Oregon Advisory Opinions August 12, 1977: OAG 77-98 (August 12, 1977)
Collection: Oregon Attorney General Opinions
Docket: OAG 77-98
Date: Aug. 12, 1977
Advisory Opinion Text
OAG 77-98.
These questions arise in connection with O&C funds(fn1) received by counties, and concern the nature of those funds and the authority and manner of their use by counties.
O&C funds are income of the county to be used as other county funds.
"On and after March 1, 1938, all moneys deposited in the Treasury of the United States in the special fund designated the 'Oregon and California land-grant fund' shall be distributed annually as follows:
43 USCA 1181(f)."(a) Fifty per centum to the counties in which the lands revested under the Act of June 9, 1916 (39 Stat. 218), are situated, to be payable on or after June 30, 1938, and each year thereafter to each of said counties in the proportion that the total assessed value of the Oregon and California grant lands in each of said counties for the year 1915 bears to the total assessed value of all of said lands in the State of Oregon for said year, such moneys to be used as other county funds . . ." (Emphasis supplied)
Unlike other forestry receipts, the money comes directly to the counties and is a budget resource. The funds are subject to the Local Budget Law and were discussed in 28 Op Atty Gen 287, 288 (1958) as follows:
"The use of Oregon and California land-grant funds under the Act of July 13, 1926 (44 Stat. 915) was considered in Opinions to the Attorney General in 1928-1930, p. 26, in which it was ruled that moneys other than those required by the federal Act to be used for specific purposes, could be apportioned and used by the county for purposes for which the county was authorized by state law to levy taxes. See, State ex rel . Van Winkle v. Siegmund , 125 Or. 197."
Under ORS 294.361, the funds become a part of the estimate of probable receipts and balances at the end of the fiscal year, this estimate serving as the basis for determining the estimated tax levy for the ensuing fiscal year. ORS 294.351. A county may use funds for county purposes only. The county cannot make a "gift" of public funds. In Conlin v. Board of Supervisors , 33 P 753, 99 Cal Rpt 17 (1893) the court said:
"The legislature has no more right to direct a municipality to give away the public money in its treasury than had the municipality."
We believe the principle behind this statement is equally true for Oregon governmental units. The key issue is the use of county funds for county purposes. In 34 Op Atty Gen 1005 (1970) this office held that Jackson County had properly granted money to the City of Ashland for park purposes. The opinion noted that providing parks is a function or activity of both the county and city and the park would serve both entities. Education, fire, police, elections, planning and any number of other activities could be functions of a county government and of another governmental body jointly or simultaneously.
Therefore, the rule is: if a county purpose or benefit can be found for making a grant of county money to a municipality, whether of O&C funds or taxes, it would be an allowable expenditure. It is unlikely, however, that a grant by a county to another unit of government for its general use would fall within that rule, since such general
use would ordinarily include purposes which are not county purposes.
The second question arises out of instructions by the county commissioners to the assessor in an O&C county, requiring the assessor to directly offset school levies by a specified amount from a fund of O&C moneys without going through the budgeting process. Such a procedure results in improper use of the fund.
O&C funds are a budget resource and must go through the budgeting process. In that process the county may either increase the amount of money it contributes to the county school fund under ORS 328.005, or make a grant to the school districts. But it cannot hold the funds and then direct the assessor to offset school levies by the amount in the fund. This would violate the Local Budget Law, set forth in ORS chapter 294 and requiring uniformity of fiscal operations in the various counties throughout the state.
Further, the county assessor does not have authority to handle offsets not specified by law. ORS 311.105(1) (b), a 1969 amendment, was enacted specifically to forestall such fiscal deviations. ORS 311.105(1) (b) states:
"From the amounts listed in paragraph (a) of this subsection there shall be deducted the amount, if any, of each offset of taxes against each district's levy required by law to be made by the assessor."
The state has limited the authority of the assessor to make offsets from the county levy and that limitation cannot be circumvented by local county action.
An examination of statutes providing for county school funds and their disposition, ORS 328.005 to 328.035, also indicates a contrary scheme. ORS 328.005 provides for creation of a county school fund by the county and requires a minimum amount be placed in that fund from taxes or other sources. ORS 328.015 sets forth the method of apportionment and payment to the district by the executive officers of the county administrative office. The apportionments are to be paid to the district. Nowhere in the statutes is the assessor instructed to use the county school fund or any part thereof as an offset against the levy.
We have concluded under our answer to the first question that a county may only make a grant of county money to another governmental unit for a county purpose. We also conclude that a properly budgeted grant to school districts located in the county serves a county purpose since education of the young is a legitimate county concern. However, would the same conclusion be reached if one of the school districts is a joint district? The answer must be no. A look at school district maps makes it obvious that school administrative boundaries have little relationship to county boundaries. District and county functions are separate and distinct even if they overlap in part. A grant from a county to school districts where there is a joint district would have the effect of giving county money to benefit
citizens of the adjoining county. Such a result would not be in accord with the "county purpose" restriction on use of county funds.
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