SB402

Regular Session

Relating to the payment of certain ad valorem tax refunds.

ModeratePlan for compliance

Low Cost

Effective:2025-09-01

Enforcing Agencies

Comptroller of Public Accounts • County Tax Assessor-Collectors • Local Taxing Units

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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Legislative Timeline

This bill's path through the Texas Legislature

TopicsTaxation Taxation--property-assessment & Collection Taxation--property-state Administration Comptroller of Public Accounts

Official Analysis

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BILL ANALYSIS

Senate Research Center	S.B. 402
89R3694 DRS-F	By: Paxton
	Local Government
	3/6/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

In 2019, S.B. 1856 created Section 1.071, Tax Code, allowing for property tax refunds, but this section does not include language for a standardized form. Section 42.43, Tax Code, prescribes the method that a property tax refund may be sent to a property owner in the event a judicial review shows the taxing entity was in error on overcharging a property owner. In this section, a property owner may file a form prescribed by the Comptroller of Public Accounts of the State of Texas (comptroller) with the taxing entity for a refund to be sent to a person other than the property owner or an address other than the property owner's address.

Section 1.071, Tax Code, has a similar provision, but this section lacks the clarity that is included in Section 42.43, Tax Code, that gives the comptroller the authority to prescribe the correct form.

S.B. 402 provides the comptroller guidance to create a form for a property tax refund.

As proposed, S.B. 402 amends current law relating to the payment of certain ad valorem tax refunds.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 1.071, Tax Code, as follows:

Sec. 1.071. DELIVERY OF REFUND. (a) Requires a collector or taxing unit, except as provided by Subsection (b), required by Title 1 (Property Tax Code) to deliver a refund to a person to send the refund to the person's mailing address as listed on the appraisal roll.

(b) Requires the collector or taxing unit, if a person to whom a refund is owed files a written request on a form prescribed by the Comptroller of Public Accounts of the State of Texas with a collector or taxing unit before the date the refund is issued requesting that the refund be sent to a particular address, to send the refund to the address stated on the form. Deletes existing text requiring the collector or taxing unit, notwithstanding Subsection (a), to send the refund to the address stated in the request if a person files a written request with the collector or taxing unit that a refund owed to the person be sent to a particular address.

(c) Requires the comptroller to prescribe a form a person is authorized to use to make a request under Subsection (b). Requires the comptroller to include on the form a notice of the penalties prescribed by Section 37.10 (Tampering With Governmental Record), Penal Code, for making or filing an application containing a false statement.

(d) Authorizes a person who files a request with a collector or taxing unit under Subsection (b) to revoke the request by filing a written revocation with the collector or taxing unit.

SECTION 2. Makes application of this Act prospective.

SECTION 3. Effective date: September 1, 2025.

Senate Authors

Sen. Angela PaxtonRepublican · Primary Author

Coauthors (1)

Royce West (D)

House Sponsors

Rep. Mitch LittleRepublican · Primary Sponsor

Cosponsors (6)

Bill Text(with markup)

S.B. No. 402

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	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. Section 1.071, Tax Code, is amended to read as
	follows:
	Sec. 1.071. DELIVERY OF REFUND. (a) Except as provided by
	Subsection (b), a [A] collector or taxing unit required by this
	title to deliver a refund to a person shall send the refund to the
	person's mailing address as listed on the appraisal roll.
	(b) If [~~Notwithstanding Subsection (a), if~~] a person to whom
	a refund is owed files a written request on a form prescribed by the
	comptroller with a [~~the~~] collector or taxing unit before the date
	the [~~that a~~] refund is issued requesting that the refund [~~owed to~~
	~~the person~~] be sent to a particular address, the collector or taxing
	unit shall send the refund to the address stated on the form [~~in the~~
	~~request~~].
	(c) The comptroller shall prescribe a form a person may use
	to make a request under Subsection (b). The comptroller shall
	include on the form a notice of the penalties prescribed by Section
	37.10, Penal Code, for making or filing an application containing a
	false statement.
	(d) A person who files a request with a collector or taxing
	unit under Subsection (b) may revoke the request by filing a written
	revocation with the collector or taxing unit.
	SECTION 2. The change in law made by this Act applies only
	to a request filed on or after the effective date of this Act. A
	request filed before the effective date of this Act is governed by
	the law in effect on the date the request is filed, and the former
	law is continued in effect for that purpose.
	SECTION 3. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 8, 2025

TO:	Honorable Paul Bettencourt, Chair, Senate Committee on Local Government

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB402 by Paxton (Relating to the payment of certain ad valorem tax refunds.), As Introduced

No significant fiscal implication to the State is anticipated.

The bill would provide that a person to whom a refund is owed may submit a written request to a collector or taxing unit to request that the refund be sent to an address other than the address listed on the appraisal roll. The bill would provide that the Comptroller prescribe the form to be used in such a written request.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

JMc, SZ, SD, BRI

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Frequently Asked Questions

Common questions about SB402

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. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025.

Who authored SB402?

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

When was SB402 signed into law?

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

Which agencies enforce SB402?

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

How urgent is compliance with SB402?

The compliance urgency for SB402 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

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.

What topics does SB402 address?

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

Legislative data provided by LegiScanLast updated: November 25, 2025

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