Piece of the Puzzle, Part of the Whole Hon. Lisa David was sworn - PDF document

Registry Wednesday, January 30, 2019 2019 County 10:45 a.m.–noon and District Clerks’ Association of Texas Winter Education Conference Hon. Lisa David January 28-31, 2019 Williamson County District Clerk Embassy Suites by Hon. Tammy Kneuper Hilton Hotel Bandera County District Clerk Conference Center & Spa, San Marcos This session will be a discussion on registry of the court and escheating funds by the clerk. Piece of the Puzzle, Part of the Whole

Hon. Lisa David was sworn in as Williamson County district clerk in 2007. She began working in the District Clerk’s Office in 1981 and has served as deputy district clerk and assistant chief deputy. David serves on the Legislative Committee, Indigent Defense Committee, Bail Bond Board, OCA Protective Order Task Force Committee and OCA Collection of Data Task Force and was just recently named the 2018 District Clerk of the Year. She currently serves as president of the Texas District Court Alliance. She has been married to Bobby for 39 years and has four children and seven grandchildren. Hon. Tammy Kneuper currently holds the office of Bandera County district clerk, a position held since 1999 when the county and district clerk offices divided due to increased population. She is a member of the County and District Clerks Association and ha s served on the board and various committees in the Association. She is currently serving as the immediate past president. She is a member of the Texas District Court Alliance and currently serves as a director and secretary for the organization. Kneuper has been married to Gerald, her friend and life partner of 46 years. They have two children, Charles Kneuper and Shannon Miller, three grandsons and one granddaughter. She and her husband live on the family farm in Medina.

REGISTRY OF THE COURT Presented by: Lisa David, Williamson County District Clerk Registry of the Court • Each District and County Clerk must maintain • a bank account to receive money ordered • tendered into the court’s registry. • All funds must be deposited if they are to be • held more than 3 days. • Registry of the Court • The clerk should keep a record of all funds • tendered into the court’s registry that includes: • 1. The cause number. • 2. The style of the case. • 3. Instructions regarding the investment or disbursement of the funds. • 4. An accounting of all withdrawals and deposits. 1

Types of Registry Funds Funds of minors or incapacitated persons 1. Funds tendered in an interpleader action 2. Funds paid in satisfaction of a judgment 3. Child support funds held for more than 3 days 4. Cash bonds 5. Cash bail bonds 6. Funds in an eminent domain case and 7. Any other funds tendered to the clerk for deposit 8. into the registry of the court. Registry of the Court • REFERENCE THE FOLLOWING STATUTES FOR ADDITIONAL INFO ON REGISTRY FUNDS: • Chapter 142, Property Code-minor funds • Sec. 31.008 Civ. Prac. & Rem. Code- payment of judgments • Art. 17.02 Code of Criminal Procedure-bail bonds • Chapter 72 – 76 Property Code-Escheat & Unclaimed Property CUSTODIANSHIP • A CLERK SHALL ACT ONLY IN A CUSTODIAL CAPACITY IN RELATION TO THE REGISTRY FUND, A SPECIAL ACCOUNT, OR A SEPARATE ACCOUNT. • A CLERK IS NOT THE TRUSTEE FOR THE BENEFICIAL OWNER AND DOES NOT ASSUME THE DUTIES, OBLIGATIONS, OR LIABILITIES OF A TRUSTEE FOR A BENEFICIAL OWNER. • LGC 117.0521 2

MANAGEMENT OF REGISTRY FUNDS The clerk has two options when deciding on the type of registry to open: The registry account Interest Bearing may earn interest. Account or The registry account may Non-Interest not earn interest. Bearing Account IF THE CLERK ELECTS TO HAVE THE REGISTRY ACCOUNT EARN INTEREST THE CLERK MUST DO THE Interest FOLLOWING NOT LATER THAN THE 30 TH DAY BEFORE Bearing THE DATE THE COUNTY GIVES NOTICE THAT THE Account COUNTY WILL ACCEPT APPLICATIONS TO THE DEPOSITORY. • A. Make a written request to the commissioner’s court that the contract include a provision that funds in a special account in the clerk’s name earn interest. • B. The application of a bank that seeks to become the county depository must be accompanied by a certified or cashier’s check for an amount equal to one ‐ half of one percent of the average daily balance of the registry funds held by the clerk during the preceding calendar year. The clerk must calculate this amount and include the figure to the commissioner’s court requesting that the registry account earn interest. Interest IF THE CLERK ELECTS TO HAVE THE REGISTRY Bearing ACCOUNT EARN INTEREST . . . . Account • If the registry account or any separate accounts earn interest, the clerk must keep a record of the amount of interest earned and the amount to each case. • The clerk shall pay 10% of any interest earned to the general fund of the county to compensate the county for the accounting and administrative expense of maintaining the accounts. • LGC 117.054 3

Non- TO COMPENSATE THE COUNTY FOR THE Interest ACCOUNTING AND ADMINISTRATIVE EXPENSES Bearing INCURRED IN HANDLING THE REGISTRY FUNDS THAT HAVE NOT EARNED INTEREST… Account • the clerk shall, at the time of withdrawal, deduct from the amount of the withdrawal a fee in the amount of 5% of the withdrawal but not to exceed $50. • WITHDRAWAL OF FUNDS GENERATED FROM A CASE ARISING UNDER THE FAMILY CODE ARE EXEMPT FROM THE FEE DEDUCTION. LCG 117.055 • INVESTMENT OF FUNDS • The clerk shall transfer any registry funds into a separate account only when directed to do so by a written order of the court of proper jurisdiction or when the clerk is required under the probate code 887 Investment of funds as follows: • • 1. In a financial institution doing business in the state and that is insured by FDIC • 2. United States treasury bills • 3. An eligible investment pool that meets requirements of Sections 2256.016, 2256.017 and 2256.019, Government code (ex. TexPool ) • 4. A no ‐ load money market mutual fund, if the fund: A. Is regulated by the Securities Commission and Exchange • Commission B. Has a dollar weighted average stated maturity date of 90 days or fewer and C. Includes in its investment objectives the maintenance of a stable net asset value of $1 for each share D. A structured settlement account LGC 117.053 and Prop Code 142.008 and 142.009 DISBURSEMENT OF REGISTRY FUNDS • Unless otherwise provided by statute or rule, registry funds are to be disbursed only by a court order. • When an order is received, the clerk will disburse the funds to the proper party according less administrative fees . • LGC 117.054 and 117.055 4

STRUCTURED SETTLEMENT PAYMENTS TEXAS PROPERTY CODE 142.008 • In a suit in which a minor or incapacitated person who has no legal guardian is represented by a next friend or an appointed guardian ad litem, the court, on a motion from the parties, may provide for a structured settlement that: • • 1. Provides for periodic payments; and • 2. Is funded by: • A. An obligation guaranteed by the United States government; or • B. An annuity contract that meets the requirement of Section 142.009. STRUCTURED SETTLEMENT PAYMENTS • The person obligated to fund a structured settlement shall provide to the court: • • 1. A copy of the instrument that provides funding for the structured settlement; or • 2. An affidavit from an independent financial consultant that specifies the present value of the structured settlement and the method by which the value is calculated. • A structured settlement provided for under this section is solely for the benefit of the beneficiary of the structured settlement and is not subject to the interest payment calculations contained in Section 117.054, Local Government Code. • Prop Code 142.008 ESCHEAT FUNDS • Personal property is assumed abandoned if dormant for longer than a period of 3 years. Section 72.101 Property Code • • Any funds deposited under this chapter, except cash bail bonds, that are presumed abandoned under Chapter 72,73 or 75, Property Code, and exceed $250, shall be reported and delivered by the county or district clerk to the comptroller without further action by any court. Section 117.002 Local Government Code • • DORMANCY PERIOD IS THREE YEARS FOR ALL PROPERTY TYPES EXCEPT WAGES, WHICH ARE ONE YEAR. • 5

ESCHEAT FUNDS • • Each holder, who on March 1st, holds proper subject to this chapter shall file a report of the property on or before the following July 1st. • Each report is filed with the treasurer of the holder. • • All should be done to notify the owner of the funds you are holding and a record kept of the last known address even though mail may have been returned. ESCHEAT FUNDS • Recommendations: • • On or around March 1st of each year, review your accounts and identify funds that meet the 3 year dormancy period. • Notify the property owners of the funds/property that are being held and keep all documentation of your efforts to notify owners. Notices are to be sent no later than May 1 st . • On or before July 1 st , complete the required forms and submit to comptroller. • EXCESS FUNDS • The sale of property for delinquent taxes may generate excess funds over and above the judgment. • These funds are turned over to the clerk issuing the order of sale to be placed in the registry and disbursed according to the law or as ordered by the court. • The tax code requires the clerk to send out notices to the former owner of the property that excess funds have been paid into the court’s registry. • The retention period for these funds is 2 years. 6