Could an Arkansas county treasurer deduct a 2% commission from suburban improvement district assessments?

Plain-English summary

The Attorney General concluded that the Fulton County Treasurer could not deduct a 2% commission from assessments collected for the Cherokee Village Suburban Improvement District.

The improvement-district statute assigned the collection work to the county tax collector and directed the collector to pay the money directly to the district's depository. It set commissions for the county clerk and collector but did not give the county treasurer a role or compensation. Because the funds were not supposed to pass through the treasurer's hands, the general statute requiring a 2% commission on funds handled by a county treasurer did not apply.

Currency note

This opinion was issued in 2013. 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.

How the opinion applied in 2013

County treasurers

The opinion found no statutory authority for the treasurer to handle these suburban improvement district assessments. Without the funds coming into the treasurer's hands, there was no basis for the 2% commission.

County tax collectors

A.C.A. § 14-92-230 directed the collector to collect the district assessments and pay them directly to the district's depository at the same time as county funds were paid over.

Improvement district commissioners

The opinion treated the assessments as money payable directly from the collector to the district depository. It agreed with an earlier AG opinion that improvement-district taxes should go to the recipient identified by statute rather than to the county treasurer.

Common questions

Was the county treasurer entitled to a 2% commission from these assessments?

No. The AG concluded that the treasurer was not authorized to handle the district's assessment revenue and therefore could not collect a handling commission.

Who was supposed to receive the assessment money from the tax collector?

The district's depository. The governing statute directed the collector to pay it there directly.

Why did the general treasurer-commission statute not apply?

That statute applied to funds coming into a county treasurer's hands. The improvement-district statute did not route these assessments through the treasurer.

Did the statute provide commissions to other county officers?

Yes. The opinion quoted provisions granting commissions to the county clerk for extending the taxes and to the tax collector for collecting them. It found no comparable role or payment for the county treasurer.

Background and statutory framework

The request reported that the new Fulton County Treasurer had begun deducting 2% from assessments collected for the district before forwarding the balance. The treasurer apparently relied on the general statute requiring a county treasurer to collect 2% on funds coming into the treasurer's hands unless an enumerated exception applied.

The AG read the more specific improvement-district statute as controlling the payment route. A.C.A. § 14-92-230 required direct payment from the collector to the district depository. The opinion concluded that this structure was inconsistent with diverting the money to the treasurer for further handling under § 21-6-302(a).

Citations and references

Statutes:

• A.C.A. § 14-92-230 (Supp. 2011)
• § 21-6-302(a) (Supp. 2011)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKANSAS

Tue ATTORNEY GENERAL
DusTIn McDANIEL

Opinion No. 2013-050

July 12, 2013

The Honorable Scott Baltz

State Representative

4589 Highway 90 West
Pocahontas, Arkansas 72455-1231

Dear Representative Baltz:

I am writing in response to your request for my opinion on a question I will paraphrase as follows:

Is the Fulton County Treasurer authorized to receive a 2%
commission from the tax assessments he collects on behalf of the Cherokee Village Suburban Improvement District (“SID”) before forwarding those funds to the SID?

As background, you report that “[t]he new Fulton County Treasurer . . . has started deducting 2% from the assessments which the county collects on their tax

statements on behalf of the SID, and which the Treasurer subsequently forwards
[to] the SID.”

RESPONSE
In my opinion, the answer to this question is “no.”

You report that your question arises from the fact that Act 41 of 1941,’ under which the SID was organized, contains the following provisions:

' Act 41 is codified in title 14, chapter 92, subchapter 2 of the Code (Repl. 1998 & Supp. 2011).

323 CENTER STREET, SUITE 200 * LitrLe Rock, ARKANSAS 72201
TELEPHONE (501) 682-2007 * Fax (501) 682-8084
INTERNET WEBSITE * http://www.ag.state.ar.us/

The Honorable Scott Baltz
State Representative
Opinion No. 2013-050
Page 2

(a)(2)(A) It shall be the duty of the county clerk of the county to extend the taxes annually upon the tax books of the county until the levy is exhausted.

(B) For his services, the clerk shall receive a commission of one and one-half percent (1.5%) of the amount so extended.

(b)(1)(A)Q) It shall then be the duty of the tax collector of the county to collect each year the taxes extended upon the books along with the other taxes until the entire levy is exhausted.

(ii) For his or her services in making the collections, including prepayments, the collector shall receive a commission of one and one-half percent (1.5%). In the case of prepayments, the maximum commission shall be the lesser of one and one-half percent (1.5%) or fifty dollars ($50.00).

(B) The taxes shall be paid over by the collector to the depository of the district at the same time he or she pays over the county funds.

(2) In counties operating under the unit tax ledger system, the collector shall receive a commission of one and one-half percent (1.5%) for extending the taxes and a commission of an additional one and one-half percent (1.5%) for collecting the taxes.

(c)(1) County clerks and tax collectors are authorized to employ additional deputies to do the increased work imposed by the terms of this subchapter.

(2) They may pay the deputies’ salaries up to the sum of three thousand three hundred dollars ($3,300) per annum. However, the salaries shall never exceed the receipts from the commissions allowed by this subchapter.’

Your question apparently arises from what you consider the possible application of the following statute:

7 A.C.A. § 14-92-230 (Supp. 2011) (emphasis added).

The Honorable Scott Baltz
State Representative
Opinion No. 2013-050
Page 3

Unless otherwise provided by §§ 6-13-701, 6-17-908, 6-20-221, 14- 90-913, 14-284-403, and 21-6-104, the county treasurers shall be required to collect, as a treasurer’s commission, two percent (2%) on all funds coming into their hands as treasurers and to be paid out of the respective funds.?

This statute unambiguously imposes upon the county treasurer a duty (“shall be required”) to collect 2% commission on all money he or she handles unless one of the itemized statutes dictates otherwise. Given that none of the statutes listed bears in any way on SID collections,* the current Fulton County treasurer apparently considers himself not merely authorized but obliged to collect as commission 2% of funds paid the SID from assessment collections.

This interpretation of the statutes, however, ignores the fact that the highlighted portion of the statute quoted above expressly directs the county collector to directly pay SID collections into “the depository of the district” — a provision that does not contemplate any diversion of the funds to the treasurer for further “handling.” This directive is fully consistent with the statute’s failure even to mention the county treasurer, much less to provide for his or her compensation, as it does for the county clerk and the county collector. The controlling statute is thus facially inconsistent with the claim that the county treasurer might be entitled to collect a 2% commission for “handling” the SID assessments.

3 A.C.A, § 21-6-302(a) (Supp. 2011).

• Without belaboring the details, I will note that two of these statutes recite a figure other than 2% as a
  treasurer’s commission, A.C.A. §§ 6-13-701(h) (Supp. 2011) (dealing with the handling of school-district funds) and 14-90-913(c) (Repl. 1998) (dealing with the handling of assessments of municipal improvement districts); two foreclose a treasurer's commission altogether, A.C.A. §§ 6-17-908(c) (Supp. 2011) (prohibiting charges “for handling any part of the teachers’ salary fund”) and 14-284-403(c) (Supp. 2011) (prohibiting payment of treasurer’s commission on any premium tax moneys disbursed from the Fire Protection Premium Tax Fund); one recites various conditions as qualifying the 2% entitlement, A.C.A. § 6-20-22 1(a) (Repl. 2007) (relating to treasurers’ commissions on school funds); and one provides that an officer, if so authorized and no specific fee is set by law, may charge a fee such as “would be allowed for similar services,” A.C.A. § 21-6-104 (Repl. 2004),

> See Ops. Att’y Gen. 92-176 and 89-339 (noting that if a 2% treasurer’s commission is not barred in an
enumerated statute, it must be collected pursuant to A.C.A. § 21-6-302); compare Op. Att?y Gen. 2004-289 (opining that a statutory provision, currently codified at A.C.A. § 19-5-1207 (Repl. 2007), barring any fees or expenses not expressly designated in legislation related to the Arkansas Real Property Reappraisal Fund trumped the statute requiring payment of a 2% treasurer’s fee).

The Honorable Scott Baltz
State Representative
Opinion No. 2013-050
Page 4

The conclusion just stated is in all respects consistent with one reached by one of my predecessor nearly thirty years ago.° That opinion addressed a request from the legislative auditor regarding a discrepancy in the ways various cities and improvement district handled respective tax collections. My predecessor pointed out that the then applicable statute’ required the county collector, after “hav[ing] settled with the County Clerk,” to pay over directly to the city treasurer all city tax collections. He further pointed out that “[t]he majority of statutes providing for the collection of improvement district taxes specifically provide that all moneys collected be paid over to the depository of the improvement district.°* He concluded that “improvement district taxes, as well as City tax moneys, should be paid directly to the persons designated by statute, not into the hands of the County Treasurer.”

Specifically with respect to the improvement-district taxes at issue in your request, I fully concur in my predecessor’s conclusion. Accordingly, in my opinion, because the Fulton County treasurer is not statutorily authorized to “handle” SID tax revenues, he is not entitled to collect a 2% commission for doing so.

Assistant Attorney General Jack Druff prepared the foregoing opinion, which I hereby approve.

Attorney Gencral

DM/JHD:cyh

° Op. Att’y Gen. 84-208,
7 Ark. Stat. Ann. § 19-4503 (Repl. 1980).

• In support of this proposition, my predecessor cited Ark. Stat. Ann, §§ 20-710 (the predecessor to the
  statute at issue here); 20-1209 (currently codified at A.C.A. § 14-317-116(b) (1987) (rural road improvement districts)); 20-2009 (currently codified at A.C.A. § 14-282-111(a) (Repl. 1998) (ambulance service districts)); and 20-2410 (currently codified at A.C.A. § 14-93-119(a)(2)(B){ii) (Repl. 1998) (property owners’ improvement districts)).