S.B. No. 700

UNCLAIMED PROPERTY

Effective Date: September 1, 1997

AN ACT

relating to unclaimed property; providing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Sections 4 through 12 and 14 through 16, Article 4.08, Insurance Code, are amended to read as follows:

Sec. 4.  REPORTS. Every such life insurance company shall on or before the first day of November of each year make a report in writing to the comptroller [State Treasurer of Texas] of all unclaimed funds, as hereinbefore defined, held and owing by it on the 30th day of June next preceding, provided, however, such report shall not be required to include amounts which have been paid to another state or jurisdiction under any escheat or unclaimed funds law thereof. Such report shall be signed and sworn to by an officer of such company and shall set forth: (1) in alphabetical order the full name of the insured or annuitant, the last known address according to the company's records, and the policy or contract number; (2) the amount appearing from the company's records to be due on such policy or contract; (3) the date such unclaimed funds became payable; (4) the name and last known address of each beneficiary or other person who, according to the company's records, may have an interest in such unclaimed funds; and (5) such other identifying information as the comptroller [State Treasurer] may require; provided, however, that individual amounts of less than $50 may be reported in the aggregate without furnishing any of the information required in Clauses (1), (2), (3), (4), and (5) of this Section. Each life insurance company required to file a report under this Section shall maintain a record of the name and last known address, if any, of the insured, annuitant, or beneficiary, the policy or contract number, and the amount appearing from the company's records to be due on the policy or contract for 10 years after the funds are reportable, whether or not the amount was reported in the aggregate under this Section. The comptroller [State Treasurer] may provide by rule for a shorter holding period for these records.

Sec. 5.  NOTICE; PUBLICATION. (a)  In the calendar year following the submission of the reports required under Section 4 of this Article and the payment to the comptroller [State Treasurer] under Section 6 of this Article of all unclaimed funds described in the report, the comptroller [State Treasurer] may cause to be published notices based on the information contained in such reports. Except as provided by Subsection (d) of this Section, such a notice shall be published once in a newspaper published or having a general circulation in each county of this state in which is located the last known address of a person appearing to be entitled to such funds.

(b)  Each such notice shall set forth in alphabetical order the names of the insureds or annuitants under policies or contracts and the city of last known address, if any. The notice shall also state that such unclaimed funds have been delivered to the comptroller [State Treasurer] on the preceding November 1 and that those funds may be claimed from the comptroller [State Treasurer].

(c)  The publication requirements under Subchapter C, Chapter 74, Property Code, apply to publication of notice under this section. [It shall not be obligatory upon the State Treasurer to publish any item of less than Fifty Dollars ($50) in such notice, unless the State Treasurer deems such publication to be in the public interest. Expenses incurred for the publication of notice may be charged against the funds delivered to the State Treasurer under Section 6 of this Article.]

(d)  The comptroller [State Treasurer] may use a method of publishing notice that is different from that prescribed by Subsection (a) of this Section if the comptroller [State Treasurer] determines that the different method would be as likely as the prescribed method to give actual notice to the person required to be named in the notice.

Sec. 6.  PAYMENT TO COMPTROLLER [STATE TREASURER]. All unclaimed funds contained in the report required to be filed by Section 4 of this Article shall be delivered to the comptroller [State Treasurer] on or before November 1 with the report.

Sec. 7.  CUSTODY OF UNCLAIMED FUNDS IN STATE; INSURERS INDEMNIFIED. Upon the payment of such unclaimed funds to the comptroller [State Treasurer] the state shall assume, for the benefit of those entitled to receive the same and for the safety of the money so paid, the custody of such unclaimed funds, and the life insurance company making such payment shall immediately and thereafter be relieved of and held harmless by the state from any and all liability for any claim or claims which exist at such time with reference to such unclaimed funds or which thereafter may be made or may come into existence on account of or in respect to any such unclaimed funds.

Sec. 8.  INDEMNIFICATION FOR CLAIMS. (a)  Any life insurance company which in good faith has paid monies to the comptroller [State Treasurer] pursuant to this Article is relieved of all liability for a claim that exists at the time of delivery, that arises after delivery to the comptroller [State Treasurer], or that is made with respect to the property, to the extent of the value of the property delivered.

(b)  If a life insurance company in good faith delivers property to the comptroller [State Treasurer] and after delivery a person claims the property from the life insurance company or another state claims the property under its laws relating to escheat or unclaimed property, the attorney general shall, on written notice of the claim, defend the life insurance company against the claim. The life insurance company shall be indemnified from the unclaimed money received [fund established] under Chapter 74 [Section 74.601], Property Code, or any other statute requiring the delivery of unclaimed property to the comptroller, against any liability on the claim.

Sec. 9.  FUND ADMINISTRATION. Upon receipt of any unclaimed funds from such life insurance companies [by the State Treasurer], the comptroller [State Treasurer] shall deposit those funds in the general revenue [unclaimed money fund established by Section 74.601, Property Code. Money in the unclaimed money] fund. Unclaimed money received under Chapter 74, Property Code, or any other statute requiring the delivery of unclaimed property to the comptroller may be appropriated by the legislature to enforce and administer this Article.

Sec. 10.  DETERMINATION AND REVIEW OF CLAIMS. Any person claiming to be entitled to unclaimed funds paid to the comptroller [State Treasurer] may file a claim at any time with such official. The comptroller [State Treasurer] shall possess full and complete authority to accept or reject any such claim. If he rejects such claim or fails to act thereon within ninety days after receipt of such claim, the claimant may institute suit therefor in a court of competent jurisdiction naming the comptroller [State Treasurer] as defendant.

Sec. 11.  PAYMENT OF ALLOWED CLAIMS. Any claim which is accepted by the comptroller [State Treasurer] or ordered to be paid by him by a court of competent jurisdiction shall be paid out of the unclaimed money received under Chapter 74, Property Code, or any other statute requiring the delivery of unclaimed property to the comptroller [special trust fund in his custody, or in the event such special trust fund shall be insufficient, out of the general funds of the state].

Sec. 12.  RECORDS REQUIRED. The comptroller [State Treasurer] shall keep in his office a public record of each payment of unclaimed funds received by him from any life insurance company. Except as to amounts reported in the aggregate, such record shall show in alphabetical order the name and last known address of each insured or annuitant, and of each beneficiary or other person who, according to the company's reports, may have an interest in such unclaimed funds, and with respect to each policy or contract, its number, the name of the company, and the amount due.

Sec. 14.  ENFORCEMENT. This Article shall be enforced in the manner provided for enforcement of Chapter 74, Property Code, under Subchapter H of that chapter. [INTEREST, ATTORNEY'S FEES, AND PENALTIES. (a)  A person who fails to pay or deliver property within the time prescribed by this Article shall pay to the State Treasurer interest, at the judgment rate of interest as published by the consumer credit commissioner in the Texas Register, on the property or value of the property from the date the property should have been paid or delivered until the date the property is actually paid or delivered.

[(b)  If the State Treasurer presents a claim for unclaimed property to a person who fails timely to pay or deliver the property and the just amount of the unclaimed property owed has not been tendered before the 31st day after the date the claim is presented, the State Treasurer may, on approval of a court of competent jurisdiction in Travis County, recover reasonable attorney's fees from the person in addition to unclaimed property and interest due.

[(c)  Any person who wilfully fails to file a report required by this Article, or who violates any of the other terms and provisions of this Article shall be punished by a fine not less than Five Hundred Dollars ($500.00), nor more than One Thousand Dollars ($1000.00), or by confinement for not more than six months in the county jail, or both, and in addition, shall be subject to civil penalties of not exceeding One Hundred Dollars ($100.00) for each day of such wilful failure or refusal, said civil penalties to be collected by suit in a District Court of Travis County, Texas, by the Attorney General in the name of the State of Texas.]

Sec. 15.  RULES. The comptroller [State Treasurer] may adopt rules necessary to carry out this Article.

Sec. 16.  EXAMINATION OF RECORDS. The comptroller [State Treasurer] may examine the records of a life insurance company to determine if the life insurance company is complying with this Article. The comptroller [State Treasurer] may not make public any information obtained by an examination made under this Section.

SECTION 2.  Section 117.002, Local Government Code, is amended to read as follows:

Sec. 117.002.  TRANSFER OF UNCLAIMED FUNDS TO COMPTROLLER [STATE TREASURER]. Any funds deposited under this chapter that are presumed abandoned under Chapter 72, 73, or 75, Property Code, shall be reported and delivered by the county or district clerk to the comptroller [state treasurer] without further action by any court. The dormancy period for funds deposited under this chapter begins on the later of:

(1)  the date of entry of final judgment or order of dismissal in the action in which the funds were deposited;

(2)  the 18th birthday of the minor for whom the funds were deposited; or

(3)  a reasonable date established by rule by the comptroller [state treasurer] to promote the public interest in disposing of unclaimed funds.

SECTION 3.  Section 381.004, Local Government Code, is amended by adding Subsection (e) to read as follows:

(e)  The legislature may appropriate unclaimed money the comptroller receives under Chapter 74, Property Code, for a county to use in carrying out a program established under this section. To receive money for that purpose for any fiscal year, the county must request the money for that fiscal year. The amount a county may receive under this subsection for a fiscal year may not exceed an amount equal to the value of the capital credits the comptroller receives from an electric cooperative corporation on behalf of the corporation's members in the county requesting the money less an amount sufficient to pay anticipated expenses and claims. The comptroller shall transfer money in response to a request after deducting the amount the comptroller determines to be sufficient to pay anticipated expenses and claims.

SECTION 4.  Subsection (a), Section 71.101, Property Code, is amended to read as follows:

(a)  If any person, including the attorney general, the comptroller [State Treasurer], or a district attorney, criminal district attorney, county attorney, county clerk, district clerk, or attorney ad litem is informed or has reason to believe that real or personal property is subject to escheat under this chapter, the person may file a sworn petition requesting the escheat of the property and requesting a writ of possession for the property.

SECTION 5.  Subsection (c), Section 71.103, Property Code, is amended to read as follows:

(c)  The comptroller [State Treasurer] is an indispensable party to any judicial or administrative proceeding concerning the disposition and handling of property that is the subject of an escheat proceeding and must be made a party to the proceeding by personal service of citation.

SECTION 6.  Subsection (c), Section 71.301, Property Code, is amended to read as follows:

(c)  A copy of the petition shall be served on the comptroller [State Treasurer], who shall represent the interests of the state. As the comptroller [State Treasurer] elects and with the approval of the attorney general, the attorney general, the county attorney or criminal district attorney for the county, or the district attorney for the district shall represent the comptroller [State Treasurer].

SECTION 7.  Subsection (a), Section 71.304, Property Code, is amended to read as follows:

(a)  A suit brought for the collection of personal property delivered to the comptroller [State Treasurer] under this chapter must be brought in the name of this state.

SECTION 8.  Subsections (b) and (c), Section 72.102, Property Code, are amended to read as follows:

(b)  A traveler's check to which Subsection (a) applies is presumed to be abandoned on the latest of:

(1)  the 15th anniversary of the date on which the check was issued;

(2)  the 15th anniversary of the date on which the issuer of the check last received from the owner of the check [written] communication concerning the check; or

(3)  the 15th anniversary of the date of the last writing, on file with the issuer, that indicates the owner's interest in the check.

(c)  A money order to which Subsection (a) applies is presumed to be abandoned on the latest of:

(1)  the fifth anniversary of the date on which the money order was issued;

(2)  the fifth anniversary of the date on which the issuer of the money order last received from the owner of the money order [written] communication concerning the money order; or

(3)  the fifth anniversary of the date of the last writing, on file with the issuer, that indicates the owner's interest in the money order.

SECTION 9.  Section 72.103, Property Code, is amended to read as follows:

Sec. 72.103.  PRESERVATION OF PROPERTY. Notwithstanding any other provision of this title, a [A] holder of abandoned property shall preserve the property and may not at any time, by any procedure, including a deduction for service, maintenance, or other charge, transfer or[,] convert to the profits or assets of the holder[,] or otherwise reduce the value of the property. For purposes of this section, value is determined as of the date of the last transaction or contact concerning the property [to the profits or assets of the holder].

SECTION 10.  The heading to Chapter 73, Property Code, is amended to read as follows:

CHAPTER 73.  PROPERTY [INACTIVE ACCOUNTS] HELD BY

FINANCIAL INSTITUTIONS [BANKING ORGANIZATIONS]

SECTION 11.  Subsection (a), Section 73.001, Property Code, is amended by amending Subdivision (1) and adding Subdivision (5) to read as follows:

(1)  "Account" means funds deposited with a depository in an interest-bearing account, a checking[, interest,] or savings account.

(5)  "Check" includes a draft, cashier's check, certified check, registered check, or similar instrument.

SECTION 12.  Subsections (c) and (d), Section 73.001, Property Code, are amended to read as follows:

(c)  Any property, other than an account, check, or safe deposit box, held by a depository is subject to the abandonment provisions of Chapter 72.

(d)  A holder of accounts, checks, or safe deposit boxes presumed abandoned under this chapter is subject to the procedures of Chapter 74.

SECTION 13.  Sections 73.002 and 73.003, Property Code, are amended to read as follows:

Sec. 73.002.  DEPOSITORY. For the purposes of this chapter, a depository is a bank, savings and loan association, credit union, or other banking organization that:

(1)  receives and holds a deposit of money or the equivalent of money in banking practice or other personal property in this state; or

(2)  receives and holds such a deposit or other personal property in another state for a person whose last known residence is in this state.

Sec. 73.003.  PRESERVATION OF INACTIVE ACCOUNT OR SAFE DEPOSIT BOX. (a)  A depository shall preserve an account that is inactive and the contents of a safe deposit box that is inactive. The depository may not, at any time, by any procedure, including the imposition of a service charge, transfer or[,] convert to the profits or assets of the depository[,] or otherwise reduce the value of the [such an] account or the contents of such a box. For purposes of this subsection, value is determined as of the date the account or safe deposit box becomes inactive [to the profits or assets of the depository].

(b)  An account is inactive if for more than one year there has not been a debit or credit to the account because of an act by the depositor or an agent of the depositor, other than the depository, and the depositor has not communicated with the depository. A safe deposit box is inactive if the rental on the box is delinquent [for more than one year].

(c)  This section does not affect the provisions of Subchapter B, Chapter 8, Texas Banking Act (Article 342-8.101 et seq., Vernon's Texas Civil Statutes).

[(d)  For purposes of presumption of abandonment under Section 73.101, the five-year period of inactivity for accounts begins on the date of the last transaction or correspondence by the depositor. The five-year period of inactivity of safe deposit boxes begins on the date the rental was due but not paid.]

SECTION 14.  Section 73.101, Property Code, is amended to read as follows:

Sec. 73.101.  INACTIVE ACCOUNT OR SAFE DEPOSIT BOX PRESUMED ABANDONED. (a)  An account or safe deposit box is presumed abandoned if:

(1)  the account or safe deposit box has been inactive [under Section 73.003(b)] for at least five years as determined under Subsection (b);

(2)  the location of the depositor of the account or owner of the safe deposit box is unknown to the depository; and

(3)  the amount of the account or the contents of the box have not been delivered to the comptroller [State Treasurer] in accordance with Chapter 74.

(b)  For purposes of Subsection (a)(1):

(1)  an account becomes inactive beginning on the date of the depositor's last transaction or correspondence concerning the account; and

(2)  a safe deposit box becomes inactive beginning on the date a rental was due but not paid. [To satisfy the five-year period of inactivity required by Subdivision (1) of Subsection (a), the account or safe deposit box must have been inactive for a continuous period beginning not later than June 30 of the fifth year preceding the year in which the report is filed under Chapter 74.]

SECTION 15.  Subchapter B, Chapter 73, Property Code, is amended by adding Section 73.102 to read as follows:

Sec. 73.102.  CHECKS. A check is presumed to be abandoned on the latest of:

(1)  the third anniversary of the date the check was payable;

(2)  the third anniversary of the date the issuer or payor of the check last received documented communication from the payee of the check; or

(3)  the third anniversary of the date the check was issued if, according to the knowledge and records of the issuer or payor of the check, during that period, a claim to the check has not been asserted or an act of ownership by the payee has not been exercised.

SECTION 16.  Section 74.001, Property Code, is amended to read as follows:

Sec. 74.001.  APPLICABILITY. (a)  Except as provided by Subsection (b), this [This] chapter applies to a holder of property that is presumed abandoned under Chapter 72, Chapter 73, or Chapter 75.

(b)  This chapter does not apply to a holder of property subject to Chapter 76.

SECTION 17.  Subsections (a) and (c), Section 74.101, Property Code, are amended to read as follows:

(a)  Each holder who on June 30 holds property that is presumed abandoned under Chapter 72, [Chapter] 73, or [Chapter] 75, or under [Section 5A,] Chapter 512, Acts of the 54th Legislature, 1955 (Article 548b, Vernon's Texas Civil Statutes), shall file a report of that property on or before the following November 1. The comptroller may require the report to be in a particular format, including a format that can be read by a computer. [Each report shall be filed with the State Treasurer as provided by this section and on forms prescribed by the State Treasurer.]

(c)  The property report must include:

(1)  the name and social security number, if known, and the last known address, if any, of each person who, from the records of the holder of the property, appears to be the owner of the property, or the name and address, if known, of any person who is entitled to the property;

(2)  a [brief] description of the property, the identification number, if any, and, if appropriate, a balance of each account, except as provided by Subsection (d) [(e)];

(3)  the date that the property became payable, demandable, or returnable;

(4)  the date of the last transaction with the owner concerning the property; and

(5)  [any deduction made by the holder of the property for a service, maintenance, or other charge, unless fully restored and included in the amount reported; and

[(6)]  other information that the comptroller [State Treasurer] by rule requires to be disclosed as necessary for the administration of this chapter.

SECTION 18.  Section 74.102, Property Code, is amended to read as follows:

Sec. 74.102.  VERIFICATION. (a)  The person preparing a property report shall provide with [place at the end of] each copy of the report a verification made under oath and executed by:

(1)  the individual holding the reported property;

(2)  a partner, if the holder is a partnership;

(3)  an officer, if the holder is an unincorporated association or a private corporation; or

(4)  the chief fiscal officer, if the holder is a public corporation.

(b)  The verification must include the following sentence:

"This [The foregoing] report contains a full and complete list of all property held by the undersigned that, from the knowledge and records of the undersigned, is abandoned under the laws of the State of Texas."

SECTION 19.  Subsections (a) and (c), Section 74.103, Property Code, are amended to read as follows:

(a)  A holder required to file a property report under Section 74.101 shall keep a record of:

(1)  the name, the social security number, if known, and the last known address of each person who, from the records of the holder of the property, appears to be the owner of the property;

(2)  a brief description of the property, including the identification number, if any; and

(3)  the balance of each account, if appropriate.

(c)  The comptroller [State Treasurer] may by rule provide for a shorter period for keeping a record required by this section.

SECTION 20.  Section 74.104, Property Code, is amended to read as follows:

Sec. 74.104.  CONFIDENTIALITY OF PROPERTY REPORT. (a)  Except as provided by Section [Sections] 74.201, 74.203, or [and] 74.307, a property report filed with the comptroller [State Treasurer] under Section 74.101 is confidential until the second anniversary of the date the report is filed.

(b)  The [Notwithstanding any other provision of law, the] social security number of an owner that is provided [reported] to the comptroller [State Treasurer] is confidential.

SECTION 21.  Sections 74.201, 74.202, and 74.203, Property Code, are amended to read as follows:

Sec. 74.201.  REQUIRED [PUBLISHED] NOTICE. (a)  Except as provided by [Subsection (b) and] Section 74.202, the comptroller may use one or more methods as necessary to provide the most efficient and effective notice to each reported owner [State Treasurer shall publish a notice in a newspaper of general circulation] in the calendar year immediately following the year in which the report required by Section 74.101 is filed. The notice must be provided [published]:

(1)  in the county of the property owner's [in which the] last known address [of a person required to be named in the notice is located]; or

(2)  [if the address of a person listed is not set out in the report or if it is outside the state,] in the county in which the holder [of the abandoned property] has its principal place of business or its[,] registered office[, or agent] for service in this state, if the property owner's last address is unknown.

(b)  [The State Treasurer may use a method of publishing notice that is different from that prescribed by Subsection (a)(1) or (2) if the State Treasurer determines that the different method would be as likely as the prescribed method to give actual notice to the person required to be named in the notice.

[(c)]  The [published] notice must state that the reported property is presumed abandoned and subject to this chapter and must contain:

(1)  the name and city of last known address of the reported owner[, if any, of each person listed in the property report filed under Section 74.101, listed alphabetically by name];

(2)  a statement that, by [addressing an] inquiry [to the State Treasurer], any person possessing a legal or beneficial interest in the reported property may obtain information concerning the amount and description of the property; and

(3)  a statement that the person [owner] may present proof of the claim [to the State Treasurer] and establish the person's [owner's] right to receive the property.

(d)  The comptroller [State Treasurer] may offer for sale space for suitable advertisements in a notice published under this section. [Proceeds from the sale of the advertising space shall be used to defray the cost of publishing the notices, with the remaining amount, if any, to be deposited to the credit of the unclaimed money fund.]

Sec. 74.202.  NOTICE FOR ITEM WITH VALUE OF LESS THAN $100 [NOT EXCEEDING $50]. In the notice required by Section 74.201, the comptroller [State Treasurer] is not required to publish information regarding an item having a value that is less than $100 [$50] unless the comptroller [State Treasurer] determines that publication of that information is in the public interest.

Sec. 74.203.  AUTHORIZED NOTICE [TO OWNER]. (a)  During the calendar year immediately following the year in which the report required by Section 74.101 is filed, [the State Treasurer may mail a] notice may be mailed to each person who has been reported with a Texas address and appears to be entitled to the reported property [valued at $50 or more].

(b)  The notice under Subsection (a) must conform to the requirements for notice under Section 74.201(b) [must contain:

[(1)  a statement that property is being held by the State Treasurer to which the addressee appears to be entitled; and

[(2)  a statement that the owner may present proof of the claim to the State Treasurer and establish the owner's right to receive the property].

SECTION 22.  Sections 74.205 and 74.301, Property Code, are amended to read as follows:

Sec. 74.205.  CHARGE FOR NOTICE. The comptroller [State Treasurer] may charge the following against the property delivered under this chapter:

(1)  expenses incurred for the publication of notice required by Section 74.201; and

(2)  the amount paid in postage for the notice to the owner required by Section 74.203.

Sec. 74.301.  DELIVERY OF PROPERTY TO COMPTROLLER [STATE TREASURER]. (a)  Except as provided by Subsection (c), each [Each] holder who on June 30 holds property that is presumed abandoned under Chapter 72, [Chapter] 73, or [Chapter] 75 shall deliver the property to the comptroller [State Treasurer] on or before the following November 1 accompanied by the report required to be filed under Section 74.101.

(b)  If the property subject to delivery under Subsection (a) is stock or some other intangible ownership interest in a business association for which there is no evidence of ownership, the holder shall issue a duplicate certificate or other evidence of ownership to the comptroller [State Treasurer] at the time delivery is required under this section.

(c)  If the property subject to delivery under Subsection (a) is the contents of a safe deposit box, the comptroller may instruct a holder to deliver the property on a specified date after November 1 but before June 1 of the following year.

SECTION 23.  Subsections (c), (e), and (g), Section 74.3011, Property Code, are amended to read as follows:

(c)  A local telephone exchange company shall file with the comptroller [state treasurer] a verification of money delivered under this section that complies with Section 74.302.

(e)  The comptroller [state treasurer] shall prescribe forms and procedures governing this section, including forms and procedures relating to:

(1)  notice of presumed abandoned property;

(2)  delivery of reported money to a scholarship fund; and

(3)  filing of a claim.

(g)  During a state fiscal year, the total amount of money that may be transferred by all local telephone exchange companies under this section may not exceed $400,000. The comptroller [state treasury] shall keep a record of the total amount of money transferred annually. When the total amount of money transferred during a state fiscal year equals the amount allowed by this subsection, the comptroller [treasury] shall notify each local telephone exchange company that the company may not transfer any additional money to the company's scholarship fund during the remainder of that state fiscal year.

SECTION 24.  Subsections (a), (e), and (g), Section 74.3012, Property Code, are amended to read as follows:

(a)  Notwithstanding and in addition to any other provision of this chapter or other law, a local exchange company may deliver reported money to a scholarship fund for urban students instead of delivering the money to the comptroller [state treasurer] as prescribed by Section 74.301.

(e)  The comptroller [state treasurer] shall prescribe forms and procedures governing this section, including forms and procedures relating to:

(1)  notice of presumed abandoned property;

(2)  delivery of reported money to a scholarship fund; and

(3)  filing of a claim.

(g)  [During the 1995-1996 fiscal year, the total amount of money that may be transferred by all local exchange companies under this section may not exceed $400,000.] During each [subsequent] state fiscal year, the total amount of money that may be transferred by all local exchange companies under this section may not exceed the total amount of money transferred to rural scholarship funds under Section 74.3011 during the previous state fiscal year. The comptroller [state treasury] shall keep a record of the total amount of money transferred annually. If the total amount of money transferred during a state fiscal year equals the amount allowed by this subsection, the comptroller [treasury] shall notify each local exchange company that the company may not transfer any additional money to the company's scholarship fund during the remainder of that state fiscal year.

SECTION 25.  Subchapter D, Property Code, is amended by amending Sections 74.304, 74.306, 74.307, and 74.308 and adding Section 74.3061 to read as follows:

Sec. 74.304.  RESPONSIBILITY AFTER DELIVERY. (a)  If reported property is delivered to the comptroller, [State Treasurer] the state shall assume custody of the property and responsibility for its safekeeping.

(b)  A holder who delivers property to the comptroller [State Treasurer] in good faith is relieved of all liability to the extent of the value of the property delivered for any claim then existing, that may arise after delivery to the comptroller [State Treasurer], or that may be made with respect to the property.

(c)  If the holder delivers property to the comptroller [State Treasurer] in good faith and, after delivery, a person claims the property from the holder or another state claims the property under its laws relating to escheat or unclaimed property, the attorney general shall, on written notice of the claim, defend the holder against the claim, and the holder shall be indemnified from the unclaimed money received under this chapter or any other statute requiring delivery of unclaimed property to the comptroller [fund established in Section 74.601] against any liability on the claim.

(d)  The comptroller [State Treasurer] is not, in the absence of negligence or mishandling of the property, liable to the person who claims the property for damages incurred while the property or the proceeds from the sale of the property are in the comptroller's [treasurer's] possession. But in any event the liability of the state is limited to the extent of the property delivered under this chapter and remaining in the possession of the comptroller [State Treasurer] at the time a suit is filed.

(e)  For the purposes of this section, payment or delivery is made in good faith if:

(1)  payment or delivery was made in a reasonable attempt to comply with this chapter;

(2)  the holder [person] delivering the property was not a fiduciary then in breach of trust with respect to the property and had a reasonable basis for believing based on the facts then known to the holder [person] that the property was abandoned or inactive for purposes of this chapter; and

(3)  there is no showing that the records under which the delivery was made did not meet reasonable commercial standards of practice in the industry.

(f)  On delivery of a duplicate certificate or other evidence of ownership to the comptroller [State Treasurer] under Subsection (b) of Section 74.301, the holder and any transfer agent, registrar, or other person acting for or on behalf of a holder in executing or delivering the duplicate certificate are relieved of all liability of every kind in accordance with this section to any person, including any person acquiring the original certificate or the duplicate of the certificate issued to the comptroller [State Treasurer], for any losses or damages resulting to any person by the issuance and delivery to the comptroller [State Treasurer] of the duplicate certificate.

Sec. 74.306.  UNCLAIMED PROPERTY HELD BY FEDERAL GOVERNMENT. (a)  If the federal government enacts a law that provides for the discovery of unclaimed property held by the federal government and that provides or makes that information available to the states, the comptroller [State Treasurer] may pay to the federal government from the unclaimed money received under this chapter or any other statute requiring the delivery of unclaimed property to the comptroller [fund] the proportional share of the necessary cost of examining records.

(b)  If the federal government delivers unclaimed property to the comptroller [State Treasurer], this state shall hold the federal government harmless from claims made by owners of the property after the delivery.

Sec. 74.3061.  ESCHEAT OF FUNDS IN THE POSSESSION OF THE UNITED STATES. (a)  In the event any money is due to a resident of this state in the nature of a refund, rebate, or other overpayment of taxes or fees to the United States with respect to which the resident is likely to have his rights to secure such refund or rebate barred by a statute of limitations, or if for any reason at least three years has elapsed after the date on which the resident could have filed a timely claim for said refund or rebate, the comptroller is appointed agent of such resident to apply for said refund or rebate and is authorized to do any act which a natural person could do to recover said money. When the comptroller files an application or initiates any other proceeding to secure said refund or rebate, the comptroller is coupled with an interest in the money sought and money recovered. All property within this provision, including all principal and interest accruing thereon, is declared to have escheated and to have become the property of the state.

(b)  The funds escheated by the state pursuant to this provision shall be given notice as provided by Section 74.201. Title to any such property shall be transferred by the state to any persons who in accordance with Subchapter F can show that the property belonged to them immediately prior to the escheat or that they were heirs to those funds immediately prior to the escheat.

Sec. 74.307.  LIST OF OWNERS. (a)  The comptroller [State Treasurer] shall compile and revise each year, except as to amounts reported in the aggregate, an alphabetical list of the names and last known addresses of the owners listed in the reports and the amount credited to each account.

(b)  The comptroller [State Treasurer] shall make the list available for public inspection during all reasonable business hours.

Sec. 74.308.  PERIOD OF LIMITATION NOT A BAR. The expiration, on or after September 1, 1987, of any period specified by contract, statute, or court order, during which an action or proceeding may be initiated or enforced to obtain payment of a claim for money or recovery of property, does not prevent the money or property from being presumed abandoned property and does not affect any duty to file a report required by this chapter or to pay or deliver abandoned property to the comptroller [State Treasurer].

SECTION 26.  Sections 74.401 and 74.402, Property Code, are amended to read as follows:

Sec. 74.401.  SALE OF PROPERTY. (a)  Except as provided by Subsection (c), the comptroller [State Treasurer] shall sell at public sale all personal property, other than money and marketable securities, delivered to the comptroller [State Treasurer] in accordance with Section 74.301. The comptroller [State Treasurer] shall conduct the sale in the city in this state that the comptroller [State Treasurer] determines affords the most favorable market for the particular property.

(b)  The comptroller [State Treasurer] shall sell the property to the highest bidder. If the comptroller [State Treasurer] determines that the highest bid is insufficient, the comptroller [State Treasurer] may decline that bid and offer the property for public or private sale.

(c)  The comptroller [State Treasurer] is not required to offer property for sale if the property belongs to a person with an address outside this state or the comptroller [State Treasurer] determines that the probable cost of the sale of the property exceeds its value.

(d)  If after investigation the comptroller [State Treasurer] determines that property delivered from a safe deposit box or other repository has insubstantial commercial value, the comptroller [State Treasurer] may destroy or otherwise dispose of the property at any time.

(e)  A person may not maintain any action or proceeding against the state, an officer of the state, or the holder of property because of an action taken by the comptroller [State Treasurer] under this section.

Sec. 74.402.  NOTICE OF SALE. Before the 21st day preceding the day on which a public sale is held under Section 74.401, the comptroller [State Treasurer] shall publish notice of the sale in a newspaper of general circulation in the county where the sale is to be held.

SECTION 27.  Subsection (b), Section 74.403, Property Code, is amended to read as follows:

(b)  The comptroller [State Treasurer] shall execute all documents necessary to complete the transfer of title.

SECTION 28.  Sections 74.501 and 74.502, Property Code, are amended to read as follows:

Sec. 74.501.  [FILING OF] CLAIM FILED WITH COMPTROLLER. (a)  The comptroller shall review the validity of each claim filed under this section. [Except as provided by Subsection (b), a claim for property or proceeds from the sale of property delivered to the State Treasurer under this chapter, including claims by other states, must be filed with the State Treasurer.]

(b)  If the comptroller determines that a claim is valid, the comptroller or the comptroller's authorized agent shall approve [a claim is for inactive property that was held by a depository before being delivered to the State Treasurer,] the claim [may be filed with the depository under Section 74.502]. If the claim is for money and has been approved under this section, the comptroller shall pay the claim. If a claim is for personal property other than money and has been approved under this section, the comptroller shall deliver the property to the claimant unless the comptroller has sold the property. If the property has been sold under Section 74.401, the comptroller shall pay to the claimant the proceeds from the sale.

(c)  All claims to which this section applies must be filed in accordance with procedures, contain the information, and be on forms prescribed by the comptroller [State Treasurer].

Sec. 74.502.  CLAIM FILED WITH HOLDER [DEPOSITORY]. (a)  [If inactive property held by a depository under Chapter 73 is delivered to the State Treasurer under Section 74.301, a claim may be filed with the depository except that any claim by another state must be filed with the State Treasurer. The State Treasurer shall prescribe forms and procedures for filing claims with depositories.

[(b)]  If a claim is filed with a holder [depository] under this section and the holder [depository] determines in good faith that the claim is valid, the holder [depository] may pay the amount of the claim.

(b)  The comptroller shall reimburse the holder for a valid claim paid under this section.

(c)  The request from a holder for reimbursement must be filed in accordance with procedures and on forms prescribed by the comptroller. [If the amount paid under Subsection (b) is $100 or less, the State Treasurer shall reimburse the depository on receipt of a written statement subscribed and sworn to by an officer of the depository that states:

[(1)  the name and address of the person to whom payment was made; and

[(2)  that the depository believes in good faith that the claim is valid.

[(d)  If the amount paid under Subsection (b) is more than $100, the State Treasurer shall examine the claim and any supporting affidavit or evidence of the claim. Before the State Treasurer may reimburse a depository for a claim under this subsection, the claim must be approved and signed by the State Treasurer.]

SECTION 29.  Section 74.504, Property Code, is amended to read as follows:

Sec. 74.504.  HEARING. (a)  The comptroller [State Treasurer] may hold a hearing and receive evidence concerning a claim filed under this subchapter.

(b)  If the comptroller [State Treasurer] considers that a hearing is necessary to determine the validity of a claim, the comptroller [State Treasurer] shall sign the statement of the findings and the decision on the claim. The statement shall report the substance of the evidence heard and the reasons for the decision. The statement is a public record.

(c)  If the comptroller [State Treasurer] determines that a claim is valid, the comptroller [State Treasurer] shall approve and sign the claim.

SECTION 30.  Subsection (c), Section 74.506, Property Code, is amended to read as follows:

(c)  An appeal under this section must be made by filing suit against the state in a district court in Travis County, Texas[, or in the county in which the claimed funds were deposited]. The state's immunity from suit without consent is abolished with respect to suits brought under this section.

SECTION 31.  Sections 74.507, 74.508, and 74.509, Property Code, are amended to read as follows:

Sec. 74.507.  FEE FOR RECOVERY. (a)  A person who informs a potential claimant that the claimant may be entitled to claim property that is reportable to the comptroller [State Treasurer] under this chapter, that has been reported to the comptroller [State Treasurer], or that is in the possession of the comptroller [State Treasurer,] may not contract for or receive from the claimant for services an amount that exceeds 10 percent of the value of the property recovered. If the property involved is mineral proceeds, the amount for services may not include a portion of the underlying minerals or any production payment, overriding royalty, or similar payment.

(b)  The person who informs a potential claimant and by contract or other written agreement is to receive a percentage of the value of the property may not file or receive a form to claim or act on behalf of a claimant.

Sec. 74.508.  CLAIM OF ANOTHER STATE TO RECOVER PROPERTY; PROCEDURE. (a)  At any time after property has been paid or delivered to the comptroller [State Treasurer] under this chapter [Act], another state may recover the property if:

(1)  the property was subjected to custody by this state because the records of the holder did not reflect the last known address of the apparent owner when the property was presumed abandoned under this chapter [Act], and the other state establishes that the last known address of the apparent owner or other person entitled to the property was in that state and under the laws of that state the property escheated to or was subject to a claim of abandonment by that state;

(2)  the last known address of the apparent owner or other person entitled to the property, as reflected by the records of the holder are in the other state and under the laws of that state the property has escheated to or become subject to a claim of abandonment by that state;

(3)  the records of the holder were erroneous in that they did not accurately reflect the actual owner of the property and the last known address of the actual owner is in the other state and under the laws of that state the property escheated to or was subject to a claim of abandonment by that state;

(4)  the property was subjected to custody by this state under Subdivision (6) of Subsection (a) of Section 72.001 and under the laws of the state of domicile of the holder the property has escheated to or become subject to a claim of abandonment by that state; or

(5)  the property is the sum payable on a traveler's check, money order, or other similar instrument that was subjected to custody by this state under Subdivision (4) and the instrument was purchased in the other state and under the laws of that state the property escheated to or became subject to a claim of abandonment by that state.

(b)  The claim of another state to recover escheated or abandoned property must be presented in a form prescribed by the comptroller [State Treasurer], who shall decide the claim within 90 days after it is presented. The comptroller [State Treasurer] shall allow the claim if he determines that the other state is entitled to the abandoned property under Subsection (a).

Sec. 74.509.  HANDLING FEE FOR PROCESSING UNCLAIMED PROPERTY. A [The State Treasurer shall charge a person claiming unclaimed property a] handling fee may be deducted from the amount of the claim payment if [ownership of the property is reinstated and] the payment is at least $100 [value of the property is $50 or more].

SECTION 32.  Subchapter G, Chapter 74, Property Code, is amended to read as follows:

SUBCHAPTER G. UNCLAIMED MONEY [FUND]

Sec. 74.601.  UNCLAIMED MONEY [FUND]. (a)  The comptroller [State Treasurer] shall maintain a record that documents [fund known as the] unclaimed money received under this chapter or any other statute requiring the delivery of unclaimed property to the comptroller [fund].

(b)  The comptroller [State Treasurer] shall deposit to the credit of the general revenue fund:

(1)  all funds, including marketable securities, delivered to the comptroller [State Treasurer] under this chapter or any other statute requiring the delivery of unclaimed property to the comptroller [State Treasurer];

(2)  all proceeds from the sale of any property, including marketable securities, under this chapter;

(3)  all funds that have escheated to the state under Chapter 71, except that funds relating to escheated real property shall be deposited according to Section 71.202; and

(4)  any income derived from investments of the unclaimed money [fund].

(c)  The comptroller [State Treasurer] shall keep a separate record and accounting for delivered unclaimed property, other than money, before its sale.

(d)  Except as provided by Subsection (e), the comptroller [State Treasurer] shall from time to time invest the amount of [in the] unclaimed money [fund] in investments approved by law for the investment of state funds.

(e)  The comptroller [State Treasurer] may from time to time sell securities [in the fund], including stocks, bonds, and mutual funds, received under this chapter or any other statute requiring the delivery of unclaimed property to the comptroller and use the proceeds to buy, exchange, invest, or reinvest in marketable securities. When making or selling the investments, the comptroller [State Treasurer] shall exercise the judgment and care of a prudent person.

(f)  The comptroller [State Treasurer] shall keep a separate record and accounting for securities delivered, sold, purchased, or exchanged and the proceeds and earnings from the securities.

Sec. 74.602.  USE OF MONEY [FUND]. [(a)]  Except as provided by Section 381.004, Local Government Code [Subsection (b)], the comptroller [State Treasurer] shall use the unclaimed money received under this chapter or any other statute requiring the delivery of unclaimed property to the comptroller [fund] to pay the claims of persons or states establishing ownership of property in the possession of the comptroller [State Treasurer] under this chapter or under any other unclaimed property or escheat statute.

[(b)  Each fiscal year after deducting funds sufficient to pay anticipated expenses and claims of the unclaimed money fund, the state treasurer shall transfer:

[(1)  half of the balance of the unclaimed money fund to the foundation school fund;

[(2)  $1.2 million to the state ethics fund;

[(3)  to each county of the state that requests, an amount equal to any capital credits in the fund, less anticipated claims, that were delivered under this chapter to the state treasurer by an electric cooperative corporation on behalf of the corporation's members in that county, with the money to be used only to carry out a program under Section 381.004, Local Government Code; and

[(4)  the remainder to the General Revenue Fund.

[(c)  The State Treasurer and the attorney general may use the unclaimed money fund generally for the enforcement and administration of this title, including the expenses of sale, forms, notices, examinations, travel, court costs, supplies, equipment, employment of necessary personnel, and any other necessary expenses.]

Sec. 74.603.  AUDIT; APPROPRIATION. The unclaimed money received under this chapter or any other statute requiring the delivery of unclaimed property to the comptroller [fund] is subject to audit by the State Auditor and to appropriation by the legislature for enforcing and administering this title.

SECTION 33.  Sections 74.701 and 74.702, Property Code, are amended to read as follows:

Sec. 74.701.  RULES. The comptroller [State Treasurer] may adopt rules necessary to carry out this title.

Sec. 74.702.  EXAMINATION OF RECORDS. (a)  To enforce this chapter and to determine whether reports have been made as required by this chapter, the comptroller [State Treasurer], the attorney general, or an authorized agent of either, at any reasonable time, may examine the books and records of any holder.

(b)  The comptroller [State Treasurer], the attorney general, or an agent of either may not make public any information obtained by an examination made under this section and may not disclose that information except in the course of a judicial proceeding, authorized by this chapter, in which the state is a party or pursuant to an agreement with another state allowing joint audits or the exchange of information obtained under this section.

SECTION 34.  Subsection (a), Section 74.703, Property Code, is amended to read as follows:

(a)  The comptroller [State Treasurer] and the attorney general may employ, in the office of either official, additional personnel necessary to enforce this title.

SECTION 35.  Sections 74.704 and 74.705, Property Code, are amended to read as follows:

Sec. 74.704.  ASSISTANCE IN ENFORCEMENT. If the comptroller [State Treasurer] or the attorney general requests, the State Auditor, Banking Commissioner of Texas [state comptroller, banking commissioner], securities commissioner, [insurance] commissioner of insurance, savings and loan commissioner, Credit Union Commission, Department of Public Safety of the State of Texas, or any district or county attorney shall assist the comptroller [State Treasurer] or attorney general in enforcing this title.

Sec. 74.705.  INTEREST[, ATTORNEY'S FEES, AND PENALTIES]. [(a)]  A holder[person] who fails to pay or deliver property within the time prescribed by this chapter shall pay to the comptroller [State Treasurer] interest, at an annual rate of 10 percent [the judgment rate of interest as published by the consumer credit commissioner in the Texas Register], on the property [or value of the property] from the date the property should have been paid or delivered until the date the property is actually paid or delivered.

[(b)  If the State Treasurer presents a claim for unclaimed property to a person who fails timely to pay or deliver the property and the just amount of unclaimed property owed has not been tendered before the 31st day after the date the claim is presented, the State Treasurer may, on approval of a court of competent jurisdiction in Travis County, recover reasonable attorney's fees from the person in addition to unclaimed property and interest due.

[(c)  A person commits an offense if the person:

[(1)  wilfully fails to file a report required by this chapter;

[(2)  refuses to permit examination of records in accordance with this chapter;

[(3)  makes a deduction from or a service charge against a dormant account or dormant deposit of funds; or

[(4)  violates any other provision of this title.

[(d)  An offense under this section is punishable by:

[(1)  a fine of not less than $500 nor more than $1,000;

[(2)  confinement in jail for a term not to exceed six months; or

[(3)  both the fine and confinement.

[(e)  In addition to a criminal penalty, a person who commits an offense under Subsection (c) is subject to a civil penalty not to exceed $100 for each day of the violation. The attorney general shall collect the civil penalty by bringing suit on behalf of the state in a district court in Travis County, Texas.]

SECTION 36.  Subchapter H, Chapter 74, Property Code, is amended by adding Sections 74.706 through 74.710 to read as follows:

Sec. 74.706.  PENALTY. A penalty equal to five percent of the value of the property due shall be imposed on a holder who fails to pay or deliver property within the time prescribed by this chapter. If a holder fails to pay or deliver property before the 31st day after the date the property is due, an additional penalty equal to five percent of the value of the property due shall be imposed.

Sec. 74.707.  WAIVER OR ABATEMENT OF PENALTY OR INTEREST. (a)  The comptroller may waive penalty or interest imposed on delinquent property if the comptroller determines that the holder has made a good faith effort to comply with Chapters 72-75.

(b)  The comptroller may provide for periods during which a holder of delinquent property may report and remit the unclaimed property without paying a penalty or interest.

Sec. 74.708.  PROPERTY HELD IN TRUST. A holder who on June 30 holds property presumed abandoned under Chapters 72-75 holds the property in trust for the benefit of the state on behalf of the missing owner and is liable to the state for the full value of the property, plus any accrued interest and penalty. A holder is not required by this section to segregate or establish trust accounts for the property provided the property is timely delivered to the comptroller in accordance with Section 74.301.

Sec. 74.709.  SUIT TO COMPEL DELIVERY OF PROPERTY AND CIVIL PENALTIES. (a)  On request of the comptroller, the attorney general shall bring an action in district court, in the name of the state, to compel a holder to deliver property or to file a property report.

(b)  Venue for a suit brought under this section is in Travis County.

(c)  The fact that a suit seeks enforcement of this section from more than one holder is not grounds for an objection concerning misjoinder of parties or causes of action.

(d)  When introduced into evidence, the verified property report, unless rebutted, is sufficient evidence that the property is abandoned and subject to delivery under this chapter and for entry of a judgment transferring custody of the property to the comptroller.

(e)  The attorney general, on behalf of the comptroller, may recover reasonable attorney's fees from the holder in addition to recovery of any unclaimed property accrued or a penalty or interest due.

(f)  In addition to a penalty or interest assessed on delinquent property, a holder who fails to pay or deliver property or who fails to file a property report within the time prescribed by this chapter is subject to a civil penalty not to exceed $100 for each day of violation.

Sec. 74.710.  CRIMINAL OFFENSE. (a)  A holder commits an offense if the holder wilfully violates this chapter, including:

(1)  failing to file a report in accordance with this chapter;

(2)  failing to pay or deliver property in accordance with this chapter; or

(3)  refusing to permit examination of records in accordance with this chapter.

(b)  An offense under this section is a Class B misdemeanor.

SECTION 37.  Subchapter A, Chapter 75, Property Code, is amended by adding Section 75.002 to read as follows:

Sec. 75.002.  TRANSFER AND PURCHASE OF MINERAL INTEREST ON MINERAL PROCEEDS. A person purchasing mineral proceeds of an owner whose name has been reported or is reportable to the comptroller shall provide documentation required by the comptroller to substantiate that the transfer is executed by the reported owner or the reported owner's legal agent.

SECTION 38.  Title 6, Property Code, is amended by adding Chapter 76 to read as follows:

CHAPTER 76. REPORT, DELIVERY, AND CLAIMS PROCESS FOR

CERTAIN PROPERTY

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 76.001.  APPLICABILITY. This chapter applies only to the holder of property if:

(1)  the holder is a municipality or county; and

(2)  the property is:

(A)  presumed abandoned under Chapter 72 or 75; and

(B)  valued at $100 or less.

Sec. 76.002.  OFFICERS AND REPRESENTATIVES. In this chapter:

(1)  a reference to the treasurer of a holder includes a person performing the duties of the treasurer of a holder in a municipality or county in which the office of treasurer does not exist; and

(2)  a reference to the attorney for a holder includes an attorney designated by the governing body of the holder to represent the holder.

[Sections 76.003-76.100 reserved for expansion]

SUBCHAPTER B. PROPERTY REPORT

Sec. 76.101.  PROPERTY REPORT. (a)  Each holder who on June 30 holds property subject to this chapter shall file a report of that property on or before the following November 1. Each report shall be filed with the treasurer of the holder as provided by this section and on forms prescribed by the treasurer of the holder.

(b)  A holder required by Subsection (a) to file a report shall file a report each successive year regardless of whether the holder has any reportable property on June 30 of the year in which the report is filed.

Sec. 76.102.  VERIFICATION. (a)  The person preparing a property report shall place at the end of each copy of the report a verification made under oath and executed by the chief fiscal officer of the holder, as designated by the holder.

(b)  The verification must include the following sentence: "This report contains a full and complete list of all property held by the undersigned that, from the knowledge and records of the undersigned, is abandoned under the laws of the State of Texas."

Sec. 76.103.  RETENTION OF RECORDS. (a)  The holder required to file a property report shall keep a record of:

(1)  the name and last known address of each person who, from the records of the holder, appears to be the owner of the property;

(2)  a brief description of the property, including the identification number of the account, if any; and

(3)  the balance of each account, if appropriate.

(b)  The record must be kept until the 10th anniversary of the date on which the property is reportable.

(c)  The treasurer of the holder may provide for a shorter period for keeping a record required by this section.

Sec. 76.104.  CONFIDENTIALITY OF PROPERTY REPORT. (a)  Except as provided by this chapter, a property report filed with the treasurer of the holder is confidential until the second anniversary of the date the report is filed.

(b)  Notwithstanding other law, the social security number of an owner that is reported to the treasurer of the holder is confidential.

[Sections 76.105-76.200 reserved for expansion]

SUBCHAPTER C. NOTICE

Sec. 76.201.  PUBLISHED NOTICE. (a)  Except as provided by Subsections (b) and (e), the treasurer of a holder shall publish a notice in a newspaper in the calendar year immediately following the year in which the property report is filed. The newspaper must be a newspaper of general circulation in the jurisdiction of the holder.

(b)  The treasurer of the holder may use a method of publishing notice that is different from that prescribed by Subsection (a) if the treasurer determines that the different method would be as likely as the prescribed method to give actual notice to the person required to be named in the notice.

(c)  The published notice must state that the reported property is presumed abandoned and subject to this chapter and must contain:

(1)  a statement that, by addressing an inquiry to the treasurer of the holder, any person possessing a legal or beneficial interest in the reported property may obtain information concerning the amount of the property; and

(2)  a statement that the owner may present proof of the claim to the treasurer of the holder and establish the owner's right to receive the property.

(d)  The treasurer of a holder may offer for sale space for suitable advertisements in a notice published under this section. Proceeds from the sale of the advertising space shall be used to defray the cost of publishing the notices, with the remaining amount, if any, to be deposited to the credit of the unclaimed money fund.

(e)  In the notice required by this section, the treasurer of the holder may publish other information regarding property if the treasurer determines that publication of that information is in the public interest.

Sec. 76.202.  NOTICE TO OWNER. (a)  During the calendar year immediately following the year in which the property report is filed, the treasurer of the holder may mail a notice to each person who has an address in this state and appears to be entitled to the reported property.

(b)  The notice must contain:

(1)  a statement that property is being held by the treasurer of the holder to which the addressee appears to be entitled; and

(2)  a statement that the owner may present proof of the claim to the treasurer of the holder and establish the owner's right to receive the property.

Sec. 76.203.  NOTICE THAT ACCOUNTS ARE SUBJECT TO THIS CHAPTER. Publication of notice in accordance with Section 76.201 is notice to the owner by the holder that the reported property is subject to this chapter.

Sec. 76.204.  CHARGE FOR NOTICE. The treasurer of the holder may charge the following against the property delivered under this chapter:

(1)  expenses incurred for the publication of notice required by Section 76.201; and

(2)  the amount paid in postage for the notice to the owner required by Section 76.202.

[Sections 76.205-76.300 reserved for expansion]

SUBCHAPTER D. DELIVERY

Sec. 76.301.  DELIVERY OF PROPERTY TO TREASURER. (a)  Each holder who on June 30 holds property that is subject to this chapter shall deliver the property to the treasurer of the holder on or before the following November 1 accompanied by the property report.

(b)  If the property subject to delivery under Subsection (a) is stock or some other intangible ownership interest in a business association for which there is no evidence of ownership, the holder shall issue a duplicate certificate or other evidence of ownership to the treasurer of the holder at the time delivery is required under this section.

Sec. 76.302.  VERIFICATION OF DELIVERED PROPERTY. (a)  Property delivered under Section 76.301 must be accompanied by a verification under oath that:

(1)  the property delivered is a complete and correct remittance of all accounts subject to this chapter in the holder's possession;

(2)  the existence and location of the listed owners are unknown to the holder; and

(3)  the listed owners have not asserted a claim or exercised an act of ownership with respect to the owner's reported property.

(b)  The verification required by Subsection (a) shall be signed by the chief fiscal officer of the holder, as designated by the holder.

Sec. 76.303.  LIST OF OWNERS. (a)  The treasurer of the holder shall compile and revise each year an alphabetical list of names and last known addresses of the owners listed in the reports and the amount credited to each account.

(b)  The treasurer of the holder shall make the list available for public inspection during all reasonable business hours.

Sec. 76.304.  PERIOD OF LIMITATION NOT A BAR. The expiration of any period specified by statute or court order, during which an action or proceeding may be initiated or entered to obtain payment of a claim for money, does not prevent the money from being presumed abandoned property and does not affect any duty to file a report required by this chapter or to deliver abandoned property to the treasurer of the holder.

[Sections 76.305-76.400 reserved for expansion]

SUBCHAPTER E. DISPOSITION OF DELIVERED PROPERTY

Sec. 76.401.  SALE OF PROPERTY. (a)  Except as provided by Subsection (c), the treasurer of the holder shall sell at public sale all personal property, other than money and marketable securities, delivered to the treasurer of the holder in accordance with Section 76.301. The treasurer of the holder shall conduct the sale in the holder's jurisdiction.

(b)  The treasurer of the holder shall sell the property to the highest bidder. If the treasurer of the holder determines that the highest bid is insufficient, the treasurer of the holder may decline that bid and offer the property for public or private sale.

(c)  The treasurer of the holder is not required to offer property for sale if the property belongs to a person with an address outside this state or the treasurer of the holder determines that the probable cost of the sale of the property exceeds its value.

(d)  If after investigation the treasurer of the holder determines that property delivered has insubstantial commercial value, the treasurer of the holder may destroy or otherwise dispose of the property at any time.

(e)  A person may not maintain any action or proceeding against the state, an officer of the state, or the holder of property because of an action taken by the treasurer of the holder under this section.

Sec. 76.402.  NOTICE OF SALE. Before the 21st day before the day on which a public sale is held under Section 76.401, the treasurer of the holder shall publish notice of the sale in a newspaper of general circulation in the county where the sale is to be held.

Sec. 76.403.  PURCHASER'S TITLE. (a)  At a sale, public or private, of property that is held under this subchapter, the purchaser receives title to the purchased property free from all claims of the prior owner and prior holder of the property and all persons claiming through or under the owner or holder.

(b)  The treasurer of the holder shall execute all documents necessary to complete the transfer of title.

[Sections 76.404-76.500 reserved for expansion]

SUBCHAPTER F. CLAIM FOR DELIVERED PROPERTY

Sec. 76.501.  FILING OF CLAIM. (a)  A claim for property delivered to the treasurer of the holder under this chapter must be filed with the treasurer of the holder.

(b)  All claims to which this section applies must be filed in accordance with procedures and on forms prescribed by the treasurer of the holder.

Sec. 76.502.  CONSIDERATION OF CLAIM. The treasurer of the holder shall consider the validity of each claim filed under this subchapter.

Sec. 76.503.  HEARING. (a)  The treasurer of the holder may hold a hearing and receive evidence concerning a claim filed under this subchapter.

(b)  If the treasurer of the holder considers that a hearing is necessary to determine the validity of a claim, the treasurer of the holder shall sign the statement of the findings and the decision on the claim. The statement shall report the substance of the evidence heard and the reasons for the decision. The statement is a public record.

(c)  If the treasurer of the holder determines that a claim is valid, the treasurer of the holder shall approve and sign the claim.

Sec. 76.504.  PAYMENT OF CLAIM. (a)  If a claim has been approved under this subchapter, the treasurer of the holder shall pay the claim.

(b)  If a claim is for personal property other than money and has been approved under this subchapter, the treasurer of the holder promptly shall deliver the property to the claimant unless the treasurer of the holder has sold the property. If the property has been sold under Section 76.401, the treasurer of the holder shall pay to the claimant the proceeds from the sale.

(c)  Costs of publication and postage shall be deducted from the amounts paid under this section, but deductions for any costs of administration or service charges may not be made.

Sec. 76.505.  APPEAL. (a)  A person aggrieved by the decision on a claim filed under this subchapter may appeal the decision before the 61st day after the date the decision was rendered.

(b)  If a claim has not been decided before the 91st day after the date the claim was filed, the claimant may appeal within the 60-day period beginning on the 91st day after the date of filing.

(c)  An appeal under this section must be made by filing suit against the holder in a district court in the county in which the claimed property is located. The holder's immunity from suit without consent is waived with respect to a suit under this section.

(d)  A court shall try an action filed under this section de novo and shall apply the rules of practice of the court.

Sec. 76.506.  FEE FOR RECOVERY. A person who informs a potential claimant that the claimant may be entitled to claim property that is reportable to the treasurer of the holder under this chapter, that has been reported to the treasurer of the holder, or that is in the possession of the treasurer of the holder may not contract for or receive from the claimant for services an amount that exceeds 10 percent of the value of the property recovered. If the property involved is mineral proceeds, the amount for services may not include a portion of the underlying minerals or any production payment, overriding royalty, or similar payment.

Sec. 76.507.  CLAIM OF ANOTHER STATE TO RECOVER PROPERTY; PROCEDURE. (a)  At any time after property has been paid or delivered to the treasurer of the holder under this chapter, another state may recover the property if:

(1)  the property was subjected to custody by the holder because the records of the holder did not reflect the last known address of the apparent owner when the property was presumed abandoned under this chapter, and the other state establishes that the last known address of the apparent owner or other person entitled to the property was in that state and under the laws of that state the property escheated to or was subject to a claim of abandonment by that state;

(2)  the last known address of the apparent owner or other person entitled to the property, as reflected by the records of the holder, is in the other state and under the laws of that state the property has escheated to or become subject to a claim of abandonment by that state; or

(3)  the records of the holder were erroneous in that the records did not accurately reflect the actual owner of the property and the last known address of the actual owner is in the other state and under the laws of that state the property escheated to or was subject to a claim of abandonment by that state.

(b)  The claim of another state to recover escheated or abandoned property must be presented in a form prescribed by the treasurer of the holder, who shall decide the claim within 90 days after the date it is presented. The treasurer of the holder shall allow the claim if the treasurer of the holder determines that the other state is entitled to the abandoned property under Subsection (a).

[Sections 76.508-76.600 reserved for expansion]

SUBCHAPTER G. UNCLAIMED MONEY FUND

Sec. 76.601.  FUND. (a)  The treasurer of the holder shall maintain a fund known as the unclaimed money fund.

(b)  The treasurer of the holder shall deposit to the credit of the fund:

(1)  all funds, including marketable securities, delivered to the treasurer of the holder under this chapter or any other statute requiring the delivery of unclaimed property to the treasurer of the holder;

(2)  all proceeds from the sale of any property, including marketable securities, under this chapter; and

(3)  any income derived from investments of the fund.

(c)  The treasurer of the holder shall keep a separate record and accounting for delivered unclaimed property, other than money, before its sale.

(d)  The treasurer of the holder shall from time to time invest the amount in the unclaimed money fund in investments approved by law for the investment of funds by the holder.

(e)  The treasurer of the holder may from time to time sell securities in the fund, including stocks, bonds, and mutual funds, and use the proceeds to buy, exchange, invest, or reinvest in marketable securities. When making the investments, the treasurer of the holder shall exercise the judgment and care of a prudent person.

(f)  The treasurer of the holder shall keep a separate record and accounting for securities delivered, sold, purchased, or exchanged and the proceeds and earnings from the securities.

Sec. 76.602.  USE OF FUND. (a)  The treasurer of the holder shall use the unclaimed money fund to pay the claims of persons establishing ownership of property in the possession of the treasurer of the holder under this chapter or under any other unclaimed property or escheat statute.

(b)  Each fiscal year after deducting funds sufficient to pay anticipated expenses and claims of the unclaimed money fund, the treasurer of the holder shall transfer the remainder to the general fund of the holder.

(c)  The treasurer of the holder and the attorney for the holder may use the unclaimed money fund generally for the enforcement and administration of this chapter, including the expenses of forms, notices, examinations, travel, court costs, supplies, equipment, and employment of necessary personnel and other necessary expenses.

Sec. 76.603.  AUDIT; BUDGET. The unclaimed money fund is subject to:

(1)  audit by the auditor of the holder or an independent auditor if the holder does not have an auditor; and

(2)  budgetary procedures adopted by the governing body of the holder.

[Sections 76.604-76.700 reserved for expansion]

SUBCHAPTER H.  ENFORCEMENT

Sec. 76.701.  RULES. The treasurer of the holder may adopt rules necessary to carry out this chapter.

Sec. 76.702.  EXAMINATION OF RECORDS. (a)  To enforce this chapter and to determine whether reports have been made as required by this chapter, the treasurer of the holder, at any reasonable time, may examine the books and records of the holder.

(b)  The treasurer of the holder, attorney for the holder, or an agent of either person may not make public any information obtained by an examination made under this section and may not disclose that information except:

(1)  in the course of a judicial proceeding authorized by this chapter in which the holder is a party; or

(2)  under an agreement with another state allowing joint audits or the exchange of information obtained under this section.

Sec. 76.703.  ADDITIONAL PERSONNEL. (a)  The treasurer of the holder and the attorney for the holder may employ, in the office of either person, additional personnel necessary to enforce this chapter.

(b)  The salary rate of additional personnel may not exceed the rate paid to other employees of the holder for similar services.

(c)  The salaries of additional personnel shall be paid in accordance with Section 76.602.

(d)  The provisions of this section are subject to the budgetary procedures adopted by the governing body of the holder.

Sec. 76.704.  OFFENSE. (a)  A person commits an offense if the person:

(1)  wilfully fails to file a report required by this chapter;

(2)  refuses to permit examination of records in accordance with this chapter;

(3)  makes a deduction from or a service charge against a dormant account or dormant deposit of funds; or

(4)  violates any other provision of this chapter.

(b)  An offense under this section is punishable by:

(1)  a fine of not less than $500 or more than $1,000;

(2)  confinement in jail for a term not to exceed six months; or

(3)  both the fine and confinement.

(c)  In addition to a criminal penalty, a person who commits an offense under Subsection (a) is subject to a civil penalty not to exceed $100 for each day of the violation. The attorney for the holder shall collect the civil penalty by bringing suit in a district court of the county in which the holder is located.

SECTION 39.  Subsection (c), Section 91.403, Natural Resources Code, is amended to read as follows:

(c)  The payor's obligation to pay interest and the payee's right to receive interest under Subsection (a) of this section terminate on delivery of the proceeds and accumulated interest to the comptroller [State Treasurer] as provided by Title 6, Property Code.

SECTION 40.  The following provisions are repealed:

(1)  Section 571.030, Government Code;

(2)  Sections 73.004, 74.204, 74.305, and 74.505, Property Code; and

(3)  Section 74.503, Property Code, as amended by Chapters 36 and 851, Acts of the 73rd Legislature, 1993.

SECTION 41.  (a)  The changes in law made by Section 74.001, Property Code, as amended by this Act, and Chapter 76, Property Code, as added by this Act, apply only to unclaimed property held by a holder, as that term is used in Chapter 76, Property Code, as added by this Act, on or after June 30, 1998.

(b)  Property held by a holder, as that term is used in Chapter 76, Property Code, as added by this Act, on June 30, 1997, is governed by the law as it existed immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 42.  (a)  The change in law made by this Act applies only to an offense committed on or after the effective date of this Act. For purposes of this section, an offense is committed before the effective date of this Act if any element of the offense occurs before that date. An offense committed before the effective date of this Act is covered by the law in effect when the offense was committed, and the former law is continued in effect for that purpose.

(b)  The change in law under Section 74.705, Property Code, as amended by this Act, applies only to the rate for interest that accrues under that section on or after the effective date of this Act. The rate for interest that accrued under that section before the effective date of this Act is governed by the law as it existed at the time the interest accrued, and that law is continued in effect for that purpose.

(c)  On the effective date of this Act, the comptroller shall transfer to the general revenue fund money in the unclaimed money fund.

(d)  The change in law under Sections 74.201 and 74.202, Property Code, as amended by this Act, applies to any notice requirement provided under Section 74.201, Property Code, on or after September 1, 1997, including notice requirements for property reported prior to September 1, 1997.

SECTION 43.  (a)  Interest, attorney's fees, and penalties owed by a county or municipality under Section 74.705, Property Code, before June 30, 1998, are not required to be paid if the county or municipality delivers to the comptroller of public accounts not later than March 1, 1999, the property for which the interest, attorney's fees, or penalties have accrued. The waiver of interest, attorney's fees, and penalties provided by this subsection is for the purpose of permitting the county or municipality to defray the costs of administering Chapter 76, Property Code, as added by this Act.

(b)  Any property valued at $100 or less that is required to be delivered to the comptroller of public accounts by a county or municipality under Chapter 74, Property Code, before June 30, 1998, and that has not been delivered to the comptroller by that date:

(1)  is not required to be delivered to the comptroller; and

(2)  will not accrue interest, attorney's fees, or penalties after June 30, 1998.

SECTION 44.  This Act takes effect September 1, 1997.

SECTION 45.  The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.


Courtesy of Glenn M. Karisch, Ikard & Golden, P. C., Austin, Texas. This page was last revised on June 7, 1997.