TITLE: Relating to deposits of funds into a court registry by a clerk of a justice court.

SUMMARY: Relating to deposits of funds into a court registry by a clerk of a justice court.

FULL TEXT:
AN ACT relating to deposits of funds into a court registry by a clerk of a justice court. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 117.001(2), Local Government Code, is amended to read as follows: (2) "Clerk" means a justice court clerk, a county clerk, a district clerk, or a county and district clerk. SECTION 2. Sections 117.002 and 117.003, Local Government Code, are amended to read as follows: Sec. 117.002. TRANSFER OF UNCLAIMED FUNDS TO COMPTROLLER. Any funds deposited under this chapter, except cash bail bonds, that are presumed abandoned under Chapter 72, 73, or 75, Property Code, shall be reported and delivered by the justice court, county,or district clerk to the comptroller without further action by any court. The dormancy period for funds deposited under this chapter begins on the later of: (1) the date of entry of final judgment or order of dismissal in the action in which the funds were deposited; (2) the 18th birthday of the minor for whom the funds were deposited; or (3) a reasonable date established by rule by the comptroller to promote the public interest in disposing of unclaimed funds. Sec. 117.003. COMPLIANCE WITH FEDERAL TAX LAW FOR FUNDS HELD UNDER THIS CHAPTER. (a) If any funds deposited under this chapter are placed into an interest-bearing account, any person with a taxable interest in funds deposited to such account must submit appropriate tax forms and provide correct information to the justice court, county, or district [or county] clerk so that the interest earned on such funds can be timely and appropriately reported to the Internal Revenue Service. The information and forms provided to the [district or county] clerk under this section are not subject to public disclosure except to the extent necessary to effectuate compliance with federal tax law requirements. (b) The justice court, county, or district [or county] clerk is authorized to pay any or all of the interest earned on funds deposited under this chapter, without court order, to the Internal Revenue Service to satisfy tax withholding requirements. SECTION 3. Sections 117.021(a) and (d), Local Government Code, are amended to read as follows: (a) The commissioners court of a county shall select by the process provided by this subchapter or by Subchapter C, Chapter 262, a federally insured bank or banks in the county to be the depository for a special account held by the justice court clerks, county clerk,and [the] district clerks. The county shall enter a contract with the selected federally insured bank or banks for a two-year or four-year term. The original term can be renewed once for an additional two-year term. The contract may, on request by a [the] clerk and approval of the commissioners court, include a provision that the funds in a special account earn interest. A request from a [the] clerk that an account earn interest must be made, in writing, to the commissioners court not later than the 30th day before the date the county gives notice under Section 117.022 and shall be entered in the minutes of the court. (d) A bank must file its application on or before a date set by the commissioners court. The application must be accompanied by a certified check or cashier's check for at least one-half of one percent of the average daily balance of the registry funds held by the justice court clerks, county clerk,and [the] district clerks [clerk] during the preceding calendar year, as determined by the [county] clerk [and the district clerk] on or before the 10th day before the date the application is required to be filed. A certified check or cashier's check that complies with this section is a good-faith guarantee on the part of the applicant that if its application is accepted it will execute the bond required under this subchapter. If the bank selected as depository does not provide the bond, the county shall retain the amount of the check as liquidated damages and the county shall select another depository as provided by this subchapter. SECTION 4. Section 117.022, Local Government Code, is amended to read as follows: Sec. 117.022. NOTICE. A county shall advertise or give notice that the county will accept applications to be the depository for registry funds held by the justice court clerks, county clerk,and [the] district clerks [clerk] in the same manner as notice is required under Section 116.022. SECTION 5. Section 117.023(a), Local Government Code, is amended to read as follows: (a) At the meeting at which banks are to be selected to serve as the depository for registry funds held by the justice court clerks, county clerk,and [the] district clerks [clerk],the commissioners court shall enter the applications in the minutes of the court and select a depository. SECTION 6. The heading to Section 117.052, Local Government Code, is amended to read as follows: Sec. 117.052. DEPOSITS OF REGISTRY FUNDS BY JUSTICE COURT, COUNTY,AND DISTRICT CLERKS. SECTION 7. Section 117.052(a), Local Government Code, is amended to read as follows: (a) If a depository has been selected under Subchapter B, a justice court clerk, county clerk,or [a] district clerk who is to have,for more than three days,legal custody of money deposited in the registry of the court pending the result of a legal proceeding shall deposit the money in the depository. SECTION 8. Section 117.053(a), Local Government Code, is amended to read as follows: (a) If a commissioners court selects a new depository under Subchapter B, when the depository qualifies, the justice court clerks, county clerk,and [the] district clerks [clerk] shall transfer the funds in a special account from the old depository to the new depository, and the clerks may draw checks on the accounts for this purpose. SECTION 9. Section 117.056(a), Local Government Code, is amended to read as follows: (a) A depository selected under Subchapter Bshall pay a check drawn by a justice court, county,or district clerk against funds deposited in the clerk's name on presentment of the check at the county seat if the funds subject to the check are in the possession of the depository. SECTION 10. Section 117.057(a), Local Government Code, is amended to read as follows: (a) A commissioners court may require a depository selected under Subchapter Bto execute a new bond whenever the commissioners court considers it necessary for the protection of the justice court clerks', county clerk's,and [the] district clerks' [clerk's] registry funds. SECTION 11. Section 117.058(b), Local Government Code, is amended to read as follows: (b) If the commissioners court of a county provides a depository for the registry funds of the justice court clerks, county clerk,or [the] district clerks [clerk],those officers shall make reports under oath to the county auditor to properly reflect all registry funds received and disbursed by the officer, including all money remaining on hand at the time of the report. The county auditor shall prescribe the form and frequency of the report. SECTION 12. Sections 117.081 and 117.083, Local Government Code, are amended to read as follows: Sec. 117.081. LIABILITY OF JUSTICE COURT, COUNTY,AND DISTRICT CLERKS. (a) A justice court clerk, county clerk,or [a] district clerk is not responsible for a loss of registry funds resulting from the failure or negligence of a depository. (b) This section does not release a justice court clerk, county clerk,or [a] district clerk from: (1) liability for a loss of registry funds resulting from the clerk's official misconduct, negligence, or misappropriation of the funds; or (2) responsibility for keeping the registry funds safe until the clerk deposits them in a depository selected under Subchapter B. (c) After a justice court clerk, county clerk,or [a] district clerk deposits in a depository selected under Subchapter Bthe registry funds held by the clerk, the clerk is relieved of the responsibility for keeping the funds secure. Sec. 117.083. LOSS OF REGISTRY FUNDS. If registry funds held by a justice court clerk, county clerk,or [a] district clerk and deposited by the county with a depository selected under Subchapter Bare lost for any reason, including a loss due to the insolvency of the depository, the county is liable to the rightful owner of the funds for the full amount of the funds due the owner. SECTION 13. This Act takes effect September 1, 2025.