Request By:
Mr. William T. Royalty
Superintendent
Burgin Independent Schools
P.O. Box B
Burgin, Kentucky 40310
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Robert L. Chenoweth, Assistant Deputy Attorney General and Chief Counsel
You have asked the Office of the Attorney General to consider several questions regarding the collection of school taxes by the sheriff as the tax collector. You noted as brief background to your questions that the Mercer County Sheriff is currently collecting tax monies for the school system. You further noted that each month the sheriff has been deducting his four percent (4%) fee before mailing the collected tax monies to the school depository. In a draft copy of the your school district's 1982 audit, the auditor has referred to KRS 160.510 and an opinion from this office, OAG 76-627, indicating such practice by a sheriff as tax collector is incorrect. The specific questions you have presented are as follows:
1. May the collection agent deduct the collection fee before tax funds are mailed to the depository?
2. May the school system write a monthly check for the collection fee, providing the sheriff delivers a proper bill?
3. Must the school system delay payment of the collection fee until all taxes are collected?
There are actually two school law provisions to be considered in responding to your questions, KRS 160.500 and KRS 160.510. The first mentioned provision was amended in 1982, but those amendments will not become effective until January 1, 1984. KRS 160.500, with the not yet effective amended language underscored, reads as follows:
"(1) School taxes shall be collected by the sheriff for county school districts and by the regular tax collector of the city or special tax collector for the independent school districts at the same time and in the same manner as other local taxes are collected, except as provided in this section and in KRS 160.510. The bond of the regular or special tax collector shall be made to cover his duties as the tax collector of the school district or districts for which he collects taxes. The tax collector shall be entitled to a fee equal to his expense but not less than one and one-half percent (1 1/2%) and not to exceed the rate of four percent (4%) for the collection of school taxes, which fee may be charged only for collecting or receiving school taxes or school funds received from the local school levy. No allowance shall be made for the collection of school taxes to any collecting officer who continues to collect taxes after his term that would not be allowed him had he collected the taxes during his term.
"(2) An independent school district may select a special tax collector to collect its school taxes and in the event such independent school district does so select a special tax collector, a majority of the members of the independent school district board of education shall fix a fee for such special tax collector at a rate of not less than one and one-half percent (1 1/2%) and not more than four percent (4%) of the school taxes or school funds collected by such special tax collector from the local school levy in such independent school district. The special tax collector shall be required to execute bond in the same manner as provided in KRS 160.560 for the execution of a treasurer's bond, and the penal sum of the bond shall not be less than the aggregate of the tax bills that come into the hands of the special tax collector.
"(3) The clerk shall include all school taxes on the regular tax bills furnished the tax collector except in case an independent district has selected a special tax collector, in which case the school taxes shall be listed by the clerk on a separate bill. The clerk shall be allowed a fee not to exceed three cents (3 ) for each separate school tax bill, to be paid by the independent district board of education.
"(4) The County clerk shall be the ad valorem tax collector for motor vehicle taxes for county and independent school districts, and shall be allowed a commission of two percent (2%) of all such moneys collected for any school district.
" (5) For collections related to January 1, 1984 assessments other than motor vehicles, no county or independent school district shall fix a fee for the sheriff or special tax collector at a lesser percentage rate than was fixed in the prior year."
The other pertinent statutory provision as indicated above is KRS 160.510 and this section provides:
"The tax collector shall, on or before the tenth day of each month, pay to the depository of the district board of education the amount of school tax collected up to and including the last day of the preceding month. The amount so paid together with the classes of property from which it was received shall be reported in writing to the treasurer of the board. The report shall be accompanied by a duplicate of the receipt for the money given to the tax collector by the depository. The tax collector shall make final settlement with the district board of education at the same time he makes final settlement with the local taxing authority to which he is responsible. Blanks for such purposes shall be furnished by the state board for elementary and secondary education."
Your first question is the easiest of the questions to answer as we have responded to such a question before. See OAG 75-131, OAG 76-54, OAG 76-251 and OAG 76-627. It is our settled opinion, based upon statutory history and case law, that a sheriff, or other tax collection agent if retained by an independent school district, may not deduct the collection fee before school tax funds are presented to the depository for the school district. As we concluded in OAG 76-54, copy attached, "Pursuant to KRS 160.510, the sheriff, and special tax collector also, is obligated to make monthly statements of the amount of school taxes collected. This means all tax amounts collected must be turned over to the depository of the district board of education." (Emphasis in the original).
Your other two questions can actually be considered together and we acknowledge they are not answered by our preceding discussion of the law in this area. It is our belief the answer to your second question is in the affirmative and therefore that a school system may monthly, or perhaps bimonthly, agree to pay the sheriff his fee, up to four percent (4%), covering the school taxes collected for the particular reporting period, based upon a showing by the sheriff of the reasonable costs incurred in collecting the school taxes. KRS 160.510 requires the sheriff to make monthly deposits of all school taxes collected as well as monthly written responses concerning the school taxes collected. We find nothing in the law that would mandate that the sheriff must wait until final settlement time in order to be paid his school tax collection fee up to four percent (4%). As a practical matter, it is recognized and has been observed in the cases, e.g.,
Davie v. Board of Education of Hickman City Schools, Ky., 249 S.W.2d 954 (1952), that the services of the sheriff's office are continuous as concerns school tax collection. Therefore, we believe predetermined times, be it monthly or otherwise, for payment by the school district to the sheriff of his fee for school tax collection, if based upon a reasonable approximation of the cost of collection, is legally permissible.
We trust the above will be of assistance to you concerning the matters raised in your questions. If we may be of further assistance, please contact us.