Fiscal Note
Fiscal Note On: HB 445 HLS 20RS 761
Bill Text Version: REENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 17, 2020 5:27 PM Author: SCHEXNAYDER
Dept./Agy.: Treasury
Subject: Dedicates unclaimed property funds Analyst: Greg Albrecht
FUNDS/FUNDING RE -$25,000,000 GF RV See Note Page 1 of 1
(Constitutional Amendment) Dedication of unclaimed property funds and creation of Louisiana Unclaimed Property
Permanent Trust Fund
Proposed constitutional amendment creates the La Unclaimed Property Permanent Trust Fund to receive all monies attributable to the
Uniform Unclaimed Property Act, and to be used solely for the payment of claims made by owners of unclaimed property. No
appropriations are to be made from the Fund, but monies in the Fund can be utilized to make claims payments if claims exceed gross
receipts. Monies in the Fund are exempt from Bond Security and Redemption Fund requirements, and are not subject to deficit reduction
provisions applicable to other funds. Monies are to be deposited into the Fund until the balance equals the state’s potential liability for all
unclaimed property claims. Monies received beyond that liability, as well as investment earnings, net of administrative expenses, are to be
deposited into the state general fund. The treasurer may invest up to 50% of the Fund in equities, and is required to submit an initial
report and annual reports.
To be submitted to the electors at the statewide election to be held on November 3, 2020. Effective July 1, 2021.
EXPENDITURES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0
REVENUES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 ($25,200,000) ($24,700,000) ($24,200,000) ($24,200,000) ($98,300,000)
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $25,200,000 $24,700,000 $24,200,000 $24,200,000 $98,300,000
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
The Treasury will likely incur expenditures beginning in FY 22 associated with the management of investments and operating expenses
related to the new Trust Fund (approximately $48,000 annually). The management of investments (up to 50% equities is allowed) will be
paid by professional services contract, and are allowed to be appropriated from the investment earnings of the Trust Fund.
Creating a new special fund/dedication (Louisiana Unclaimed Property Permanent Trust Fund) within the state treasury will result in
additional workload for the Treasury, which can generally be absorbed with existing resources. However, the accumulation of statutory and
constitutional dedications (over 400 special funds currently managed) will ultimately require additional resources. When unable to absorb
additional workload with existing resources, the treasury anticipates the need for an additional position ($71,000 treasury fiscal analyst)
and one-time equipment purchases ($2,500).
Proposed constitutional amendment will result in a dollar for dollar decrease in state general fund deposits and an increase in dedicated
fund deposits (Louisiana Unclaimed Property Permanent Trust Fund) until such time as the balance in the new Fund equals the amount of
potential liability to unclaimed property claimants as reported in the previous fiscal year by the state treasurer. At such time as the Fund
balance exceeds the state’s potential liability in the previous fiscal year, program net receipts shall be deposited into the state general
fund. As of the end of FY19, the potential liability was $881 million. The treasury anticipates earning an accumulating $1 million per year
from the Trust Fund’s separate portfolio, including equities ($1M FY23, $2M FY24, $3M FY25...).
Treasury practice from inception of the program through FY18 was to revert to the state general fund all program funds received each
fiscal year that have not been returned to the owners nor used for allowable administrative costs, after making a transfer of $15 M to the
Unclaimed Property Leverage Fund {R.S. 9:165(C)} since FY08. These excess receipts are appropriated by the legislature in support of the
state budget. Earnings attributable to UCP receipts are credited to the state general fund, as well. Historically, annual receipts (FY19:
$81.5M) substantially exceed annual claims refunds and expenses (FY19: $54.5M), and the state’s liability to claimants does not expire.
Based on the current official forecast of May 11, 2020, the projected diversion of funds away from the state general fund and into the new
Trust Fund is depicted in the revenue table above (FY25 is assumed equivalent to FY24). It should be noted that the treasury did not
revert excess program collections in FY19, and indicates it will not do so in subsequent years. However, this issue is being litigated, and
the REC has not removed these receipts from the official forecast, nor have state general fund appropriations been reduced.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} x 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
John D. Carpenter
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Legislative Fiscal Officer