Can a Texas county auditor require the county's federal tax ID number on all county depository bank accounts?

Texas AG Opinion JM-1263: Can a County Auditor Require the County's Tax ID on All Depository Accounts?

Plain-English summary

Every county keeps its money in a designated county depository (its bank), and the accounts there carry a federal employer identification number (EIN), the tax ID the IRS uses to track an entity. In Collin County, the county auditor adopted a rule in May 1990 requiring every depository account to use the county's own federal EIN and forbidding any other. The county tax assessor-collector had gotten a separate EIN from the IRS for that office, and the two officials disagreed. The Collin County criminal district attorney asked the Attorney General whether the auditor had authority to impose that rule.

The Attorney General's answer was a qualified yes. The auditor's rulemaking power comes from section 112.001 of the Local Government Code, which lets a county auditor (in a county with a population under 190,000) adopt and enforce regulations the auditor considers necessary for the speedy and proper collecting, checking, and accounting of funds "that belong to the county." The key words are "belong to the county." That power extends only over county funds. So the auditor may require the county EIN on depository accounts, but only on the accounts that actually hold money belonging to the county.

The rest of the opinion explained why that limit matters for the tax assessor-collector specifically, because a lot of what that office collects and parks in the county depository is not county money. When the assessor-collector collects taxes for other taxing units (a school district, a city), the office acts as the agent of those units, and money an agent collects for a principal still belongs to the principal (Aldine Independent School District v. Standley). So taxes collected for other units are not county funds and are outside the auditor's section 112.001 rule. The same goes for motor-vehicle registration fees and other collections that are remitted to the state.

On the other hand, the parts the county actually keeps are county funds and are covered. The collection fees the assessor-collector earns for collecting other units' taxes must be paid into the county treasury and belong to the county. The portions of motor-vehicle registration fees credited to the county road and bridge fund, the statutory fees of office, and various retained percentages under the Tax Code, the Certificate of Title Act, and the Parks and Wildlife Code all belong to the county. Those accounts fall within the auditor's authority. The opinion also drew a contrast with the auditor's separate and broader audit power (sections 115.001, 115.002, and 115.0035), which lets the auditor examine records of both county and non-county funds, unlike the narrower regulation power in section 112.001.

Currency note

This opinion was issued in 1990. 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.

Who this opinion affected (as of 1990)

County auditors: The opinion confirmed that an auditor's section 112.001 rulemaking power was tied to county funds. An auditor could require the county EIN on depository accounts that held county money, but could not force that rule onto accounts holding money the county merely collected for others.

County tax assessor-collectors: The opinion sorted the office's many collections into county and non-county money. Fees the office retained and paid into the county treasury, and road-and-bridge deposits, were county funds subject to the rule; taxes and fees collected for other taxing units or remitted to the state were not.

Other taxing units and the state: The opinion recognized that when the assessor-collector collected for a school district, city, or the state, that money belonged to the other unit or the state, not the county, which is why the county auditor's section 112.001 rule could not reach those accounts.

Common questions

Can the county auditor make every depository account use the county's tax ID?
Not every account. The opinion concluded the auditor may require the county's federal EIN under section 112.001, but only on accounts that contain funds belonging to the county. Accounts holding money the county collects for someone else fall outside that power.

Why isn't tax money the assessor-collector collects for a school district "county money"?
Because when the assessor-collector collects taxes for another taxing unit, the office acts as that unit's agent, and money an agent collects for a principal still belongs to the principal (Aldine Independent School District v. Standley). So those funds belong to the other unit, not the county.

What money does count as county funds here?
Money the county actually keeps: the collection fees the assessor-collector earns and pays into the county treasury, the share of motor-vehicle registration fees credited to the county road and bridge fund, statutory fees of office, and the retained percentages of various taxes and fees under the Tax Code, the Certificate of Title Act, and the Parks and Wildlife Code.

Isn't the auditor allowed to look at all the accounts anyway?
Yes, but that is a different power. The opinion pointed out that the auditor's audit authority (sections 115.001, 115.002, and 115.0035) is broader and lets the auditor examine records of both county and non-county funds. The narrower power at issue here, adopting binding accounting regulations under section 112.001, reaches only county funds.

Background and statutory framework

Section 112.001 of the Local Government Code provides that in a county with a population of less than 190,000, the county auditor may adopt and enforce regulations, not inconsistent with law or with a rule adopted under section 112.003, that the auditor considers necessary for the speedy and proper collecting, checking, and accounting of the revenues and other funds and fees that belong to the county. The authority "plainly extends only over funds that belong to the county." Section 112.001 derives from article 1656, V.T.C.S., and is identical in substance to article 1656 as first enacted in 1905 (Acts 1905, 29th Leg., ch. 161). By contrast, in a county with a population of 190,000 or more, section 112.002 (descendant of article 1656a, first enacted by Acts 1933, 43rd Leg., ch. 98) extends the auditor's regulation power to funds that belong to the county or to a person for whom a county officer has made a collection.

The opinion contrasted the section 112.001 regulation power with the auditor's separate audit authority. Section 115.001 gives the auditor continual access to the records of any officer; section 115.002 requires the auditor to check the books of all county officers, including the tax assessor-collector; and section 115.0035 (enacted in 1989) authorizes the auditor to examine and verify the accounts of all precinct, county, and district officials, defining "accounts" as all public funds subject to the control of any such official. Those audit provisions do not distinguish county from non-county funds, so the audit power is broader than the section 112.001 regulation power.

Whether the auditor's regulation reaches a given account therefore depends on whether it holds county funds. The tax assessor-collector's duties are prescribed by title 1 of the Tax Code (the Property Tax Code). When the office collects taxes for other taxing units, it acts as their agent, and collection by an agent does not diminish the principal's title (Aldine Independent School District v. Standley, 280 S.W.2d 578 (Tex. 1955)); so taxes collected for other units and placed in the depository are not county funds (see Local Gov't Code § 116.113(b); Tax Code § 31.10(d)). The collection fees the office earns for collecting other units' taxes, however, must be paid into the county treasury (Tax Code § 6.27(b); Tex. Const. art. XVI, § 61) and are county funds.

The same analysis sorts motor-vehicle collections. As agent of the state highway department for vehicle registration (V.T.C.S. art. 6675a-2 et seq.), the assessor-collector deposits a share of registration fees to the county road and bridge fund and remits the balance to the state (V.T.C.S. arts. 6675a-9a, 6675a-10); the road-and-bridge share and interest earned on deferred fees belong to the county, while amounts remitted to the state do not. Statutory fees of office under the County Road and Bridge Act (V.T.C.S. art. 6702-1, § 4.202; see also Local Gov't Code § 118.171), retained percentages of motor-vehicle sales and rental taxes (Tax Code §§ 152.021-152.026, 152.041, 152.121), amounts retained under the Certificate of Title Act (V.T.C.S. art. 6687-1), and retained percentages under the Parks and Wildlife Code (§§ 31.0341, 31.048) likewise belong to the county. Accordingly, the auditor may require the county EIN on depository accounts under section 112.001, but only for accounts representing funds belonging to the county. (The federal employer identification number itself is the taxpayer identification number assigned under 26 U.S.C. §§ 6011(b), 6109; 26 C.F.R. § 301.7701-12.)

Citations

Statutory and constitutional authorities:

• Local Government Code § 112.001 (auditor's regulation power, county under 190,000; formerly article 1656, V.T.C.S.); § 112.002 (county 190,000 or more; formerly article 1656a); § 112.003
• Local Government Code §§ 115.001, 115.002, 115.0035, 115.901 (auditor's audit authority)
• Local Government Code § 116.113(b) (deposit of funds for other taxing units); § 118.171 (returned-check fee)
• Tax Code § 6.27(b) (collection fee for other taxing units); § 31.10(d) (deposit of collected taxes); §§ 152.021-152.026, 152.041, 152.121 (motor vehicle sales and rental taxes)
• Tex. Const. art. XVI, § 61 (fees paid into county treasury)
• V.T.C.S. art. 6675a-2 et seq., art. 6675a-9a, art. 6675a-10 (motor vehicle registration fees; road and bridge fund)
• V.T.C.S. art. 6687-1 (Certificate of Title Act); art. 6702-1, § 4.202 (County Road and Bridge Act fees of office)
• Parks & Wildlife Code §§ 31.0341, 31.048 (motorboat certificate and title fees)
• Acts 1905, 29th Leg., ch. 161; Acts 1933, 43rd Leg., ch. 98 (predecessor enactments)
• 26 U.S.C. §§ 6011(b), 6109; 26 C.F.R. § 301.7701-12 (federal employer identification number)

Case:

• Aldine Independent School District v. Standley, 280 S.W.2d 578 (Tex. 1955)

Prior Attorney General opinions referenced:

• Attorney General Opinion C-277 (1964); Attorney General Opinion WW-86 (1957) (auditor's authority over non-county funds under article 1656a)
• Attorney General Opinion M-859 (1971) (tax assessor-collector as agent of other taxing units)
• Attorney General Opinion M-624 (1970) (collection fees paid into county treasury)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1263
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1990/jm1263.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

December 18, 1990

Honorable Tom O'Connell
Criminal District Attorney
Collin County Courthouse
McKinney, Texas 75069

Opinion No. JM-1263

Re: Authority of a county auditor to prescribe the use of a county's federal employer identification number on all departmental depository bank accounts (RQ-2034)

Dear Mr. O'Connell:

You ask whether, pursuant to section 112.001 of the Local Government Code, the county auditor may require the use of the county's federal employer identification number on the accounts of the county tax assessor-collector in the county depository, to the exclusion of other employer identification numbers that may have been assigned to a county office.[Footnote 1] We conclude that the county auditor may impose such a requirement pursuant to section 112.001, but only with respect to accounts that contain county funds.

We are advised that this question is prompted by an apparent disagreement between the county auditor and the county tax assessor-collector concerning the appropriate employer identification number for the accounts of the tax assessor-collector's office. On May 8, 1990, the auditor adopted a regulation governing the styling of depository accounts. It requires the use of the county's federal employer identification number on all such accounts and prohibits the use of other employer identification numbers. Previously, the county tax assessor-collector had applied for and received a separate employer identification number from the Internal Revenue Service. Much of the dispute appears to center on whether the tax assessor-collector was entitled to receive a separate employer identification number. That is a matter within the jurisdiction of the Internal Revenue Service, but we can ascertain the authority of the county auditor to adopt the regulation in question pursuant to section 112.001 of the Local Government Code. Furthermore, since there is disagreement between the county auditor and the county tax assessor-collector over the statutory duties of each office, we will respond accordingly.

Section 112.001 of the Local Government Code provides the following:

In a county with a population of less than 190,000, the county auditor may adopt and enforce regulations, not inconsistent with law or with a rule adopted under Section 112.003, that the auditor considers necessary for the speedy and proper collecting, checking, and accounting of the revenues and other funds and fees that belong to the county. (Emphasis added.)

The authority granted under this provision plainly extends only over funds that "belong to the county." Section 112.001 is derived from article 1656, V.T.C.S., and is identical in substance to article 1656 as it was first enacted in 1905. See Acts 1905, 29th Leg., ch. 161, at 381.[Footnote 2]

The county auditor's power to prescribe accounting regulations under section 112.001 should also be contrasted with the audit authority of the county auditor. Section 115.001 of the Local Government Code gives the auditor "continual access" to the "books, accounts, reports, vouchers, and other records of any officer." He is required to examine and investigate the correctness of these records. Under section 115.002(b), the auditor is required to check the books and examine the reports of all county officers, including the tax assessor-collector. Section 115.0035 of the code, enacted in 1989, authorizes the county auditor to examine and verify the correctness of the accounts of all precinct, county, and district officials. "Accounts" is defined as "all public funds that are subject to the control of any precinct, county or district official," including funds of law enforcement agencies and attorneys for the state composed of seized and forfeited property. These provisions do not distinguish between records concerning the collection of county funds and non-county funds. Compare Local Gov't Code § 115.002(a) (auditor shall examine and report on all reports made to the commissioners court "that are about the collection of money for the county") with id. § 115.901 (auditor shall examine accounts, dockets, and records of county tax assessor-collector, among others, to determine whether money "belonging to the county and in possession of the officer" has not been accounted for and paid over as required by law). Thus, the county auditor's power to audit the accounts of county officers is broader than his power to adopt and enforce regulations under section 112.001.

Consequently, in order to determine the validity of a regulation adopted by the county auditor under section 112.001, it is necessary to first determine whether the funds to which the regulation relates comprise county funds. In the case of the county tax assessor-collector, there are a number of instances in which funds collected by the office and deposited in the county depository may not be characterized as county funds.

The basic duties of the county tax assessor-collector are prescribed by title 1 of the Tax Code, designated the Property Tax Code.[Footnote 3] He is responsible primarily for the assessment and collection of county property taxes, but may have the duty of performing these functions for another taxing unit.

Various laws govern the deposit of taxes collected by the county tax assessor-collector for other taxing units. See, e.g., Local Gov't Code § 116.113(b); Tax Code § 31.10(d). The following discussion is merely illustrative of the funds involved. It does not purport to be exhaustive, but is intended to assist you in determining whether the auditor's regulation is applicable to particular funds.

When the county tax assessor-collector collects taxes on behalf of other taxing units, he acts as the agent of the other taxing unit. Aldine Independent School District v. Standley, 280 S.W.2d 578 (Tex. 1955); Attorney General Opinion M-859 (1971). With rare exceptions, the collection of funds by an agent on behalf of his principal does not diminish the title of the principal in such property. 3 Am. Jur. 2d, Agency §§ 222-224 (1986). Therefore, we do not believe the monies collected by the county tax assessor-collector on behalf of other taxing units and placed in the county depository can be characterized as county funds subject to the county auditor's authority under section 112.001 of the Local Government Code.

The county tax assessor-collector is entitled by law to a reasonable fee, not to exceed actual costs, for collecting taxes for another taxing unit pursuant to section 6.22 [subsection references not legible in scan]. Tax Code § 6.27(b). The fees are not retained by the tax assessor-collector, but must be paid into the county treasury. Tex. Const. art. XVI, § 61; Attorney General Opinion M-624 (1970). They are appropriately characterized as county funds, and thus are subject to the auditor's power to adopt regulations under section 112.001.

The county tax assessor-collector is also designated the agent of the state Department of Highways and Public Transportation for the registration of motor vehicles and the collection of motor vehicle fees. See V.T.C.S. art. 6675a-2 et seq. He is required to deposit a portion of the motor vehicle registration fees collected by his office in the county depository to the credit of the county road and bridge fund. The sum of the deposit is determined by a formula that specifies the maximum amount of fees a county may retain before remitting the balance to the Department of Highways and Public Transportation. V.T.C.S. art. 6675a-10(a), (b).

The commissioners court may impose an optional registration fee of either five or ten dollars (depending on the population of the county) on each vehicle registered in the county, unless the vehicle is exempted from the payment of registration fees. V.T.C.S. art. 6675a-9a. The county tax assessor-collector must deposit 97 percent of the optional county registration fee in the county depository to the credit of the road and bridge fund; the remainder is remitted to the Department of Highways and Public Transportation. V.T.C.S. art. 6675a-10(c-2).

The county tax assessor-collector may defer remittance of certain motor vehicle registration fees and deposit them in an interest bearing account or certificate in the county depository. V.T.C.S. art. 6675a-10(d). The county owns all interest earned on fees so deposited, and such interest is credited to the road and bridge fund. V.T.C.S. art. 6675a-10(f). We think there can be no doubt that all funds credited to the road and bridge fund pursuant to these provisions "belong" to the county within the meaning of section 112.001 of the Local Government Code. By the same token, funds collected on behalf of and remitted to the state under these provisions are not county funds subject to the county auditor's authority under section 112.001.

Furthermore, the County Road and Bridge Act entitles the county tax assessor-collector to deduct as a fee of office $1.50 from each motor vehicle registration and collect $1.00 as a service charge for registrations that are mailed or delivered by electronic means. V.T.C.S. art. 6702-1, § 4.202(a), (b), (c); see also Local Gov't Code § 118.171 (fee for returned checks). These amounts belong to the county for purposes of section 112.001.

The same reasoning applies to fees the county tax assessor-collector receives for collecting various fees and taxes imposed pursuant to the following provisions:

(1) Tax Code §§ 152.021 - 152.026 (taxes imposed on transfers of title and motor vehicle rentals), 152.041 (duty of county tax assessor-collector), 152.121 (tax assessor-collector shall retain five percent of taxes and penalties collected under ch. 152 as fees of office or fees to be paid into officers salary fund);

(2) V.T.C.S. art. 6687-1 (Certificate of Title Act), § 57 (tax assessor-collector shall turn over $5 of each $10 fee collected to county treasurer for deposit in officers salary fund, and either remit remaining $5 to Department of Highways and Public Transportation or defer remittance and deposit or invest as authorized in this section, with accrued interest belonging to the county);

(3) Parks & Wildlife Code §§ 31.0341 (tax assessor-collector shall retain ten percent of fee collected for issuance of certificates of number for motorboats), 31.048 (same with respect to certificates of title for motorboats and outboard motors, or for notation of security interest, lien or other encumbrance).

Accordingly, you are advised that the county auditor may prescribe a rule requiring the use of the county's employer identification number on all accounts in the county depository pursuant to the authority conferred by section 112.001 of the Local Government Code, but only with respect to accounts that represent funds belonging to the county.

                   SUMMARY

       A county auditor in a county with a population of less than 190,000 may adopt and enforce a regulation pursuant to section 112.001 of the Local Government Code that requires the use of the county's federal employer identification number on all accounts in the county depository that contain funds belonging to the county.

                               Very truly yours,

                               JIM MATTOX
                               Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Steve Aragon
Assistant Attorney General

Footnote 1: The federal employer identification number is the taxpayer identification number of an individual or other person (whether or not an employer) assigned pursuant to title 26 of the United States Code section 6011(b) (providing for the identification of taxpayers by the secretary of the treasury) or section 6109 (authorizing the secretary to require the use of assigned identification numbers). 26 C.F.R. § 301.7701-12.

Footnote 2: In contrast, a county auditor in a county with a population of 190,000 or more may adopt and enforce regulations for the speedy and proper collecting, checking, and accounting of

the revenues and other funds and fees that belong to the county or to a person for whom a . . . county officer . . . has made a collection or for whose use or benefit the officer holds or has received funds.

Local Gov't Code § 112.002(b). Section 112.002 is the descendant of article 1656a, first enacted in 1933. Acts 1933, 43rd Leg., ch. 98, at 217. It, too, reflects the substance of the predecessor statute. In an opinion considering the practice of certain county officers of accepting reimbursements for dishonored checks on behalf of the recipients of the checks, this office stated broadly that a county auditor could, pursuant to article 1656a, adopt and enforce regulations for the collecting, checking, and accounting of funds not belonging to the county but collected by a county officer in an official capacity or under color of authority. Attorney General Opinion C-277 (1964); see also Attorney General Opinion WW-86 (1957) (pursuant to article 1656a, county auditor could require chief probation officer of Dallas County to deposit with county treasurer money collected for child support in divorce cases). Neither section 112.001 nor its predecessor, article 1656, provide an equivalent extension of the county auditor's authority.

Footnote 3: A comprehensive discussion of the powers and duties of the county tax assessor-collector appears in 35 D. Brooks, County and Special District Law ch. 13 (Texas Practice 1989).