Enrolled Bill Summary

            Senate Bill 1601 amends provisions of the Civil Practice and Remedies Code relating to unclaimed class action settlement or judgment funds. The bill requires a court, before approving an order for settlement or judgment, to direct all defendants to report the total amount of all funds paid to the class members. After receiving the report, the court is authorized to amend the settlement or judgment to direct each defendant to pay the sum of any unpaid funds to the clerk of the court. The bill requires the clerk to pay the unclaimed funds to the clerk of the supreme court for deposit into a trust fund established and administered by the supreme court. The bill authorizes the supreme court to distribute the funds to programs that provide civil legal services to the indigent.

            Reason Given for Veto: "When a class action is settled or the defendant loses at trial, the defendant deposits the amount of the settlement or judgment into a trust fund. Individual plaintiffs may then apply to receive money from the fund. Usually, a large sum of money is left over which is not needed to settle the claim of any plaintiff. Because the money belongs to the defendant, it reverts back to the defendant when an agreed amount of time has passed.

                "Senate Bill No. 1601 would require that all the money in the fund that is not paid to any plaintiff would be transferred to the Supreme Court to pay for indigent civil representation. However, any funds not needed to settle the claim of a plaintiff are still the property of the defendant. No one, including the state, has the right to take this property.

                "Senate Bill No. 1601 is an unconstitutional taking of property without compensation.