THE ATTOR-VEY GENERAL 

OF TEXAS 

February 16, 1988 

Honorable Gary Garrison 

Ector County Attorney 

Room 218, Courthouse 

Odessa, Texas 79761 

Honorable Billy Ray Stubblefield 

Williamson County Attorney 

P. 0. Drawer 1139 

Georgetown, Texas 78627 

,- 

Opinion.No. (.I+857) 

Re: Whether a taxing 

unit that contracts with 

a private attorney pursuant to section 6.30 of 

the Tax Code may impose 

the additional penalty 

of 15 percent authorized 

by section 33.07 of the 

Tax Code in an instance 

in which the section 

6.30 contract provides 

that the delinquent tax 

attorney will be compensated by a percentage 

of less than 15 percent 

(RQ-984) 

Gentlemen: 

You request an opinion on the authorized expenditure 

of penalties imposed pursuant to section 33.07 of the 

Tax Code, which permits taxing units to provide that 

delinquent ad valorem taxes incur "an 

to defray costs of collection" if 

additional penalty 

the taxing unit has 

contracted with an attorney under section 6.30 of the Tax 

Code. See aenerally Attorney General Opinion JM-285 

(1984) (discussing circumstances under which section 33.07 

penalty may be applied to delinquent taxes). Section 6.30 

of the Tax Code provides in part: 

(a) The county attorney or, if there is 

no county attorney, the district attorney 

shall represent the county to enforce the 

collection of delinquent taxes if the 

commissioners court does not contract with a 

private attorney as provided by Subsection 

(c) of this section. 

. . . . 

p. 4145 
Honorable Gary Garrison 

Honorable Billy Ray Stubblefield 

Page 2 (JM-857 

(c) The governing body of a taxing unit 

may contract with any competent attorney to 

represent the unit to enforce the collection 

of delinquent taxes. The attornev's compensation is set in the contract. but the 

total amount of ComDensation Drovided may 

not exceed 20 Dercent of the amount of 

delinouent tax, Denaltv. and interest 

collected. (Emphasis added.) 

Tax Code 56.30; see also Attorney General Opinion JM-135 

(1984) (neither county attorney nor city attorney may 

enter into a contract pursuant to section 6.30(c) of the 

Tax Code). 

Section 33.01 of the Tax Code establishes the penalty 

and interest imposed on delinquent taxes. Section 33.07 

of the Tax Code authorizes the additional penalty as 

follows: 

I 

(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 Denaltv to defrav 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 Denaltv mav not exceed 15 

percent of the amount of taxes, Denaltv, and 

interest due. 

. . . . 

(c) If a penalty is imposed pursuant to 

this section, a taxing unit may not recover 

attorneyIs fees in a suit to collect 

delinquent taxes subject to the penalty. 

(Emphasis added.) 

Tax Code 533.07. 

Mr. Stubblefield informs us that some attorneys who 

have applied to collect delinquent taxes for Williamson 

County have proposed that the county impose the full 15 

percent penalty under section 33.07 of the Tax Code, but 

compensate them only at the rate of 12.5 percent, with the 

county retaining 2.5 percent to defray its own costs of 

p. 4146 
Honorable Gary Garrison 

Honorable Billy Ray Stubblefield 

Page 3 m-857) 

collecting the delinquent taxes. You both ask whether the 

penalty imposed and collected under section 33.07 may be 

used to defray the taxing unit's costs of collecting 

delinquent taxes, or whether the penalty may only be used 

to compensate the attorney who contracts to collect 

delinquent taxes pursuant to section 6.30 of the Tax Code. 

The answer to your question depends on whether "costs of 

collection" in section 33.07 refers only to the cost of 

contracting with an attorney pursuant to section 33.07, or 

whether it includes costs incurred by the county. 

Before addressing your specific question, we point 

out that the 15 percent figure represents the maximum 

penalty that may be imposed by a taxing unit. A taxing 

unit may impose a section 33.07 penalty of a lesser 

percentage. In addition, the taxing unit may change the 

amount of penalty from year to year, if it does so "in the 

manner required by law for official action by the 

body. . . ." Tax Code 533.07(a). Thus, by referring in 

this draft to the "15 percent penalty," we do not intend 

to negate the taxing unit's power to set an amount less 

than 15 percent and to change the amount of penalty from 

year to year. 

Turning to your question, we will first examine 

former statutory provisions, to establish some of the 

circumstances under which section 33.07 of the Tax Code 

was enacted. See Gov't Code 5311.023 (construction of 

statutes in a code). The provisions you inquire about are 

found in the Property Tax Code, which was adopted in 1979 

and codified as Title I of the Tax Code. Tax Code 31.01; 

B Acts 1979, 66th Leg., ch. 841. Section 33.07 was 

added to the Property Tax Code in 1981, in a bill which 

adopted a series of amendments to the Property Tax Code. 

u H.B. No. 30, Acts 1981, 67th Leg., 1st C.S., ch. 13, 

at 168. 

Before the Property Tax Code was adopted, former 

article 7335, V.T.C.S., authorized the commissioners court 

to contract with a private attorney 

to enforce or assist in the enforcement or 

the collection of any delinquent State 

and county taxes for a percent on the 

taxes, penalty and interest actually 

collected. . . . 

Acts 1923, 38th Leg., 2d C.S., ch. 13, at 37; Acts 1923, 

38th Leg., 3d C.S., ch. 21, at 182. Former article 7335a, 

V.T.C.S., provided that the compensation under a contract 

p. 4147 
Honorable Gary Garrison 

Ro;zr;blT$-F5;fr Ray Stubblefield 

to collect delinquent taxes could not be more than 15 percent of the amount collected. Acts 1930, 41st Leg., 4th 

C.S., ch. 8, at 9. These provisions also 

school districts. 

applied to 

Bell v. Mansfield Indenendent School 

District, 129 S.W.2d 629 (Tex. 1939). Articles 7335 and 

7335a, V.T.C.S., were revised and recodified as 

subsections 6.30(c) through 6.30(e) of the Tax Code, and 

the total compensation payable to the attorney under the 

contract was increased, so that it now "may not exceed 20 

percent of the amount of delinquent tax, penalty, and 

interest collected." Under former law, there was no 

requirement that the compensation be paid from delinquent 

tax COlleCtiOnS. Morrison v. Lane, 157 S.W.2d 466 (Tex. 

Civ. APP. - Beaumont 1941, no writ); see aenerallv 

Attorney General Opinion WW-217 (1980). 

provide in its 

The county had to 

budget for the contract 

compensation. Morrison v. Lane, sunra. 

attorney's 

Fifteen percent of the amount collected constituted 

an absolute limit on the amount that could be paid to an 

attorney under contract pursuant to former articles 7335 

and 7335a, V.T.C.S. Attorney General Opinion O-4004 

(1941) concluded that the attorney contracting with a 

school district could not make claims in excess of the 15 

percent limit to pay for stationery, stamps, and other 

similar items used in collecting delinquent taxes. The 

opinion stated as follows: 

It is manifest that unless the school 

district pays for the stationery, stamps, 

etc., the tax attorney must provide such 

items. It is also manifest that if the 

tax attorney receives 15% of the amount 

collected plus a payment for the above 

mentioned items he will receive more than 

15% of the amount collected, the maximum 

amount allowed by law. 

Attorney General Opinion O-4004 (1941). 

Thus, at the time section 33.07 of the Tax Code was 

adopted, no particular source of funds was designated to 

pay the private attorney's compensation under section 6.30 

of the Tax Code. The legislature was, moreover, 

presumably aware that compensation for the attorney might 

include payment for his expenditures for supplies and 

other items which could not strictly speaking be described 

as attorney fees. See Attorney General Opinion O-4004 

(1941). 

p. 4148 
- 

P 

Honorable Gary Garrison 

Honorable Billy Ray Stubblefield 

Page 5 (JM-857) 

Section 33.07 of the Tax Code provides for 

an additional nenaltv to defrav costs of 

collection if the unit or district or 

another unit that collects taxes for the 

unit has contracted with attorney 

pursuant to Section 6.30 ofanthis code. 

(Emphasis added.) 

Tax Code 933.07(a). This penalty provides funds to pay 

some or all of the attorney's compensation under a section 

6.30 contract. The additional penalty may be imposed upon 

a delinquent taxpayer only if the taxes are going to be 

collected by a private attorney pursuant to section 6.30 

of the code. This condition for imposing the additional 

penalty suggests that funds realized from collecting it 

must be applied to payment of the attorney's compensation. 

This reading of section 33.07(a) is supported by subsection (c) of that statute, which provides as follows: 

If a penalty is imposed pursuant to this 

section, a taxing unit may not recover 

attorneyIs fees in a suit to collect 

delinquent taxes subject to the penalty. 

Tax Code, 533.07(c). The section 33.07 penalty may be 

seen as a substitute for court-ordered attorney fees, with 

the advantage that the taxing unit determines the amount 

of penalty up to the 15 percent maximum, and that the 

penalty can be collected even if the case does not go to 

court. See. a Tax Code 533.48(a)(4) 

attorney's feeseappkoved by the court). 

(reasonable 

Section 33.48 of the Tax Code provides for the costs 

and expenses that a taxing unit may recover in a suit to 

collect a delinquent tax: 

(a) In addition to other costs authorized 

by law, a taxing unit is entitled to recover 

the following costs and expenses in a suit to 

collect a delinquent tax: 

(1) all usual court costs, including 

the cost of serving process: 

(2) expenses of foreclosure sale: 

(3) reasonable expenses, subject to 

approval by the court, that are incurred by .- 

p. 4149 
Honorable Gary Garrison 

Honorable Billy Ray Stubblefield 

Page 6 (m-857) 

the taxing unit in determining the name, 

identity, and location of necessary parties 

and ' procuring necessary 

descrittions of the property on 

legal 

which a 

delinquent tax is due; and 

(4) reasonable attOrnSV*S fSSS aDDrOVed 

bv the court and not exceedina 15 nercent 

of the total amount of taxes. nenalties, 

and interest adiudaed due the unit. 

. . . . 

(cl Fees collected for attorneys and other 

officials are fees of office, extent that fees 

for contract attornevs reoresentina a taxinq 

unit that is joined or intervenes shall be 

aonlied toward the comoensation due the 

attornev under the contract. (Emphasis 

added.) 

Tax Code 533.48. The attorney's fees authorized by subsection (a)(4) of section 33.48 may not be recovered if 

the taxing unit imposes a penalty pursuant to section 

33.07 of the code. Subsection (c) of section 33.48 

provides that fees for contract attorneys shall be applied 

toward the contractual compensation rather than supplementing it. See aenerally Attorney General Opinion ME-67 

(1979) (contract entered into under former article 7335 

and 7335a, V.T.C.S., does not permit contract attorney to 

receive attorney fees in connection with motion to compel 

answers to interrogatories). The provisions of section 

33.48 support the view that there is an equivalence of 

purpose between the section 33.07 penalty, court-ordered 

attorney fees, and compensation payable to the private 

attorney under a section 6.30 contract. 

There is support in the legislative history of 

section 33.07 that the penalty it authorizes is to be 

allocated only to the compensation payable to an attorney 

under a section 6.30 contract. The fiscal note to House 

Bill No. 30 of the 67th Legislature, First Called Session, 

stated as follows: 

Some increase in revenue to taxing units 

would result from the increase in penalty 

and interest rates on delinquent taxes and 

from allowing the taxing unit to impose 

additional penalty on delinquent taxes of up 

to 15% for attorney's fees, if delinquent on 

p. 4150 
Honorable Gary Garrison 

Honorable Billy Ray Stubblefield 

Page 7 (m-857) 

July 1 and if the unit has contracted with a 

delinquent tax attorney. 

Fiscal Note on file in Legislative Reference Library for 

H.B. No. 30, 67th Leg., 1st C.S. (July 17, 1981). This 

document refers to the section 

imposed "for attorney's 

33.07 penalty as being 

fees," thus 

that the penalty is 

supporting the view 

contracting attorney. 

applied solely to compensate the 

A Texas court, 

bring a class 

in considering whether taxpayers could 

action to recover section 33.07 

which they had paid, repeatedly referred to the 

penalties 

section 

33.07 penalties as "attorney fees," and "attorney fee 

charges." See Salvaaaio v. Houston Indenendent School 

District, 709 S.W.2d 306 (Tex. App. - Houston [14th Dist.] 

1986, writ dism'd). For example, the court in Salvaaaio 

characterized the penalty as *'§33.07 attorney 

imposed to cover the collection of 

fee charges 

the delinquent taxes." 

709 S.W.2d at 308. The court thus assumed that the 

penalty was allocated to the contract attorney's costs of 

collection. Even though the court was not addressing the 

issue before us, its assumption as to the use of the 

section 33.07 penalties demonstrates the reasonableness of 

construing "costs of collection" to refer to the cost of 

having a private attorney collect delinquent taxes. 

We conclude that the penalty imposed and collected 

under section 33.07 of the Tax Code may not be spent to 

defray costs of collection incurred by a taxing unit 

itself. The penalty payments must go 

attorney with whom the taxing unit 

to compensating the 

has contracted to 

collect its delinquent taxes. The taxing unit need not 

impose the full 15 percent penalty authorized. That 

figure is a maximum, and the statute does not compel a 

taxing unit to pay an attorney more than his services are 

worth. In drafting the contract, the taxing unit has the 

opportunity to include specific terms on the "costs of 

collection" which the attorney will absorb. 

If a taxing unit does not contract with an attorney 

under section 6.30 of the Tax Code, the delinquent taxes 

are collected by the attorney who ordinarily represents 

it, and the taxing unit has to pay for all costs of tax 

collection. 

unit to 

Section 33.07 of the code permits the taxing 

shift to the delinquent taxpayer the cost of 

compensating the outside attorney with whom it contracts. 

We have found no evidence that the legislature also 

intended the delinquent taxpayer to absorb the taxing 

unit's collection costs over and above the attorneyrs 

p. 4151 
Honorable Gary Garrison 

Honorable Billy Ray Stubblefield 

Page 8 (Jk-857) 

compensation under a section 6.30 contract. Statutes 

imposing penalties are to be strictly construed. Hatch v. 

Davis, 621 S.W.2d 443 (Tex. App. - Corpus Christi 1981, 

writ ref'd n.r.e.); w Attorney General Opinion JM-285 

(1984) (discussing applicabilty of section 33.07 penalty). 

Accordingly, we advise you that the penalty imposed and 

collected under section 33.07 of the Tax Code may not be 

used to defray the taxing units' costs of 

delinquent taxes. 

collecting 

SUMMARY 

Pursuant to section 33.07 of the Tax 

Code, a taxing unit that has contracted with 

an attorney to collect delinquent taxes 

under section 6.30 of the Tax Code is 

authorized to impose a penalty not to exceed 

15 percent against delinquent taxpayers to 

cover the attorney's compensation. The 

taxing unit may not apply any part of the 

penalties collected under section 33.07 to 

any additional costs of collection which it 

incurs but must use all of the assessed 

penalties solely to compensate the attorney 

with whom it contracted. 

JIM MATTOX - 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Susan L. Garrison 

Assistant Attorney General 

? 

p. 4152