LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 29, 1997
TO: Honorable Kim Brimer, Chair IN RE: House Bill No. 2986, Committee Report 1st House, Substituted
Committee on Business & Industry By: Smith
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB2986 ( Relating
to the transfer of certain unclaimed property to the municipal
treasurer; providing penalties.) this office has detemined the
following:
Biennial Net Impact to General Revenue Funds by HB2986-Committee Report 1st House, Substituted
Implementing the provisions of the bill would result in a net
negative impact of $(1,120,000) to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
Current law requires all unclaimed property to be reported and
remitted to the Comptroller of Public Accounts and deposited
into the General Revenue Fund. This bill would reduce the amount
of unclaimed property remitted to the state by excluding municipalities
and counties from filing reports and remitting unclaimed property
to the state.
The bill would also require the State Comptroller
to waive any interest, attorney s fees, and penalties owed by
a municipality or county under existing law for failure to remit
unclaimed property to the state in a timely manner.
The
bill would require each municipal or county treasurer to establish
and maintain an unclaimed money fund. Valid claims would be
paid from the fund. At the end of each fiscal year, remaining
balances would be transferred to the general fund of the municipality
or county. The local government would be responsible for publishing
notices in for unclaimed property exceeding a value of $50 in
the county of the owner s last known address.
The bill would
apply only to unclaimed property held by a municipality or county
on or after June 30, 1998.
Methodolgy
Estimated losses are based on historical data on abandoned property
reports filed with the state, as reported by the Comptroller s
office. In computing the estimated net loss to the state, adjustments
were made to account for the ensuing reduction in valid claims
paid by the state.
It is not assumed that revenue losses
would occur until fiscal year 1999, since the bill would apply
to property held by a municipality or county on or after June
30, 1998.
The following estimates do not include losses
from waiving interest, attorney s fees, and penalties resulting
from existing unclaimed property law violations.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Revenue Probable Revenue
Gain/(Loss) from Gain/(Loss) to
General Revenue Municipalities
Fund and Counties
0001 LCL-COUNTY
1998 $0 $0
1998 (1,120,000) 1,120,000
2000 (1,130,000) 1,130,000
2001 (1,140,000) 1,140,000
2002 (1,140,000) 1,140,000
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $0
1999 (1,120,000)
2000 (1,130,000)
2001 (1,140,000)
2002 (1,140,000)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
Municipalities and counties could incur costs associated with
administration and publishing requirements, as provided by the
bill. However, it is expected that most local governments will
recover such expenses, since such entities would be allowed
to retain remaining balances in the unclaimed money fund and
charge handling and publication fees to those claiming property.
Source: Agencies:
304 Comptroller of Public Accounts
City of Houston
City of Lubbock
LBB Staff: JK ,TH ,TL