HB 795 amends Louisiana Revised Statutes R.S. 47:337.13(B) to add a fee cap for Orleans Parish: any fee charged to a taxing authority under an agreement among parish taxing authorities for tax collection services cannot exceed five percent of tax collections. The underlying statutory framework that authorizes local taxing authorities to enter written agreements for joint collection, enforcement, or administration remains intact.
The change is narrowly targeted to Orleans Parish but touches every municipal and special-district tax body that participates in shared collection arrangements there, and it affects private or public collection agents used under those agreements. Compliance officers, municipal finance teams, and private collectors should review current contracts and budgeting assumptions: the cap may force renegotiation, cost-shifting, or consolidation of collection functions to maintain service levels at a lower fee ceiling.
At a Glance
What It Does
The bill adds a new subsection limiting to 5% the fee a taxing authority may be charged under inter-local agreements for tax collection, enforcement, or administration in Orleans Parish. It leaves the existing authorization for joint agreements in place but imposes a financial ceiling on fees billed under those agreements.
Who It Affects
Orleans Parish taxing authorities (municipalities, school boards, special districts) that enter agreements for shared tax collection; public entities that perform collection for other taxing authorities; private collection or processing firms that contract with those agreements.
Why It Matters
A statutory fee cap changes the economics of how local taxes are collected in Orleans Parish: it constrains compensation models for collectors, may trigger contract renegotiations, and could change whether small or low-volume taxing authorities can feasibly outsource collection without local subsidies.
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What This Bill Actually Does
Louisiana’s existing law allows taxing authorities within a parish to create written agreements that pool resources — staff, facilities, or funds — to collect, enforce, and administer taxes. HB 795 keeps that framework but inserts a clear financial limit that applies only in Orleans Parish: any fee charged to a taxing authority under those agreements may not exceed five percent of tax collections.
Practically, the change means that when one municipal or special-district taxing authority contracts with another entity (a neighboring taxing body, a consolidated parish collector, or a private vendor) to perform collection, the amount that can be retained or charged as a fee under that contractual arrangement is capped at 5% of the taxes collected through the agreement. The statute explicitly contemplates collection of taxes beyond sales and use taxes, so the cap can apply to other locally levied taxes collected under these agreements.The bill is surgical: it amends a single subsection of R.S. 47:337.13 and reenacts the provision with the added paragraph.
It does not include enforcement language (criminal or civil penalties), transitional rules for existing contracts, or definitions for terms like “tax collections” or how fees are calculated across pooled receipts. That leaves administrative agencies and contracting parties to resolve measurement and implementation questions when they revise or draft agreements.Because the cap is measured as a percentage of collections rather than a flat dollar amount, its practical impact varies with the tax base: high-volume, low-cost administration tasks will likely remain profitable within the cap, while services tied to hard-to-collect, low-dollar accounts (where contingency or higher processing fees were typical) may no longer be feasible without subsidy or restructuring.
Local governments and private vendors will need to renegotiate budgets and contracts, or consolidate collection functions to achieve economies of scale under the 5% ceiling.
The Five Things You Need to Know
The bill amends and reenacts R.S. 47:337.13(B), adding a new paragraph that imposes the cap.
In Orleans Parish only, any fee charged to a taxing authority under an agreement authorized by the statute cannot exceed 5% of tax collections.
The statutory authorization for joint collection, enforcement, administration, and shared use of funds, facilities, or personnel remains unchanged; HB 795 only adds the fee cap.
The provision explicitly covers agreements that may involve taxes other than sales and use taxes, so the 5% limit can apply to other local levies collected under such agreements.
The text contains no enforcement mechanism, penalty structure, or transitional rule for pre-existing contracts, leaving those practical matters unresolved in the statute.
Section-by-Section Breakdown
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Scope for inter-local tax collection agreements (existing law retained)
This paragraph preserves existing authority: taxing authorities within each parish may enter written agreements for joint collection, enforcement, and administration of taxes and may share funds, personnel, and facilities. Practically, it continues to authorize arrangements ranging from informal cost-sharing to fully consolidated collection offices and extends to taxes beyond sales and use taxes.
New fee cap for Orleans Parish
This is the operative change: any fee charged to a taxing authority under an agreement authorized by Paragraph (1) in Orleans Parish may not exceed five percent of tax collections. The language ties the cap to the amount of tax collected rather than to vendor invoices or operating budgets, which focuses the limit on revenue flow but leaves open how gross versus net collections, refunds, or credits are treated.
Technical reenactment and placement
The bill reenacts R.S. 47:337.13(B) with the added paragraph rather than inserting a stand-alone statute. That approach replaces the subsection in its entirety in the statute book. The reenactment does not include definitions or administrative procedures, so agencies and contracting parties must interpret how the new paragraph interacts with existing agreements and operational practices.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Orleans Parish taxing authorities that receive collection services: they gain a statutory ceiling on fees, which can lower administrative costs if collectors previously charged higher contingency rates.
- Orleans Parish taxpayers if savings from lower collection fees are retained locally or used to reduce net tax burdens, particularly in jurisdictions that pass collection-cost savings through to taxpayers or budgets.
- Smaller taxing bodies within Orleans Parish that lack in-house collection capacity: the cap could incentivize joining consolidated collection arrangements that spread fixed costs across a larger base.
Who Bears the Cost
- Private collection firms and contingency vendors that currently rely on contracts exceeding a 5% fee; they may see reduced revenue or be priced out of serving low-volume local taxes.
- Municipal entities or consolidated collectors who must absorb operational overhead if 5% does not cover actual collection costs, potentially forcing service reductions or pushes for local subsidies.
- Small or newly formed taxing authorities with low tax bases: the cap may make outsourced collection uneconomical for their portfolios, requiring them to establish in-house processes or accept reduced enforcement.
Key Issues
The Core Tension
The central dilemma is straightforward: protect local taxing authorities and taxpayers from high collection fees by imposing a hard cap, or preserve contracting flexibility so collectors can price services for difficult, low-volume, or resource-intensive accounts. A 5% ceiling contains costs but risks reducing the supply or quality of collection services unless parties restructure arrangements, provide subsidies, or consolidate functions to spread fixed costs.
HB 795 solves a single problem—the absence of a statutory limit on fees in Orleans Parish—by introducing a firm percentage cap. But the statute leaves key implementation questions unanswered.
It does not define "tax collections" (gross receipts, net of refunds, or after inter-jurisdictional allocations), it does not state whether the cap applies per taxing authority or on combined pooled receipts, and it does not provide a method for allocating shared-cost services across multiple taxing authorities with different rates and billing cycles. Those gaps will matter when parties calculate whether a proposed fee complies with the 5% ceiling.
The bill also contains no transitional language for existing agreements. Where current contracts exceed 5% or are structured as performance-contingent arrangements, parties will face negotiation or potential litigation.
Absent an enforcement mechanism, affected taxing authorities may need to pursue contract remedies or seek declaratory relief to compel compliance. Finally, by targeting Orleans Parish alone, the law invites cross-parish comparisons and potential arbitrage: private collectors might prioritize higher-fee work outside Orleans, while consolidated collectors could shift fixed costs onto participating authorities to remain solvent under the cap.
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