DAN MORALES

.ATT”RNEl GENERAL 

## Office of tfie EWmep

&ate of &xaa
June 13,1996 

## 65enersl

The HonorableJamesM. Kuboviak Brazes County Attorney Brazes County Courthouse Bryan, Texas 77803 Opinion No. DM-398
Re: whether a tax assessor-collectormay, without approval of the commissioners court of his county, expend knds accrued as interest under section 23.122, Tax code @Q413) Dear Mr. Kuboviak:
You ask certain questions concerning interest on the dealer’ s motor vehicle inventory escrow acwunt maintained by the tax aasessor-colktor pumuant to section 23.122 of the Tax Code, as amended by the Seventy-fourth Legislature. Act of May 18,1995,74thLeg., RS., ch. 945, 1995Tex. Sess.Law Setv. 4727,4730-33. This statute requires the assessor-collector to maintain such an account in the county depository for the prepayment of certain property taxes on motor vehicle inventory. Subsection(c), as amendedeffectiveas ofJanuary 1,1996, now reads as follows:

The collector shall maintainthe escrow account for each owner in the county depository. The collector is not required to maintain a separate account in the depository for each escrow account created as provided by this section but shall m&&tin separate records for each owner. Thecollector shallretainaq.vinterest generated by the escrow account IO &j@ the Carl of adminieation of the prewent procedure Rdablished by this section. Interest generated by an escrowamount created (2~ provkied by ihis seciion is thesoleproper?vofthecollector,arutthat interestnqv be usedby no entity other thanfhe wlfector. Zntereti generated by an escmw account may not be used to reduce or otherwisea#ect the onnual qpropriation to ihe collector thatwouldotherwisebe mask Tax Code 3 23.122(c) (empi&s added).
You ask two questions about the interest created by tbis escrow account and how it is to be administered. First, you ask whetherthe assessor-cokctor is “sllowed to set up a special account for these tknds and spend them without the approval of the oxtunissioners court.” In our vie-w, these tirnds are analogous to the “hot-check Smd” a&ninistcredby the district attorney pursuant to article 102.007 of the Code of Criminal Procedure. The administrationof that fond as we have reiterated in a series of Opinions ofwhich the most recent is Attorney GeneralOpiionDM-357 (1995), is “wholly outside ,IThe HonorableJamesM. Kuboviak - Page 2 (DM-398)

of the county budgeting process.” Accordingly, we answer your first question in the affirmative. Ordinarily,as we pointed out in Attorney GeneralOpinionDM-357, expenditure of county funds is under the control of the commissioners court. Attorney General OpinionDM-357 (1995) at 3. However, the hot-check limd has been removed from the control of the commissioners court by article 102.007(f) of the Code of Criminal Procedure, whichprovides as fouows:

Fees collected under Subsection (c) of this article shall be deposited in the county treasury in a specialfimd to be administered by the county attorney.

. Expenditures fiorn this fUnd shall be at thesole discredon of the attorneyandmaybe used only to defray the salaries and expensesof the prosecutor’ s office, but in no event may the county attorney. supplementhis or her own salary horn this find. We believe it was the intent of the legislature. in denominatinginterest generated by the inventory escrow account as the “sole property” of the collector to indicate that such funds, like the hot-check fund, were not subject to the wntrol of the wmmissioners comt. Further, the collector has the authority to separate these finds in a specialaccount. Indeed, given the insistence of the statute that the collector %etain” the funds, and that they “hay be used by no entity other than the collector,” such separation is necessary for the statutory scheme to be effective. See Letter Opinion 92-7 (1992) at 2 (separate account required to avoid commingling of funds so that statute willbe compliedwith).
The statute speaks of the tind derived Cornthe interest on the inventory escrow account as “the sole property of the collector.” We must ask what this means. It plainly cannot mean that the collector may retain the funds for his personal use and benefit, both because the collector is directed to retain the interest “‘to defray tbe cost of administration” of this prepayment.procedure and because any such purported grant of these public finds to a private individualwould be impermissible under article III, section 51 of the Texas Constitution. Bfuck’sLaw Dicriowy defines property, infer da, as “[t]he exclusive right of possessing,enjoying, and disposingof a thing.” BLACK’ S LAW DICTIONN~Y

1095 (5th ed. 1979). In this case, the collector has no such exclusive right of enjoyment. However, the collector does have an exclusive,but not unconditionalright to the disposal of the fimd.
It has beensuggestedthat the fund in question here is less like the hot-check iimd and more akin to the records management fee established by section 108.01 l(b) of the Local GovernmentCode, whichis discussedin Letter OpinionNo. 92-7 or the fee relating to motor vehicle registration mandated by section 4.202(a) of the County Road and Bridge Act, article 6702.1, V.T.C.S., which is discussed in Attorney General Opiion DM-199 (1993) at 1. However, in neither of those statutes, both of which unlike section 23.122 describe the fees involved as fees of office, is the fimd described as e “sole

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property’ ofthe officer;nor in either ofthose statutes is the officer directed to “retain” the fees involved.
We are t%ther persuaded that it was not the intent of the legislature that this interest should be placed within the general wunty fund when we compare subsection 23.122(c) with subsection 23.122(p), enacted by the Seventy-fourth Legislature. Act of May 18, 1995,74th Leg., R.S., 1995, ch. 945, 1995Tex. Sess. Law Serv. 4727,4731-33, 4733. Subsection23.122(p), which contemplatesthat tines and penaltiesfor failureto tile a required inventory tax statement willbe assessed against motor vehicle dealers, reads as foUows: Fines collected pursuant to the authority of this section shall be

deposited in the county depository 10the creriit of thegeneralfund Pen&es collected pursuant to the authority of this section are the soleproperry of rhe collector, may be used by no entity other than the collector, and may not be used to reduce or otherwise affect the annualappropriationto the collectorthat would otherwisebe made. [Emphasisadded.] The “penalties” are treated precisely as the interest is in subsection (c), and they are distinguished from “fines” which are explicitly made part of the general t&d of the county. Reading the two subsections in pari materia makes clear the legislative intent that these fimds are not to be treated as general county revenue, but are rather a specially dedicated fund, the “sole property” of the collector, and like the hot-check &nd are “wholly outside of the county budgeting process.” Attorney General Opinion DM-357 (1995) at 6. As further evidenceof this, we note the insistencein both sections that these funds “may not be used to reduce or otherwise affect” general appropriations to the assessor. Tax Code 3 23.122 (p).
We conclude., therefore, in response to your first question that the assessorcollector may set up a special account for the t%rdsgenerated by the interest on the motor vehicle inventory escrow account, and that he may dispose of such funds without the approval of the commissionerscourt. Your second question is whether the costs of administrationfor which the interest is dedicatedmay includecosts and expensesalready provided for in the county budget and paid for out of the general fund. We find nothing in the statute that requires that these costs be not otherwise provided for, although obviously if particular costs have already been defrayed the money will not be used to that end. More importantly, nothing in the statute supports a construction which would permit the county to recapture general expendituresfrom this fbnd. Indeed, the last two sentences of subsection (c), which note that tbe interest “may be used by no other entity” and “may not be used to reduce or otherwise atfect the annualappropriationto the collector” expresslyforbid such recapture. What constitutes a legitimate cost of administrationof the prepayment program is a matter of fact upon which this office cannot opine. We do note, however, that the

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requirement that the interest be used “to d&y the cost of administration of the prepayment procedure” is more restrictive than the corresponding language in the hotcheck fund statute, article 102.007(f) of the Code of CriminalProcedure, which permits that fimd to be used “to defray the salaries and expenses of the prosecutor’ s office.” In this respect, the interest at issue here is more akin to the records management fee established by section 118.011(b) of the Local Government Code, and these frrndsmay not be used for general officeexpensesof the assessor-collectorwhich are unrelated to the costs of the prepaymentprogram. Moreover, the same restrictions which apply to hot-check finds as public moneys also apply to the funds at issue here. Accordingly,these timds are subject to audit by the county auditor. C.’ Attorney General Opiion DM-357 at 8 (1995) (hot-check fimd subject, as part of county attorney’ s accounts, to examination at least yearly). More generally, these funds, like the hot-check tind, must be “administer@d] within the confines of laws applicable to the use of county fimds.” Attorney General Opiion JM-313 (1985); see also Attorney General Opinion IM-967 (1988); Attorney General DM-357 (1995). With these restrictions in mind, however, the fimds generated by the interest on the dealer’ s motor vehicle inventory escrow account are not subject to the control of the commissionerscourt.
SUMMARY The interest generated by the dealer’ s motor vehicle escrow account held by the tax assessor-collectorpursuant to section 23.122 of the Tax Code constitutes a hmd which is to be used at the discretion of the collector to defray the cost of administrationof the statutory prepaymentprocedure. The fimdsmay be kept in a special account, and the collector does not need the approval of the commissionerscourt for their disbursement.
Such funds may, however, only be used to defray the cost of administration of the prepaymentprocedure. They may not be used for general office expenses of the assessor-collector which are unrelated to the cost of administering the program.

DAN MORALES Attorney General of Texas

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JORGEVEGA Fii Ass&ant Attorney General
SARAHJ. SHIRLEY Chair, OpinionCommittee Prepared by JamesE. Tourtelott AssistantAttorney General

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