Interim Hearing: Usage of Third-Party Collection Firms

February 24, 2020

Legislative News

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On Feb. 5, 2020, the House Ways and Means Committee held a legislative hearing to discuss the following interim charge:

Review the use of third-party tax collection firms, including law firms and tax specialty firms, by governmental units. Evaluate what methods other states use to collect taxes. Determine whether the use of those firms is cost-effective for the taxing jurisdiction or if the tax collection efforts should be performed by the taxing units directly.

In an effort to examine the need for continued use of third-party tax collection firms, the committee heard from stakeholders regarding use of these firms by local governments, their business model, fees collected by the firms, property tax collection rates by the counties prior to the usage of these firms and more. Larry Gaddes, Williamson County Tax Assessor-Collector, testified on behalf of the Tax Assessor-Collectors Association of Texas about the positive impact using a third-party firm has had for his office. Specifically, he referred to the intricacies of property tax law and the increase in tax collections by the county since this practice has been in place.

Additional testimony provided by other speakers echoed Mr. Gaddes’ sentiment and built on it, discussing the additional value created to the county from this business practice. Currently, this practice is discretionary for the county, with 253 counties using a third-party vendor. Travis County is the only county currently doing their own collections. However, Travis County still assesses the same fee in addition to the delinquent taxes that third-party vendors do.

Testimony included:

  • Larry Gaddes (Tax Assessor-Collectors Association of Texas)
  • Mimi Han (Harris County Attorney’s Office)
  • Edward Lopez, Jr. (Linebarger Goggan Blair & Sampson, LLP)
  • Robert Mott (Perdue Brandon Fielder Collins & Mott LLP)
  • David Patterson (Self and Assessments of the Southwest, Inc.)
  • Donald Postell (Self)
  • Amy Samples (Harris County Attorney’s Office)
  • Matthew Tepper (Self and McCreary, Veselka, Bragg, & Allen, P.C. Attorneys at Law)
  • Chad Timmons (Abernathy, Roeder, Boyd & Hullett P.C.)

View written testimony submitted on behalf of the Tax Assessor-Collectors Association of Texas. View the posting for the Ways and Means hearing. Watch the full hearing.

For more information, contact Katy Estrada at (800) 456-5974.