Texas 2025 - 89th Regular

Texas Senate Bill SB850 Compare Versions

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1	1		By: Middleton S.B. No. 850
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3		-
	2	+	(In the Senate - Filed January 17, 2025; February 13, 2025,
	3	+	read first time and referred to Committee on Local Government;
	4	+	March 17, 2025, reported adversely, with favorable Committee
	5	+	Substitute by the following vote: Yeas 6, Nays 0; March 17, 2025,
	6	+	sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR S.B. No. 850 By: Middleton
4	9
5	10
6	11		A BILL TO BE ENTITLED
7	12		AN ACT
8	13		relating to the payment of certain ad valorem tax refunds.
9	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	15		SECTION 1. Chapter 1, Tax Code, is amended by adding Section
11	16		1.072 to read as follows:
12	17		Sec. 1.072. APPLICATION FOR TAX REFUND. A person may but is
13	18		not required to apply for a refund of taxes due to the person under
14	19		this title if the amount of the refund is at least $1.
15	20		SECTION 2. Section 11.35(j), Tax Code, is amended to read as
16	21		follows:
17	22		(j) If a person qualifies for the exemption authorized by
18	23		this section after the amount of the tax due on the qualified
19	24		property is calculated and the effect of the qualification is to
20	25		reduce the amount of the tax due on the property, the assessor for
21	26		each applicable taxing unit shall recalculate the amount of the tax
22	27		due on the property and correct the tax roll. If the tax bill has
23	28		been mailed and the tax on the property has not been paid, the
24	29		assessor shall mail a corrected tax bill to the person in whose name
25	30		the property is listed on the tax roll or to the person's authorized
26	31		agent. If the tax on the property has been paid, the tax collector
27	32		for the taxing unit shall refund to the person who paid the tax the
28	33		amount by which the payment exceeded the tax due. [No interest is
29	34		due on an amount refunded under this subsection.]
30	35		SECTION 3. Section 11.431(b), Tax Code, is amended to read
31	36		as follows:
32	37		(b) If a late application is approved after approval of the
33	38		appraisal records by the appraisal review board, the chief
34	39		appraiser shall notify the collector for each taxing unit in which
35	40		the residence is located not later than the 30th day after the date
36	41		the late application is approved. The collector shall deduct from
37	42		the person's tax bill the amount of tax imposed on the exempted
38	43		amount if the tax has not been paid. If the tax has been paid, the
39	44		collector shall refund to the person who was the owner of the
40	45		property on the date the tax was paid the amount of tax imposed on
41	46		the exempted amount. [The collector shall pay the refund not later
42	47		than the 60th day after the date the chief appraiser notifies the
43	48		collector of the approval of the exemption.] A person is not
44	49		required to apply for a refund under this subsection to receive the
45	50		refund.
46	51		SECTION 4. Section 11.438(c), Tax Code, is amended to read
47	52		as follows:
48	53		(c) If a late application is approved after approval of the
49	54		appraisal records for a year for which the exemption is granted, the
50	55		chief appraiser shall notify the collector for each taxing unit in
51	56		which the property was taxable in that year. The collector shall
52	57		deduct from the organization's tax bill the amount of tax imposed on
53	58		the property for that year and any penalties and interest relating
54	59		to that tax if the tax and related penalties and interest have not
55	60		been paid. If the tax and related penalties and interest on the
56	61		property for a tax year for which an exemption is granted under this
57	62		section were paid under protest, the collector shall [organization
58	63		is eligible for a] refund to the organization [of] the tax,
59	64		penalties, and interest paid [as provided by Section 31.11. The
60	65		deadline prescribed by Section 31.11(c) for applying for a refund
61	66		does not apply to a refund under this section].
62	67		SECTION 5. Section 11.439(b), Tax Code, is amended to read
63	68		as follows:
64	69		(b) If a late application is approved after approval of the
65	70		appraisal records for the year for which the exemption is granted,
66	71		the chief appraiser shall notify the collector for each taxing unit
67	72		in which the property was taxable in that year not later than the
68	73		30th day after the date the late application is approved. The
69	74		collector shall correct the taxing unit's tax roll to reflect the
70	75		amount of tax imposed on the property after applying the exemption
71	76		and shall deduct from the person's tax bill the amount of tax
72	77		imposed on the exempted portion of the property for that year. If
73	78		the tax and any related penalties and interest have been paid, the
74	79		collector shall pay to the person who was the owner of the property
75	80		on the date the tax was paid a refund of the tax imposed on the
76	81		exempted portion of the property and the corresponding portion of
77	82		any related penalties and interest paid. [The collector shall pay
78	83		the refund not later than the 60th day after the date the chief
79	84		appraiser notifies the collector of the approval of the exemption.]
80	85		SECTION 6. Section 31.071, Tax Code, is amended by amending
81	86		Subsection (c) and adding Subsection (d) to read as follows:
82	87		(c) If the property is no longer subject to a challenge,
83	88		protest, or appeal at any time before the delinquency date, the
84	89		collector shall apply the amount paid by the property owner under
85	90		this section to the tax imposed on the property and shall refund the
86	91		remainder, if any, to the property owner in accordance with Section
87	92		31.12.
88	93		(d) If the property is still subject to an appeal on the last
89	94		working day before the delinquency date, or at an earlier date if so
90	95		requested by the property owner, the collector shall apply the
91	96		amount paid under this section to the payment required by Section
92	97		42.08(b) [of this code] and shall retain the remainder, if any,
93	98		until the appeal is completed. When the appeal is completed, the
94	99		collector shall apply any amount retained under this subsection
95	100		[section] to the tax ultimately imposed on the property that is not
96	101		covered by the payment under Section 42.08(b) and shall refund the
97	102		remainder, if any, to the property owner. The collector shall make
98	103		the refund not later than the 60th day after the date the appeal is
99	104		completed. If the collector does not make the refund within the
100	105		period required by this subsection, the collector shall include
101	106		with the refund interest on the amount refunded at an annual rate of
102	107		12 percent, calculated from the delinquency date for the taxes
103	108		being refunded until the date the refund is made.
104	109		SECTION 7. Section 31.072(g), Tax Code, is amended to read
105	110		as follows:
106	111		(g) When the tax bill is prepared for property for which an
107	112		escrow account is established, the collector shall apply the money
108	113		in the account to the taxes imposed and deliver a tax receipt to the
109	114		taxpayer together with a refund of any amount in the account in
110	115		excess of the amount of taxes paid. The collector shall issue the
111	116		refund to the taxpayer not later than the 60th day after the date
112	117		the collector determines that the amount of money in the escrow
113	118		account exceeds the amount of taxes imposed. If the amount in the
114	119		escrow account is not sufficient to pay the taxes in full, the
115	120		collector shall apply the money to the taxes and deliver to the
116	121		taxpayer a tax receipt for the partial payment and a tax bill for
117	122		the unpaid amount. If the escrow account applies to more than one
118	123		taxing unit or to more than one item of property, the collector
119	124		shall apply the amount to each taxing unit or item of property in
120	125		proportion to the amount of taxes imposed unless the contract
121	126		provides otherwise.
122	127		SECTION 8. Section 31.11, Tax Code, is amended by amending
123	128		Subsections (a), (b), (c), (f), (g), and (k) and adding Subsections
124	129		(a-1) and (a-2) to read as follows:
125	130		(a) If a taxpayer submits a tax payment that exceeds by $1 or
126	131		more the amount of taxes the taxpayer owes for a tax year to a taxing
127	132		unit, the collector for the taxing unit shall refund the amount of
128	133		the erroneous or excessive payment to the taxpayer after the
129	134		collector determines the payment was erroneous or excessive if the
130	135		auditor for the taxing unit agrees with the collector's
131	136		determination.
132	137		(a-1) If a taxpayer submits a tax payment that exceeds by
133	138		less than $1 the amount of taxes the taxpayer owes for a tax year to
134	139		a taxing unit and the taxpayer applies to the [tax] collector for
135	140		the [of a] taxing unit for a refund of the [an overpayment or]
136	141		erroneous or excessive payment [of taxes], the collector for the
137	142		taxing unit shall refund the amount of the erroneous or excessive
138	143		payment to the taxpayer after the collector determines that the
139	144		payment was erroneous or excessive if[, and] the auditor for the
140	145		taxing unit agrees with the collector's determination.
141	146		(a-2) The[, the] collector for a taxing unit shall make a
142	147		refund under Subsection (a) or (a-1) using [the amount of the
143	148		excessive or erroneous payment from] available current tax
144	149		collections or money [from funds] appropriated by the taxing unit
145	150		for the purpose of making refunds. [However, the collector may not
146	151		make the refund unless:
147	152		[(1) in the case of a collector who collects taxes for
148	153		one taxing unit, the governing body of the taxing unit also
149	154		determines that the payment was erroneous or excessive and approves
150	155		the refund if the amount of the refund exceeds:
151	156		[(A) $5,000 for a refund to be paid by a county
152	157		with a population of 2.5 million or more; or
153	158		[(B) $500 for a refund to be paid by any other
154	159		taxing unit; or
155	160		[(2) in the case of a collector who collects taxes for
156	161		more than one taxing unit, the governing body of the taxing unit
157	162		that employs the collector also determines that the payment was
158	163		erroneous or excessive and approves the refund if the amount of the
159	164		refund exceeds:
160	165		[(A) $5,000 for a refund to be paid by a county
161	166		with a population of 2.5 million or more; or
162	167		[(B) $2,500 for a refund to be paid by any other
163	168		taxing unit.]
164	169		(b) Notwithstanding Subsections (a) and (a-1), a [A] taxing
165	170		unit that determines a taxpayer is delinquent in ad valorem tax
166	171		payments on property other than the property for which liability
167	172		for a refund arises or for a tax year other than the tax year for
168	173		which liability for a refund arises may apply the amount of an
169	174		overpayment or erroneous payment to the payment of the delinquent
170	175		taxes if the taxpayer was the sole owner of the property:
171	176		(1) for which the refund is sought on January 1 of the
172	177		tax year in which the taxes that were overpaid or erroneously paid
173	178		were assessed; and
174	179		(2) on which the taxes are delinquent on January 1 of
175	180		the tax year for which the delinquent taxes were assessed.
176	181		(c) Except as provided by Subsection (c-1), an application
177	182		for a refund must be made within three years after the date of the
178	183		payment or the taxpayer waives the right to the refund. A taxpayer
179	184		may apply for a refund by filing:
180	185		(1) an application on a form prescribed by the
181	186		comptroller by rule; or
182	187		(2) a written request that includes information
183	188		sufficient to enable the collector and the auditor for the taxing
184	189		unit [and, if applicable, the governing body of the taxing unit] to
185	190		determine whether the taxpayer is entitled to the refund.
186	191		(f) This subsection applies only to an application for a
187	192		refund that is filed with the collector for a taxing unit after the
188	193		deadline for filing the application is extended [is required to be
189	194		approved] by the governing body of the [a] taxing unit under
190	195		Subsection (c-1). The presiding officer of the governing body of
191	196		the taxing unit is not required to sign the application for the
192	197		refund or any document accompanying the application to indicate the
193	198		governing body's approval or disapproval of the extension of the
194	199		deadline prescribed by Subsection (c) as it relates to the
195	200		application [refund]. The collector for the taxing unit shall
196	201		indicate on the application whether the governing body approved or
197	202		disapproved the extension of the deadline [the refund] and the date
198	203		of the approval or disapproval.
199	204		(g) If a taxpayer submits a payment of taxes that exceeds
200	205		[by $5 or more] the amount of taxes owed for a tax year to a taxing
201	206		unit, the collector for the taxing unit, without charge, shall mail
202	207		to the taxpayer or the taxpayer's representative a written notice
203	208		of the amount of the overpayment. If the amount of the overpayment
204	209		is at least $1, the notice must state that the taxpayer is not
205	210		required to apply for the refund. If the amount of the overpayment
206	211		is less than $1, the notice must state that the taxpayer is required
207	212		to apply for the refund and the collector shall include with the
208	213		notice [accompanied by] a refund application form.
209	214		(k) A [Not later than the 60th day after the date the
210	215		collector for a taxing unit denies an application for a refund, the]
211	216		taxpayer may file suit against a [the] taxing unit in district court
212	217		to compel the payment of a [the] refund. If the collector for the
213	218		taxing unit collects taxes for more than one taxing unit, the
214	219		taxpayer shall join in the suit each taxing unit on behalf of which
215	220		the collector denied the refund. For a refund for which a taxpayer
216	221		is not required to file an application, the suit must be filed not
217	222		later than the 60th day after the date the taxpayer receives the
218	223		notice required by Subsection (g). For a refund for which a
219	224		taxpayer is required to file an application, the suit must be filed
220	225		not later than the 60th day after the date the collector for the
221	226		taxing unit denies the application for the refund. If the taxpayer
222	227		prevails in the suit, the taxpayer may be awarded:
223	228		(1) costs of court; and
224	229		(2) reasonable attorney's fees in an amount not to
225	230		exceed the greater of:
226	231		(A) $1,500; or
227	232		(B) 30 percent of the total amount of the refund
228	233		determined by the court to be due.
229	234		SECTION 9. Sections 31.112(d) and (e), Tax Code, are
230	235		amended to read as follows:
231	236		(d) If a dispute or error described by Section 72.010(c),
232	237		Local Government Code, is resolved by the agreement of the taxing
233	238		units, a refund required by Subsection (c)(3) of this section must
234	239		be made in accordance with Section 31.12 [not later than the 90th
235	240		day after the date on which the agreement is made].
236	241		(e) If a dispute or error described by Section 72.010(c),
237	242		Local Government Code, is not resolved by the agreement of the
238	243		taxing units and the supreme court enters a final order in a suit
239	244		under Section 72.010, Local Government Code, determining the amount
240	245		of taxes owed on the property and the taxing unit or units to which
241	246		the taxes are owed, a refund required as a result of the order must
242	247		be made not later than the 60th [180th] day after the date the order
243	248		is entered. If the taxing unit does not make the refund within the
244	249		period required by this subsection, the taxing unit shall include
245	250		with the refund interest on the amount refunded at an annual rate of
246	251		12 percent, calculated from the delinquency date for the taxes
247	252		being refunded until the date the refund is made.
248	253		SECTION 10. Section 31.12, Tax Code, is amended to read as
249	254		follows:
250	255		Sec. 31.12. PAYMENT OF CERTAIN TAX REFUNDS; INTEREST. (a)
251	256		A [If a] refund of a tax provided by Section 11.35(j), 11.431(b),
252	257		11.436(b), 11.438(c), 11.439(b), 23.1243(d), 23.48(d), 23.60(d),
253	258		26.05(e), 26.07(g), 26.075(k), 26.08(d-2), 26.1115(c), 26.112(b),
254	259		26.1125(b), 26.1127(b), 26.15(f), 31.061(e), 31.071(c), 31.11,
255	260		31.111, or 31.112(c)(3) must be paid not later than the 60th day
256	261		after the date the liability for the refund arises as determined
257	262		under this section.
258	263		(b) If a refund to which this section applies [31.112] is
259	264		paid in accordance with Subsection (a) [on or before the 60th day
260	265		after the date the liability for the refund arises], no interest is
261	266		due on the amount refunded. If the refund is not paid in accordance
262	267		with Subsection (a) [on or before that 60th day], the amount of the
263	268		tax to be refunded accrues interest at an annual [a] rate of 12
264	269		[one] percent, calculated from the date on which the liability for
265	270		the refund arises until [for each month or part of a month that] the
266	271		date the refund is paid [unpaid, beginning with the date on which
267	272		the liability for the refund arises].
268	273		(c) [(b)] For purposes of this section, liability for a
269	274		refund arises:
270	275		(1) if the refund is required by Section 11.35(j), on
271	276		the date the collector for the taxing unit learns the refund is
272	277		required;
273	278		(2) if the refund is required by Section 11.431(b),
274	279		11.436(b), 11.438(c), or 11.439(b), on the date the chief appraiser
275	280		notifies the collector for the taxing unit of the approval of the
276	281		applicable [late homestead] exemption;
277	282		(3) if the refund is required by Section 23.1243(d),
278	283		on the date the chief appraiser notifies the collector for the
279	284		taxing unit of the amount of tax to be refunded;
280	285		(4) if the refund is required by Section 23.48(d),
281	286		23.60(d), 26.1115(c), 26.112(b), 26.1125(b), or 26.1127(b), on the
282	287		date the assessor notifies the collector for the taxing unit of the
283	288		decrease in the person's tax liability;
284	289		(5) if the refund is required by Section 26.05(e), on
285	290		the date the action to enjoin the collection of taxes imposed by the
286	291		taxing unit is finally determined;
287	292		(6) [(2)] if the refund is required by Section
288	293		26.07(g), [or] 26.075(k), or 26.08(d-2), on the date the assessor
289	294		for the taxing unit mails the corrected tax bills under Section
290	295		26.07(f), 26.075(j), or 26.08(d-1) [results of the election to
291	296		approve or reduce the tax rate], as applicable[, are certified];
292	297		(7) [(3)] if the refund is required by Section
293	298		26.15(f):
294	299		(A) for a correction to the tax roll made under
295	300		Section 26.15(b), on the date the change in the tax roll is
296	301		certified to the assessor for the taxing unit under Section 25.25;
297	302		or
298	303		(B) for a correction to the tax roll made under
299	304		Section 26.15(c), on the date the change in the tax roll is ordered
300	305		by the governing body of the taxing unit;
301	306		(8) if the refund is required by Section 31.061(e), on
302	307		the date the taxing unit determines that the amount credited under
303	308		Section 31.061(d) exceeds the amount due to the taxing unit;
304	309		(9) if the refund is required by Section 31.071(c), on
305	310		the date the challenge, protest, or appeal is finally determined;
306	311		(10) [(4)] if the refund is required by Section 31.11,
307	312		on the date the auditor for the taxing unit determines that the
308	313		payment was erroneous or excessive [or, if the amount of the refund
309	314		exceeds the applicable amount specified by Section 31.11(a), on the
310	315		date the governing body of the taxing unit approves the refund];
311	316		(11) [(5)] if the refund is required by Section
312	317		31.111, on the date the collector for the taxing unit determines
313	318		that the payment was erroneous; or
314	319		(12) [(6)] if the refund is required by Section
315	320		31.112(c)(3) [31.112], on the date the agreement described by
316	321		Section 31.112(c) is made [required by Section 31.112(d) or (e), as
317	322		applicable.
318	323		[(c) This section does not apply to a refund in an amount
319	324		less than $5].
320	325		SECTION 11. Section 41A.10(a), Tax Code, is amended to read
321	326		as follows:
322	327		(a) The pendency of an appeal under this chapter does not
323	328		affect the delinquency date for the taxes on the property subject to
324	329		the appeal. Except for a property owner who has elected to defer
325	330		the collection of taxes under Section 33.06 or 33.065 on the
326	331		property subject to the appeal and for which the deferral is still
327	332		in effect, a property owner who appeals an appraisal review board
328	333		order under this chapter shall pay taxes on the property subject to
329	334		the appeal in an amount equal to the amount of taxes due on the
330	335		portion of the taxable value of the property that is not in dispute.
331	336		If the final determination of an appeal under this chapter
332	337		decreases the property owner's tax liability to less than the
333	338		amount of taxes paid, the taxing unit shall refund to the property
334	339		owner the difference between the amount of taxes paid and the amount
335	340		of taxes for which the property owner is liable. The collector for
336	341		the taxing unit shall make the refund not later than the 60th day
337	342		after the date of the final determination of the appeal. If the
338	343		collector does not make the refund within the period required by
339	344		this subsection, the collector shall include with the refund
340	345		interest on the amount refunded at an annual rate of 12 percent,
341	346		calculated from the delinquency date for the taxes being refunded
342	347		until the date the refund is made.
343	348		SECTION 12. Sections 42.43(b), (c), (d), and (f), Tax Code,
344	349		are amended to read as follows:
345	350		(b) For a refund made under this section, the taxing unit
346	351		shall include with the refund interest on the amount refunded
347	352		calculated at an annual rate of 9.5 percent, calculated from the
348	353		delinquency date for the taxes until the date the refund is made. A
349	354		property owner may waive the interest required by this subsection.
350	355		(c) Notwithstanding Subsection (b), if a taxing unit does
351	356		not make a refund, including any interest, required by this section
352	357		before the 60th day after the date of the final determination of the
353	358		appeal to which the refund relates [the chief appraiser certifies a
354	359		correction to the appraisal roll under Section 42.41], the taxing
355	360		unit shall include with the refund interest on the amount refunded
356	361		at an annual rate of 12 percent, calculated from the delinquency
357	362		date for the taxes until the date the refund is made. A refund is
358	363		not considered made under this section until sent to the proper
359	364		person as provided by this section.
360	365		(d) A property owner who prevails in a suit to compel a
361	366		refund, including interest, required by this section that is filed
362	367		on or after the 60th [180th] day after the date of the final
363	368		determination of the appeal to which the refund relates [the chief
364	369		appraiser certifies a correction to the appraisal roll] is entitled
365	370		to court costs and reasonable attorney's fees.
366	371		(f) The final judgment in an appeal under this chapter:
367	372		(1) may designate to whom and where a refund is to be
368	373		sent; and
369	374		(2) may not require the property owner to file a form
370	375		with the Internal Revenue Service as a prerequisite to the issuance
371	376		of a refund unless the form is required under federal law.
372	377		SECTION 13. Section 2003.913(a), Government Code, is
373	378		amended to read as follows:
374	379		(a) The pendency of an appeal to the office does not affect
375	380		the delinquency date for the taxes on the property subject to the
376	381		appeal. A property owner who appeals an appraisal review board
377	382		order to the office shall pay taxes on the property subject to the
378	383		appeal in an amount equal to the amount of taxes due on the portion
379	384		of the taxable value of the property that is not in dispute. If the
380	385		final determination of the appeal decreases the property owner's
381	386		tax liability to an amount less than the amount of taxes paid, each
382	387		taxing unit shall refund to the property owner the difference
383	388		between the amount of taxes paid and the amount of taxes for which
384	389		the property owner is liable. The taxing unit shall make the refund
385	390		not later than the 60th day after the date of the final
386	391		determination of the appeal. If the taxing unit does not make the
387	392		refund within the period required by this subsection, the taxing
388	393		unit shall include with the refund interest on the amount refunded
389	394		at an annual rate of 12 percent, calculated from the delinquency
390	395		date for the taxes being refunded until the date the refund is made.
391	396		SECTION 14. Sections 31.11(d) and (i), Tax Code, are
392	397		repealed.
393	398		SECTION 15. The changes in law made by this Act apply only
394	399		to an ad valorem tax refund the liability for which arises on or
395	400		after the effective date of this Act.
396	401		SECTION 16. This Act takes effect September 1, 2025.
	402	+	* * * * *