Court Opinion

ID: 4129783
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:56:21.67862+00
Date Added: 2024-06-11T14:31:22.632045
License: Public Domain

Office of tfie EWmep 65enersl
                                   &ate of &xaa
DAN MORALES
 .ATT”RNEl
       GENERAL                             June 13,1996

     The Honorable James M. Kuboviak                OpinionNo. DM-398
     Brazes County Attorney
     Brazes County Courthouse                      Re: whether a tax assessor-collector may,
     Bryan, Texas 77803                            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.vinterest 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, arutthat interest nqv be used by
               no entity other than fhe wlfector. Znteretigenerated 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
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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 fUndshall 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 comminglingof 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 “‘todefray tbe cost of administration”
of this prepayment.procedure and because any such purported grant of these public finds
to a private individual would be impermissibleunder 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 108.01l(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 assessor-
collector 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 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 hot-
check 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 commissionerscourt.

                                  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
          commissionerscourt 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 administeringthe program.

                                                     DAN MORALES
                                                     Attorney General of Texas

                                             p. 2188
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

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