What did Texas House Bill 1976 propose for county tax collectors accepting checks and handling dishonored payments?

Plain-English summary

House Bill 1976, as reproduced after legislative passage, would let county tax collectors accept checks while treating payment as conditional until the check cleared.

The listed payments included vehicle registration fees, motor vehicle sales taxes, occupation taxes, title-transfer fees, liquor license or permit fees, and property taxes. A collector was permitted, not required, to accept a check and had to record adequate identification for the maker.

If the check failed, the collector and bondsman avoided liability when the identification and reasonable-knowledge conditions were met. The collector could notify the maker, law enforcement, and relevant state agencies; state agencies could assist collection and cancel or revoke conditionally issued documents.

The Comptroller or highway department could prohibit further checks after identification violations or when more than two percent of amounts due were not remitted because of bad checks. A collector who accepted checks after notice became liable for them.

The fiscal note said total public cost could not be determined because the total number of dishonored checks needing collection was unknown. It reported local estimates including about 2,000 annual bad motor-vehicle-tax checks in Bexar County and 159 in Midland County.

What this means for you

This document records proposed and passed legislative mechanics plus a fiscal estimate. Because the reproduced gubernatorial approval line is blank, the document itself should not be used as proof of enactment or current law.

Common questions

Q: Did the bill require collectors to accept checks?
A: No. It said they may accept them.

Q: Did handing over a check complete payment?
A: No. Payment remained conditional until bank honor.

Q: Does this document prove the Governor signed the bill?
A: No. Its approval date is blank.

Citations and references

• Texas House Bill 1976 (1977, as finally passed and sent to the Governor)
• House Rule V, § 28
• Article 6675a-1 et seq., Vernon's Texas Civil Statutes
• Chapter 6, Title 122A, Revised Civil Statutes of Texas
• Article 6687-1, Vernon's Texas Civil Statutes

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/7705L2017D06

Original ruling text

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE
May 17, 1977

Honorable Gibson D. Lewis, Chairman
Committee on Intergovernmental Affairs
House of Representatives
Austin, Texas

In Re: House Bill No. 1976
By Cartwright

Sir:

In response to your request pursuant to House Rule V, Section 28, this
office
finds the fiscal implications of House Bill No. 1976 (relating to the
acceptance
of checks by a tax collector for the payment of certain fees and taxes)
to be
as follows:

This bill would allow a tax collector to accept checks for payment
of motor vehicle registration fees, motor vehicle sales taxes,
occupation taxes, motor vehicle title transfer fees, license or
permit fees, and property taxes. The assessor-collector must
obtain identification of the maker. If he does so and the check
is returned, then the tax assessor-collector is not liable for the
amount. If a fee that should be remitted to the State Comptroller
cannot be collected, then the assessor-collector must notify the
proper department at the Office of the Comptroller. The Comptroller
may establish rules concerning the acceptance of checks by tax
collectors and for the collection of dishonored checks.

County officials from Harris, Jefferson and Dallas counties reported
that their offices do not receive a great number of bad checks. Dealers
who remit the motor vehicle sales tax usually must have a letter of
guarantee from a bank or a cashier's check.

Bexar county officials estimated that their office receives approximately
2,000 bad checks a year for motor vehicle sales tax, while Midland county
officials reported 159 hot checks.

Total fiscal implication or additional cost to the State or units of
local government attributable to the bill, should it be enacted, cannot
be ascertained, because the total number of bad checks that would
require notification and collection is not known.

Thomas M. Keel
Director

TEXAS LEGISLATIVE SERVICE H. B. 1976
As Finally Passed
7-8-9-10-18-24---450 and Sent to the
Governor

1 AN ACT
2 relating to the acceptance of checks by a tax collector for the
3 payment of certain fees and taxes; providing procedures for the
4 collection of dishonored checks received for the payment of
certain
5 fees and taxes.

6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

7 Section 1. In this Act:

8 (1) "Tax collector" means the county tax
assessor-collector.

9 (2) "Check" means an instrument signed by the maker;
10 containing an unconditional promise or order to pay a sum
certain
11 in money and containing no other promise, order, obligation, or
12 power given by the maker; payable on demand; and drawn on a
blank

13 (3) "Maker" means the drawer of a check.

14 Sec. 2 A tax collector may, but is not required to,
accept
15 a check for the payment of motor vehicle registration fees
(Article
16 6675a-1 et seq., Vernon's Texas Civil Statutes); motor vehicle
17 sales taxes imposed by Chapter 6, Title 122A, Taxation -
General,
18 Revised Civil Statutes of Texas, 1925; occupation taxes paid to
the
19 tax collector under Chapter 19, Title 122A, Taxation - General,
20 Revised Civil Statutes of Texas, 1925; motor vehicle title
transfer
21 fees under the Certificate of Title Act (Article 6687-1,
Vernon's
22 Texas Civil Statutes); license or permit fees under the Texas
23 Liquor Control Act (Article 666-1 et seq., Vernon's Texas Penal
24 Auxiliary Laws), and property taxes.

1 Sec. 3. The acceptance of a check for the payment of taxes
2 and fees listed in Section 2 of this Act does not constitute
3 payment of the tax or fee, and the tax or fee is not considered
4 paid until the check is honored by the bank on which the check
is
5 drawn. This section does not prohibit a tax collector from
issuing
6 receipts, license plates, certificates, or other instruments on
the
7 receipt of a check, but the issuance is conditional on the
payment
8 of the check by the drawee bank.

9 Sec. 4. When a tax collector received a check as
conditional
10 payment of a tax or fee listed in Section 2 of this Act, he
shall
11 require adequate identification of the maker and note on the
check
12 or otherwise record the type of identification of the maker and
13 information from the identification to assist in locating the
maker
14 in the event the check is not honored.

15 Sec. 5. Except as provided in Section 8 of this Act, a
tax
16 collector and his bondsman are not liable for the amount of any
17 taxes and fees for which the tax collector has accepted a check
18 that is not honored by the drawee bank if the tax collector
19 complied with the requirements of Section 4 of this Act and if
the
20 tax collector did not know or should not reasonably have known
that
21 the check was not properly drawn or that it would not be
honored.

22 Sec. 6. A tax collector may establish procedures for the
23 collection of dishonored checks. The procedures may include:

24 (1) official notification to the make that the check has
25 not been honored and that the receipt, registration,
certificate,
26 or other instrument issued on the receipt of the check is not
valid
27 until payment of the tax or fee is made;

1 (2) notification of the sheriff or other law enforcement
2 officers that a check has not been honored and that the
receipt,
3 registration, certificate, or other instrument held by the
maker is
4 not valid; and

5 (3) notification to the State Department of Highways and
6 Public Transportation, the State Comptroller of Public
Accounts, or
7 the Department of Public Safety that the receipt, registration,
8 certificate, or instrument held by the maker is not valid.

9 Sec. 7. If taxes and fees listed in Section 2 of this Act
10 are required to be remitted to the State Comptroller of Public
11 Accounts or the State Department of Highways and Public
12 Transportation and if payment was made to the tax collector by
a
13 check that was not honored by the drawee bank, the amount of
the
14 tax or fee is not required to be remitted, but the tax
collector
15 shall notify the appropriate department of the amount of the
fee or
16 tax, the type of fee or tax involved, and the name and address
of
17 the maker. The State Department of Highways and Public
18 Transportation and the State Comptroller of Public Accounts
shall
19 assist the tax collector in collecting the fee or tax and may
20 cancel or revoke any receipt, registration, certificate, or
21 instrument issued in the name of the state conditioned on the
22 payment of the fee or tax.

23 Sec. 8. If the State Comptroller of Public Accounts or
the
24 State Department of Highways and Public Transportation
determines
25 that the tax collector of a county has accepted payment for
fees
26 and taxes to be remitted to that department in violation of
Section
27 4 of this Act or that more than two percent of the fees and
taxes
1 to be received from the tax collector are not remitted because
of
2 the acceptance of checks that are not honored by the drawee
bank,
3 the department may notify the tax collector that he may not
accept
4 a check for payment of any fee or tax to be remitted to that
5 department. A tax collector who, after notice that he may not
6 receive a check for the payment of fees or taxes to be remitted
to
7 a department, accepts a check for the payment of a fee or tax,
is
8 liable to the state for the amount of the check accepted.

9 Sec. 9. The State Comptroller of Public Accounts and the
10 State Department of Highways and Public Transportation may make
11 rules concerning the acceptance of checks by tax collectors and
for
12 the collection of dishonored checks.

13 Sec. 10. The importance of this legislation and the
crowded
14 condition of the calendars in both houses create an emergency
and
15 an imperative public necessity that the constitutional rule
16 requiring bills to be read on three several days in each house
be
17 suspended, and this rule is hereby suspended, and that this Act
18 take effect and be in force from and after its passage, and it
is
19 so enacted.

-END-

H. B. No. 1976

President of the Senate Speaker of the House

I certify that H. B. No. 1976 was passed by the House on May
23, 1977, by a non-record vote.

Chief Clerk of the House

I certify that H. B. No. 1976 was passed by the Senate on May
28, 1977, by a viva-voce vote.

Secretary of the Senate

APPROVED: Date

Governor