Honorable J. W. Edgar

State Commissioner of Education 201 East Eleventh Street Austin, Texas 78701

Dear Mr. Edgar: OpiniOn NO. M-1072 Re: Legality of adoption by IndependentSchool District of Home Rule City's ordinanceproviding a 10% penalty on delinquent taxes. Your request for an official opinion is quotedas follows:
"Pursuant to the provisions of Article 1066b, Vernon's Civil Statutes, as amended, taxes of theWichita Falls Independent School District are assessed and collectedby the City of Wichita Falls. "ByOrdinanceNo. 2680 (passedNovember 2, 1971), the City of Wichita Falls has increasedpenalty chargedby it for delinquent taxes from 8% to 10%. "TheWichita Falls Independent School District board desires to adopt the ordinance allowing collectionby or for said school district of a 10% delinquent taxpenalty, if not prohibitedby the limit in Article 7336, V.C.S., or any other statute.~ "TheBoard of Trustees of theWichita Falls Independent School District has by resolution requested me to submit for considerationand opinion of the Office of Attorney General re the following: "The legali~by

of increasingpenalty on delinquent school tares of theWichita Falls district from 8% .toIO%--whose taxes are collected pursuant to authority exercised underArticle 1066b,V.C.S., as amended."

-5253-Honorable J. W. Edgar, page 2, (M-1072)

Undoubtedly, the crux of theproblem posed by your question is whether Section lb of Article 1066b, which gives a city assessingand collecting taxes for another district or m-ipality, the option to collect such taxes in installmentsas allowed by Article 7336, or in lump sums with an 8% delinquency penalty limit, is a limitationon thepowers granted in Section la of such Article. This latter Section grants to any municipality or district takingadvantage of the act in -stion (Art. 1066b) the r1gh.tto adopt 3 law of the State or charterprovision or ordinance applicable to the levying,assessing and collecting of taxesby the district of municipality rendering the tax service.
It is apparent that Sections la and lb of Article 1066b serve dual functionswithin the framework of theAct, i.e., to achieve uniform and economical collectionprocedures. Sec. la allows the participatingmunicipalities or districts to adopt by ordinance or resolutionany applicable law of the State, and, as well, any ordinance or charterprovision of each other which are applicable to the levying, assessing and collecting of taxes, In order that such tax servicesmay be performed in a uniform and economicalmanner. Sec. lb, on the other hand, applies on1 to the agency performing the tax services for

-3 another, an then only when such active agency is a city. This section is plainly a grant of extrapower to citiesparticipatingunder the terms of Articm66b who performthese tax services for other cities or districts. The authority here given to such cities is the unilateraloption to collect such taxes for them- and the other partming municipalities and districts according to the general tax collection laws prescribedby Article 7255 and 7336 (whichpermit installmentpaymen,ts) or by the exclusive lump sum payment plan prescribed as an alternativeby Sec. lb of Article 1066b. Obviously, this extra power given the City chosen to serve as assessor, collectorand Board of Equalization in taxmatters for the other participants, further serves the stated purpose of uniformity and eco'nomy as expressed in Section la of Article 1066b. However, ,this option on thepart of such participating cities is merely permissive and they are not

(AllArticles and Sections thereofherein referred to are Vernon's Civ:ilSatutes.)

-5254-Honorable J. W. Edgar, page 3, (M-1072)

obliged to exercise such right. Neither are the alternative taxprocedures of Sec. lb of Article 1066b exclusive of other procedures allowedby law to be chosenby theparticipating members. Thus, the City of Wichita Falls, being governed under a Home Rule Charter, can serve as a tax agent for theWichita Falls IndependentSchool District while using its own charter provisions and ordinances relating to the assessing and collecting of taxes. Furthermore,by authority givenby Sec. la of Article 1066b theWichita Falls IndependentSchool District can adopt the City's said Charterprovisions and ordinances relating to the assessing and collectingof taxes. It appears from thematerial furnishedwith your request that the Charter under which the City of Wichita Falls is operating allows a penalty of not more than 10% on the City's delinquentad valorem taxes. While an Independent School District has no power of its own to setpenalties or interest on its delinquent taxes, it may adopt all provisions of state and county laws on taxation thatnay be applicable (Art.7337); and if, as is desired in this instance, it takes advantage of theprovisions of Article 1066b, it may by ordinance or resolution adopt all or any part of the Charter or ordinances applicable to the levying, assessing and collectingof taxes, of the City rendering the tax service. (Sec.la, Art. 1066b). Hence, it is the opinion of this office that theWichita Falls Independent School District,whose taxes are assessed and collectedby the City of Wichita Falls pursuant to authority exercised underArticle 1066b,may adopt the City's Ordinance allowing the collection of a 10% penalty on delinquent taxes, thus equalizing the legal penalty on delinquent taxes of the City and the school district at 10%.

SUMMARY

The adoQil'~~or!

by Wichita Falls Independent School District o:?the Home Rule City of Wichita

-5255-Honorable J. W. Edgar, page 4, (M-1072)

Falls! tax ordinance,will authorize the City to collect its and the school district'sdelinquent taxes at a penalty rate of ten (10%)per cent.

Prepared by R. L. Lattimore AssistantAttorney General APPROVED: OPINION COMMITTEE Kerns Taylor, Chairman W. E. Allen, Co-Chairman
James Broadhurst Harriet Burke James McCoy Malcolm Quick SAMUEL D. MCDANIEL Staff Legal Assistant
ALFREDWALKER ExecutiveAssistant
NOLA WHITE First Assistant

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