DAN MORALES 

ATTORNEY GENERAL 

Bffice of tfp !Zlttornep &nerat 

&ate of Qkxae 

September 28, 1993 

Susan A. Spataro, CPA, CMA 

Travis County Auditor 

P.O. Box 1748 

Austin, Texas 78767 

Opinion No. DM-258 

Be.: Whether unclaimed overpayments on 

property taxes escheat to the state or do 

they belong to Travis County after three 

years @Q-W 

Dear Ms. Spataro: 

Travis County collects property taxes for itself as well as several other taxing units 

pursuant to the Tax Code section 3 1.01. In the event of overpayment or erroneous 

payment of taxes, unclaimed funds are deposited in a separate escrow account. You 

express concern that over a significant period of time, the amount of funds in the account 

has accumulated. Refunds consisting of overpayments or erroneous payments are 

addressed by section 3 1.11 of the code which provides as follows: 

(a) If a taxpayer applies to the tax collector of a taxing unit for 

a retbnd of an overpayment or erroneous payment of taxes and the 

auditor for the unit determines that the payment was erroneous or 

excessive, the tax collector shall retimd the amount of the excessive 

or erroneous payment from available current tax collections or gem 

krds appropriated by the unit for making refunds. However, if the 

amount of the relimd exceeds $500, the collector may not make the 

refund unless the governing body of the taxing unit also determines 

that the payment was erroneous or excessive and approves the 

refimd. 

. . 

(c) An alpplication for a refund must be made within three 

years afrr the dare of the payment or the taxpayer waives the right 

to the refind. 

Acts 1993,73d Leg., ch. 198, 3 1 (emphasis added). Your inquiry is concerned with the 

disposition of the fimds once the three year time period for reclamation has lapsed. You 

speciticslly ask whether the unclaimed overpayments belong to Travis County and if so, 

whether they may be legally transferred into the county’s general fund. 

Our research indicates that the Tax Code does not address the disposition of the 

8mds following the reclamation period, nor do any prior judicial or attorney general 

p. 1342 
Susan A. Spataro, CPA, ChIA - Page 2 (DM-258) 

opinions. However, chapters 71 through 75 of the Property Code, also known as the 

Texas Unclaimed Property Law, address the escheat of personal property held by a person 

other than a banking organization or life insurance company. Chapter 71 addresses 

escheat in the context of an individual that dies intestate and without heirs. In such an 

instance the real and personal property previously held would escheat to and vest in the 

state. Prop. Code $ 71.001. 

Chapters 72 and 74 address abandoned unclaimed property and the procedures 

necessary for escheat to the state. Chapter 72 specifically applies to personal property 

held by a person other than a banking organization or life insurance company;’ and 

provides in pertinent part 

personal property is presumed abandoned if, for longer than 

three years: 

(1) the existence and location of the owner of the property is 

unknown to the holder of the property;2 and 

(2) according to the knowledge and records of the holder of the 

property, a claim to the property has not been asserted or an act of 

ownership of the property has not been exercised. 

Id. 5 72.101(a) (footnote added). While the state does possess a property interest in 

abandoned funds, that interest is only as great as the interest held by the original owner of 

the funds. State v. Texas Elec. Service Co., 488 S.W.2d 878, 881 (Tex. Civ. App.--Fort 

Worth 1972, no writ). As section 72.101 provides, the original owner waives all rights to 

the property once the three year time period has lapsed. Once the owner’s rights to the 

property cease to exist, the state is left without an interest to claim. Central Power & 

Light Co. v. St&e, 410 S.W.2d 18, 26 (Tex. Civ. App.--Corpus Christi 1966, writ refd 

n.r.e.). Similarly, the original owner of an overpayment of property taxes waives his right 

to claim an interest in the funds once the three year reclamation period has lapsed. Hence, 

the state also loses any right to assert a claim to the funds at the end of the three year 

period. In the absence of an interest which may be asserted by the original owner of the 

fiurds or the state, such Iknds may be retained by the county. 

For a substantial amount of time, counties levying such a tax have exercised their 

discretion in retaining unclaimed overpayments. Cur research indicates that such exercise 

‘Chapter 73 addresses the escheat of inactive accmn& held by banking organizations. Id. 

85 73.001 - 73.503. 

zFor pupmes of chapter 72, a holder is defined ss a person who is in possession of property that 

belongs to another, a trustee or is indebted to another on an obligation. Id. 8 72.001(e). We conclude that 

Travis county meets the requirements of a holder prior to the expiration of the three year reclamation 

period. 

p. 1343 
Susan A. Spataro, CPA, CMA - Page 3 (DM-258) 

of discretion has been unchallenged. Thus, it is our understanding that it has been 

standard practice for counties to retain unclaimed overpayments collected at a local level. 

In the absence of authority to the contrary, we conclude that local counties may exercise 

their discretion in retaining possession of unclaimed overpayments on property taxes; 

finthermore, such finds may be transferred into the counties’ general timd accounts 

pursuant to article VIII, section 9 of the Texas Constitution.3 

SUMMARY 

In the absence of authority to the contrary, unclaimed 

overpayments on property taxes belong to the county once the three 

year period of reclamation has lapsed under section 3 1.11 of the Tax 

Code. The timds may be transferred into the county’s general fund 

account pursuant to article VIII, section 9 of the Texas Constitution. 

DAN MORALES 

Attorney General of Texas 

WILL PRYOR 

First Assistant Attorney General 

MARY KELLER 

Deputy Attorney General for Litigation 

RENEA HICKS 

State Solicitor 

MADELEINE B. JOHNSON 

Chair, Opinion Committee 

Prepared by Toya C. Cook 

Assistant Attorney General 

3ArticIe VU, section 9 of the Texas Constitution states that “[a]ny county may put all tax money 

collected by the county into one general fund without regard to the purpose or source of each tax.” We 

note that this provision only pertains to collections of county tax, not cokctions for other political 

SUhdiViSiO"S. 

p. 1344