Louisiana Tax Collector Involvement in Tax Sales, Amendment 3 (2014)
The Louisiana Tax Collector Involvement in Tax Sales, Amendment 3 was on the November 4, 2014 ballot in Louisiana as a legislatively-referred constitutional amendment, where it was defeated. The measure would have permitted authorized private firms to assist local governments in the tax sale process, including in the sale of property for delinquent taxes. The measure would have mandated that the fee charged by the firm be included within the costs that the collector may recover in the tax sale.
|Louisiana Amendment 3|
Election results via: Louisiana Secretary of State
Text of measure
The proposed ballot text read as follows:
|“||Do you support an amendment allowing an authorized agent of a tax collector to assist in the tax sale process, including the sale of property for delinquent taxes and that the fee charged by the authorized agent be included within the costs that the collector can recover in the tax sale? (Amends Article VII, Section 25(A)(1) and (E))||”|
- See also: Article VII, Louisiana Constitution
|Section 25. (A) Tax Sales. (1) There shall be no forfeiture of property for nonpayment of taxes. However, at the expiration of the year in which the taxes are due, the collector or an authorized agent of the collector, without suit, and after giving notice to the delinquent in the manner provided by law, shall advertise for sale the property on which the taxes are due. The advertisement shall be published in the official journal of the parish or municipality, or, if there is no official journal, as provided by law for sheriffs' sales, in the manner provided by judicial sales. On the day of sale, the collector or an authorized agent of the collector shall sell the portion of the property which the debtor points out. If the debtor does not point out sufficient property, the collector shall sell immediately the least quantity of property which any bidder will buy for the amount of the taxes, interest, and costs, which shall also include the fee of an authorized agent of the collector, not to exceed the maximum amount set in accordance with applicable state law, charged on the date of delinquency. The sale shall be without appraisement. A tax deed by a tax collector shall be prima facie evidence that a valid sale was made. The use of an authorized agent shall not relieve the tax collector of its duties and responsibilities under law to the delinquent taxpayer.
(E) Movables; Tax Sales. When taxes on movables are delinquent, the tax collector or an authorized agent of the collector shall in accordance with law seize and sell sufficient movable property of the delinquent taxpayer to pay the tax and costs, which shall also include the fee of an authorized agent of the collector, not to exceed the maximum amount set in accordance with applicable state law, charged on the date of delinquency, whether or not the property seized is the property which was assessed. Sale of the property shall be at public auction, without appraisement, after ten days advertisement, published within ten days after date of seizure. It shall be absolute and without redemption. The use of an authorized agent shall not relieve the tax collector of its duties and responsibilities under law to the delinquent taxpayer.<u>
If the tax collector can find no corporeal movables of the delinquent to seize, he may levy on incorporeal rights, by notifying the debtor thereof, or he may proceed by summary rule in the courts to compel the delinquent to deliver for sale property in his possession or under his control.
Local governments, such as municipalities, parishes and sheriff departments, collect taxes from property owners. They obtain and sell properties that are “long delinquent” on tax payments. This may also happen in situations where a property owner dies or a property is abandoned.
New Orleans passed an ordinance to allow private agents to collect delinquent taxes on immovable property, according to the Public Affairs Research Council. In 2014, the Louisiana Supreme Court ruled against the city. The court held that only a tax collector - in other words, a government - can collect delinquent property taxes.
Amendment 3 would have allowed municipalities, such as New Orleans, to hire authorized firms to assist local governments in the delinquent tax sale process.
The Public Affairs Research Council provided arguments for and against the constitutional amendment. The following was the council's argument in support:
|“||The amendment would address the ambiguous impact of the Louisiana State Supreme Court decision in the New Orleans case by clarifying that jurisdictions may use authorized agents for delinquent tax collections and sales. The amendment does not require political subdivisions to use a third-party but simply affords the option. Government hiring of contractors to perform various public services is a common and beneficial practice if conducted fairly and openly.
Proponents of the amendment see it as a tool in “the war on blight” because the hiring of tax- collecting agents streamlines the process to put tax-delinquent blighted and abandoned property back on the tax rolls. Selling such properties requires expertise in navigating the often difficult and complex legal process that is required. Many small political subdivisions lack the staff and expertise to perform this function effectively. Also, contracting this function to an experienced third party would better ensure the protection of the rights of the property owner. Cleaning up blighted and abandoned property can lead to redevelopment and a reduction in crime. 
—Public Affairs Research Council
The Public Affairs Research Council provided arguments for and against the constitutional amendment. The following was the council's argument against:
|“||Opponents of the amendment say tax collectors should simply do the job they were elected to do and should not rely on outside professional services to perform public functions. This sort of contracting is prone to favoritism and should be avoided. If communities choose to privatize the process of selling delinquent taxes, then the fee, presently capped at 10%, would have to be paid by the titled property owner should they redeem the delinquent taxes within the time period set by state statute. This fee is often set at an arbitrary rate and is not necessarily tied to the actual cost of performing the service, which is all a fee is supposed to do. Even if a local government hires a collector, public officials still would have to monitor the activities of the private agent to ensure that the motive for profits does not overshadow the larger public interest and cause unwarranted inconvenience for property owners.||”|
—Public Affairs Research Council
Path to the ballot
- See also: Amending the Louisiana Constitution
A two-thirds majority vote was required in the Louisiana Legislature in order to place the constitutional amendment on the ballot. HB 488 was approved in the Louisiana Senate on May 21, 2014. The measure was approved by the Louisiana House on May 28, 2014. The amendment was enrolled with the secretary of state on June 2, 2014.
May 21, 2014 Senate vote
|Louisiana HB 488 Senate Vote|
May 28, 2014 House vote
|Louisiana HB 488 House Vote|
- Louisiana Legislature, "House Bill No. 488," accessed June 13, 2014
- Public Affairs Research Council, "Guide to the 2014 Constitutional Amendments," accessed September 12, 2014
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
- Louisiana Legislature, "HB488 Bill Info," accessed June 13, 2014
State of Louisiana
Baton Rouge (capital)
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