Texas Senate Bill SB1446

Texas 2021 - 87th Regular

Caption

Relating to the collection of delinquent property taxes.

Impact

The introduction of this bill is significant as it directly impacts the strategies used by taxing units within Texas to manage and collect delinquent property taxes. By limiting the fees that attorneys can charge, the legislation aims to make tax collection operations more efficient and financially sustainable for local governments. This position may encourage more municipalities to engage legal representation in the collection process, potentially leading to higher rates of tax recovery without imposing excessive costs on the taxing authority.

Summary

SB1446 seeks to amend the Texas Tax Code regarding the collection of delinquent property taxes. Specifically, it allows the governing bodies of taxing units to contract competent attorneys to enforce the collection of these taxes. The critical change in the legislation is the adjustment of the attorney's compensation, which is capped at fifteen percent of the amount of delinquent tax, penalty, and interest collected, down from the previous twenty percent limit. This amendment reflects an effort to reduce the financial burdens associated with the collection of overdue property taxes for local governmental entities.

Contention

Arguments surrounding SB1446 primarily focus on the balance between financial efficiency and the effectiveness of tax recovery. Critics may express concern that reducing attorney compensation could impact the quality of legal representation that taxing units can afford. As these legal services are essential for enforcing tax laws and collecting overdue payments, there may be worries that lower compensation rates could result in fewer qualified attorneys willing to accept such contracts. On the other hand, supporters will argue that the bill ensures that the costs of collection do not outweigh the financial benefits gained from recovering delinquent taxes, thus maintaining the fiscal responsibility of local governments.