Can a Virginia city treasurer get paid a percentage for collecting delinquent court fines, and what are the limits?

Plain-English summary

The Chesapeake City Treasurer asked whether she could enter into a collection agreement with the Commonwealth's Attorney, take a percentage of what she recovered, and also charge the standard county/city administrative fee.

The AG said yes on all counts, with one important limit: restitution to victims cannot be skimmed for fees.

Authority to contract. Va. Code § 19.2-349 sets up the process. The Commonwealth's Attorney has the duty to cause "proper proceedings to be instituted for the collection and satisfaction of all fines, costs, forfeitures, penalties and restitution." If she finds it "impractical or uneconomical" to do so directly, she has four contract options: private attorneys or collection agencies, the local governing body, the county or city treasurer, or the Department of Taxation. So a treasurer contract is on the menu.

Contingent fee cap. The statute's reference to "guidelines promulgated by the Office of the Attorney General, the Executive Secretary of the Supreme Court with the Department of Taxation and the Compensation Board" leads to the Master Guidelines for fines and fees collection. Those guidelines cap the contingent fee at 35% of monies "actually collected" for unpaid fines, court costs, forfeitures, statutory interest, and penalties. The cap applies to local treasurer contracts as well as private contractor contracts.

The 35% cannot come out of restitution. Restitution recovered must be passed through to the victim (or other court-ordered recipient) in full. No deduction for the contingent fee.

Administrative fee on top. Va. Code § 19.2-349(B) explicitly says: "A local treasurer undertaking collection pursuant to an agreement with the attorney for the Commonwealth may collect the administrative fee authorized by § 58.1-3958." Section 58.1-3958 sets that fee at not more than $30 for collections subsequent to 30 or more days after notice but before judgment, and not more than $35 for collections subsequent to judgment. (There are special rules for nuisance abatement liens.) The administrative fee is in addition to penalties and interest, and in addition to the contingent fee.

The Setoff Debt Collection Act carve-out. Private attorneys or collection agencies cannot get a fee for amounts collected by the Department of Taxation under the Setoff Debt Collection Act. The opinion does not say whether this carve-out also applies to local treasurer contracts; the statutory language references "any private attorneys or collection agencies."

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

In particular, both Va. Code § 19.2-349 and § 58.1-3958 have been amended multiple times since 2013, with adjustments to fee caps and procedural details. The Master Guidelines have also been updated. Anyone designing or executing a current collection agreement should consult the current statute and the current guidelines from the Office of the Attorney General.

Common questions

What's the difference between fines, costs, and restitution?
Fines are punitive amounts payable to the government. Costs are court fees and prosecution expenses. Restitution is compensation owed to the victim of the offense. The first two are revenue to the government; the third belongs to the victim.

Why do contingent fees not apply to restitution?
Because restitution belongs to the victim, not the government. Taking a percentage of restitution as a collection fee would effectively reduce the victim's recovery to pay for the collection effort. The General Assembly chose not to allow that.

Can the same treasurer charge both fees on the same dollar collected?
Yes. The 35% contingent fee and the $30/$35 administrative fee are separate authorizations and can stack.

Who imposes the administrative fee?
The governing body of the county, city, or town imposes the administrative fee on the delinquent taxpayer under § 58.1-3958. The treasurer collects it as part of the delinquent debt.

How does the Master Guidelines document work?
It's a guidance document from the Office of the Attorney General, the Supreme Court's Executive Secretary, the Department of Taxation, and the Compensation Board. It implements the statutory directive in § 19.2-349 to standardize contracting terms. The version current as of the 2013 opinion was the July 9, 2013 version.

Can private collection agencies still be hired?
Yes. § 19.2-349 lists private attorneys/agencies as one of four contractor options. The 35% cap and other rules apply to them too.

Why do these collection mechanisms exist?
Because court fines, costs, and restitution have historically been hard to collect. The General Assembly authorized multiple collection paths to maximize recovery. Local treasurers, with their existing collection infrastructure, are an efficient option for some jurisdictions.

Background and statutory framework

• Va. Code § 19.2-349(B): collection-of-court-debt statute, including treasurer authority and reference to administrative fee.
• Va. Code § 58.1-3958: locality-imposed administrative fee for delinquent collections; caps at $30 (post-notice, pre-judgment) and $35 (post-judgment).
• Va. Code § 58.1-3919: notice of delinquent taxes.
• Va. Code § 58.1-520 et seq.: Setoff Debt Collection Act.
• Master Guidelines (July 9, 2013): the 35% contingent fee cap, restitution carve-out.

The interpretive moves:

• Plain language of § 19.2-349(B) authorizes treasurer contracts and the administrative fee.
• Reference to the Master Guidelines for contingent fee terms.
• Restitution is excluded from contingent fee assessment because it belongs to the victim, not the government.

Citations

• Va. Code § 19.2-349(B)
• Va. Code § 58.1-3958
• Va. Code § 58.1-3919
• Va. Code § 58.1-520 et seq.
• Master Guidelines Governing Collection of Unpaid Delinquent Court-Ordered Fines & Costs (July 9, 2013)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2013/13-044_Carraway.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

August 30, 2013

The Honorable Barbara O. Carraway, CPA
Chesapeake City Treasurer
Post Office Box 16495
Chesapeake, Virginia 23328-6495

Dear Ms. Carraway:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You inquire whether a city treasurer can enter into an agreement with the local Commonwealth's Attorney for the collection of delinquent court debt and, if so, whether the city treasurer may claim a percentage of amounts collected in this manner as a contingent collection fee. You further ask whether there is a limit on the percentage that may be charged as a contingent collection fee and whether the treasurer also may claim an administrative fee under § 58.1-3958.

Response

It is my opinion that a city treasurer is authorized to enter into an agreement with the local Commonwealth's Attorney for the collection of delinquent court debt. It is my further opinion that the city treasurer is authorized to receive a contingent collection fee provided the percentage amount of this fee is no higher than 35 percent of any amounts recovered. Finally, it is my opinion that the city treasurer may receive an administrative fee under § 58.1-3958 in addition to the contingent collection fee.

Applicable Law and Discussion

Section 19.2-349 establishes procedures for the collection of delinquent court debt. Specifically, it provides that:

It shall be the duty of the attorney for the Commonwealth to cause proper proceedings to be instituted for the collection and satisfaction of all fines, costs, forfeitures, penalties and restitution. The attorney for the Commonwealth shall determine whether it would be impractical or uneconomical for such service to be rendered by the office of the attorney for the Commonwealth ....

If the attorney for the Commonwealth does not undertake collection, he shall contract with (i) private attorneys or private collection agencies, (ii) enter into an agreement with a local governing body, (iii) enter into an agreement with the county or city treasurer, or (iv) use the services of the Department of Taxation, upon such terms and conditions as may be established by guidelines promulgated by the Office of the Attorney General, the Executive Secretary of the Supreme Court with the Department of Taxation and the Compensation Board ....

The fees of any private attorneys or collection agencies shall be paid on a contingency fee basis out of the proceeds of the amounts collected. However, in no event shall such attorney or collection agency receive a fee for amounts collected by the Department of Taxation under the Setoff Debt Collection Act (§ 58.1-520 et seq.). A local treasurer undertaking collection pursuant to an agreement with the attorney for the Commonwealth may collect the administrative fee authorized by § 58.1-3958.[1]

Section 58.1-3958, in turn, provides in relevant part that,

The governing body of any county, city or town may impose, upon each person chargeable with delinquent taxes or other delinquent charges, fees to cover the administrative costs and reasonable attorney's or collection agency's fees actually contracted for. The attorney's or collection agency's fees shall not exceed 20 percent of the taxes or other charges so collected. The administrative costs shall be in addition to all penalties and interest, and shall not exceed $30 for taxes or other charges collected subsequent to 30 or more days after notice of delinquent taxes or charges pursuant to § 58.1-3919 but prior to the taking of any judgment with respect to such delinquent taxes or charges, and $35 for taxes or other charges collected subsequent to judgment. If the collection activity is to collect on a nuisance abatement lien, the fee for administrative costs shall be $150 or 25 percent of the cost, whichever is less; however, in no event shall the fee be less than $25.[2]

The plain language of § 19.2-349 makes clear that the city treasurer can enter into an agreement with the local Commonwealth's Attorney to collect delinquent court debt and that the treasurer also may receive the administrative fee authorized by § 58.1-3958. The availability of a contingent fee arrangement under the collection agreement is controlled by the guidelines referred to under § 19.2-349. The guidelines currently in place provide that the percentage charged as a contingent collection fee will be an amount, negotiated between the Commonwealth's Attorney and the collections contractor, which "shall not exceed 35 percent of all monies owed and actually collected through the contractor's efforts for unpaid fines, court costs, forfeitures, statutory interest, and penalties."[3] The current guidelines do not distinguish between private and local government agents when setting forth the terms of the collection contract.[4]

Conclusion

Accordingly, it is my opinion that a city treasurer is authorized to enter into an agreement with the local Commonwealth's Attorney for the collection of delinquent court debt. It is my further opinion that the city treasurer is authorized to receive a contingent collection fee provided the percentage amount of this fee is no higher than 35 percent of any amounts recovered. Finally, it is my opinion that the city treasurer may receive an administrative fee under § 58.1-3958 in addition to the contingent collection fee.

With kindest regards, I am

Kenneth T. Cuccinelli, II
Attorney General

[1] Va. Code Ann. § 19.2-349(B) (Supp. 2013) (emphasis added).

[2] Va. Code Ann. § 58.1-3958 (2009) (emphasis omitted).

[3] Master Guidelines Governing Collection of Unpaid Delinquent Court-Ordered Fines & Costs Pursuant to Virginia Code § 19.2-349 at 2-3 (July 9, 2013), available at http://www.scb.virginia.gov/guidelinesfinesandfees.PDF. Please note that the city treasurer may not deduct a contingent fee against any restitution it recovers. The amount of restitution recovered must be disbursed to the victim or court-ordered recipient in its entirety. See id. at 3.

[4] See id. at 1 ("These Master Guidelines are mandatory and apply to all contracts for the collection of all fines, court costs, forfeitures, penalties, statutory interest, restitution, and restitution interest entered into by the attorneys for the Commonwealth and contractors, local governing bodies, county or city treasurers, or the Department of Taxation.").