When Georgia extended the sunset on the State Revenue Commissioner's authority to distribute unidentifiable local sales tax proceeds, did the extension cover the gap period when authority had ceased?

Plain-English summary

Georgia's State Revenue Commissioner collects sales taxes for both the State and for local governments (county Local Option Sales Tax, Homestead Option Sales Tax, Special Purpose Local Option Sales Tax, and others). When dealers file returns with insufficient information, some tax proceeds become "unidentifiable" because the Commissioner cannot tie them to a specific local jurisdiction. Since 1998, O.C.G.A. § 48-8-67 has provided a pro rata allocation procedure for those unidentifiable proceeds, distributing them among the local governments according to each one's share of identifiable proceeds for the same period.

The statute carries a sunset clause. The Commissioner's authority "shall cease" on a specified date "unless such authority is extended by a subsequent general Act." The General Assembly extended the sunset twice. The 2007 sunset expired before the 2009 extension was passed, creating a gap period from December 31, 2007 through May 4, 2009 (a similar gap occurred earlier between 2000 and 2001). Roughly $24.7 million in unidentifiable proceeds had accumulated by January 2010, including funds collected before and during the most recent gap.

The Lieutenant Governor asked whether the 2009 extension reached back to cover unidentifiable proceeds collected during the gap period, or whether those funds should be treated under whatever law would have governed had § 48-8-67 not existed. The Attorney General concluded that the extension reaches back. The pro rata distribution procedure applies to gap-period proceeds.

The reasoning is layered. First, the Code section's plain language ("[f]ollowing the initial allocation under subsection (c) … allocations of unidentifiable proceeds shall be made") naturally extends to the gap-period accumulations. Second, DeKalb County v. State (1999) held that prior to § 48-8-67 the Commissioner had only general administrative discretion, not a specific directive, on unidentifiable proceeds. The General Assembly's intent in extending § 48-8-67 (rather than just letting it expire) was to keep the chosen remedy in place, including for the gap. Third, the rule that remedial laws presumptively apply to pending matters supports retroactive coverage of gap proceeds. Fourth, the funds were never treated as state revenue: they were held custodially by the Office of Treasury and Fiscal Services on behalf of local governments, and "backed out" of state surplus calculations as a state liability. They were never part of the state-purpose treasury that requires appropriation to release.

Currency note

This opinion was issued in 2010. 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.

Common questions

Q: What are "unidentifiable" sales tax proceeds?
A: Proceeds the Department of Revenue cannot tie to a specific local jurisdiction because the dealer's return has insufficient information. Under the Department's rule, a return lacks sufficient information when the Department has made reasonable efforts to process it (including contacting the dealer) and is unable to do so within 90 days of receipt.

Q: How big was the accumulated unidentifiable pile?
A: Footnote 8 reports the $24.7 million December 2009 distribution under H.B. 181. Of that, $13.8 million was for May 2009-July 2009 (post-extension) and $10.9 million was for payments made prior to January 1, 2008. The gap-period (December 31, 2007 through May 4, 2009) proceeds were not included in that initial distribution and were the subject of this opinion.

Q: Why is there a sunset clause on the Commissioner's authority at all?
A: The opinion does not have a definitive answer. Footnote 23 speculates that the sunset reflects ambivalence about the pro rata methodology (some jurisdictions believed they could be hurt by approximation versus more accurate methods). The sunset forces the General Assembly to revisit and reaffirm. Multiple attempts to repeal the sunset clause itself have failed (footnote 24).

Q: What is the "DeKalb County v. State" case about?
A: DeKalb County had challenged the initial allocation of an old backlog of unidentifiable HOST proceeds. The Georgia Supreme Court upheld § 48-8-67's retroactive application to the backlog as remedial legislation that did not impair vested rights. The 2010-1 opinion treats DeKalb County as the foundational decision: prior to § 48-8-67, the Commissioner had general administrative discretion but no specific directive on how to handle unidentifiable proceeds. The legislative response was to provide a clear pro rata rule.

Q: Why isn't this just state money the legislature can keep?
A: The opinion gives a careful constitutional answer in the "Status as Treasury Funds Vel Non" section. Ga. Const. art. VII, sec. III, par. II says only revenue collected "for state purposes" must go into the general fund of the state treasury. Local sales tax proceeds are collected for local government purposes under separate constitutional authorities (special district clause, education sales tax clause, MARTA local constitutional amendment). They have always been treated as custodial funds held by the State on behalf of local governments, not as state-owned revenue. Disbursements have been made administratively without appropriations because the funds are not "state purposes" revenue.

Q: What if the General Assembly hadn't extended the sunset?
A: The Commissioner would have lost specific statutory authority to make pro rata allocations. Under DeKalb County, the Commissioner would have fallen back on general administrative discretion to handle the unidentifiable proceeds. The opinion's footnote 28 emphasizes this discretion is bounded: it must operate within the constitutional and statutory framework of the various sales taxes, which exist to raise revenue for local governments.

Q: Are state sales taxes treated the same way?
A: No. Footnote 41 notes that "all moneys collected from each taxpayer by the commissioner shall be applied first to such taxpayer's liability for taxes owed the state." That priority rule lets the State first satisfy state-tax obligations from the same return. After that, the local-government portion of the proceeds is the residual. The unidentifiable proceeds at issue were already net of state-tax obligations.

Q: How long was the actual gap period in 1998?
A: There was technically a small "approval gap" of April 1 through April 5, 1998 (the original act was passed by the General Assembly on March 16 but not approved by the Governor until April 6). The opinion treats this as the first of three gap periods, and uses the same logic to conclude that the 1998 act's pro rata methodology covered the brief approval gap. The reasoning supports the same conclusion for the later 2000-2001 and 2007-2009 gaps.

Background and statutory framework

Georgia's centralized sales tax administration is unusual in scope. The Department of Revenue collects state sales taxes (about 4%) and a half-dozen local sales taxes (LOST, HOST, SPLOST, E-SPLOST, water/sewer tax, MARTA), then disburses the local portions to the appropriate jurisdictions. Each local tax has its own constitutional authority and its own statute. The aggregation point is § 48-2-17, which requires all collected tax money to be paid to the Office of Treasury and Fiscal Services within 45 days.

OTFS holds the proceeds in "Georgia Fund 1," a short-term investment pool that is bookkeeping-credited to a state-funds account but functions as a custodial holding for both state and local taxes pending allocation. Identifiable local proceeds are disbursed administratively (without appropriation) to the appropriate local jurisdiction. Unidentifiable proceeds, when § 48-8-67 is in force, get pro rata allocation. The State Accounting Office and Department of Audits and Accounts back out undisbursed local sales taxes from state surplus calculations because they recognize the funds as a state liability, not state revenue.

The 2010-1 opinion does extensive work on a question that initially looks technical: when does an extension of a sunset clause reach back? The opinion concludes that the answer depends on legislative intent, and the indicators all point to retroactive coverage. The General Assembly chose extension language ("shall cease… unless… extended") rather than repeal-and-reenactment language. The accompanying caption recited an intent "to repeal certain provisions regarding limitations on the state revenue commissioner's authority" rather than re-creating the authority from scratch. The Department of Revenue's regulation has consistently defined "unidentifiable proceeds" without reference to dates, suggesting the rule was always meant to handle accumulating proceeds. And the alternative reading would leave gap-period proceeds in administrative limbo, which would be inconsistent with the legislative purpose of providing a clear remedy.

The opinion also draws on persuasive authority from other jurisdictions. Trichilo v. Sec'y of Health & Human Serv. (2d Cir. 1987) and Sierra Club v. Sec'y of Army (1st Cir. 1987) both followed similar reasoning under federal extension statutes: when Congress extends a benchmark or authority after a gap, the extension reaches back unless the statute clearly says otherwise.

Citations and references

Statutes:
- O.C.G.A. § 48-8-67, pro rata allocation of unidentifiable proceeds (the central provision)
- O.C.G.A. § 48-8-67(h), the sunset clause
- O.C.G.A. § 48-8-87, LOST exclusive administration
- O.C.G.A. § 48-8-104, HOST
- O.C.G.A. § 48-8-113, SPLOST
- O.C.G.A. § 48-8-141, E-SPLOST
- O.C.G.A. § 48-2-17, payment to state treasury within 45 days
- O.C.G.A. § 1-3-5, codification of presumption against retroactive operation
- O.C.G.A. § 1-3-8: state not bound unless named

Constitutional provisions:
- Ga. Const. art. III, sec. IX, par. I (no money from treasury except by appropriation) and II(c) (regulation of finance)
- Ga. Const. art. VII, sec. III, par. II: revenue for state purposes goes to general fund

Cases:
- DeKalb County v. State, 270 Ga. 776 (1999), § 48-8-67 upheld as remedial legislation; pre-statute Commissioner had only general discretion
- Trichilo v. Sec'y of Health & Human Serv., 823 F.2d 702 (2d Cir. 1987), extension reaches back
- Sierra Club v. Sec'y of Army, 820 F.2d 513 (1st Cir. 1987), same
- Mason v. Home Depot U.S.A., Inc., 283 Ga. 271 (2008), remedial laws apply to pending matters
- Youngblood v. State, 259 Ga. 864 (1990), hotel/motel tax not a state tax under analogous reasoning

Prior AG opinion:
- 1973 Op. Att'y Gen. 73-99: repeal of repeal restores prior law

Source

• Landing page: https://law.georgia.gov/opinions/2010-1
• Original PDF: not linked from landing page

Original opinion text

Best-effort transcription of an opinion that includes lengthy footnotes. The linked landing page is authoritative.

You have requested my opinion on the proper disposition of certain unidentifiable sales tax proceeds collected by the Commissioner of Revenue while his authority to distribute them under O.C.G.A. § 48-8-67 was in a temporary period of statutory sunset. The ultimate question here is whether unidentifiable local sales tax proceeds should be retained by the State or distributed to local governments for which the taxes were authorized and collected. When collecting and disbursing sales taxes centrally for state and local governments, n1 the Department of Revenue sometimes has insufficient information from returns, even after follow-up inquiries, to attribute the proceeds to particular local jurisdictions. n2 The proceeds in question are a subset of these "unidentifiable proceeds." There is a statutory procedure to allocate unidentifiable proceeds pro rata according to distributions of identifiable proceeds, O.C.G.A. § 48-8-67, enacted in 1998. n3 However, O.C.G.A. § 48-8-67 from its beginning has contained a "sunset clause," O.C.G.A. § 48-8-67(h). n4 Commencing April 12, 2005, n5 the sunset clause read as follows: "The authority of the commissioner to make distributions pursuant to this Code section shall cease on December 31, 2007, unless such authority is extended by a subsequent general Act of the General Assembly." A subsequent act, effective May 5, 2009, replaced "2007" with "2011." n6 The extending act made no other change in the sunset clause or in the Code section as a whole. In particular, the amendment made no express provision for the "gap period" from December 31, 2007, through May 4, 2009, when authority under the Code section had "ceased." Your request concerns the unidentifiable proceeds of this gap period: Does O.C.G.A. § 48-8-67, as "extended" May 5, 2009, apply to the unidentified proceeds held and collected during the gap period ("gap proceeds"), and, if not, what law does govern their disposition?

Further Background: Administration of Sales Tax Proceeds. The Constitution empowers the General Assembly "by general law [to] provide for the regulation and management of the finance and fiscal administration of the state." Ga. Const. art. III, sec. IX, par. II(c). In an exercise of that power, the General Assembly has provided in O.C.G.A. § 48-2-17: Except as otherwise provided by law, all taxes, penalties, interest, and other moneys collected or received by the [State Revenue Commissioner], the department, or any unit, officer, or employee of the department pursuant to this title or any other revenue or licensing law shall be paid to the Office of Treasury and Fiscal Services and deposited within 45 days of such collection or receipt. My office has been advised that the Revenue Department daily remits all sales tax proceeds to the Office of Treasury and Fiscal Services (OTFS). Among its functions, OTFS manages cash resources of the State and certain cash resources of local governments and other public bodies, including custodial accounts. n7 On administrative instructions from the Department of Revenue and local governments, OTFS disburses identified local sales tax proceeds to the jurisdictions of their collection, either by crediting accounts in the local government investment pool (LGIP) or by withdrawing funds for direct payments to the local jurisdictions. With regard to unidentifiable funds, during periods of time when the Department of Revenue has had authority under O.C.G.A. § 48-8-67 to make pro rata disbursements of unidentifiable funds, the Department and OTFS have proceeded in a similar manner by administrative correspondence but in distinct transactions and less often. n8

The disbursements to local governments have been accomplished administratively on the basis of correspondence among the Department of Revenue, OTFS, and local sales tax recipients. There have been no corresponding appropriations in the general appropriations Act or any special appropriations, and the funds have not been disbursed pursuant to the warrant process used for drawing down appropriations because these processes have been considered inapplicable by administrators. See Undercofler v. Eastern Air Lines, 221 Ga. 824, 832 (1966) ("Also of significance is the contemporaneous administrative construction given the Act, and the legislative acquiescence in that construction for a long period of time."). In a corresponding way, when state administrators calculate the amount of state general funds available for appropriation, an amount for undisbursed local sales taxes, including an estimate of unidentifiable local tax funds, is "backed out" of calculations of state surplus and carried as a state liability on its financial statements. n9 In other words, the funds which are the subject of your request have never been treated as state funds, and their allocation to local governments would not reduce funds reported as available for appropriations in an already tight revenue situation.

O.C.G.A. § 48-8-67. Code section 48-8-67 was enacted in 1998 in response to a large backlog in unidentifiable proceeds. n10 It creates the following general procedure unchanged since original enactment: When a dealer makes a return with insufficient information to identify proceeds as being attributable to ... a particular special district or particular county, the [State Revenue Commissioner] shall make reasonable efforts to obtain the information needed to make a distribution of those proceeds. When the information cannot be obtained, [e]ach authorized recipient's pro rata share ... shall be the same as that authorized recipient's pro rata share of the identifiable proceeds for the same collection period. O.C.G.A. § 48-8-67(b). n11 These general instructions were made initially applicable to the existing backlog by subsection (c): "The initial allocation of such unidentifiable proceeds shall be distributed in the manner consistent with subsection (b) ... before July 1, 1998, and such allocation shall include ... unidentifiable proceeds ... collected subsequent to June 30, 1997, and prior to April 1, 1998...." Additional conditions were imposed with this initial allocation, in subsection (f), providing that acceptance of the initial allocation barred "any challenges to this Code section" and that acceptance constituted an "accord and satisfaction" regarding the backlog. n12 General instructions for subsequent disbursements continue in subsection (d): Following the initial allocation under subsection (c) of this Code section, allocations of unidentifiable proceeds shall be made by the commissioner according to a schedule provided for by rules and regulations of the commissioner but in no event less often than twice per year. Any such subsequent distribution of unidentified proceeds to an authorized recipient shall be made separate and distinct from the regular distribution of identifiable proceeds to such authorized recipient.

Without regard to the sunset clause, the language of O.C.G.A. § 48-8-67 is straightforward. "Following the initial allocation under subsection (c)," the State Revenue Commissioner "shall" continue making allocations of unidentifiable proceeds under subsections (b) and (d) at least twice a year according to a schedule adopted by rule. n13 (That is, when the Commissioner's "authority" is in force under O.C.G.A. § 48-8-67, the provisions are mandatory.) Taking into account the sunset clause in subsection (h), the Commissioner is still directed to make allocations under subsections (b) and (c) until his "authority [under them] shall cease ... unless ... extended...." When the authority to act under O.C.G.A. § 48-8-67 is extended after a gap period, it is still a natural reading to apply the Code section to the unidentifiable proceeds of the gap because the proceeds "follow[]" the "initial allocation" and are the kind of proceeds the Code section is intended to address.

Though straightforward, this interpretation is not without difficulty. It shows how O.C.G.A. § 48-8-67 can be applied to the unidentified proceeds of the gap period by its plain language and in light of its history as a response to the problem of unidentifiable proceeds. However, neither the Code section, nor specifically its sunset clause or subsection (d), nor the statutory extensions of the sunset clause expressly provide what is to be done in regard to gap periods. The issue of extensions following periods of ceased authority must further be considered in light of legislative history and the rules for determining when laws apply to events of the past, the ultimate goal being to ascertain legislative intent.

First of Three Gap Periods. There have been three gap periods in regard to O.C.G.A. § 48-8-67, two in addition to the one under review. The first arose with the original bill. In 1998, after providing for methodology in subsection (b), the Code section applied that methodology by subsection (c) to "proceeds that have been collected subsequent to June 30, 1997, and prior to April 1, 1998." This express retroactive application of the Code section to the antecedent backlog was held constitutional as remedial legislation in DeKalb County v. State. n14 However, in an aspect of the situation not discussed in the DeKalb County case, the General Assembly passed the bill on March 16, 1998, but did not send the bill to the Governor until after adjournment on March 19, and the bill became law under its terms upon approval by the Governor on April 6, 1998. n15 When the General Assembly passed the bill it could not have known whether the law would be in force by April 1, 1998. Since the bill was not transmitted during the session, under the Constitution it could have become law as late as 40 days after adjournment. n16 Whether unidentifiable proceeds arose in the actual gap period, April 1 through April 5, 1998, the possibility existed upon passage that they might arise during a gap period ending as late as April 28, depending upon approval. This invites the question, what did the General Assembly intend should such a gap occur?

The General Assembly could have intended that subsections (b), (c), and (f) would apply to the initial disbursement of the stated backlog period, "subsequent to June 30, 1997, and prior to April 1, 1998," and subsections (b) and (d) would apply only to unidentifiable proceeds collected from the date of approval. That would mean that the Code section would not apply to the gap between the backlog period and approval date. This interpretation, first, is inconsistent with subsection (d), which by plain language covers unidentifiable proceeds following the initial allocation. n17 Second, the Supreme Court has held that prior to enactment of O.C.G.A. § 48-8-67 "there was no statutory directive regarding the disbursement of unidentifiable proceeds, [and] the Commissioner was left to his discretion in dealing with them." DeKalb County v. State, 270 Ga. 776, 778 (1999). It is illogical to attribute to the General Assembly an intent to provide for unidentifiable proceeds of the backlog period by means of the Code section and also the unidentifiable proceeds commencing with its approval, while leaving unidentifiable proceeds of the gap between these periods subject to the very state of the law the General Assembly was remediating. The proceeds were essentially backlog proceeds not considered necessary to be subject to the conditions of subsection (f). The better interpretation is that subsection (d) made the proceeds of the "approval gap" subject to the Code section. n18 The question then becomes, should the same logic apply to the two gap periods which came later and involved the sunset clause?

Second and Third Gap Periods: Sunset Extensions following Sunset. Except for typographical corrections, n19 the only changes to O.C.G.A. § 48-8-67 have been to extend it by changing the year in its sunset clause, subsection (h). Under its legislative history, the clause has read as follows: "The authority of the commissioner to make distributions pursuant to this Code section shall cease... on December 31, [2000 or 2005 or 2007] 2011, unless such authority is extended by a subsequent general Act of the General Assembly." n20 The extension from 2005 to 2007 was enacted before the 2005 sunset occurred and therefore did not involve a gap period. n21 The extensions from 2000 to 2005 and from 2007 to 2011 both were enacted after the sunset had occurred and followed gap periods. n22 Neither the Code section, the sunset clause, nor the statutory extensions address in specific terms gap periods like those after 2000 and 2007. While it may still appear illogical that the General Assembly meant to leave a hiatus unaffected by remedial measures it has just extended, and also that the General Assembly would intend a different result for the second two gaps from what it intended for the first, there is the difference that the first gap did not involve a sunset.

As opposed to the documented reason for enacting the pro rata allocation procedures, n23 there is no reported explanation known to us for the inclusion of the sunset clause or its extensions. The legislative history does indicate that the sunset clause has been a matter of some interest. n24 The very existence of a sunset clause implies that the problem is perceived as temporary or that the solution is perceived as temporary, perhaps from being unsatisfactory or in the hope of a better solution, and the sunset forces the reevaluation. Perhaps pro rata allocations came into the law under a perceived merit of fairness and approximation or compromise, but the political community at large had doubts or certain jurisdictions felt other methods would serve them more accurately. When DeKalb County litigated with the State over retrospective use of pro rata estimates in the initial allocation provisions of O.C.G.A. § 48-8-67, the Georgia Supreme Court took note that DeKalb County was not the only jurisdiction with a stake in the matter: "[T]he backlog of unidentifiable proceeds also included other local option sales taxes imposed by other jurisdictions." DeKalb County v. State, 270 Ga. 776, 777 (1999). In apparent response to such concerns, O.C.G.A. § 48-8-67 requires in subsection (d) that "distribution of unidentified proceeds ... be made separate and distinct from the regular distribution of identifiable proceeds" for each recipient, and further makes a point of transparency in subsection (e) by providing that "[i]nformation regarding proceeds distributed ... pursuant to this Code section shall be identified by the commissioner, and ... made available upon request." Related to these concerns, the apparent purpose of the sunset clause is to force affirmative legislative reconsideration and action to continue or change the statutory remedy of O.C.G.A. § 48-8-67.

Consistent with a purpose of continuity unless there is a change in legislative provisions, the Code section's internal provision for authorization to cease also has internal provision for the authorization to be extended. The built-in provision for "extend[ing]" the authority implies a belief that the pro rata allocations may continue to be better than alternatives, whether the alternatives be simply the status of the law without the Code section or some other solution. In this light, the built-in extension language is evidence of greater intent for continuity than a simple provision for a date of repeal or expiration. In its language, "[t]he authority ... to make distributions pursuant to this Code section shall cease," the sunset clause places the Code section into a dormant posture (authority under the Code section has "ceased") but also invites extension by simple revival of authority as opposed to requiring reenactment following repeal. The meanings of the words "cease" and "extend," and their conjunctive use, support a revival of authority which reaches back. n25

Status during and after a Gap. During a cessation of authority, the language of the sunset clause only blocks distributions pursuant to the Code section, suggesting that dispositions of unidentifiable proceeds not made "pursuant to this Code section" n26 are allowed if otherwise authorized. In DeKalb County v. State, the Georgia Supreme Court addressed this issue by implication: "Since there was no statutory directive regarding the disbursement of unidentifiable proceeds, the Commissioner was left to his discretion in dealing with them." DeKalb County v. Georgia, 270 Ga. 776, 778 (1999). The Court was referring to the status of the law prior to enactment of O.C.G.A. § 48-8-67. Except for O.C.G.A. § 48-8-67, the relevant law then in effect has not changed. Since all activities of public officers must be authorized by law, n27 and no other provisions appear pertinent, the Court necessarily referred to the general discretion the Commissioner has to administer the various sales tax laws, power which has since remained unchanged. n28

Two points are relevant here. First, in regard to each of the gap periods, the power to provide for disposition of unidentifiable proceeds by discretionary rulemaking has not been exercised. n29 On the basis of interviews and pertinent law, it appears that unidentifiable proceeds of the most recent gap have simply accumulated and that unidentifiable proceeds of prior gaps, if any, were processed pursuant to O.C.G.A. § 48-8-67 after sunset extensions. n30 Second, in exercising administrative discretion and rulemaking, the Commissioner is necessarily confined to boundaries of the sales tax statutes themselves and their constitutional bases, n31 as well as the rule that his discretion must be reasonable, not arbitrary. See Strickland v. Douglas County, 246 Ga. 640, 640-643 (1980); see also Matheson v. DeKalb County, 257 Ga. 48, 50 (1987). The local sales tax statutes and the constitutional sources of authority for them expressly provide that they exist to raise revenue for local governments. n32 Under these general parameters, any disposition of unidentifiable sales tax proceeds under discretionary authority must necessarily take into account the various possibilities of their constitutional and statutory origins and purposes, as does O.C.G.A. § 48-8-67.

When there has been no administrative disposition during a gap and the General Assembly has then extended O.C.G.A. § 48-8-67, it is once again more logical to believe that the General Assembly intends to restore continuity through the gap period (the Commissioner and the legislature having each determined that the remedy of O.C.G.A. § 48-8-67 remains the best acceptable solution). Without express language to the contrary, it is illogical that the General Assembly, in extending the Code section, has intended for the Commissioner to continue to be responsible for devising a remedy for three gap periods, each of which is bracketed by periods of time when the statutory remedy is in force. "The construction [of statutes] must square with common sense and sound reasoning." Blalock v. State, 166 Ga. 465, 470 (1928); accord, State v. Mulkey, 252 Ga. 201, 204 (1984); see also DeKalb County v. State, 270 Ga. 776, 779 (1999) ("It is not logical that DeKalb County has a vested right in tax proceeds that were not identifiable as belonging to it."). The conclusion that the Code section applies to the gap periods preceding extensions is supported by similar reasoning and results in similar problems of statutory interpretation in the opinions and the cases. n33 It is supported by the presumption that remedial laws apply to pending matters of procedure. n34

Status as "Treasury" Funds Vel Non. Because the issue has been suggested, I have considered whether the unidentified sales proceeds for the gap period have been placed into the "treasury" and, therefore, under the Constitution they cannot be withdrawn except by appropriation. The Constitution does state that "[n]o money shall be drawn from the treasury except by appropriation made by law." Ga. Const. art. III, sec. IX, par. I. However, it further states: "Except as otherwise provided in this Constitution, n35 all revenue collected from taxes, fees, and assessments for state purposes, as authorized by revenue measures enacted by the General Assembly, shall be paid into the general fund of the state treasury." n36 The revenue in issue is collected in part for local government purposes pursuant to constitutional and statutory authority, and that part is outside the express scope of this mandate by its emphasized phrase.

The previously described statutory provisions and administrative practices are consistent with this interpretation. The disbursements by the Office of Treasury and Fiscal Services, pursuant to administrative instructions of the Department of Revenue, of identified and pro rated sales tax proceeds without an appropriation, and the recognition of a liability for undisbursed local sales taxes in calculating state surplus, are consistent with the view that the deposits of sales tax proceeds with OTFS are custodial and not a recognition or assertion of state ownership. Cf. Youngblood v. State, 259 Ga. 864, 865 (1990) ("The hotel/motel tax is not a state tax as the Act does not require the municipalities or special districts to levy the tax nor are the revenues paid into the state general fund."). While sales tax proceeds centrally collected are transferred to OTFS as required by O.C.G.A. § 48-2-17, and initially credited to the account that holds state-owned general funds, they are held there custodially pending identification or pro rata distribution for both state and local governments, under both state revenue measures and local revenue measures. n37 Indeed, if the deposits with OTFS made unidentifiable proceeds part of the state-owned treasury requiring appropriation for removal, it would be hard to distinguish identifiable proceeds which are treated in the same manner. n38

Also consistently, the General Assembly, in providing for the central administration of sales taxes collected for both state and local governments, n39 has laid out in specific terms the extent to which the State and dealers may keep the proceeds collected for local governments. Both the State and dealers are to be paid for their costs in collecting and disbursing the local taxes. n40 Also, the State is to have priority in the application of proceeds: "[A]ll moneys collected from each taxpayer by the commissioner shall be applied first to such taxpayer's liability for taxes owed the state." n41 That is, to the extent that a return is sufficiently complete to identify the amount in sales and services subject to the state tax, the associated proceeds must first be applied to amount owed the State. Under the rule that express provision for one thing implies the exclusion of another, n42 the Revenue Code otherwise limits the State's interest in unidentifiable proceeds to that of the other recipients under O.C.G.A. § 45-8-67 n43 and would similarly limit the State's interest in the absence of the Code section or during a period of ceased authority under the Code section.

Conclusion. For the foregoing reasons it is my official opinion that when the General Assembly extends a sunset date in subsection (h) of Code section 48-8-67 in the manner of 2009 Ga. Laws 723, the extended authority to process unidentifiable sales tax proceeds pursuant to the Code section applies to undisbursed, unidentifiable proceeds of a preceding period of time, which began with the earlier sunset date and ended with its extension (the "gap period").

Prepared by: JOHN B. BALLARD, JR., Counsel for Fiscal Policy