Honorable Terry M. Wilson, Chair, House Committee on Higher Education
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4279 by Davis, Yvonne (relating to the delivery of unclaimed property to certain urban scholarship funds; authorizing administrative penalties.), Committee Report 1st House, Substituted
Passage of the bill would require local exchange companies to deliver reported unclaimed money to an urban scholarship fund. As a result, there would be an indeterminate reduction in transfers to the state.
The bill would require local exchange companies to deliver reported unclaimed money to an urban scholarship fund established by one or more local exchange companies. A local exchange company is a telecommunications utility certificated to provide local exchange telephone service within the state; has 50,000 or more access lines in service in this state; and is not a telephone cooperative.
Under current law, local exchange companies may deliver reported unclaimed money either to the Comptroller or to an urban scholarship fund, subject to certain limits.
The bill would impose a penalty, equal to ten percent of the property due per day, on a local exchange company holder who fails to pay or deliver the money to the urban scholarship fund within a prescribed period.
According to the Comptroller's office, the provisions of the bill requiring a local exchange company to deliver all reported money to an urban scholarship fund are in conflict with Section 74.3012(g) of the Property Code, which states that money transferred to urban scholarship funds may not exceed the total amount transferred to rural scholarship funds during the previous state fiscal year, which is $800,000.
The Comptroller's Unclaimed Property Division reports that in recent years, amounts diverted to urban scholarship funds have been less than amounts diverted to rural scholarship funds.
Assuming that, under the bill, amounts transferred to urban scholarship funds would be $800,000 per year, there would be an indeterminate reduction in transfers to the Comptroller and, therefore, to state revenue.
The amounts and timing of any penalty revenue are unknown.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.