LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 5, 2001
TO: Honorable David Sibley, Chair, Senate Committee on
Business & Commerce
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1355 by Armbrister (Relating to certain personal
property that is presumed abandoned.), Committee Report
1st House, Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1355, Committee Report 1st House, Substituted: negative impact *
* of $(130,000) through the biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 (130,000) *
* 2004 (130,000) *
* 2005 (5,461,000) *
* 2006 (5,461,000) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Revenue Gain/(Loss) from *
* General Revenue Fund *
* 0001 *
* 2002 $0 *
* 2003 (130,000) *
* 2004 (130,000) *
* 2005 (5,461,000) *
* 2006 (5,461,000) *
*****************************************************
Fiscal Analysis
Committee Substitute for Senate Bill 1355 would amend Chapter 72 of the
Property Code, relating to certain personal property that is presumed
abandoned. Under provisions of the bill, money orders would be presumed
abandoned if unclaimed seven years after the issuance date.
For purposes of determining the value of an abandoned money order that
must be remitted the Comptroller's Office, the bill would allow the
holder to deduct service, maintenance, or other charges from the money
order's original value. Such charges could not to exceed $0.50 per month
for each month the money order remained uncashed before the month in
which the money order was presumed abandoned.
The section of the bill concerning presumption of abandonment if
unclaimed seven years after the issue date would take effect on June 1,
2004; it would apply to money orders presumed abandoned on or after the
effective date of the section.
The section of the bill concerning the deduction of service charges would
take effect June 1, 2002.
Methodology
According to the Comptroller's office, under current law, money orders
are presumed abandoned after five years and service charges and other
charges may not be deducted from the original value of a money order for
purposes of determining the value that must be remitted the Comptroller's
Office. Money orders that are presumed abandoned on June 30 must be
remitted to the Comptroller's Office no later than the following November
1.
According to the Comptroller's office, the bill would reduce the
remittance of unclaimed property from holders of abandoned money orders
for fiscal 2005 and 2006. The loss would occur from money orders that
would have been reported as abandoned and remitted to the Comptroller in
fiscal 2005 and 2006. Under this bill, the money orders would not be
considered abandoned for an additional two years. According to the
Comptroller's office, the estimated loss was determined by analyzing
historical data on abandoned money orders reported and remitted to the
state during the last three fiscal years. This amount was adjusted for
estimated valid claims to be paid on abandoned money orders to be
reported and delivered.
According to the Comptroller's office, the bill would create additional
losses in fiscal 2003 and beyond by allowing service charges and other
charges to be deducted from the original value of money orders. The
Comptroller's office determined the estimated loss by multiplying the
average annual number of abandoned money orders reported and remitted to
the state during the last three fiscal years by an estimated service fee
of $30.00 ($0.50 per month for five years) for fiscal 2003 and 2004. The
loss for fiscal 2005 and beyond was computed using an estimated service
fee of $42.00 ($0.50 per month for seven years). This amount was
adjusted for estimated valid claims to be paid on abandoned money orders
to be reported and delivered. The actual loss from service charges and
other charges could vary and would depend on the total charges assessed
by the holders.
Note: According to the Comptroller's office, the section of the bill
concerning deductions for service fees on abandoned money orders does
not specifically indicate that the new law only would pertain to service
fees on money orders presumed abandoned on or after the effective date
of the section (June 1, 2002). The Comptroller's estimate assumes that
no deduction for service fees relating to money orders presumed
abandoned prior to the effective date of June 1, 2002 would be allowed.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts
LBB Staff: JK, JO, JC