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Texas Revises Its Unclaimed Property Statutes

By: Cathleen A. Bucholtz Jim Sadik Steven Swaigenbaum Robert M. Tucci Troy R. Wangen |

Texas House Bill 3598 (TX HB 3598) was signed into law by the Governor with an effective date of June 10th.  However, given that some of the provisions in the new law impact holders’ reporting requirements, there was some concern as to whether the new reporting provisions would be in effect for the reports that were due on July 1, 2019.  Per our discussions with the Texas Comptroller’s office, although the bill became effective upon the Governor’s signature, the position of the Texas Comptroller is that the new provisions in TX HB 3598 impacting unclaimed property reporting will become effective for the 2020 report year (reports DUE July 1, 2020).  As a result, the continuing reporting requirement (stating that holders who are required to file an UP report in any year must file negative reports each successive year) will not become effective until the 2020 report year.

A summary of some of the key provisions of TX HB 3598 include the following:

  • Prop. Code § 74.103(b) AMENDED: Provides that without regard to whether property is reported in the aggregate, records must be kept for 10 years from the latter of the date on which the property is reportable or the date on which the report is filed.
  • Prop. Code § 74.105 ADDED: Provides that if a holder is a member of an affiliated group, the holder shall file one report for the affiliated group.
  • Prop. Code § 74.106 ADDED: Created a continuing reporting requirement:
    • (a) A person who is required to file a property report under Section 74.101 in any year shall file a property report in each successive year.
    • (b) If a person required to file a property report under this section is not holding any property that is reportable under this chapter, the person shall certify that fact.
  • Prop. Code § 74.7021 ADDED: Created a limitation on the periods for examination:
    • (a) The comptroller or attorney general may not begin an examination after the seventh anniversary of the date a person filed a property report under this title.
    • (b) The limitation provided by this section does not apply if:
      • (1) the person intentionally filed a false or fraudulent property report;
      • (2) a property report for a period has not been filed; or
      • (3) A court grants a petition to compel the person to submit to an examination.
    • (c) A person is presumed to have acted with intent if, after correction of a report, the amount of property due exceeds the amount initially reported by at least 25 percent.
  • Prop. Code § 74.711 and 74.712 ADDED: Allows the Comptroller to take testimony, administer oaths, as well issue and enforce subpoenas to compel holders to comply with the state UP laws.

The full text of TX HB 3598 can be accessed here: https://capitol.texas.gov/tlodocs/86R/billtext/pdf/HB03598F.pdf

Please reach out to any member of the True Partners Unclaimed Property Management Team if you have any questions about this or any other developments likely to impact your company.