Opinion No. ( 1988 )

Mr. Charles L. Robinson, CPA Legislative Auditor State Capitol — Room 172 Little Rock, AR 72201

Dear Mr. Robinson:

This is in response to your request for an opinion on the following question:

Can depositories for state agency cash funds or depositories for cash funds of other political subdivisions in the state assess service charges for handling such funds?

Arkansas Code of 1987 Annotated 19-3-216 states as follows:

No depository of State Treasury funds shall make any charge for the handling of funds, and any claim based upon any such charge or purported charge.

Although the phrase "State Treasury funds" is not specifically defined, it may be concluded that this refers to monies that are deposited in bank depositories to the credit of the State Treasurer's account. See A.C.A. 19-3-205. It may therefore be successfully contended that 19-3-216 will not apply to preclude charges for handling state agency cash funds, to the extent that these funds constitute income or expenditures "which are handled, deposited, or expended in any manner other than through the State Treasury of the State of Arkansas." A.C.A. 19-4-807(a)(2).

A.C.A. 19-3-217 should, however, be noted with respect to certain service charges. Subsection (a) of 19-3-217 states in pertinent part as follows:

Any bank depository which shall make any charge for cashing or which shall refuse to cash upon presentation, . . . any bank check of five hundred dollars ($500) or less which has been issued by a state agency when the check . . . has been represented for payment within thirty (30) days of the date of issuance by the payee named therein, shall immediately be discontinued as a depository of six (6) months thereafter, shall be ineligible for reinstatement as such a depository.

Our review discloses no provision similar to 19-3-216 that would apply to funds of a political subdivision of the state. It seems clear that depositories can assess service charges for handling such funds.

The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elisabeth A. Walker.

Sincerely, STEVE CLARK Attorney General

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