Tuesday, Feb. 2, 2021 10:30 a.m.-noon 2021 County and District Clerks’ Association Escheating Funds of Texas Winter In this session, we will discuss the process of Education Conference escheating funds to the Texas Comptroller of Public Accounts. Feb. 2-4 Virtual Event Platform Ms. Veronica Mendoza, Accounts Examiner, Preserving Our Past, Texas Comptroller of Public Accounts Embracing Our Future Mendoza is an Accounts Examiner in the Holder Reporting and Education section of the Unclaimed Property Division with the Texas Comptroller of Public Accounts. She works closely with businesses to educate and train them on the reporting process. Mendoza applies this expertise along with her background in processing claims and customer relations to help Texas businesses comply with the unclaimed property requirements. 2020 UNCLAIMED PROPERTY REPORTING INSTRUCTIONS GLENN HEGAR Texas Comptroller of Public Accounts UNCLAIMED PROPERTY REPORTING INSTRUCTIONS UNCLAIMED PROPERTY REPORTING INSTRUCTIONS i Unclaimed Property Reporting Instructions Table of Contents CHAPTER 1: INTRODUCTION TO HOLDER CHAPTER 3: PROPERTY-SPECIFIC REPORTING REPORTING Crime Victims Restitution Reporting ...................... 11 What is Unclaimed Property? .................................... 1 Electric Cooperatives .............................................. 12 Types of Unclaimed Property ..................................... 1 Telephone Cooperatives ........................................... 12 What is a Holder? ...................................................... 2 Escrow Funds Reported by Title Companies ......... 13 What Are My Responsibilities as a Holder? .............. 2 Financial Institutions ................................................14 What You Need to File Your Report ......................... 2 Insurance-Related Property .......................................21 Reporting Format ....................................................... 2 Local Government ................................................... 24 Combined Reporting .................................................. 2 Mineral Proceeds ...................................................... 24 How Does the Reporting Process Work? ................. 4 Mutual Fund Shares, Distributions and Checks ...... 25 Securities or Securities-Related Cash ........................27 CHAPTER 2: FILING YOUR REPORT Determining Dormancy ............................................. 5 CHAPTER 4: REFERENCE TABLES Notifying Property Owners ....................................... 6 Other Methods of Verifying Whereabouts Property Type Codes and Abandonment Periods .....31 of Owners ................................................................... 6 Relationship Codes....................................................33 Preparing Your Report ............................................... 7 Suggested Abbreviations ...........................................35 Submitting Your Report and Payment ....................... 7 Property Description Codes ..................................... 36 Archiving Data ........................................................... 9 Securities Delivery Codes .........................................38 Country Codes ..........................................................39 Summary of Property Types and Dormancy Periods .....................................................42 County Codes To be used for reporting mineral proceeds ..........................................................43 Helpful Links ............................................................45 Deadlines ...................................................................45 Unclaimed Property Reporting Instructions ii iii Unclaimed Property Reporting Instructions Introduction to Holder Reporting CHAPTER 1 CHAPTER 1 Introduction to Holder Reporting What is Unclaimed Property? Unclaimed property can be any financial asset that has been abandoned by the owner for periods ranging from one to 15 years. The abandonment period is the number of years that the property is held before being sent to the Texas Comptroller of Public Accounts (Comptroller’s office). The property type determines the length of the abandonment period. Title 6 of the Texas Property Code governs the state of Texas Unclaimed Property Program. Chapters 72 through 77 apply to the reporting, delivery and claims processes for abandoned property. Chapter 76 applies only to unclaimed property held and reported by Texas counties, municipalities, independent school districts and Common Types of Unclaimed Property junior colleges. Chapter 77 applies only to unclaimed crime Abandonment victims restitution payments held and reported by county Property Type: Period (Years) probation departments. Payroll 1 Types of Unclaimed Property Utility deposits 1 Demutualization proceeds 1 Unclaimed property is classified into different property Uncashed dividend or cashier’s checks 3 types with different abandonment periods. All properties Stocks, bonds, mutual fund accounts 3 listed on your report must be assigned the correct property type codes. Your choice of codes is important Stored value cards (gift cards) 1-3 because it determines what type of information is Bank accounts and matured certificates 3 required of claimants. of deposit Insurance proceeds 3 Property Type Codes and Property Descriptions Mineral interests or royalty payments 3 When you are ready to prepare your report, select the Court deposits, trust funds, escrow accounts 3 property type code from Chapter 4: Reference Tables, Property Type Codes and Abandonment Periods section that Money orders 3 best describes the original property of the owner. Use the Safe deposit box contents 5 miscellaneous outstanding check code (MS16) only as a Traveler’s checks 15 last resort when the nature of the uncashed check is truly unknown. Refer to the table entitled Property Description Field Requirements for the specific information required in the description field for each property type. Unclaimed Property Reporting Instructions 1 CHAPTER 1 Introduction to Holder Reporting What is a Holder? What You Need to File Your Report A holder is any business in possession of property Report Overview belonging to an individual or business. There are five basic steps to follow when reporting Holders may include: any type of property: 1. • Mortgage and title companies Determining dormancy 2. • Insurance companies Notifying property owners 3. • Oil and gas companies Preparing your report 4. • Securities brokers Submitting report and payment 5. • Utility providers Archiving data • Local government entities Reporting Format • Institutions of higher education Your report must be in the electronic reporting What Are My Responsibilities as a Holder? format developed by the NAUPA. The report can be created by using any commercially available reporting Businesses (holders) who, on March 1, hold property software that generates the file in the NAUPA that is presumed abandoned are required to file a report format. of that property on or before the following July 1. The Comptroller’s office requires the report to be in the For reports with a few properties, the Unclaimed electronic format developed by the National Association Property Division offers Manual Online Reporting of Unclaimed Property Administrators (NAUPA). (MOR). MOR can be located at ClaimItTexas.org, under the “reporting property” tab, by selecting Holders that have previously filed Unclaimed Property “creating the report”. For further details, see the Reports are required to file annually. Manual Reporting Guide. Source: Texas Administrative Code, Title 34, A negative report is a zero report showing that a business did Section 13-21 not have property to report for that year. Exception: county and probation departments will still Combined Reporting need to file a negative report for crime victims restitution Effective Jun. 10, 2019, HB 3598, 86th Legislature, payments. (See page 11) amends Chapter 74 of Texas Property Code by adding The due date for unclaimed property reporting is July Section 74.105, Combined Reporting. 1 of each year. We recommend a list of customers with Section 74.105 now requires holders with a parent and whom no contact has been reestablished be relayed to affiliate companies to file one report for the affiliated the person responsible for preparing your institution’s group. report by June 1 (or whenever an internal deadline is set). All the information that you can provide for each A parent company is defined as a company owning customer will assist in verifying ownership when a claim more than 50 percent directly or indirectly of one of is generated. the following: Source: Texas Property Code, Section 74.101 • the total voting power of all classes of stock of the corporation; • the capital or profits in the partnership; • the total membership interest of the limited liability company; and 2 Unclaimed Property Reporting Instructions Introduction to Holder Reporting CHAPTER 1 • the beneficial interest in the association, trust, or other entity. When submitting a file on ClaimItTexas.org, holders are required to identify if a combined file containing multiple reports for related entities under the same parent company FEIN is being submitted. You must also enter the parent company’s FEIN in the correct field. Important Due Dates Deadlines March 1 — annual cutoff date for required abandonment periods. June 30 — annual cutoff date for life insurance. July 1 — deadline for filing your report and payment. Nov. 1 — deadline for filing life insurance