SB850

SB850 removes refund-application requirements for property-tax refunds of at least $20, broadens payment deadlines and revises interest and enforcement rules. It applies only when refund liability arises on or after September 1, 2025—not simply whenever an old tax payment is discovered. It was signed June 20, 2025. Final act, including Sections 15–16; History.

For an ordinary erroneous or excess payment under Section 31.11, the collector and auditor must agree that the payment was wrong or excessive. At $20 or more, the collector must refund it or apply it to taxes owed for the following tax year; a separate application is unnecessary. Below $20, this particular refund route requires an application. The law removes the former dollar-based governing-board approval requirement, but retains permitted offsets against delinquent taxes when the statutory ownership conditions are met. It does not promise an immediate cash payment in every case. Sections 1 and 8; Prior procedure and retained provisions.

Collectors must mail notice of any overpayment, not just one of $5 or more. The notice must explain whether an application is needed and include a form for the under-$20 route. Required Section 31.11 applications generally remain due within three years of payment, with the existing possible good-cause extension. Other refund provisions can require no application even below $20—for example, the retained late-homestead and tax-roll-correction rules. The bill also repeals the former special population-based refund exception and the separate on-request form provision. Sections 3, 8 and 14; Late homestead refund; Tax-roll correction refund.

The expanded Section 31.12 list of refunds must be paid within 60 days after the liability date specified for that refund. The list covers specified exemptions, tax-rate and tax-roll corrections, overpayments, duplicate payments and other listed situations—not every conceivable refund. Timely payment carries no interest under this section; late payment carries 12% annual interest from the liability date through payment. This replaces the former 1% for each month or part-month calculation and removes the former under-$5 exclusion. The liability date varies: examples include notice of an approved exemption, mailing corrected tax bills after a tax-rate election, or the auditor’s overpayment determination. The disaster-exemption rule’s blanket no-interest sentence is removed. The bill does not rewrite every deadline in the referenced provisions: Section 23.1243(d), for example, still contains its separate 45-day fleet-transaction refund language. Sections 2 and 10, including the complete list and date rules; Prior interest rule; Separate fleet-transaction refund provision.

For approved late veterans-organization exemptions involving taxes paid under protest, the collector must directly refund the tax, penalties and interest instead of referring the organization through the ordinary application route. The late-homestead and disabled-veteran refund deadlines move into the expanded Section 31.12 framework; deleting their old standalone deadline sentences does not remove the payment deadline. Separate deadlines remain important. Tax-collector escrow surpluses must be returned within 60 days after the collector determines the excess; the final bill does not add those escrow refunds to Section 31.12’s interest list. For conditional payments retained through an appeal, the 60-day clock starts when the chief appraiser notifies the collector of the final determination; late refunds carry 12% annual interest from the taxes’ delinquency date. If the chief appraiser caused that delay, the appraisal district reimburses the collector for the required interest. Sections 6–7.

Refunds after binding arbitration or State Office of Administrative Hearings tax appeals must be paid within 60 days of the final determination; late payment carries 12% annual interest from the delinquency date. For specified boundary-dispute refunds, an agreement now follows Section 31.12; a Supreme Court order triggers a 60-day deadline instead of 180 days, with the stated 12% late-interest rule. These appeal and order rules do not all use the same start date as the general refund rule. Sections 9, 11 and 13.

For court tax appeals under Chapter 42, the existing 9.5% annual interest remains, but the owner may waive it. The 12% late-interest trigger moves to failure to refund before the 60th day after the final appeal determination, rather than after appraisal-roll certification. A prevailing owner can recover costs and reasonable attorney’s fees in a suit filed on or after that 60th day, replacing the former 180-day certification-based rule. A final judgment cannot demand an IRS form as a refund prerequisite unless federal law requires it. Section 12; Existing court-appeal refund framework.

Section 31.11 refund suits have a different filing rule: when no application is required, suit must be filed within 60 days after receipt of the overpayment notice; when an application is required, within 60 days after denial. The existing possible court-cost and attorney-fee award remains, with fees capped at the greater of $1,500 or 30% of the refund the court finds due. These lawsuit deadlines should not be confused with the collector’s payment deadline. Section 8, amended 31.11(k).