Relating to the sale of delinquent tax receivables by certain local governments.
The legislation is intended to enhance financial efficiency for local governments by allowing them to recuperate potentially lost revenue from delinquent taxes more proactively. However, it clarifies that even though the receivables may be sold, the lien on the property associated with those taxes remains with the local government. Importantly, the purchaser of the delinquent tax receivable is prohibited from collecting the taxes directly, keeping the responsibility for tax collection with the local government.
SB1122 addresses the procedures under which local governments in Texas may sell delinquent tax receivables. The bill introduces a new chapter to the Local Government Code, permitting counties, municipalities, and school districts to declare unpaid ad valorem taxes as delinquent and sell the rights to collect these taxes at any time. This includes not only the original tax amount but also any accrued penalties and interest. The governing bodies are granted authority to decide the terms of such sales, whether through competitive bidding or negotiated sales, as they see fit for the local government's interest.
The sentiment surrounding SB1122 appears largely positive among local government officials who see it as a necessary tool for fiscal management. The bill is expected to help local entities manage delinquent tax accounts more effectively and possibly reduce the tax burden on compliant taxpayers by enhancing collection rates. However, there may be concerns from taxpayer advocates about how such measures could be enforced and impact residents who are struggling to meet tax obligations.
Notable points of contention include the potential for increased pressure on taxpayers who are already in difficult financial situations due to economic downturns or other factors. Critics might argue that while the sale of delinquent tax receivables can help generate revenue, it could also lead to aggressive collection practices if not managed properly. This concern taps into a broader debate on the balance between local government authority and the social responsibility towards its residents.