In November 2020, Louisiana voters will decide a constitutional amendment designed to resolve a conflict between Governor John Bel Edwards (D) and State Treasurer John Schroder (R) regarding the state’s unclaimed property revenue. If approved, the amendment would do the following:
• Create the Unclaimed Property (UCP) Permanent Trust Fund, with the fund earmarked for payment of claims made by owners of abandoned property
• Allocate funds above administrative costs received due to the Uniform Unclaimed Property Act of 1997 (or its successor) to the UCP Permanent Trust Fund until equal to the state’s estimated unclaimed property potential liability
• Allocate any additional unclaimed property receipts above the state’s potential liability and any investment revenue from the UCP Permanent Trust Fund to the state’s general fund
• Authorize the treasurer to invest up to 50% of the UCP Permanent Trust Fund in equities
The Uniform Disposition of Property Act was passed in Louisiana in 1972. From 1972 to 2019, the state treasurer collected $1.3 billion in unclaimed property—such as abandoned bank accounts, IRAs, and 401(k) accounts; unclaimed pensions, Social Security benefits; unredeemed U.S. Savings Bonds; and uncollected insurance proceeds and utility deposits. From this, $463 million was remitted according to claims by the owners of the formerly unclaimed property. The remaining revenue was transferred to the state’s general fund, except for a certain amount transferred to the I-49 Leverage fund. In the 2019 and 2020 fiscal years, State Treasurer John Schroder did not transfer $32.5 million in unclaimed property revenue above the amount remitted to claimants to the general fund, saying the money did not belong to the state and should be kept in case its rightful owners come forward.
In February 2020, Gov. Edwards sued Schroder, requesting the court to order the treasurer to transfer the $32.5 million to the general fund. On May 26, 2020, District Court Judge Richard Moore, III, ruled in favor of Gov. Edwards. Schroder said he would appeal the ruling. Edwards and Schroder agreed to a deal, however, that included (a) Schroder releasing the $32.5 million and an estimated $25 million for the following fiscal year and (b) this constitutional amendment to establish a permanent fund for unclaimed property revenue starting in July 2021.
Senator Michael Fesi (R) introduced the constitutional amendment as Senate Bill 12 on June 4, 2020. On June 25, 2020, the state House passed an amended version of Senate Bill 12 in a vote of 95-3, with six absent. On June 26, 2020, the state Senate concurred with the House amendments in a vote of 35-0, with four absent.
This amendment joins six others put on the November 2020 ballot by the Louisiana Legislature during the 2019 and 2020 legislative sessions. From 1995 through 2019, Louisiana voters decided 189 constitutional amendments. During even-numbered years, there were 121 constitutional amendments. An average of 10 measures appeared on even-year statewide ballots, with the total number ranging from four to 21. Louisiana voters approved 75% (141 of 189) and rejected 25% (48 of 189) of constitutional amendments since 1995.
Additional reading: