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Signed Into Law
Signed May 30, 2025Effective 2025-09-01
SB402

Regular Session

Relating to the payment of certain ad valorem tax refunds.

Government Affairs & Regulatory Compliance Analysis

SB402: Government Affairs Overview

SB402 mandates a standardized, Comptroller-prescribed form for redirecting property tax refunds to addresses other than the official appraisal roll address, replacing informal written requests. Effective September 1, 2025, this legislation impacts all commercial property owners, particularly those utilizing third-party tax consultants or centralized accounting, by attaching criminal penalties to false statements made on these redirection requests.

Sen. Angela Paxton·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01
Business Impact

Who SB402 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-09-01). Consider how these changes may affect your operations.

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Real Estate

Affected business types:

  • Property developers
  • Commercial landlords
  • Property managers
  • Real estate investors
View all real estate legislation

Key Operational Considerations

  • 1Lease Agreements: For Triple Net (NNN) leases, clarify whether the landlord or tenant has the authority to sign this specific governmental record to prevent theft or misdirection of funds.
  • 2Signature Authority: Establish internal protocols defining who is authorized to sign these forms, as the signatory bears personal criminal liability under Texas Penal Code Section 37.10.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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SB402
Moderate
Relating to the payment of certain ad valorem tax refunds.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
Comptroller of Public AccountsCounty Tax Assessor-CollectorsLocal Taxing Units
Primary Author: Sen. Angela Paxton
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025. Any refund redirection request filed on or after this date must utilize the new mandatory form. Requests filed prior to this date are governed by current law.
  • Agency Rulemaking: The Comptroller of Public Accounts is required to prescribe and publish the mandatory form prior to the effective date. Expect a "regulatory gray zone" between now and Summer 2025 while the industry awaits the draft form.

Immediate Action Plan

  • Immediate: Audit your property portfolio to identify instances where the desired refund address differs from the appraisal roll address.
  • Pre-September 1, 2025: File redirection requests for all pending refunds using current informal procedures (letters/emails) to lock them in under the old rules.
  • Summer 2025: Monitor the Comptroller’s website for the release of the new form and integrate it into your tax compliance software.
  • September 1, 2025: Enforce a strict ban on informal refund requests; reject any internal process that does not utilize the new form.

Operational Changes Required

Contracts

  • Tax Consultant Agreements: Review Master Services Agreements (MSAs) and Powers of Attorney (POAs) with third-party tax agents. Ensure they have specific authority to execute Comptroller-prescribed forms regarding refund redirection.
  • Lease Agreements: For Triple Net (NNN) leases, clarify whether the landlord or tenant has the authority to sign this specific governmental record to prevent theft or misdirection of funds.

Hiring/Training

  • Staff Training: Accounts Receivable and Tax Compliance teams must be trained to stop sending informal letters or emails for refund redirection. They must be instructed on the criminal implications (Class A Misdemeanor to Felony) of providing false information on the new form.
  • Signature Authority: Establish internal protocols defining who is authorized to sign these forms, as the signatory bears personal criminal liability under Texas Penal Code Section 37.10.

Reporting & Record-Keeping

  • Mandatory Filing: You must file the new form with the specific Tax Assessor-Collector *before* the refund is issued.
  • Audit Trail: Maintain a copy of every filed redirection request and proof of delivery. Proof of timely filing is your primary defense if a collector inadvertently mails a check to the wrong address.
  • Revocation: Establish a workflow to file a written revocation immediately if your headquarters changes or you terminate a tax agent relationship.

Fees & Costs

  • Direct Costs: No new statutory filing fees are introduced.
  • Indirect Costs: Minimal administrative costs associated with updating internal tax software to generate the new form.

Strategic Ambiguities & Considerations

  • Definition of "Issued": The statute requires filing "before the date the refund is issued." It is currently undefined whether "issued" means the date the check is printed, approved by the board, or mailed. We will advocate for a clear cutoff definition during the rulemaking process.
  • Agent Signature Validity: It remains unclear if a standard Appointment of Agent (Form 50-162) will suffice for a third party to sign this specific refund form, or if the Comptroller will require a wet signature from the property owner.
  • Electronic Acceptance: The law does not explicitly mandate that collectors accept these forms electronically. Rural counties may default to requiring physical mail unless rulemaking dictates otherwise.

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JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Nov 21, 2024
Passed Senate
Mar 24, 2025
Passed House
May 20, 2025
Signed
May 30, 2025
Effective
Sep 1, 2025
TopicsTaxationTaxation--property-assessment & CollectionTaxation--property-state AdministrationComptroller of Public Accounts
03

Senate Authors

Sen. Angela PaxtonRepublican · Primary Author
Coauthors (1)

House Sponsors

Rep. Mitch LittleRepublican · Primary Sponsor
Cosponsors (6)

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Sen. Angela Paxton

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about SB402

Q

What does Texas SB402 do?

SB402 mandates a standardized, Comptroller-prescribed form for redirecting property tax refunds to addresses other than the official appraisal roll address, replacing informal written requests. Effective September 1, 2025, this legislation impacts all commercial property owners, particularly those utilizing third-party tax consultants or centralized accounting, by attaching criminal penalties to false statements made on these redirection requests.

Q

Who authored SB402?

SB402 was authored by Texas Senator Angela Paxton during the Regular Session.

Q

When was SB402 signed into law?

SB402 was signed into law by Governor Greg Abbott on May 30, 2025.

Q

Which agencies enforce SB402?

SB402 is enforced by Comptroller of Public Accounts, County Tax Assessor-Collectors and Local Taxing Units.

Q

How significant are the changes in SB402?

The regulatory priority for SB402 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB402?

The cost impact of SB402 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB402 address?

SB402 addresses topics including taxation, taxation--property-assessment & collection, taxation--property-state administration and comptroller of public accounts.

Q

What are the key dates for SB402?

Key dates for SB402: Effective date is 2025-09-01. Rulemaking: Must prescribe and publish the mandatory form for requesting refunds be sent to an alternate address, incorporating the required Penal Code warning. (2025-09-01). Consult with legal counsel regarding applicability.

Q

What are the penalties under SB402?

SB402 establishes the following penalties: Criminal penalty of Varies (Class A Misdemeanor to Felony under Penal Code 37.10) for Making or filing a false statement on the new refund redirection form (Tampering with Governmental Record).. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by SB402?

SB402 primarily affects property owners and real estate professionals. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026