BILL ANALYSIS

 

 

Senate Research Center	S.B. 658
	By: Perry
	Jurisprudence
	3/20/2023
	As Filed

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

Currently, attorneys who handle money for their clients must participate in the Interest on Lawyers' Trust Accounts (IOLTA) Program, by depositing these funds into an IOLTA bank account. IOLTA accounts insure that attorneys do not co-mingle client funds and that client funds can be adequately managed.

 

In rare cases, an IOLTA account can become abandoned if an attorney cannot locate a client. In these situations, attorneys turn over abandoned IOLTA accounts to the Comptroller of Public Accounts of the State of Texas's (comptroller's) office as unclaimed property.

 

The proposed legislation allows unclaimed IOLTA funds to be transferred from the comptroller to the Supreme Court of Texas's judicial fund to help support basic civil legal services.

 

As proposed, S.B. 658 amends current law relating to the disposition of money from certain attorney accounts delivered to the comptroller as unclaimed property.

 

RULEMAKING AUTHORITY

 

Rulemaking authority is expressly granted to the Comptroller of Public Accounts of the State of Texas in SECTION 1 (Section 74.604, Property Code) of this bill.

 

Rulemaking authority is expressly granted to the Supreme Court of Texas in SECTION 1 (Section 74.604, Property Code) of this bill.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Subchapter G, Chapter 74, Property Code, by adding Section 74.604, as follows:

 

Sec. 74.604. DISPOSITION OF MONEY DELIVERED TO COMPTROLLER FROM CERTAIN ATTORNEY ACCOUNTS.� (a) Provides that this section applies to money delivered to the Comptroller of Public Accounts of the State of Texas (comptroller) under Section 74.301 (Delivery of Property to Comptroller) as:

 

(1) unclaimed or unidentified funds in a client trust account established by an attorney or law firm; or

 

(2) money in an abandoned IOLTA account established by an attorney or law firm to comply with the Supreme Court of Texas (supreme court) rules governing the Texas Access to Justice Program.

 

(b) Requires the comptroller, notwithstanding any other provision of Chapter 74 (Report, Delivery, and Claims Process) or other law, to deposit money to which this section applies to the credit of the judicial fund. Authorizes money deposited to the credit of the judicial fund, except as otherwise provided by this section, to be appropriated only to the supreme court for programs approved by the supreme court that provide basic civil legal services.

 

(c) Requires the supreme court, if the comptroller pays a claim to a person establishing ownership of any money that was deposited to the credit of the judicial fund under Subsection (b), to reimburse the comptroller out of the judicial fund for the amount of the claim. Authorizes the supreme court to use money deposited under Subsection (b) to pay the claim.

 

(d) Authorizes the comptroller and the supreme court to adopt rules necessary to implement this section.

 

(e) Defines "IOLTA."

 

SECTION 2. (a) Provides that Section 74.604, Property Code, as added by this Act, applies to money described by Section 74.604(a)(1) or (2), Property Code, as added by this Act, that was delivered to the comptroller under Section 74.301, Property Code, on, before, or after the effective date of this Act.

 

(b) Requires the comptroller, as soon as possible after the effective date of this Act, to identify money described by Subsection (a) of this section that was delivered to the comptroller before the effective date of this Act and deposit that money to the credit of the judicial fund in accordance with Section 74.604(b), Property Code, as added by this Act. Requires the comptroller to subtract from the amount the comptroller deposits to the judicial fund under this subsection any amounts that the comptroller has previously paid on claims to persons who established ownership of part of that money.

 

SECTION 3. Effective date: September 1, 2023.