and interest have not

been paid. If the tax and related penalties and interest on the

property for a tax year for which an exemption is granted under this

section were paid under protest, the
collector shall
[
organization

is eligible for a
] refund
to the organization
[
of
] the tax,

penalties, and interest paid [
as provided by Section 31.11.

The

deadline prescribed by Section 31.11(c) for applying for a refund

does not apply to a refund under this section
].

SECTION 5. Section 11.439(b), Tax Code, is amended to read

as follows:

(b) If a late application is approved after approval of the

appraisal records for the year for which the exemption is granted,

the chief appraiser shall notify the collector for each taxing unit

in which the property was taxable in that year not later than the

30th day after the date the late application is approved. The

collector shall correct the taxing unit's tax roll to reflect the

amount of tax imposed on the property after applying the exemption

and shall deduct from the person's tax bill the amount of tax

imposed on the exempted portion of the property for that year. If

the tax and any related penalties and interest have been paid, the

collector shall pay to the person who was the owner of the property

on the date the tax was paid a refund of the tax imposed on the

exempted portion of the property and the corresponding portion of

any related penalties and interest paid. [
The collector shall pay

the refund not later than the 60th day after the date the chief

appraiser notifies the collector of the approval of the exemption.
]

SECTION 6. Section 31.071, Tax Code, is amended by amending

Subsection (c) and adding Subsection (d) to read as follows:

(c) If the property is no longer subject to a challenge,

protest, or appeal at any time before the delinquency date, the

collector shall apply the amount paid by the property owner under

this section to the tax imposed on the property and shall refund the

remainder, if any, to the property owner
in accordance with Section

31.12
.

(d)
If the property is still subject to an appeal on the last

working day before the delinquency date, or at an earlier date if so

requested by the property owner, the collector shall apply the

amount paid under this section to the payment required by Section

42.08(b) [
of this code
] and shall retain the remainder, if any,

until the appeal is completed. When the appeal is completed, the

collector shall apply any amount retained under this
subsection

[
section
] to the tax ultimately imposed on the property that is not

covered by the payment under Section 42.08(b) and shall refund the

remainder, if any, to the property owner.
The collector shall make

the refund not later than the 60th day after the date the chief

appraiser notifies the collector of the final determination of the

appeal. If the collector does not make the refund within the period

required by this subsection, the collector shall include with the

refund interest on the amount refunded at an annual rate of 12

percent, calculated from the delinquency date for the taxes being

refunded until the date the refund is made.

If the refund is not

made within the period required by this subsection due to an act or

omission of the chief appraiser, the appraisal district that

employs the chief appraiser shall reimburse the collector for any

interest required to be included with the amount refunded.

SECTION 7. Section 31.072(g), Tax Code, is amended to read

as follows:

(g) When the tax bill is prepared for property for which an

escrow account is established, the collector shall apply the money

in the account to the taxes imposed and deliver a tax receipt to the

taxpayer together with a refund of any amount in the account in

excess of the amount of taxes paid.
The collector shall issue the

refund to the taxpayer not later than the 60th day after the date

the collector determines that the amount of money in the escrow

account exceeds the amount of taxes imposed.
If the amount in the

escrow account is not sufficient to pay the taxes in full, the

collector shall apply the money to the taxes and deliver to the

taxpayer a tax receipt for the partial payment and a tax bill for

the unpaid amount. If the escrow account applies to more than one

taxing unit or to more than one item of property, the collector

shall apply the amount to each taxing unit or item of property in

proportion to the amount of taxes imposed unless the contract

provides otherwise.

SECTION 8. Section 31.11, Tax Code, is amended by amending

Subsections (a), (b), (c), (f), (g), and (k) and adding Subsections

(a-1) and (a-2) to read as follows:

(a) If a taxpayer
submits a tax payment that exceeds by $20

or more the amount of taxes the taxpayer owes for a tax year to a

taxing unit, the collector for the taxing unit shall refund the

amount of the erroneous or excessive payment to the taxpayer, or

apply the amount of the erroneous or excessive payment to the amount

of taxes the taxpayer owes for the following tax year, after the

collector determines the payment was erroneous or excessive if the

auditor for the taxing unit agrees with the collector's

determination.

(a-1)

If a taxpayer submits a tax payment that exceeds by

less than $20 the amount of taxes the taxpayer owes for a tax year to

a taxing unit and the taxpayer
applies to the [
tax
] collector
for

the
[
of a
] taxing unit for a refund of
the
[
an overpayment or
]

erroneous
or excessive
payment [
of taxes
], the collector for the

taxing
unit
shall refund the amount of the erroneous or excessive

payment to the taxpayer after the collector
determines that the

payment was erroneous or excessive
if
[
, and
] the auditor for the

taxing
unit agrees with the collector's determination
.

(a-2) The
[
, the
] collector
for a taxing unit
shall
make a

refund
under Subsection (a) or (a-1) using
[
the amount of the

excessive or erroneous payment from
] available current tax

collections or
money
[
from funds
] appropriated by the
taxing
unit

for
the purpose of
making refunds. [
However, the collector may not

make the refund unless:

[
(1)

in the case of a collector who collects taxes for

one taxing unit, the governing body of the taxing unit also

determines that the payment was erroneous or excessive and approves

the refund if the amount of the refund exceeds:

[
(A)

$5,000 for a refund to be paid by a county

with a population of 2.5 million or more; or

[
(B)

$500 for a refund to be paid by any other

taxing unit; or

[
(2)

in the case of a collector who collects taxes for

more than one taxing unit, the governing body of the taxing unit

that employs the collector also determines that the payment was

erroneous or excessive and approves the refund if the amount of the

refund exceeds:

[
(A)

$5,000 for a refund to be paid by a county

with a population of 2.5 million or more; or

[
(B)

$2,500 for a refund to be paid by any other

taxing unit.
]

(b)
Notwithstanding Subsections (a) and (a-1), a
[
A
] taxing

unit that determines a taxpayer is delinquent in ad valorem tax

payments on property other than the property for which liability

for a refund arises or for a tax year other than the tax year for

which liability for a refund arises may apply the amount of an

overpayment or erroneous payment to the payment of the delinquent

taxes if the taxpayer was the sole owner of the property:

(1) for which the refund is sought on January 1 of the

tax year in which the taxes that were overpaid or erroneously paid

were assessed; and

(2) on which the taxes are delinquent on January 1 of

the tax year for which the delinquent taxes were assessed.

(c) Except as provided by Subsection (c-1), an application

for a refund must be made within three years after the date of the

payment or the taxpayer waives the right to the refund. A taxpayer

may apply for a refund by filing:

(1) an application on a form prescribed by the

comptroller by rule; or

(2) a written request that includes information

sufficient to enable the collector and the auditor for the taxing

unit [
and, if applicable, the governing body of the taxing unit
] to

determine whether the taxpayer is entitled to the refund.

(f) This subsection applies only to
an application for
a

refund that
is filed with the collector for a taxing unit after the

deadline for filing the application is extended
[
is required to be

approved
] by the governing body of
the
[
a
] taxing unit
under

Subsection (c-1)
. The presiding officer of the governing body of

the taxing unit is not required to sign the application for the

refund or any document accompanying the application to indicate the

governing body's approval or disapproval of the
extension of the

deadline prescribed by Subsection (c) as it relates to the

application
[
refund
]. The collector for the taxing unit shall

indicate on the application whether the governing body approved or

disapproved
the extension of the deadline
[
the refund
] and the date

of the approval or disapproval.

(g) If a taxpayer submits a payment of taxes that exceeds

[
by $5 or more
] the amount of taxes owed for a tax year to a taxing

unit, the collector for the taxing unit, without charge, shall mail

to the taxpayer or the taxpayer's representative a written notice

of the amount of the overpayment
. If the amount of the overpayment

is at least $20, the notice must state that the taxpayer is not

required to apply for the refund. If the amount of the overpayment

is less than $20, the notice must state that the taxpayer is

required to apply for the refund and the collector shall include

with the notice
[
accompanied by
] a refund application form.

(k)
A
[
Not later than the 60th day after the date the

collector for a taxing unit denies an application for a refund, the
]

taxpayer may file suit against
a
[
the
] taxing unit in district court

to compel the payment of
a
[
the
] refund. If the collector
for the

taxing unit
collects taxes for more than one taxing unit, the

taxpayer shall join in the suit each taxing unit on behalf of which

the collector denied the refund.
For a refund for which a taxpayer

is not required to file an application, the suit must be filed not

later than the 60th day after the date the taxpayer receives the

notice required by Subsection (g). For a refund for which a

taxpayer is required to file an application, the suit must be filed

not later than the 60th day after the date the collector for the

taxing unit denies the application for the refund.
If the taxpayer

prevails in the suit, the taxpayer may be awarded:

(1) costs of court; and

(2) reasonable attorney's fees in an amount not to

exceed the greater of:

(A) $1,500; or

(B) 30 percent of the total amount of the refund

determined by the court to be due.

SECTION 9. Sections 31.112(d) and (e), Tax Code, are

amended to read as follows:

(d) If a dispute or error described by Section 72.010(c),

Local Government Code, is resolved by the agreement of the taxing

units, a refund required by Subsection (c)(3) of this section must

be made
in accordance with Section 31.12
[
not later than the 90th

day after the date on which the agreement is made
].

(e) If a dispute or error described by Section 72.010(c),

Local Government Code, is not resolved by the agreement of the

taxing units and the supreme court enters a final order in a suit

under Section 72.010, Local Government Code, determining the amount

of taxes owed on the property and the taxing unit or units to which

the taxes are owed, a refund required as a result of the order must

be made not later than the
60th
[
180th
] day after the date the order

is entered.
If the taxing unit does not make the refund within the

period required by this subsection, the taxing unit shall include

with the refund interest on the amount refunded at an annual rate of

12 percent, calculated from the delinquency date for the taxes

being refunded until the date the refund is made.

SECTION 10. Section 31.12, Tax Code, is amended to read as

follows:

Sec. 31.12. PAYMENT OF
CERTAIN
TAX REFUNDS; INTEREST. (a)

A
[
If a
] refund of a tax provided by Section
11.35(j),
11.431(b),

11.436(b), 11.438(c), 11.439(b), 23.1243(d), 23.48(d), 23.60(d),

26.05(e),
26.07(g), 26.075(k),
26.08(d-2), 26.1115(c), 26.112(b),

26.1125(b), 26.1127(b),
26.15(f),
31.061(e), 31.071(c),
31.11,

31.111, or
31.112(c)(3) must be paid not later than the 60th day

after the date the liability for the refund arises as determined

under this section.

(b) If a refund to which this section applies
[
31.112
] is

paid
in accordance with Subsection (a)
[
on or before the 60th day

after the date the liability for the refund arises
], no interest is

due on the amount refunded. If
the refund is
not paid
in accordance

with Subsection (a)
[
on or before that 60th day
], the amount of the

tax to be refunded accrues interest at
an annual
[
a
] rate of
12

[
one
] percent
, calculated from the date on which the liability for

the refund arises until
[
for each month or part of a month that
] the

date the
refund is
paid
[
unpaid, beginning with the date on which

the liability for the refund arises
].

(c)
[
(b)
] For purposes of this section, liability for a

refund arises:

(1)
if the refund is required by Section 11.35(j), on

the date the collector for the taxing unit learns the refund is

required;

(2)
if the refund is required by Section 11.431(b),

11.436(b), 11.438(c), or 11.439(b),
on the date the chief appraiser

notifies the collector for the taxing unit of the approval of the

applicable
[
late homestead
] exemption;

(3)

if the refund is required by Section 23.1243(d),

on the date the chief appraiser notifies the collector for the

taxing unit of the amount of tax to be refunded;

(4)

if the refund is required by Section 23.48(d),

23.60(d), 26.1115(c), 26.112(b), 26.1125(b), or 26.1127(b), on the

date the assessor notifies the collector for the taxing unit of the

decrease in the person's tax liability;

(5)

if the refund is required by Section 26.05(e), on

the date the action to enjoin the collection of taxes imposed by the

taxing unit is finally determined;

(6)
[
(2)
] if the refund is required by Section

26.07(g)
,
[
or
] 26.075(k),
or 26.08(d-2),
on the date the
assessor

for the taxing unit mails the corrected tax bills under Section

26.07(f), 26.075(j), or 26.08(d-1)
[
results of the election to

approve or reduce the tax rate
], as applicable[
, are certified
];

(7)
[
(3)
] if the refund is required by Section

26.15(f):

(A) for a correction to the tax roll made under

Section 26.15(b), on the date the change in the tax roll is

certified to the assessor for the taxing unit under Section 25.25;

or

(B) for a correction to the tax roll made under

Section 26.15(c), on the date the change in the tax roll is ordered

by the governing body of the taxing unit;

(8)

if the refund is required by Section 31.061(e), on

the date the taxing unit determines that the amount credited under

Section 31.061(d) exceeds the amount due to the taxing unit;

(9)

if the refund is required by Section 31.071(c), on

the date the challenge, protest, or appeal is finally determined;

(10)
[
(4)
] if the refund is required by Section 31.11,

on the date the auditor for the taxing unit determines that the

payment was erroneous or excessive [
or, if the amount of the refund

exceeds the applicable amount specified by Section 31.11(a), on the

date the governing body of the taxing unit approves the refund
];

(11)
[
(5)
] if the refund is required by Section

31.111, on the date the collector for the taxing unit determines

that the payment was erroneous; or

(12)
[
(6)
] if the refund is required by Section

31.112(c)(3)
[
31.112
], on the date
the agreement described by

Section 31.112(c) is made
[
required by Section 31.112(d) or (e), as

applicable.

[
(c)

This section does not apply to a refund in an amount

less than $5
].

SECTION 11. Section 41A.10(a), Tax Code, is amended to read

as follows:

(a) The pendency of an appeal under this chapter does not

affect the delinquency date for the taxes on the property subject to

the appeal. Except for a property owner who has elected to defer

the collection of taxes under Section 33.06 or 33.065 on the

property subject to the appeal and for which the deferral is still

in effect, a property owner who appeals an appraisal review board

order under this chapter shall pay taxes on the property subject to

the appeal in an amount equal to the amount of taxes due on the

portion of the taxable value of the property that is not in dispute.

If the final determination of an appeal under this chapter

decreases the property owner's tax liability to less than the

amount of taxes paid, the taxing unit shall refund to the property

owner the difference between the amount of taxes paid and the amount

of taxes for which the property owner is liable.
The collector for

the taxing unit shall make the refund not later than the 60th day

after the date of the final determination of the appeal. If the

collector does not make the refund within the period required by

this subsection, the collector shall include with the refund

interest on the amount refunded at an annual rate of 12 percent,

calculated from the delinquency date for the taxes being refunded

until the date the refund is made.

SECTION 12. Sections 42.43(b), (c), (d), and (f), Tax Code,

are amended to read as follows:

(b) For a refund made under this section, the taxing unit

shall include with the refund interest on the amount refunded

calculated at an annual rate of 9.5 percent, calculated from the

delinquency date for the taxes until the date the refund is made.
A

property owner may waive the interest required by this subsection.

(c) Notwithstanding Subsection (b), if a taxing unit does

not make a refund, including
any
interest, required by this section

before the 60th day after the date
of the final determination of the

appeal to which the refund relates
[
the chief appraiser certifies a

correction to the appraisal roll under Section 42.41
], the taxing

unit shall include with the refund interest on the amount refunded

at an annual rate of 12 percent, calculated from the delinquency

date for the taxes until the date the refund is made. A refund is

not considered made under this section until sent to the proper

person as provided by this section.

(d) A property owner who prevails in a suit to compel a

refund, including interest, required by this section that is filed

on or after the
60th
[
180th
] day after the date
of the final

determination of the appeal to which the refund relates
[
the chief

appraiser certifies a correction to the appraisal roll
] is entitled

to court costs and reasonable attorney's fees.

(f) The final judgment in an appeal under this chapter
:

(1)
may designate to whom and where a refund is to be

sent
; and

(2)

may not require the property owner to file a form

with the Internal Revenue Service as a prerequisite to the issuance

of a refund unless the form is required under federal law
.

SECTION 13. Section 2003.913(a), Government Code, is

amended to read as follows:

(a) The pendency of an appeal to the office does not affect

the delinquency date for the taxes on the property subject to the

appeal. A property owner who appeals an appraisal review board

order to the office shall pay taxes on the property subject to the

appeal in an amount equal to the amount of taxes due on the portion

of the taxable value of the property that is not in dispute. If the

final determination of the appeal decreases the property owner's

tax liability to an amount less than the amount of taxes paid, each

taxing unit shall refund to the property owner the difference

between the amount of taxes paid and the amount of taxes for which

the property owner is liable.
The taxing unit shall make the refund

not later than the 60th day after the date of the final

determination of the appeal. If the taxing unit does not make the

refund within the period required by this subsection, the taxing

unit shall include with the refund interest on the amount refunded

at an annual rate of 12 percent, calculated from the delinquency

date for the taxes being refunded until the date the refund is made.

SECTION 14. Sections 31.11(d) and (i), Tax Code, are

repealed.

SECTION 15. The changes in law made by this Act apply only

to an ad valorem tax refund the liability for which arises on or

after the effective date of this Act.

SECTION 16. This Act takes effect September 1, 2025.

______________________________

______________________________

President of the Senate

Speaker of the House

I hereby certify that S.B. No. 850 passed the Senate on

April 10, 2025, by the following vote: Yeas 30, Nays 0; and that

the Senate concurred in House amendment on May 30, 2025, by the

following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 850 passed the House, with

amendment, on May 28, 2025, by the following vote: Yeas 140,

Nays 1, two present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor