Can a NC state agency charge another government agency a fee for performing a duty that a statute requires the first agency to perform?

Plain-English summary

In 1991, the General Assembly overhauled the way local property taxes on motor vehicles were collected. The old system was riddled with evasion (move the car, change addresses, dodge the bill). The new system tied vehicle taxation to vehicle registration: when you renewed your tags, the DMV would tell your county, the county would assess and bill, and if you didn't pay, the DMV wouldn't let you re-register. To make the new scheme work, the DMV had to send each county a monthly list of all vehicles registered or re-registered in that county the prior month.

The statute creating that duty (G.S. § 20-50.3) did not say anything about the DMV charging a fee for the lists. The DMV started charging one anyway, citing a general DMV rule (19A NCAC 5A.0002) that set fees for sales of motor-vehicle data to outside requesters. Numerous counties protested the charge to the Ad Valorem Division at the Department of Revenue. John Bailey at that division asked the AG whether the DMV had authority to bill counties for the lists.

Chief Deputy AG Andrew A. Vanore, Jr. and Assistant AG Kay Linn Miller Hobart concluded the DMV could not.

Two strands of reasoning supported the answer. First, the 1991 Act was a single integrated taxation scheme. The General Assembly elected to place part of the responsibility for administering and enforcing the new motor-vehicle tax on the DMV, treating the agency as an indispensable component of the system. The counties had reciprocal duties (they mailed the DMV monthly lists of vehicles with delinquent taxes, and they did so for free). Nothing in the act suggested the DMV could turn its share of the work into a revenue stream.

Second, the fee rule the DMV pointed to (19A NCAC 5A.0002) was the counterpart of 19A NCAC 5A.0001. Rule .0001 was promulgated to comply with G.S. § 20-43, the statute that declares DMV records open to public inspection. The fee schedule in Rule .0002 was designed for a totally different situation: members of the public asking the DMV for selected motor-vehicle lists (by make, year, body style, county, and so on). Counties asking for legislatively-required intergovernmental lists were not "public inspection" requesters. The fee rule did not reach them.

The opinion ended on a principle of broader application: when the General Assembly directs one agency to perform a specific service for another government agency but is silent on fees, the providing agency cannot impose a fee. The general grant in G.S. § 12-3-1 was not enough to fill the gap; it is a directive, not a specific fee authorization.

Currency note

This opinion was issued in 1995. 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. The motor-vehicle ad valorem tax system was further reworked by the Tax & Tag Together program (effective 2013), which integrated property tax collection into the registration renewal payment itself; the intergovernmental-list workflow analyzed in this opinion has been substantially displaced by that integration.

Background and statutory framework

The 1991 reform (Chapter 624). The General Assembly's stated purpose was to provide "a more efficient and equitable procedure for assessing and collecting local ad valorem property taxes on certain motor vehicles." Historically, motor vehicle taxation had been heavily evaded due to vehicles' mobility. Tying taxation to registration solved that by making the DMV the gatekeeper.

Who lists what when. Under G.S. § 105-330.2(a), the date a vehicle is registered (or re-registered) determines its ownership, situs, and value for ad valorem purposes. The county tax assessor lists and appraises every classified motor vehicle annually, in the name of the record owner on the registration date. The DMV's monthly list to the county is how the county knows what to bill.

The enforcement loop. G.S. § 105-330.7 requires county tax collectors to send the DMV by the 10th of each month a list of vehicles with delinquent taxes. G.S. § 20-50.4 prohibits the DMV from re-registering any listed vehicle until the owner shows a paid tax receipt. The two lists, county-to-DMV and DMV-to-county, are the two halves of the scheme.

Why Rule .0002 didn't fit. The DMV's rule-based fee schedule sized fees for "full file copy," "selection by vehicle make," "selection by county," etc. That structure was built for marketing-data buyers and other public requesters, not for the standing intergovernmental obligation under § 20-50.3.

The general-vs-specific principle. G.S. § 12-3-1 grants agencies general operating authority but does not authorize fees. The AG held an agency must point to specific statutory authority before charging for performance of an intergovernmental statutory duty.

Common questions

Q: Could the General Assembly authorize the DMV to charge?

A: Yes. The opinion did not say the DMV could never recover its costs from counties; it said the DMV needed express statutory authority to do so. The fix was legislative.

Q: What happens to fees already paid by counties?

A: The opinion did not address refunds or recovery of past payments. Counties that paid would have had to take that up with DMV administratively or in court.

Q: Does this principle apply outside DMV-to-county relationships?

A: The reasoning was broader: when a statute directs Agency A to perform a service for Agency B and is silent on charges, Agency A must absorb the cost. State and local agencies regularly relied on this principle in interagency disputes.

Q: Did the counties pay the DMV under protest?

A: The opinion indicates "numerous counties have protested this charge." The opinion did not detail any specific payment mechanism, but a protested payment preserves the option to seek recovery.

Q: How did this affect the cost of the 1991 system?

A: The cost of the DMV's list-generation work fell on the DMV's existing budget rather than being passed through to counties. In practice that meant a state-level rather than county-level fiscal hit.

Q: Why was G.S. § 12-3-1 insufficient?

A: G.S. § 12-3-1 is a generic provision authorizing departments to perform their duties; it is not a fee grant. The AG read it as a general directive incapable of supporting a specific charge against another government agency.

Citations from the opinion

• N.C.G.S. §§ 12-3-1; 20-43; 20-50.3; 20-50.4
• N.C.G.S. §§ 105-330.2(a); 105-330.3(a)(1); 105-330.7
• 1991 Session Laws ch. 624
• 19A NCAC 5A.0001 and .0002

Source

• Landing page: https://ncdoj.gov/opinions/fees-imposed-by-the-division-of-motor-vehicles-for-furnishing-information-to-counties/

Original opinion text

Although the statute imposing the duty upon the DMV fails to authorize it to charge a fee for providing this information, the Division has assessed a charge for furnishing this information to the counties. See Exhibit 1, attached hereto. Numerous counties have protested this charge to the Ad Valorem Division of the Revenue Department.

N.C.G.S. § 20-50.3 was enacted in 1991 as part of Chapter 624, entitled "An Act to Provide for a More Efficient and Equitable Procedure for Assessing and Collecting Local Ad Valorem Property Taxes on Certain Motor Vehicles." 1991 Sess. Laws, ch. 624. Historically, the taxation of motor vehicles has been subject to great abuse due primarily to the mobile nature of motor vehicles. Numerous legislative and administrative schemes have been put forth in an effort to address the problem. See Exhibit 2, attached hereto. In 1991, the legislature opted to tie the taxation of motor vehicles to the registration thereof, thus ensuring that all vehicles registered in a particular county would also be listed in that county for ad valorem taxation purposes.

Vehicle registration plays an integral role in the new scheme. Under the statutory scheme, ownership, situs and taxability of a motor vehicle are determined annually as of the day a vehicle's registration is renewed or a new registration is applied for. N.C.G.S. § 105-330.2(a).

The county tax assessor lists, appraises and assesses all taxable classified motor vehicles for county, municipal and special district taxes each year in the name of the record owner as of the day on which a new vehicle registration is applied for. Thus, the date of registration is critical for it determines ownership, situs and valuation of a vehicle for ad valorem tax purposes.

Registration is further tied to the taxation scheme as an enforcement measure and to encourage prompt payment of taxes. N.C.G.S. § 105-330.7 requires the tax collector of each county to mail to the DMV by the tenth day of each month a list containing the name and address of the owner and the vehicle identification number of all motor vehicles listed under N.C.G.S. § 105-330.3(a)(1) on which taxes are delinquent. N.C.G.S. § 20-50.4 prohibits the Division from registering any vehicle identified in the list until the owner presents the Division with a paid tax receipt identifying the vehicle for which registration was refused.

The legislature, in an effort to curb the widespread abuse in the taxation of motor vehicles, elected to include the DMV as an integral component in the ad valorem taxation scheme for motor vehicles. The DMV is charged with the responsibility of providing the information necessary for the counties to implement the provisions of Article 22A of Chapter 105. The lists furnished by it are crucial to the proper functioning of the system of taxation envisioned by the General Assembly. The prohibition against registering a non-tax paid vehicle serves as a powerful enforcement mechanism. Thus, through Chapter 624, the legislature elected to place part of the responsibility for administering and enforcing the taxation of motor vehicles on the DMV. There is no indication that the legislature intended for the DMV to impose a fee upon the counties for performing its role in the taxation scheme. The fee is unsupported by statute, as well as the manifest intent of the legislature, which was to provide for a "more efficient and equitable procedure" for taxing motor vehicles.

We understand that the DMV references 19A NCAC 5A.0002 as support for its imposition of fees for furnishing the information to the counties. Rule .0002 provides: The following fee schedule is in effect: (1) full file copy on continuous paper at fifty dollars ($50.00) per one thousand records; (2) full file copy on magnetic tape at seven dollars ($7.00) per one thousand records; (3) selected listing on continuous paper [items listed in (2) through (6) of Rule .0001 of this Subchapter] at fifty dollars ($50.00) per one thousand records, or a minimum charge of two hundred fifty dollars ($250.00), whichever is greater; (4) selected magnetic tape copy [items listed in (2) through (6) of Rule .0001 of this Subchapter] at twenty dollars ($20.00) per one thousand records, or a minimum charge of two hundred fifty dollars ($250.00), whichever is greater.

Rule .0002 was promulgated as a counterpart to Rule .0001, which, in turn, was promulgated to comply with N.C.G.S. § 20-43. N.C.G.S. § 20-43 declares all records of the Division, other than those declared by law to be confidential for the use of the Division, to be public records, open to public inspection during office hours. Rule .0001 provides:

The motor vehicle registration records maintained by the division of motor vehicles are declared by the General Statutes to be public records and available to the public for inspection during normal working hours. These records are contained on computer storage and therefore are not available for individual inspection by the public. Therefore, in order to meet the requirements of public access, the data processing section has prepared an appropriate computer program to select from the data base records on request. The division can prepare listings based on the following criteria: (1) full file copy, (2) selection by vehicle make, (3) selection by county, (4) selection by year model, (5) selection by body style, (6) any combination of items listed in (2) through (5) of this Rule.

The fee schedule established by Rule .0002 is obviously designed to coordinate with Rule .0001, which is in place to satisfy the requirement that such records be open to public inspection. Justification for charging the counties a fee for providing them with the lists required by N.C.G.S. § 20-50.3 cannot be found in Rule .0002. Note that the counties are required to provide the DMV with monthly lists of vehicles on which taxes are delinquent. N.C.G.S. § 105-330.7. There is no fee charged by the counties for preparing or mailing these lists.

This is not a public inspection issue for which the rule ostensibly was designed to reimburse the DMV for expenses in accommodating requests of third parties for agency documents. Instead, the legislature has comprehensively reordered the entire statutory scheme for collection of property taxes and directed, as part of its specific statutory responsibilities, that the DMV assume a significant, if not indispensable, role with local taxing districts. We see no authority for the agency to engraft a copying charge for fulfilling its mandated intergovernmental duties in this situation.

When the legislature directs a governmental agency to take a particular action or perform specific services with respect to another governmental agency, but does not specifically authorize the agency performing the services to charge a fee, the agency is obligated to perform the services as a part of its normal duties to the state and is precluded from assessing a fee as a condition of performing the services or act. This is true notwithstanding N.C.G.S. § 12-3-1, which is not a specific grant of authority, but merely a general directive. As such, N.C.G.S. § 12-3-1 cannot support the imposition of fees by the DMV. Since the statute imposing the intergovernmental duties upon the DMV is silent regarding any charges or fees, the Division lacks authority to impose a fee for performing statutorily-mandated services.

MICHAEL F. EASLEY Attorney General

Andrew A. Vanore, Jr., Chief Deputy Attorney General

Kay Linn Miller Hobart, Assistant Attorney General