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The bill would add
U.S. savings bonds as property to be escheated to the state of Texas and
provide that U.S. savings bonds which are presumed abandoned, including bonds
in the possession of the Comptroller and a lost, stolen, or destroyed bond
registered to persons with last known addresses in Texas, would escheat to
Texas if the bond had remained unredeemed for at least three years after the
date of maturity, and unclaimed for at least three years after being presumed
The fiscal impact of this bill cannot be determined because it requires the Comptroller to file suit to receive a judgement that savings bonds have been escheated to Texas. Neither the result nor duration of such a suit can be predicted at this time. However, if the suit were successful Texas could receive initial revenue to unclaimed property of approximately $4,000,000 followed by yearly inflows of about $300,000.
SB 1916 would add a new subchapter to Chapter 74 (Report, Delivery, and Claims Process) of the Property Code. Specifically, this legislation would escheat abandoned, lost, or stolen United States Savings bonds to the state of Texas.
If a savings bond has not been redeemed or claimed for more than three years then the comptroller would be allowed to file a civil suit against the federal government for a determination that the savings bonds has escheated to the state. If a judge determines that the savings bonds have escheated to the state then all legal rights to that savings bond transfers to the state.
Lastly, if a person believes they have a legitimate claim to a savings bond that has already escheated to the state then he or she would be allowed to file a claim with the Comptroller. The Comptroller would have sole discretion in determining whether to pay a claim based on the proof provided by the claimant.
SB 1916 would infringe on the property rights of bond holders by allowing the bond to escheat to the state after a few years. Although these bonds in question are abandoned, lost, or stolen, the fact remains these bonds are still the property of someone that has yet to lay claim to them. Just because property, such as a savings bond, has remained unclaimed should not mean that all rights to that property are abandoned.
Even though this legislation would allow a person to make a claim on bonds after it has been escheated to the state, his or her property rights would still be encroached upon. That person would have to prove to the Comptroller that he or she has a claim to that bond. The comptroller would be the sole authority to determine this. In other words, a person would not have the benefit of presenting his or her claim to a bond before a Judge, which would undermine that person’s right to an impartial hearing.
Why should bond holders have to go to the state to prove they have a claim to property that was already theirs? The author’s statement of intent says, “This bill should result in more money flowing to the state.” Why should the monetary needs of the state trump the rights of a property owner?
We oppose SB 1916 because it would violate the property rights of an individual by having the state takeaway unclaimed savings bonds.
We recommend an amendment to remove the decision making authority provided under this legislation from the comptroller and instead allow an individual to petition a judge. This would at least improve due process for individuals affected should this bill pass into law.