R-85-741 - 7/25/1985it
A RESOLUTION 7 1/
providing for the imposition of an
additional penalty on delinquent taxes
WHEREAS the City of Council of the City of Round Rock has contracted with
an attorney to collect its delinquent taxes pursuant to the authority granted in
Section 6.30 of the Property Tax Code; and
WHEREAS said contract provides that said attorney is to be paid a fee of 15%
of all delinquent taxes, penalty and interest that are collected; and
WHEREAS Section 33.07 of the Property Tax Code provides that an additional
penalty secured by a tax lien may be imposed to defray the cost of collection, not to
exceed 15% of the taxes, penalty and interest due;
NOW, THEREFORE, BE IT RESOLVED BY THE City Council of the City of
Round Rock, pursuant to the provisions of Section 33.07 of the Property Tax Code,
that:
1. The tax collector of this jurisdiction is hereby directed to cause to be
mailed, as expeditiously as possible, notices to all delinquent taxpayers, where
addresses are available, of the additional penalty to be imposed, as hereinafter set
forth, on all taxes delinquent as of this date;
2. The tax collector is directed to annually mail notices during the month of
May to all current year delinquent taxpayers advising them of the additional penalty,
as hereinafter set forth, to be imposed as of July 1 on all unpaid current year
delinquent taxes;
3. Effective 31 days after the tax collector has mailed the hereinabove
referenc$d notices, with respect to taxes delinquent for 1984 and prior years, an
additional penalty of 15% of the taxes, penalty and interest shall be incurred;
furthermore, taxes becoming delinquent during 1986 and thereafter shall not incur this
additional penalty until July 1 of the year in which they become delinquent.',
Attest: ^'
XDUQ ,
\City Secretary
4 r, Passed and approved this the 2-5
LARRY M. CALAME
DALE LINEBARGER
RUSSELL R GRAHAM
BRIAN E. BROWN
FRANK B WALKER
KATHLEEN D. MORRISON
Mr. Sam Huey
Assistant City Manager
City of Round Rock
214 East Main Street
Round Rock, Texas 78664
l-
LAW OFFICES
CALAME, LINEBARGER & GRAHAM
Austin, Texas
July 10, 1985
Re: Attorney's Fees and Collectors Costs
Dear Mr. Huey:
Section 33.07 of the Property Tax Code provides as follows:
"Sec. 33.07. ADDITIONAL PENALTY FOR COLLECTION COSTS.
(a) A taxing unit or appraisal district may provide, in the manner
required by law for official action by the body, that taxes that
remain delinquent on July 1 of the year in which they become
delinquent incur an additional penalty to defray costs of collection,
if the unit or district or another unit that collects taxes for the
unit has contracted with an attorney pursuant to Section 6.30 of this
code. The amount of the penalty may not exceed 15 percent of the
amount of taxes, penalty and interest due.
(b) A tax lien attaches to the property on which the tax is imposed
to secure payment of the penalty.
(c) If a penalty is imposed pursuant to this section, a taxing unit
may not recover attorney's fees in a suit to collect delinquent taxes
subject to the penalty.
(d) If a taxing unit or appraisal district provides for a penalty under
this section, the collector shall deliver a notice of delinquency and
of the penalty to the property owner at least 30 and not more than
60 days before July 1."
Aam 0G.
503 5wth 121 35
PO Boa 11.3
Aaw, Tm 79760
512 447-6675
Caput Christi O&a
505 Sou6 W. 5,5m 537
PO. Box 7991
Caen Clam, T 79301
512 Su-6999
H Poo O3Ba
604 Myrtle
Fl Paso, T. 79901
915 533-6537
Houton Office
955 Duy Athlad. Sue 237
Hanoo. T 77079
713 556'
Midland Moo
2910 L.Faa Boo m31. Sate 203
PO Bo. 6173
Mid, T® 79711
915 5665323
In our opinion, the statute should be construed to include all prior year taxes
that remain delinquent following notification to the taxpayers of the additional
penalty that is to be imposed. Current year taxes become subject to the penalty on
July 1 if a notice has previously been mailed in May.
If you decide to add the additional penalty, we recommend that you pass a
resolution to that effect at your earliest convenience. The resolution should provide
that the penalty take effect upon the delinquent taxpayers being notified pursuant to
the provisions of House Bill 30, i.e., not less that 30 nor more than 60 days prior to
the imposition of the penalty. Once the resolution has been passed, you should
proceed to mail letters to all taxpayers informing them of the additional penalty that
will be imposed.
Upon passage of the resolution, notices of the additional penalty to be imposed
in July should be sent annually on current year taxes during the month of May. This
notice can be included as part of your second notice. The following is an example of
the wording that may be used: "Pursuant to Section 33.07 of the Property Tax Code,
to defray the cost of collection an additional penalty of 15% of the taxes, penalty
and interest will become due on July 1, 19
Please note that the Property Tax Code does not provide for payment of
collector's costs. As such, it is our opinion that if you have been charging a fee for
issuing delinquent tax receipts of $1.00 or $2.00 per year or per statement or if you
have been collecting costs based on the ten percent cost rule, you should discontinue
charging this fee.
We will appreciate your letting us hear from you after you have reviewed the
matter.
LMC /cc
Enclosure
Very truly yours,
CALAME, LINEBARGER & GRAHAM