Court Opinion

ID: 3258243
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:30:57.630726+00
Date Added: 2024-06-11T12:55:04.440160
License: Public Domain

The Honorable Bynum Gibson State Representative 312 South Main Dermott, AR 71638
Dear Representative Gibson:
This is in response to your request for an opinion on the following questions:
          1.  What penalty is the County or County Collector able to charge a taxpayer for paying his or her taxes, i.e., watershed or drainage taxes, or other, after the deadline?  I refer you to Arkansas Code 14-121-426 and 14-117-423
on watershed and drainage.  However, my request is intended to cover any other delinquent taxes that the Collector would receive.  Also, what amount of interest is permitted to be charged?
          2.  Secondly, is the County Tax Collector or some other County official responsible for collecting these taxes?
It must be initially noted that the answer to these questions will vary, depending upon the particular statutory authority for the tax levy.  For instance, the county collector has a duty to extend a penalty of 10% against all delinquent taxpayers that have not paid their real estate and personal property taxes within the required time limit.  A.C.A. 26-36-201; see also A.C.A.26-35-501 (payment of real property taxes in installments; 10% penalty assessed by county collector after prescribed dates.)  With regard, however, to improvement district taxes, a penalty of 25% is authorized in certain instances.  See, e.g., A.C.A.14-92-232 (suburban improvement districts organized under Act 41 of 1941, as amended; county tax collector to include delinquent taxes, together with a 25% penalty, in the taxes for which he shall sell the lands);  A.C.A. 14-93-123 (property owners' improvement districts under Act 613 of 1983, as amended; county tax collector to add a 25% penalty to delinquencies reported to the board of commissioners of the district, which shall enforce collection by chancery proceedings in accordance with A.C.A. 14-121-426 to 432).
See also Municipal Property Owner's Improvement District Law, A.C.A. 14-94-101 et seq (Supp. 1989), under which the county collector has the duty to collect the taxes, and a 25% penalty is added to delinquent taxes with the delinquency to be treated as a delinquency of general taxes (A.C.A. 14-94-122 (Supp. 1989); the real property is transferred to the Commissioner of State Lands as provided in A.C.A.26-37-101 et seq. and is subject to those procedures. Id.
A 10% delinquent penalty applies in the case of certain municipal improvement districts.  See A.C.A. 14-90-909. Although provision is made under Section 14-90-910 for those wishing to redeem to pay the annual installment, penalty, and costs to the chancery clerk, A.C.A.14-86-1001 transfers all authority and responsibility vested in the circuit or chancery clerk for the collection of delinquent assessments to the county tax collector.
A 10% penalty is also imposed under A.C.A. 14-123-411
with regard to levee improvement districts, generally. Although the assessments are collected by the treasurer of the district (A.C.A. 14-123-404), the board of directors enforces collection of delinquent taxes by chancery proceedings (A.C.A. 14-123-411).  6% interest on such delinquent assessments is authorized under14-123-411(b).
It thus becomes apparent that the particular statutory authority for the tax in question must be considered. The breadth of these questions precludes an exhaustive review in the context of an opinion.  With regard, generally, to levee, drainage, municipal, suburban, bridge, and road improvement districts, taxes in such districts shall be collected at the time, in the manner, and by the officers specified in the statutes creating them or under which they were organized.  A.C.A.14-86-801 and 14-86-802.  It should also be noted with regard to levee, drainage, or levee and drainage districts that the boards of directors of such district wherein taxes are collected by special collectors may adopt a resolution for the taxes to be collected by the county tax collectors along with the other taxes. See n. 2, supra.  Collection of delinquent taxes in such districts is to be enforced by the district boards of directors A.C.A. 14-120-405.
With regard to the specific provisions referenced in your request,  A.C.A. 14-117-423 is part of the "Arkansas Irrigation, Drainage, and Watershed Improvement District Act of 1989."  Taxes levied in districts formed under this act (Act 329 of 1949, as amended) are collected by the county tax collector. A.C.A. 14-117-421(a).  The boards of directors of such districts enforce collection of delinquencies through chancery proceedings, with judgment to include a 10% penalty and 6% interest on the delinquent taxes and penalty.  A.C.A. 14-117-423.
Arkansas Code Annotated 14-121-426 applies to taxes levied under the authority of Act 279 of 1909, as amended.
(See note to A.C.A. 14-121-101 for codification of the act).  The boards of commissioners shall, in accordance with A.C.A. 14-121-426(c), enforce the collection of delinquent taxes by chancery court proceedings.  The court judgment shall include a 25% penalty and interest thereon at the rate of 6%.
Id.
In response to your second question concerning the official responsible for collecting these taxes, A.C.A.14-121-425 (a) states that "[t]he amount of taxes provided for in this section shall be annually extended upon the tax books of the county and collected by the collector of the county along with other taxes." Subsection (b) of 14-121-425 appears to make an exception with respect to districts with permanent offices throughout the year, full-time employees, assessed benefits in excess of $5,000,000, and annual collected assessments of at least $100,000.  Under subsection (b), such districts "shall collect their own assessments and taxes at their respective offices and issue receipts therefor."  Arkansas Code Annotated14-120-401 to 409 must, however, also be considered in this regard.  See n. 2., supra.  These provisions constitute the codification of Act 19 of the First Extraordinary Session of 1980.  Section 14-120-403
authorizes a majority of the directors of a levee district, drainage district, or levee and drainage district collecting taxes by special collectors to change the collection method and direct the annual collection of such taxes by the county tax collector. Although the issue is not easily resolved, it is my opinion that this provision may be applied in connection with drainage improvement district taxes collected under Act 279 of 1909, as amended.  This conclusion is compelled by the language of A.C.A. 14-120-401 which states:
          Sections 14-120-402 — 14-120-48 (sic) of this subchapter shall not repeal any existing laws but are intended to provide an alternative procedure for the extension and collection of taxes and assessments that may be adopted by any board of directors which now collects taxes and assessments in a manner other than provided for by this subchapter.
The county tax collector may, therefore, be responsible for collecting the drainage improvement district taxes, following the board of directors' adoption of the authorized resolution.
While we are unable, as noted above, to provide a response to your questions as to all types of delinquent taxes, we hope that the foregoing offers general guidance in addressing the matter.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elisabeth A. Walker.
[1] Section 14-121-426 provides for a chancery court judgment to include a 25% penalty and 5% interest. Boards of improvement may, however, remit delinquent penalties in excess of 10%.  A.C.A. 14-86-1002; see also A.C.A. 14-120-507 (remission of penalty authorized in all drainage districts organized by special act of the General Assembly.).
[2] But see A.C.A. 14-120-403 (Boards of directors of any levee, drainage, or levee and drainage districts collecting taxes by special collectors may by resolution direct the collection of district taxes by the county tax collectors.)
[3] A.C.A. 14-121-208 states that "[a]ll drainage districts created by special acts are made drainage districts under Act 1909, No. 279, with all the powers conferred by the latter and with all the liabilities and restrictions thereby imposed."
[4] See, n. 2., supra, regarding remittance of penalty in excess of 10%.