R-457
iaUSTIN. TEXAS
May 21, 1947
Hon. Jean Day Opinion No. V-214
County Attorney
Henderson County Re: Compensationdue delik
Athens, Texas quent tax attorn en
aollection of tax when
15% exoeeds the amount
of penalty and interest
collected.
Dear Mr. Day:
'Your letter requesting our opinion relative
to the above-captionedmatter; reads, in part, as fOl-
lows:
nHutohins & Weeden, a fira of tax
colJ.eotingattorneys, have a contract
with Henderson Ceunty to colleot delin-
quent taxes. They have thi,regular tax
collecting contract,which calls for 15$
upon the delinquent taxes collected to
be paid out of the penalty and interest.
"In July, 1946, they filed suit
against Texas Power & Light Co., to ool-
leot their 1945 tax. The suit was a-
mended after February 1, 1947, to ool-
lect the Texas Power E Light Co's; 1948
tax. The suit was settled Mar. 8, 1947,
tilepenalty and interest on the T946 tax,
when collected, amounted to 2.65% on the
dollar of tax collected.
"Question:
"Now, are the tax attorneys,Hutbhin-
soh & Weeden, entitled to 15% on all the
Texas Power k Light Co. taxes for the year
1946 colleotableas exoess penalty and in-
terest accrued on all the delinquent tax
oollected until they receive an amount e-
qua1 to the full 15s on the 1946 Texas Pow-
er 8 Light Co. taxes."
. . ..
Hon. Jean Day - Page 2 (V-214)
We have examined the delinquent tax contract
executed by Henderson County and attorneys Hutchins &
Weeden, which was duly approved by the Comptrollerof
Public Accounts and the Attorney General. Paragraph=
reads, in part, as f~ollows:
"First Party agrees to pay to Sea-
ond Party as compensationfor the services
hereunder required 15 per cent (not to ex-
ceed fifteen (15) per cent) of the amount
oolleated of all delinquent taxes, penalty
and interest of the years covered hereby,
actually aollectedand paid to the colleat-
or of taxes during the term of this aon-
tract, of which Second Party is instrument-
al in aolle~tingas evidence& by copies of
communication,tax notioes er pbstraats
filed with the tax oolleotorprior to the
payment of suah tax, including collectlen
of taxes on property not appearing on the
assessmeht rolls nor shown delinquentbut
whioh would have been so shown had it been
properly assessed, dlsooveredby said Sea-
ond Party, as and when colleated,~follopriag
the en& of each month within the period of
this contract;accordinglyas the colleot; 2.
or makes up his monthly regerts; provided,
cost of collectingdelinquent taxes shall
not exceed the amount of penalty and inter-
est, or an amount equal to such penalty and
interest of all delinquent taxes collected
under the terms of this contract. . ."
The contract in question,both as to ferm
and substance,is according to a form prepared by the
Attorney General and adopted by the Comptrollerof Pub-
lic Acaounts approximatelyeight years ago. The Attop
ney General in its Opinion No. O-3579, approved June 4,
1941, construed the above quoted portion of the approved
delinquenttax contract, and stated in part:
"To us the priviso in the contract
'coat of collectingdelinquent taxes shall
not exceed the amount of penalty and inter-
est, or an amount equal to such penalty and
interest of aI1 delinquent taxes collected.
under the terms of this contract'was meant
only to guard against the use of tax money
itself to pay the costs of collection,but
Hon. Jean Day - Page 3 (V-214)
to make the penalty and interest col-
lected under the contract as an over-
all proposition subjeat to such ex-
penses. In other words, it was meant
to provide that the attorney's compen-
sation under the contract and any other
costs or colleation incurred, if any,
should not exceed the total amount of
penalties and interest collectedby
him during the time of and under the
aontract, Applying this to the con-
tract in question it is our opinionthat
MrLr,
Payne may be paid the full 7$ per
oent commission stipulatedin the con-
tract, so long as such per cent, plus
any other costs of collectionincurred,
if any, do not exceed an amount equal
to the penalties and interest collected
under the contract from its beginning,*
In other words, it has been the department-
al eonstruc:tion,since the inception of such contact
form, that the contractingattorney shall reaeive as
compensationfor his services the contractedper cent
or all delinquenttaxes, penalties and interest eollact-
ed by him, provided that such per'cent together with
other costs of collection, if any, either equals or is
less than the total penalties and interest colleotedun-
der suoh contract, To illustrate:
~A, the contractingattorney, makes the fol-
lowing collectionsduring the life of his contract
Total penalties and interest= $25,000
Less other collection costs =
As the $20,000 exceeds the 15% commissionA
will receive 318,750.OO as his compensation.
Hon. Jean Day - Page 4 (V-214)
sunderthe regular approved aelinquent
tax contra&, the delinquenttax attorney
receives the oontractedper cent of'delis-
quent taxes, penalties and interest col-
lected by him, provided that such per cent,
together with other costs of collection,if
any, equals or is a less amount than the
total penalties and interest collected un-
der such contract.
Yours very truly,
ATMRNEY GZNSlU OF ISAS
W. 7. Geppert
UVQ/lh/wb Assistants
APPROIID MAY 21, 1947