Court Opinion

ID: 4131757
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:19:18.22664+00
Date Added: 2024-06-11T12:53:00.460665
License: Public Domain

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                       The Attorney              General of Texas
                                        C4arch   16,   1981
MARKWHITE
Attorney General
                   Honorable Bob Bullock                      Opinion No. NW-3 0 4
                   Comptroller of Public Accounts
                   LBJ State Office Building                  Re: Collection of warrants for a
                   Austin, Texas 78774                        city’s share of sales and use tax
                                                              revenues

                   Dear Mr. Bullock:

                           You have requested our opinion regarding the collection of warrants
                   for a city’s share of the sales and use tax. Pursuant to article 1066c,
                   V.T.C.S., the comptroller is required quarterly to remit to each municipal
                   corporation which imposes the one percent sales and use tax its portion of
                   revenue collected.    In order to avoid the delays resulting from use of the
                   mails, several municipalities have appointed an Austin bank as their agent
                   for purposes of collecting the warrants from the comptroller, presenting
                   them to the state treasurer for payment, and transmitting          the funds
                   collected to each city’s depository bank. The state treasurer has refused to
                   honor such warrants endorsed by the bank. You first ask whether a city may
                   appoint an Austin bank as its agent for the purpose of collecting its
                   allocation of local tax revenues.

                         It is well gtablished that a home rule city may exercise any power not
                   prohibited by the constitution or by statute, Bland v. City of Taylor, 37
S.W.2d 291 (Tex. Civ. App. - Austin 1931),afrd, 67 S.W.2d 1033 (Tex. 1934),
                   so long as such power is expressly granted or implied in its charter, or is
                   necessary “to make effective the objects and purposes of the [municipalI
                   corporation.” Amstater v. Andreas, 273 S.W.2d 95, 97 (Tex. Civ. App. - El
                   Paso 1954, writ rePd n.r.e.). See City of Corpus Christi v. Unitarian Church,
                   436 S.W.2d 923, 927 (Tex. Civxpp. - Corpus Christi 1968, writ rePd n.r.e.j.
                   See also article 1175, V.T.C.S.

                        A bank, on the other hand, is expressly empowered:

                              [tlo act as a fiscal agent or transfer agent and in
                              such capacity to receive and disburse money and to
                              transfer registered and countersigned certificates of
                              stock, bonds or other evidences of indebtedness.

                   Article 342-301(b), V.T.C.S. See Citizens National Bank v. Hill, 505 S.W.2d
246 (Tex. 1974). In our opin=,    it is clear that a home rule city, unless

                                                 p. 969
Honorable Bob Bullock - Page Two         (MW-304)

prohibited by its charter, may appoint an Austin bank as its agent for the purpose of
collecting its allocation of local tax revenues. Likewise, the appointee bank is not
prohibited from acting in such capacity.

       Furthermore,   the bank, as agent, is empowered to endorse the warrant on behalf of
the city:

            An indorsement must be written by or on behalf of the holder and
            on the instrument or on a paper so firmly affixed thereto as to
            become a part thereof.

Section 3.202(b), Texas Business & Commerce Code.

            A signature may be made by an agent or other representative,    and
            his authority to make it may be established as in other cases of
            representation.   No particular form of appointment is necessary to
            establish such authority.

Section 3.403(a), Texas Business & Commerce Code.

       You also ask whether the transmittal of the allocated tax revenues by the Austin
bank to the city depository bank would constitute branch banking by the depository bank in
contravention of article XVI, section 6 of the Texas Constitution.  We note that the funds
are not deposited in the Austin bank, but instead are merely sent to the depository bank in
another city by wire transfer. See First National Bank v. Dickinson, 396 U.S. 122 (1969);
Jackson v. First National Bank, 430 P.2d 1200 (5th Cir. 1970). From the facts you have
stated, the agreement is clearly between the city and the Austin bank, and it cannot be
said that the Austin bank is acting as a branch or representative    of the city depository
bank. So lorg as the latter is not a party to that agreement, we do not believe that any
question of branch banking would arise.

                                       SUMMARY

                   Unless its charter provisions prohibit its doing so, a home rule
            city may appoint an Austin bank as its agent for the purpose of
            collecting its allocation of sales and use tax revenues.

                                                  MARK      WHITE
                                                  Attorney General of Texas

   JOHN W. FAINTER, JR.
   First Assistant Attorney General

                                           P.   970
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        Honorable Bob Bullock - Page Three     (~~-304)

        RICHARD E. GRAY III
        Executive Assistant Attorney General

        Prepared by Rick Gilpin
        Assistant Attorney General

        APPROVED:
        OPINION COMMlTTEE

        Susan L. Garrison, Chairman
        David B. Brooks
        Bob Gammage
        Rick Gilpin
        C. Robert Heath
        Tom Pollan

                                               P.   971