HomeMy WebLinkAboutItem 08 - Delinquent Personal Property AccountsEarly turnover of delinquent personal property accounts
The City's tax assessor collector, Colette Franklin, has advised us that both the GCISD and
the City of Colleyville are adopting this change. She recommends that the City of
Grapevine do the same.
Of our outstanding delinquent tax accounts, approximately 23% of them are currently
personal property. Anything we can do to facilitate collection of delinquent taxes is highly
recommended.
The resolution on the agenda will allow implementation of the provisions of HB 2491 and
provide for early turnover of delinquent personal property accounts.
Staff recommends approval.
WAG/slt
March 10, 2006 (8:40AM)
ATTORNEYS AT LAW
4025 WOODLAND PARK BLVD., SUITE 300
P.O. BOX 13430
ARLINGTON, TEXAS 76094-0430
METRO 817-461-3344
FAX 817-860-6509
December 19, 2005
Ms. Colette Franklin
Tax Assessor/Collector for Grapevine-Colleyville ISD
and the Cities of Grapevine and Colleyville
VIA ELECTRONIC TRANSMISSION
This past year, the Legislature amended the Tax Code (HB2491) by the addition
of §33.11. This section authorizes taxing authorities to contract with their delinquent tax
attorneys for the earlier turnover of personal property accounts.
As you know, taxes billed in October generally go delinquent and incur penalties
and interest on February 1. All persons with taxes delinquent as of May 1 are sent a 30 -
day notice under §33.07 warning of the imposition of an additional collection penalty on
July 1 if the taxes remain unpaid. On July 1, those unpaid taxes, with interest and
penalties, are turned over to us for collection pursuant to our contract. The collection
penalty, which can be up to 20%, is used to pay our firm for its services — no money
comes out of your unit's budget.
Section 33.11 was added to the Tax Code in the last regular session of the
Legislature to provide for early turn -over of delinquent personal property taxes. Included
in these accounts would be business inventory, furniture, fixtures, equipment and mobile
homes. This new section provides a mechanism for early turnover of delinquent personal
property taxes — real property taxes would still fall under §33.07. Under the new section,
a notice would go out in the first month of delinquency to those persons owing delinquent
taxes on business personal property and the collection penalty would be imposed 60 days
later. The delinquent personal property taxes would then be turned over to us for
collection. This would allow us, for most accounts, to start working on your personal
property accounts as early as April 2 of each year rather than waiting for July.
Unfortunately, given the fact that personal property can disappear fairly quickly, that
extra three months may make a difference as to whether or not some accounts get
collected before the business and its assets leave.
The Tarrant County Tax Collector, as I understand it, is asking each entity they
collect for to adopt these mechanisms so that they may deal consistently with all entities.
In case your entities also wish to do this, I have attached a form Ordinance for each entity
and an Addendum to our contract with the ISD. Both would need to be adopted in order
to make the change effective. If you have any questions at all, please do not hesitate to
call.
Sincerely,
R. Bruce Medley
Of the Firm
cc: City of Grapevine
City of Colleyville
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS, AUTHORIZING THE EARLY
TURNOVER OF PERSONAL PROPERTY TAXES
PURSUANT TO SECTION 33.11 OF THE TEXAS TAX
CODE AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of Grapevine wishes to defray its costs of collection for
delinquent property taxes, as authorized by Section 33.11 of the Texas Tax Code; and
WHEREAS, the City has previously entered a contract for collection of delinquent
property taxes with a private law firm pursuant to Section 6.30 of the Texas Tax Code;
and
WHEREAS, Section 33.11 of the Texas Tax Code enables the City of Grapevine
to authorize the addition of a collection penalty in an amount that does not exceed the
amount of the compensation specified in the contract with the private law firm; and
WHEREAS, the Council deems the passage of this Resolution to be in the best
interests of the health, safety, and welfare of the public.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That all of the above premises are found to be true and correct and
are hereby incorporated into the body of this resolution as if copied in their entirety
herein.
Section 2. That an additional penalty on delinquent personal property taxes for
tax year 2005 and subsequent years is authorized and impose, as provided by Section
33.11 of the Texas Tax Code, in the amount of 15% of the delinquent tax, penalty, and
interest if the tax becomes delinquent on or after February 1St of a year and remains
delinquent on the 60th day thereafter.
Section 3. That the City Manager is authorized to execute an Addendum to
the City's Delinquent Tax Collection Contract with Perdue, Brandon, Fielder, Collins &
Mott, L.L.P. to effect the changes approved herein.
Section 4. That this resolution shall be effective from and after the date of its
passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 21st day of March, 2006.
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