LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 78TH LEGISLATURE 2nd CALLED SESSION - 2003
 
July 29, 2003

TO:
Honorable David Swinford, Chair, House Committee on Government Reform
 
FROM:
John Keel, Director, Legislative Budget Board
 
IN RE:
HB7 by Swinford (Relating to the abandonment of proceeds distributable on reorganization of an insurance company.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB7, As Introduced: a positive impact of $6,500,000 through the biennium ending August 31, 2005.

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 Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2004 $3,250,000
2005 $3,250,000
2006 ($1,625,000)
2007 ($1,625,000)
2008 $0




Fiscal Year Probable Revenue Gain/(Loss) from
GENERAL REVENUE FUND
1
2004 $3,250,000
2005 $3,250,000
2006 ($1,625,000)
2007 ($1,625,000)
2008 $0

Fiscal Analysis

This bill states that property distributable in the course of a demutualization, rehabilitation, or related reorganization of an insurance company would be presumed abandoned on the first anniversary of the date the property becomes distributable if, on that date, (1) the last known address of the owner was known to be incorrect or the correspondence with the owner was returned by the post office, and (2) the owner had not communicated with the holder of the property.

Methodology

The state receives revenue from its role as custodian of unclaimed property.  The change in dates that property is considered abandoned would result in an acceleration of revenue collected from abandoned property as a result of an insurance company demutualization.  The annual estimated general revenue gain is $3,250,000 for fiscal years 2004 and 2005.  Annual estimated revenue losses for fiscal years 2006 and 2007 are estimated to be $1,625,000.  However, future demutualizations are expected to partially offset these amounts.


Local Government Impact

No fiscal implication to units of local government is anticipated.


Source Agencies:
LBB Staff:
JK, SD, WP, DLBe