R-457

iaUSTIN. **TEXAS**

May 21, 1947

Hon. Jean Day County Attorney Henderson County Athens, Texas

Dear Mr. Day: Opinion No. V-214

Re: Compensation

due delik quent tax attorn en aollectionof tax when 15% exoeeds the amount of penalty and interest collected.

'Your letter requestingour opinion relative to the above-captioned matter; reads, in part, as fOllows:

nHutohins& Weeden, a fira of tax colJ.eoting

attorneys,have a contract with Henderson Ceunty to colleot delinquent taxes. They have thi, regular tax collectingcontract,which calls for 15$ upon the delinquenttaxes collectedto be paid out of the penalty and interest.

"In July, 1946, they filed suit against Texas Power & Light Co., to oolleot their 1945 tax. The suit was amended after February 1, 1947, to oollect the Texas Power E Light Co's; 1948 tax. The suit was settledMar. 8, 1947, tile penalty and interest on the T946 tax, when collected,amounted to 2.65% on the dollar of tax collected.

"Question:

"Now, are the tax attorneys,Hutbhinsoh & Weeden, entitled to 15% on all the Texas Power k Light Co. taxes for the year 1946 colleotable

as exoess penalty and interest accrued on all the delinquent tax oollecteduntil they receive an amount equa1 to the full 15s on the 1946 Texas Power 8 Light Co. taxes.". . ..

Hon. Jean Day - Page 2 (V-214)

We have examined the delinquent tax contract executedby Henderson County and attorneysHutchins & 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 Seaond Party as compensation for the services hereunder required 15 per cent (not to exceed fifteen (15) per cent) of the amount oolleatedof all delinquenttaxes, penalty and interest of the years coveredhereby, actually aollectedand paid to the colleator of taxes during the term of this aontract, of which Second Party is instrumental 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 appearingon the assessmeht rolls nor shown delinquentbut whioh would have been so shown had it been properly assessed,dlsoovered**by** said Seaond 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 collectingdelinquenttaxes shall not exceed the amount of penalty and interest, or an amount equal to such penalty and interest of all delinquenttaxes collected under the terms of this contract.

. ."

The contract in question,both as to ferm and substance,is according to a form preparedby the Attorney General and adopted by the Comptrollerof Public Acaounts approximately eight years ago. The Attop ney General in its Opinion No. O-3579, approvedJune 4, 1941, construedthe above quotedportion of the approved delinquenttax contract,and stated in part:

"To us the priviso in the contract 'coat of collectingdelinquenttaxes shall not exceed the amount of penalty and interest, or an amount equal to such penalty and interest of aI1 delinquenttaxes 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, butHon. Jean Day - Page 3 (V-214)

to make the penalty and interest collected under the contract as an overall proposition subjeat to such expenses. In other words, it was meant to provide that the attorney's compensation under the contract and any other costs 

### or colleationincurred,

### if any, should not exceed the total amount of penaltiesand interest collectedby him during the time of and under the aontract, Applying this to the contract in question it is our opinionthat MrLr, Payne may be paid the full 7$ per oent commissionstipulatedin the contract, 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,*

al eonstruc In other words, it has been the department-

:tion, since the inceptionof such contact form, that the contracting attorney shall reaeive as compensationfor his services the contracted per cent 

### or all delinquenttaxes, penaltiesand interest eollacted by him, provided that such per'centtogetherwith other costs of collection,if any, either equals or is less than the total penaltiesand interest colleotedunder suoh contract, To illustrate:

~A, the contracting attorney,makes the following collectionsduring the life of his contract

Total penaltiesand interest= $25,000 Less other collectioncosts =

As the $20,000 exceeds the 15% commission A will receive 318,750.OOas his compensation.Hon. Jean Day - Page 4 (V-214)

sunder the regular approved aelinquent tax contra&, the delinquenttax attorney receives the oontracted per cent of'

delisquent taxes, penaltiesand interest collected by him, provided that such per cent, togetherwith other costs of collection,if any, equals or is a less amount than the total penaltiesand interest collectedunder such contract.

Yours very truly,

ATMRNEY GZNSlU OF ISAS

UVQ/lh/wb W. 7. Geppert Assistants

APPROIIDMAY 21, 1947