Texas Senate Bill SB 850

Texas 2025 - 89th Regular

• Filed: 1/17/25
• Out of Senate Committee: 3/17/25
• Voted on by Senate: 4/10/25
• Out of House Committee: 5/20/25
• Voted on by House: 5/28/25
• Governor Action: 6/20/25

Caption

Relating to the payment of certain ad valorem tax refunds.

Summary

SB 850 revises Texas Tax Code procedures for issuing and collecting certain ad valorem tax refunds, with a focus on making refund rules clearer, faster, and more automatic in many situations. The bill creates a general rule that taxpayers are not required to file a refund application when the refund due is at least $20, and it updates notice requirements so collectors must tell taxpayers when an overpayment exists and whether an application is needed. It also revises several refund provisions tied to homestead and other exemptions, late-filed exemption applications, escrow accounts, tax protests, appraisal appeals, and correction of tax rolls. The bill also standardizes refund timing and interest rules across multiple refund scenarios. In many cases, refunds must be paid within 60 days after the refund liability arises, and if they are not, the refund accrues interest at 12 percent annually. The bill adjusts deadlines for refunds related to appraisal review board appeals and State Office of Administrative Hearings-type appeal processes, and it changes some court-fee and attorney-fee provisions for taxpayers who must sue to compel payment. It also repeals certain existing provisions in Section 31.11 and makes the changes apply only to refund liabilities arising on or after September 1, 2025.

Impact

SB 850 amends multiple sections of the Texas Tax Code and one provision in the Government Code governing ad valorem tax refunds, including refunds tied to exemptions, overpayments, appraisal corrections, protests, and appeals. It removes some older approval thresholds and application requirements, establishes a $20 floor for automatic refund treatment, and requires collectors and appraisal officials to provide notices and process refunds under more uniform deadlines. The bill also increases the interest rate on late refunds in several contexts to 12 percent and clarifies when refund liability arises for interest purposes.

Sentiment

The bill appears to have been broadly supported and largely noncontroversial. It passed the Senate unanimously and the House by a very large margin, with only one recorded no vote in the House. The final Senate concurrence in the House amendment was also unanimous, suggesting general agreement that the bill was a technical or administrative improvement to tax refund procedures rather than a major policy dispute.

Contention

There is little evidence of substantive opposition in the available record. The main policy choices embedded in the bill are administrative: whether taxpayers should have to apply for small refunds, how quickly taxing units must pay refunds, and when interest should begin to accrue. The most notable changes that could matter to taxing units are the automatic refund rule for amounts of at least $20, the removal of some local-government approval language, and the higher 12 percent interest penalty for late refunds, which may increase administrative burden and financial exposure for taxing units if they delay payment.