Hot check and asset forfeiture funds

2008
An updated list of approved expenditures for these office monies

As the research attorney here at TDCAA, I get a lot of questions from prosecutors; they run the gamut from whether the punishment range for aggravated sexual assault of a child can be enhanced if the defendant has a prior family violence assault, to who is responsible for getting cows off a county road. But one question that I get repeatedly is whether an office can use asset forfeiture funds or hot check funds to purchase all manner of objects ranging from office supplies to a new car for an investigator.

We thought it was a good time to give a little refresher to everyone on the use of those funds. The following is a brief overview, which was originally written by Markus Kypreos, TDCAA’s previous research attorney, for the July-August 2005 issue of this journal, of the common problems offices run into when spending their hot check and asset forfeiture proceeds; it’s been updated to cover changes from the last legislative session and new Attorney General opinions.

Hot check fund

The legislature did not make any big changes to CCP art. 102.007 during the last session. The fee schedule for prosecutors collecting on hot checks is still the same:
• $10 if the face amount of the check or sight order does not exceed $10;
• $15 if the face amount of the check or sight order is greater than $10 but does not exceed $100;
• $30 if the face amount of the check or sight order is greater than $100 but does not exceed $300;
• $50 if the face amount of the check or sight order is greater than $300 but does not exceed $500; and
• $75 if the face amount of the check or sight order is greater than $500.1

The holder of a dishonored check may also charge the drawer or endorser a reasonable processing fee of not more than $30.2 In addition, the defendant is also liable for the costs of delivering notification by registered or certified mail; this new fee must be collected anytime a defendant is prosecuted for theft, theft of service, or issuance of bad check.3 Note that if a defendant has written several hot checks, there is nothing to prohibit you from collecting a fee on each check.

The statute gives the elected prosecutor sole discretion over expenditures from the hot check fund; the elected is not required to get approval from the commissioners court to use the funds. However, the expenditure of funds is still subject to audit by the county auditor.4 Also, there is no requirement that a prosecutor spend the entire fund each year. However, any positive balance carried forward remains subject to the “official business” restrictions of art. 102.007 and any interest that accrues must be severed from the principal and given to the county.5

The statute provides that the fund can be used to defray the salaries and expenses of the office but not to supplement the elected prosecutor’s own salary.6 Originally, the legislature envisioned the money would be used to defray the costs directly attributable to the prosecution of hot check writers, but the spending guidelines have expanded over the years.

Asset forfeiture fund

For simplicity’s sake, this article focuses on just the use of asset forfeiture funds. If you would like more information on the procedure used to forfeit contraband, Guide to Asset Seizure & Forfeiture is available from TDCAA.

Generally, CCP art. 59.06 allows a district attorney to use forfeited property “for the official purposes of his office.” The proceeds from the sale of forfeited property go into the state’s general revenue fund unless there is a local agreement between the attorney for the state and law enforcement agencies, so be sure to make a written agreement with your local enforcement agencies so your office can get those proceeds.7

If there is a local agreement, there are three ways forfeited property may be distributed. First, the attorney for the state may convey property to a law enforcement agency, which may “maintain, repair, use and operate the property for official purposes.”8 Statutory bidding requirements do not apply to the prosecutor’s authority to administer forfeited property.9

A new way to distribute property, created during the last legislative session, is for law enforcement agencies to loan or transfer forfeited property to another municipal or county agency or to a school district for that agency or district’s use.10 There are no restrictions on the use of the loaned property, so presumably, it could be put to use for anything. However, the commissioners court or the governing body of the municipality may revoke the loan of a vehicle at any time with proper notice to the receiving agency or district.11

Third, after deducting certain costs to which the district clerk is entitled under CCP art. 59.05(f), the attorney for the state must deposit “all money, securities, negotiable instruments, stocks or bonds, or things of value, or proceeds from the sale of those items” into special funds solely for the official purposes of the office or law enforcement purposes, respectively.12 Before money from the asset forfeiture fund may be used, a detailed budget for the expenditure must be submitted to the commissioners court or governing body of the municipality. The budget is not required to list details that would endanger the security of an investigation or prosecution. And unlike hot check funds, the attorney for the state may not use the existence of an award to increase a salary, expense, or allowance for an employee who is budgeted for by the commissioners court without the court’s approval. But the commissioners court cannot offset or decrease salaries, expenses, or allowances, either.13

Conclusion

If you can’t decide whether the use of hot check funds or asset forfeiture funds is appropriate, use the lists (attached to this page as PDF documents) as a guide and ask yourself the following questions:

For hot check expenditures:
• Is the expenditure related to the official business of the office?
• Are there any other constitutional or statutory provisions prohibiting the expenditure?
For asset forfeiture expenditures:
• Is the expenditure for an official purpose of the office?
• If the forfeited property is real or personal property, will the law enforcement agency maintain, repair, use, and operate the property for official purposes?

Prosecutors are always going to have questions about expenditures. If these charts don’t answer your questions, call the association at 512/474-2436, and we’ll be happy to track down an answer. ✤

Endnotes

1 Tex. Code of Crim. Proc. Art. 102.007(c).
2 Tex. Bus. and Com. Code §3.506.
3 Tex. Code of Crim. Proc. Art. 102.007(e).
4 Op. Tex. Att’y Gen. GA-0053 (2003).
5 Tex. Loc. Gov’t Code §114.002.
6 Op. Tex. Att’y Gen. JM-313 (1985).
7 Tex. Code of Crim. Proc. Art. 59.06(a).
8 Tex. Code of Crim. Proc. Art. 59.06(b).
9 Op. Tex. Att’y Gen. GA-122 (2004).
10 Tex. Code of Crim. Proc. Art. 59.06(b).
11 Tex. Code of Crim. Proc. Art. 59.06(b-1).
12 Tex. Code of Crim. Proc. Art. 59.06(c).
13 Tex. Code of Crim. Proc. Art. 59.06(d).
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