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OFFICIAL OPINION 2010-1
To: Lieutenant Governor March 9, 2010
Re: 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 ).
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 uinidentifiable local sales tax proceeds should be retained
by the State or distributed to local goveniments for which the taxes were authorized and collected.
When collecting and disbursing sales taxes centrally for state and local goveniments,[1] the Department of Revenue
sometimes has insufficient information from retuns, even after follow-up inquiries, to attribute the proceeds to
particular localjurisdictions.[2] 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.[3] However, O.C.G.A. § 48-8-67 from its beginning has contained a sunset
clause, O.C.G.A. § 48-8-67(h).[4] Commencing April 12, 2005,[5] the sunset clause read as follows: The authority
of the commissioner to make distributions pursuant to this Code section shall cease on December31, 2007, unless
such authority is extended by a subsequent general Act of the General Assembly. A subsequent act, effective May 5,
20o9, replaced 2007 with 2011.[6] The extending act made no other change in the sunset clause orin 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, 11(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. [71 On administrative
instructions from the Department of Revenue and local goveniments, OTFS disburses identified local sales tax
proceeds to the jurisdictions of their collection, either by crediting accounts in the local goveniment 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. [8]
The disbursements to local goveniments 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
inapplicablebyadministrators. 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.[9] 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.[Io] It creates the
following general procedure unchanged since original enactment:](ViewImageLocal?handle=hein.sag/sagga0008&div=1&collection=&method=preview&ext=.png&size=3)