By: Middleton S.B. No. 850
A BILL TO BE ENTITLED
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 $1.
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 appeal is
completed. 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 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 $1 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 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 $1 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 $1, the notice must state that the taxpayer is not
required to apply for the refund. If the amount of the overpayment
is less than $1, 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.