DAN MORALES 

.ATT”RNEl GENERAL 

Office of tfie EWmep 

&ate of &xaa 

June 13,1996 

65enersl 

The Honorable James M. Kuboviak 

Brazes County Attorney 

Brazes County Courthouse 

Bryan, Texas 77803 

Opinion No. DM-398 

Re: whether a tax assessor-collector may, 

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, 1995 Tex. 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 amended effective as of January 1,1996, now reads as follows: 

The collector shall maintain the 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. The collector shall retain aq.v interest generated by the 

escrow account IO &j@ the Carl of adminieation of the 

prewent procedure Rdablished by this section. Interest 

generated by an escrow amount created (2~ provkied by ihis seciion 

is the sole proper?v of the collector, arut that interest nqv be used by 

no entity other than fhe wlfector. Zntereti generated by an escmw 

account may not be used to reduce or otherwise a#ect the onnual 

qpropriation to ihe collector that would otherwise be 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 whether the 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&ninistcred by the district attorney pursuant to article 102.007 of the Code of Criminal 

Procedure. The administration of that fond as we have reiterated in a series of Opinions 

ofwhich the most recent is Attorney General OpiionDM-357 (1995), is “wholly outside ,I 
The Honorable James M. 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 General Opinion DM-357, expenditure 

of county funds is under the control of the commissioners court. Attorney General 

Opinion DM-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, which provides as fouows: 

Fees collected under Subsection (c) of this article shall be 

deposited in the county treasury in a special fimd to be administered 

by the county attorney. . Expenditures fiorn this fUnd shall be at 

the sole discredon of the attorney and may be used only to defray the 

salaries and expenses of the prosecutor’s office, but in no event may 

the county attorney. supplement his or her own salary horn this 

find. 

We believe it was the intent of the legislature. in denominating interest 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 special account. 

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 will be complied with). 

The statute speaks of the tind derived Corn the 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 individual would be impermissible under article III, section 51 of the Texas 

Constitution. Bfuck’s Law Dicriowy defines property, infer da, as “[t]he exclusive 

right of possessing, enjoying, and disposing of a thing.” BLACK’LAW S 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 unconditional right to the disposal 

of the fimd. 

It has been suggested that 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 Government Code, which is discussed in Letter Opinion No. 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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The Honorable James M. Kuboviak - Page 3 (DM-398) 

property’ of the officer; nor in either of those 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, 1995 Tex. Sess. Law Serv. 4727,4731-33, 

4733. Subsection 23.122(p), which contemplates that tines and penalties for failure to tile 

a required inventory tax statement will be assessed against motor vehicle dealers, reads as 

foUows: 

Fines collected pursuant to the authority of this section shall be 

deposited in the county depository 10 the creriit of the generalfund 

Pen&es collected pursuant to the authority of this section are the 

sole properry of rhe collector, may be used by no entity other than 

the collector, and may not be used to reduce or otherwise affect the 

annual appropriation to the collector that would otherwise be made. 

[Emphasis added.] 

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 evidence of this, we note the insistence in 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%rds generated by the interest on the motor 

vehicle inventory escrow account, and that he may dispose of such funds without the 

approval of the commissioners court. 

Your second question is whether the costs of administration for which the interest 

is dedicated may include costs and expenses already 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 

expenditures from 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 annual appropriation to the collector” expressly forbid such recapture. 

What constitutes a legitimate cost of administration of the prepayment program is 

a matter of fact upon which this office cannot opine. We do note, however, that the 

p. 2187 
The Honorable James M. Kuboviak - Page 4 (DM-398) 

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 Criminal Procedure, 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 frrnds may 

not be used for general office expenses of the assessor-collector which are unrelated to the 

costs of the prepayment program. 

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 commissioners court. 

SUMMARY 

The interest generated by the dealer’s motor vehicle escrow 

account held by the tax assessor-collector pursuant 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 administration of the 

statutory prepayment procedure. The fimds may be kept in a special 

account, and the collector does not need the approval of the 

commissioners court for their disbursement. 

Such funds may, however, only be used to defray the cost of 

administration of the prepayment procedure. 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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The Honorable James M. Kuboviak - Page 5 (DM-398) 

JORGE VEGA 

Fii Ass&ant Attorney General 

SARAH J. SHIRLEY 

Chair, Opinion Committee 

Prepared by James E. Tourtelott 

Assistant Attorney General 

p. 2189