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 

aollection of tax when 

15% exoeeds the amount 

of penalty and interest 

collected. 

'Your letter requesting our 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 

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 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 settled Mar. 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 

oollected until 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 

executed by Henderson County and attorneys Hutchins & 

Weeden, which was duly approved by the Comptroller of 

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 

oolleated of all delinquent taxes, penalty 

and interest of the years covered hereby, 

actually aollected and paid to the colleator of taxes during the term of this aontract, of which Second Party is instrumental in aolle~ting as evidence& by copies of 

communication, tax notioes er pbstraats 

filed with the tax oolleotor prior to the 

payment of suah tax, including collectlen 

of taxes on property not appearing on the 

assessmeht rolls nor shown delinquent but 

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; accordingly as the colleot; 2. 

or makes up his monthly regerts; provided, 

cost of collecting delinquent taxes shall 

not exceed the amount of penalty and interest, 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 Comptroller of Public Acaounts approximately eight years ago. The Attop 

ney General in its Opinion No. O-3579, approved June 4, 

1941, construed the above quoted portion of the approved 

delinquent tax contract, and stated in part: 

"To us the priviso in the contract 

'coat of collecting delinquent taxes shall 

not exceed the amount of penalty and interest, 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 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 colleation incurred, if any, 

should not exceed the total amount of 

penalties and interest collected by 

him during the time of and under the 

aontract, Applying this to the contract in question it is our opinion that 

MrLr, Payne may be paid the full 7$ per 

oent commission stipulated in the contract, so long as such per cent, plus 

any other costs of collection incurred, 

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 inception of such contact 

form, that the contracting attorney shall reaeive as 

compensation for his services the contracted per cent 

or all delinquent taxes, penalties and interest eollacted 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 colleoted under suoh contract, To illustrate: 

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

Total penalties and interest = $25,000 

Less other collection costs = 

As the $20,000 exceeds the 15% commission A 

will receive 318,750.OO as his compensation. 
Hon. Jean Day - Page 4 (V-214) 

sunder the regular approved aelinquent 

tax contra&, the delinquent tax attorney 

receives the oontracted per cent of' delisquent taxes, penalties and interest collected 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 under such contract. 

Yours very truly, 

ATMRNEY GZNSlU OF ISAS 

UVQ/lh/wb 

W. 7. Geppert 

Assistants 

APPROIID MAY 21, 1947