If a Texas county tax office comes up short and it was not the tax collector's fault, how does the collector avoid having to pay it back?

Texas AG Opinion JM-1055: How Does a County Tax Collector Escape Liability for Lost Funds?

Plain-English summary

For most of Texas history, a public official who took in the public's money was on the hook for every dollar, no excuses. Courts held officers strictly to account: even when money was stolen by robbers through no fault of the official, the official or his surety still had to make it good. Against that hard backdrop, the Legislature carved out a narrow escape hatch in 1987, section 6.275 of the Tax Code, for one specific office: the county tax assessor-collector. The Harris County Attorney asked how that escape hatch actually works, and the answer turned out to be more demanding than the county had hoped.

The question came in two parts. First, if a county tax office turns up short on funds it had already collected, and the commissioners court investigates and concludes the loss was not the collector's fault, is the collector off the hook? Second, if the collector had already dipped into personal funds to cover the shortfall, can he be paid back?

On the first question, the Attorney General held that section 6.275 is the only way out, and it requires a court, not the commissioners court. The statute says a county assessor-collector is not personally liable for lost public funds in his custody if, and only if, a district court enters a declaratory judgment that the loss was due to a reason other than the collector's negligence or misconduct. The county attorney argued this should not apply when nobody disputes that the collector was blameless: if the commissioners court already agrees the loss was not negligent, why force everyone into district court to litigate an undisputed matter and burn taxpayer money on a useless lawsuit? It is a reasonable-sounding argument, and ordinarily a declaratory-judgment suit does need a real controversy to proceed. But the AG rejected it for two reasons rooted in how this particular statute came to be.

First, a commissioners court is not a general-purpose government. It has only the powers the Texas Constitution and statutes give it, and nothing anywhere authorizes a commissioners court to decide, as a threshold matter, whether a loss of the tax collector's funds was due to his negligence. One statute lets the commissioners court dock an officer's salary for failing to collect a fee, but that is about uncollected fees, not lost funds already in hand. Another relieves the collector once the money is properly deposited in the county treasury, which is not this situation. Outside section 6.275, there simply was no mechanism for a commissioners court to clear the collector.

Second, the legislative history pointed directly at the answer. As the House first passed the bill, it let the commissioners court make the no-negligence finding. The Senate struck that out and replaced it with a requirement that the finding be made by a district court in a declaratory-judgment suit, and the House then agreed to the Senate's change. When a legislature deletes a proposal from a pending bill, courts read that as a deliberate decision to reject it. So reading the statute to let the commissioners court decide would resurrect exactly what the Legislature took out. The AG would not do that. The declaratory-judgment suit must be filed even when the commissioners court agrees the collector was not negligent. The Legislature made the action available even without a genuine factual dispute, and that legislative choice controls.

On the second question, though, the AG gave the collector meaningful relief. The whole point of section 6.275 was to lift the heavy burden off the collector, so it would make no sense to require him to prepay a large shortfall out of his own pocket before a court ever decided whether he owed it. The AG construed the statute so that filing the section 6.275 suit stays the requirement to cover the shortfall from personal funds while the case is pending. Personal liability attaches only if the district court does not find the loss was free of negligence or misconduct. In other words, the collector waits for the court's decision before paying, rather than paying first and hoping to be reimbursed.

Currency note

This opinion was issued in 1989. 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.

Section 6.275 of the Tax Code and the Local Government Code provisions cited here have been amended since 1989, and the Uniform Declaratory Judgment Act is now codified in the Civil Practice and Remedies Code. Anyone facing a present-day shortage in a county tax office should check the current version of Tax Code section 6.275, the current declaratory-judgment statute, and current case law rather than rely on the 1989 provisions described here.

Who this opinion affected (as of 1989)

County tax assessor-collectors: The opinion told them the good and the demanding news. To escape personal liability for a non-negligent loss, they must obtain a district court declaratory judgment, but while that suit is pending they are not required to prepay the shortfall from personal funds.

Commissioners courts: The opinion made clear they cannot clear a collector of liability on their own, no matter how confident they are that the loss was blameless. Their agreement does not substitute for the required court judgment.

County attorneys and sureties: The opinion set the procedure they must follow when a tax office comes up short, channeling the question into a declaratory-judgment suit and settling that the suit is required even in undisputed cases.

Common questions

Can a commissioners court clear a tax collector of liability for lost funds by itself?
No. The Attorney General concluded that section 6.275 of the Tax Code is the exclusive method, and it requires a district court to enter a declaratory judgment that the loss was not due to the collector's negligence or misconduct. The commissioners court cannot make that determination.

Do you still have to sue if everyone agrees the collector was not at fault?
Yes. The AG held that by the clear terms of section 6.275 the declaratory-judgment suit must be filed even when the commissioners court and the collector agree the loss was not negligent. The Legislature made the action available even without a factual dispute.

Does the collector have to repay the shortfall before the court rules?
No. The AG construed section 6.275 so that filing the suit stays any requirement to cover the shortfall from personal funds while the case is pending. Personal liability results only if the court does not find the loss free of negligence or misconduct.

Why did the district-court requirement matter so much?
Because the House version originally let the commissioners court make the finding, and the Senate deliberately replaced that with a district-court declaratory judgment. Courts treat the deletion of a proposal from a bill as an intent to reject it, so the AG would not read the commissioners-court power back in.

Background and statutory framework

The Harris County Attorney asked whether a county tax assessor-collector may be relieved of personal liability for a loss of public funds if the commissioners court determines after investigation that the funds were lost without negligence, and whether the collector may be reimbursed for personal funds used to replace the loss. The question concerned a shortage of funds already collected and in the collector's custody, not a failure to collect a fee or commission (a situation governed by Local Government Code section 154.009, which lets a commissioners court deduct an uncollected fee from an officer's salary after a hearing).

Historically, Texas courts strictly enforced a public officer's obligation to account for and pay over the public money he receives. See, e.g., Bexar County v. Linden, 220 S.W. 761 (Tex. 1920); Poole v. Burnet County, 76 S.W. 425 (Tex. 1903); Attorney General Opinions JM-517 (1986); H-360 (1974). An official or his surety was not relieved even when the money was stolen by robbers through no fault of the official. See Coe v. Foree, 50 S.W. 616 (Tex. Civ. App. 1899, writ ref'd). Section 6.275 of the Tax Code is an exception to that rule. It provides that a county assessor-collector is not personally liable for the loss of public funds in the custody of the assessor-collector or the office if a district court enters a declaratory judgment that the loss is due to a reason other than the negligence or misconduct of the assessor-collector. H.B. 95, Acts 1987, 70th Leg., 2d C.S., ch. 37, § 1, at 125. Section 2 of H.B. 95 made the provision apply only to losses occurring on or after its October 20, 1987 effective date, with prior losses governed by the former law. The opinion assumed the loss occurred after the effective date.

As originally passed by the House, H.B. 95 allowed the determination of non-liability to be made by the commissioners court on a finding that the loss was due to a reason other than the collector's negligence or misconduct. The Senate amended the bill to require that finding to be made by a district court in a suit under the Uniform Declaratory Judgment Act, and the House agreed. The county attorney argued that requiring a declaratory-judgment suit when the commissioners court agrees the collector was not negligent would circumvent the Legislature's intent, because a declaratory judgment is remedial and requires a real controversy. See, e.g., Firemen's Ins. Co. v. Burch, 442 S.W.2d 331 (Tex. 1968); California Products, Inc. v. Puretex Lemon Juice, Inc., 334 S.W.2d 780 (Tex. 1960).

The AG disagreed for two reasons. First, commissioners courts have only the powers set forth and defined by the Texas Constitution and state statutes. Canales v. Laughlin, 214 S.W.2d 451 (Tex. 1948); Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941). No provision authorizes a commissioners court to decide, as a threshold matter, whether a loss of the collector's funds is due to negligence. Section 113.006 of the Local Government Code relieves the collector and his surety only after the funds are deposited in the county treasury, and section 154.009 addresses failure to collect fees, not loss of collected funds. Apart from section 6.275, no provision lets a commissioners court relieve a collector of responsibility for a non-negligent loss of funds in his custody. Second, statutes must be construed to give effect to legislative intent, Gov't Code § 311.021, and Texas courts hold that the deletion of a provision in a pending bill discloses an intent to reject the proposal. Smith v. Baldwin, 611 S.W.2d 611 (Tex. 1980); Transportation Ins. Co. v. Maksyn, 580 S.W.2d 334 (Tex. 1979); Grasso v. Cannon Ball Motor Freight Lines, 81 S.W.2d 482 (Tex. 1935). The Senate removed the commissioners-court authority and replaced it with a district-court declaratory judgment, and the House agreed; reading the statute as the county attorney suggested would circumvent that. A footnote explained that three cases the county attorney relied on, El Paso County v. City of El Paso, 357 S.W.2d 783 (Tex. Civ. App. - El Paso 1962, no writ), City of Tyler v. Smith County, 246 S.W.2d 601 (Tex. 1952), and Kingsville Independent School Dist. v. Crenshaw, 164 S.W.2d 49 (Tex. Civ. App. - San Antonio 1942, writ ref'd w.o.m.), were inapposite because they addressed eminent-domain statutes in disputes between political subdivisions, not this question.

Absent section 6.275, a declaratory-judgment action would not lie where there was no real dispute of fact, but the Legislature enacted section 6.275, and by its clear terms the action lies even without a factual dispute. The AG therefore construed section 6.275 to require a Uniform Declaratory Judgment Act suit even when the commissioners court and the collector agree the loss was not through the collector's negligence or misconduct.

On the second question, the AG adopted an alternative the county attorney had suggested: that section 6.275 obviates the practice of requiring collectors to make up shortfalls with personal funds until liability is determined. The AG construed section 6.275 so that filing the suit stays the collector's obligation to pay the shortfall from personal funds pending the court's judgment. Requiring prepayment before the court's determination would defeat the apparent legislative intent to relieve the collector of the heavy burden of prepaying large sums, and personal liability results only absent a district court finding that the loss was not occasioned by negligence or misconduct. This reading is consistent with the stated purpose of H.B. 95 in its bill analysis, to release the collector from personal liability upon a determination that the loss is not based on negligence or misconduct.

Citations

Statutory authority:

• Tax Code § 6.275 (release of county assessor-collector from liability for loss of funds)
• Local Gov't Code § 113.006 (safekeeping of funds after deposit); § 154.009 (deduction for uncollected fees)
• Gov't Code § 311.021 (construing statutes to give effect to legislative intent)
• H.B. 95, Acts 1987, 70th Leg., 2d C.S., ch. 37, §§ 1, 2, at 125 (enacting section 6.275)
• Uniform Declaratory Judgment Act

Cases cited:

• Bexar County v. Linden, 220 S.W. 761 (Tex. 1920)
• Poole v. Burnet County, 76 S.W. 425 (Tex. 1903)
• Coe v. Foree, 50 S.W. 616 (Tex. Civ. App. 1899, writ ref'd)
• Firemen's Ins. Co. v. Burch, 442 S.W.2d 331 (Tex. 1968)
• California Products, Inc. v. Puretex Lemon Juice, Inc., 334 S.W.2d 780 (Tex. 1960)
• Canales v. Laughlin, 214 S.W.2d 451 (Tex. 1948)
• Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941)
• Smith v. Baldwin, 611 S.W.2d 611 (Tex. 1980)
• Transportation Ins. Co. v. Maksyn, 580 S.W.2d 334 (Tex. 1979)
• Grasso v. Cannon Ball Motor Freight Lines, 81 S.W.2d 482 (Tex. 1935)
• El Paso County v. City of El Paso, 357 S.W.2d 783 (Tex. Civ. App. - El Paso 1962, no writ)
• City of Tyler v. Smith County, 246 S.W.2d 601 (Tex. 1952)
• Kingsville Independent School Dist. v. Crenshaw, 164 S.W.2d 49 (Tex. Civ. App. - San Antonio 1942, writ ref'd w.o.m.)

Attorney General materials referenced:

• JM-517 (1986); H-360 (1974)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1055
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1989/jm1055.pdf

Original opinion text

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

June 9, 1989

Honorable Mike Driscoll
Harris County Attorney
1001 Preston, Suite 634
Houston, Texas 77002

Opinion No. JM-1055

Re: Liability of a county tax assessor-collector for the loss of public funds (RQ-1608)

Dear Mr. Driscoll:

You ask whether a county tax assessor-collector may be relieved of personal liability for the loss of public funds if the commissioners court determines after an investigation that the funds were lost without negligence. You further ask whether the county tax assessor-collector may be reimbursed for personal funds used to replace lost funds upon such official establishing that the loss is due to a reason other than negligence. We understand you to refer to a shortage of funds already collected by the county tax assessor-collector, rather than to any failure on his part to collect a fee or commission that he is required by law to collect.1

Historically, Texas courts have enforced strictly the obligation of a public officer to account for and pay over to the proper custodian the public money that he receives. See, e.g., Bexar County v. Linden, 220 S.W. 761 (Tex. 1920); Poole v. Burnet County, 76 S.W. 425 (Tex. 1903); Attorney General Opinions JM-517 (1986); H-360 (1974). An official, or his surety, was not relieved of liability, even in an instance in which the money was stolen by robbers through no fault of the official. See Coe v. Foree, 50 S.W. 616 (Tex. Civ. App. 1899, writ ref'd). Section 6.275 of the Tax Code constitutes an exception to this long-held rule.

Section 6.275 of the Tax Code provides:

A county assessor-collector is not personally liable for the loss of public funds in the custody of the assessor-collector or the assessor-collector's office if a district court enters a declaratory judgment that the loss is due to a reason other than the negligence or misconduct of the assessor-collector. (Emphasis added.)

H.B. 95, Acts 1987, 70th Leg., 2d C.S., ch. 37, § 1, at 125 [hereinafter H.B. No. 95]. Section 2 of H.B. No. 95 further provides:

The addition by this Act of Section 6.275, Tax Code, relating to the release of a county assessor-collector from liability for the loss of funds, applies only to a loss of funds occurring on or after the effective date of this Act. Liability for a loss of funds occurring before the effective date is governed by the law in effect at the time of the loss, and the former law is continued in effect for this purpose. (Emphasis added.)

The effective date of section 6.275, Tax Code, was October 20, 1987. You do not indicate in your request for an opinion whether the loss of public funds occurred prior to the effective date of the section. If such were the case, of course, the county tax assessor-collector would not be relieved of personal liability by section 6.275. For purposes of this opinion, we assume that the loss of funds occurred after the effective date of section 6.275, Tax Code, and that section governs.

As originally passed by the House, H.B. No. 95 provided that a determination that the county tax assessor-collector is not personally liable could be made by the commissioners court upon a finding that the loss was due to a reason other than the negligence or misconduct of the assessor-collector. However, the senate amended H.B. No. 95 to provide that such a finding must be made by a district court pursuant to a suit under the Uniform Declaratory Judgment Act, rather than by a commissioners court. As amended by the senate, H.B. No. 95 was approved by the House and then passed by the senate.

You ask whether a suit under the Uniform Declaratory Judgment Act must be filed in district court pursuant to section 6.275 of the Tax Code, even in a situation in which the commissioners court agrees with the county tax assessor-collector that the loss was not due to the county tax assessor-collector's negligence. We conclude that, by the clear terms of the section, such a suit must be filed, regardless of whether the commissioners court agrees that the county tax assessor-collector is not negligent.

You contend that, to construe section 6.275, Tax Code, to require a hearing before a state district judge under the Uniform Declaratory Judgment Act, would serve to circumvent the evident intention of the legislature when it enacted the section. You argue that the purpose of the Uniform Declaratory Judgment Act is remedial and that it is inapplicable in the event that there is no real dispute or controversy at issue. See, e.g., Firemen's Ins. Co. v. Burch, 442 S.W.2d 331 (Tex. 1968); California Products, Inc. v. Puretex Lemon Juice, Inc., 334 S.W.2d 780 (Tex. 1960). You assert that, in an instance in which neither the county tax assessor-collector nor the commissioners court disagrees as to whether the county tax assessor-collector was negligent, there is no dispute in controversy:

If it is uncontroverted that the county tax assessor-collector was not negligent, no purpose is served by seeking a declaratory judgment in district court. An action for declaratory judgment would lie when a real controversy has arisen and an effective and speedy remedy is sought to determine the rights of parties; without a real controversy, review by the district court would serve no purpose. In situations where the commissioners court has determined that the loss was not due to negligence, and is therefore in agreement with the Tax Assessor-Collector, are the parties required to file a suit in the District Court and expend tax dollars to litigate an undisputed matter? Section 6.275 should be given a reasonable construction and not one which would require the performance of a useless act and a waste of taxpayers' money. In the event that the commissioners court determines that the county tax assessor-collector was negligent, the tax assessor-collector may choose to either accept the decision of the commissioners court or bring a declaratory judgment action pursuant to Section 6.275. [Citations omitted.]

We disagree with your assertion for two reasons.

Commissioners courts have no power or duties except those that are clearly set forth and defined by the Texas Constitution and the state statutes. Canales v. Laughlin, 214 S.W.2d 451 (Tex. 1948); Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941). We have found no provision, either in the Texas Constitution or in the statutes, that purports to authorize a commissioners court to decide as a threshold matter whether a loss of public funds in the custody of the county tax assessor-collector is due to the negligence of that official or whether it is due to some other cause.

Section 113.006 of the Local Government Code and its predecessor statutes relieve the county tax assessor-collector and his surety of responsibility for the safekeeping of funds collected from taxes, but only after the funds are deposited as required by law in the county treasury. As we noted earlier, section 154.009 of the Local Government Code empowers a commissioners court to deduct from the salary of a district, county, or precinct officer the amount of a fee or commission that the official was required by law to collect if, after a hearing, the commissioners court finds that such failure was due to neglect. With the exception of section 6.275 of the Tax Code, we have neither found nor have you directed us to any constitutional or statutory provision that sets forth any means whereby a commissioners court may relieve a county tax assessor-collector of his responsibility for the non-negligent loss of public funds in his custody.

Second, we are required to construe statutory provisions in such a way as to give effect to the evident intention of the legislature. Gov't Code § 311.021. Texas courts have held that the deletion of a provision in a pending bill discloses a legislative intent to reject the proposal. Smith v. Baldwin, 611 S.W.2d 611 (Tex. 1980); Transportation Ins. Co. v. Maksyn, 580 S.W.2d 334 (Tex. 1979); Grasso v. Cannon Ball Motor Freight Lines, 81 S.W.2d 482 (Tex. 1935). As introduced in and passed by the House, H.B. No. 95 conferred authority on a commissioners court to find that a county tax assessor-collector's loss of public funds in his custody is not due to his negligence or misconduct, thereby relieving the county tax assessor-collector of personal liability for the loss. The senate removed the language conferring such authority on the commissioners courts and replaced it with language conferring such authority on a district court pursuant to an action for a declaratory judgment. The House subsequently agreed to the senate's amendment. If we were to construe section 6.275 of the Tax Code in the manner that you suggest, we effectively would circumvent the express language of the senate in amending H.B. No. 95 and of the House in agreeing with the senate's amendment. This we cannot do.2

Absent the enactment of section 6.275, Tax Code, an action under the Uniform Declaratory Judgment Act would not lie in an instance in which there was no real dispute of fact between the commissioners court and the county tax assessor-collector. However, the legislature did enact section 6.275, and by the clear terms of its provisions such an action will lie even in an instance in which there is no dispute as to facts.

Therefore, we construe section 6.275 of the Tax Code to require an action under the Uniform Declaratory Judgment Act, even in an instance in which a commissioners court and the county tax assessor-collector agree that the loss of public funds in the custody of the county tax assessor-collector is not through that officer's negligence or misconduct.

Your second question concerns the reimbursement of the assessor-collector upon a determination that such official is not personally liable for the loss of funds in the custody of his office. A review of your brief reflects that this question presupposes the necessity of the assessor-collector repaying the funds (reflected by the shortfall of funds in the office) pending the determination of personal liability.

Our answer to this question is based on an approach you suggest as an alternative in your brief, as follows:

An alternative approach would be to conclude that the enactment of section 6.275 obviates the practice of requiring tax assessor-collectors to make up shortfalls in official accounts with personal funds. This step may be postponed until a determination is made by the commissioners court, and when necessary by the district court, that the tax assessor-collector is liable for the lost funds.

We construe section 6.275 to provide that the filing of a suit to determine whether "the loss is due to a reason other than the negligence or misconduct of the assessor-collector" stays the necessity of the assessor-collector paying the amount of the shortfall from his personal funds pending judgment of the court. As heretofore noted, such suit must be filed in the district court pursuant to section 6.275, rather than left to the determination of the commissioners court. If we construed section 6.275 to require payment of the shortfall prior to the determination of liability by the court, we would defeat the apparent legislative intent to relieve the assessor-collector of the possible heavy burden of prepaying large sums of money pending judgment of the court. Personal liability results absent a finding by the district court that the loss was not occasioned by negligence or misconduct by the assessor-collector. We believe this construction is consistent with the stated purpose of H.B. No. 95, as set forth in the bill analysis, to release the county tax assessor-collector from personal liability upon a determination that the loss is not based on the negligence or misconduct of such official.

1. Section 154.009, Local Government Code, permits a commissioners court, after a hearing, to deduct the amount of a fee or commission from the salary of any district, county, or precinct officer, if the commissioners court finds that that officer failed, through neglect, to collect that fee or commission that the officer is required by law to collect. Because you ask about a situation involving a loss of public funds that have already been collected and were in the custody of the county tax assessor-collector, rather than a situation involving any alleged failure to collect a fee or commission that the county tax assessor-collector is required by law to collect, any reliance upon section 154.009, Local Government Code, is inapposite.

2. You rely on El Paso County v. City of El Paso, 357 S.W.2d 783 (Tex. Civ. App. - El Paso 1962, no writ), City of Tyler v. Smith County, 246 S.W.2d 601 (Tex. 1952), and Kingsville Independent School Dist. v. Crenshaw, 164 S.W.2d 49 (Tex. Civ. App. - San Antonio 1942, writ ref'd w.o.m.) in support of your argument. None of the three cases is apposite. Those cases addressed the inapplicability of statutes governing eminent domain to situations involving, not an attempt by a political subdivision to condemn real property owned by an individual, but rather a dispute between two political subdivisions regarding the disposition of real property owned by one of them. The courts simply declared that the eminent domain statutes, which by their terms involve a dispute between a political subdivision and a private individual, were not applicable in a situation involving the validity of a transfer of real property from one political subdivision to another.

SUMMARY

Section 6.275 of the Tax Code provides the exclusive method for relieving the county tax assessor-collector of personal responsibility for loss of funds in his custody or the custody of his office. The assessor-collector is not required to prepay any shortfall pending the determination of the district court regarding negligence or misconduct of such official.

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

RICK GILPIN
Chairman, Opinion Committee

Prepared by Tom G. Davis
Assistant Attorney General