Bill Text: CA SB495 | 2011-2012 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Unclaimed property.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2011-09-21 - Chaptered by Secretary of State. Chapter 305, Statutes of 2011. [SB495 Detail]

Download: California-2011-SB495-Introduced.html

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BILL NUMBER: SB 495	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Fuller

                        FEBRUARY 17, 2011

   An act to amend Sections 1514, 1540, and 1565 of, and to add
Section 1576.5 to, the Code of Civil Procedure, relating to unclaimed
property, and making an appropriation therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 495, as introduced, Fuller. Unclaimed property.
   (1) Existing law provides that the contents of a safe deposit box,
or the proceeds of their sale, held in this state by a business
association escheat to the state if unclaimed by the owner for more
than 3 years, as specified. Existing law requires the business
association to provide notice to the apparent owner of the contents
no less than 6 months and not less than 4 months before the contents
become reportable as escheated property and to provide a specified
notice.
   This bill would lengthen the period for the escheat of the
contents of a safe deposit box, as described above, to 5 years. The
bill would additionally require a business association to provide
notice to the apparent owner of the contents no less than 21/2 years
and not more than 3 years before the contents become reportable. The
bill would require the notice also to include a prescribed form, by
which the customer may declare an intention to maintain the safe
deposit box, as specified, or otherwise take possession of the
property, which, if properly returned to the business association,
would be considered as a claim for the safe deposit box or other
safekeeping repository and the contents shall not escheat. The bill
would permit the business association to substitute an electronic
process for the notice and permit the association to impose a service
fee in this regard. The bill would also require the Controller to
establish a program to identify holders of unclaimed property who are
not in compliance with specified unclaimed property report filing
requirements.
   (2) Existing law provides that any person who claims an interest
in escheated property paid or delivered to the Controller may file a
claim on the property or to the net proceeds from its sale. Existing
law provides that no interest shall be paid on these claims. Existing
law requires that all money received pursuant to the Unclaimed
Property Law, including proceeds from the sale of property, be
deposited in the Abandoned Property Account in the Unclaimed Property
Fund, which is continuously appropriated. Existing law permits these
moneys to be used for the payment of claims.
   This bill would require that the Controller shall add interest at
the lower of 2 specified rates to the amount of any claim paid to the
owner for the period the property was on deposit in the Unclaimed
Property Fund. By providing that moneys in a continuously
appropriated fund be used for a new purpose, this bill would make an
appropriation. The bill would also require a former holder of
property who compensates the owner of the property that has escheated
and been remitted to the state to also pay interest to the owner,
for which the owner would apply to the Controller for reimbursement.
   (3) Existing law requires that property delivered to the
Controller that has no apparent commercial value be retained for a
period of not less than 18 months from the date the property is
delivered.
   This bill would require that this property be retained for a
period of not less than 7 years.
   Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1514 of the Code of Civil Procedure is amended
to read:
   1514.  (a) The contents of, or the proceeds of sale of the
contents of, any safe deposit box or any other safekeeping
repository, held in this state by a business association, escheat to
this state if unclaimed by the owner for more than  three
  five  years from the date on which the lease or
rental period on the box or other repository expired, or from the
date of termination of any agreement because of which the box or
other repository was furnished to the owner without cost, whichever
last occurs.
   (b) If a business association has in its records an address for an
apparent owner of the contents of, or the proceeds of sale of the
contents of, a safe deposit box or other safekeeping repository
described in subdivision (a), and the records of the business
association do not disclose the address to be inaccurate, the
business association shall make reasonable efforts to notify the
owner by mail, or, if the owner has consented to electronic notice,
electronically, that the owner's contents, or the proceeds of the
sale of the contents, will escheat to the state pursuant to this
section. The business association shall give notice  not less
than six months and not more than 12 months before the time the
contents, or the proceeds of the sale of the contents, become
reportable to the Controller in accordance with this chapter.
  at each of the following two times before the date the
contents become reportable to the Controller in  
accordance with this chapter:  
   (1) Not less than two and one-half years and not more than three
years before that date.  
   (2) Not less than six and not more than 12 months before that
date. 
   (c) The face of the notice shall contain a heading at the top that
reads as follows: "THE STATE OF CALIFORNIA REQUIRES US TO NOTIFY YOU
THAT YOUR UNCLAIMED PROPERTY MAY BE TRANSFERRED TO THE STATE IF YOU
DO NOT CONTACT US," or substantially similar language. The notice
required by this subdivision shall specify the date that the property
will escheat and the effects of escheat, including the necessity for
filing a claim for the return of the property. The notice required
by this section shall, in boldface type or in a font a minimum of two
points larger than the rest of the notice, exclusive of the heading,
do all of the following:
   (1) Identify the safe deposit box or other safekeeping repository
by number or identifier.
   (2) State that the lease or rental period on the box or repository
has expired or the agreement has terminated.
   (3) Indicate that the contents of, or the proceeds of sale of the
contents of, the safe deposit box or other safekeeping repository
will escheat to the state unless the owner requests the contents or
their proceeds.
   (4) Specify that the California Unclaimed Property Law requires
business associations to transfer the contents of, or the proceeds of
sale of the contents of, a safe deposit box or other safekeeping
repository to the Controller if they remain unclaimed for more than
 three   five  years.
   (5) Advise the owner to make arrangements with the business
association to either obtain possession of the contents of, or the
proceeds of sale of the contents of, the safe deposit box or other
safekeeping repository, or enter into a new agreement with the
business association to establish a leasing or rental arrangement. If
an owner fails to establish such an arrangement prior to the end of
the period described in subdivision (a), such contents or proceeds
shall escheat to this state. 
   (d) The notice shall also include a form, as prescribed by the
Controller, by which the customer may declare an intention to
maintain the safe deposit box or other safekeeping repository by
either renewing the lease, rental period, or agreement, or otherwise
taking possession of property from the business association. If that
form is filled out, signed by the customer, and returned to the
business association, it shall be considered as a claim for the safe
deposit box or other safekeeping repository and the contents shall
not escheat. In lieu of returning the form, the business association
may provide a telephone number or other electronic means to enable
the owner to contact that organization. The contact, as evidenced by
a memorandum or other record on file with the business association,
shall be considered as a claim for the safe deposit box or other
safekeeping repository and the contents shall not escheat. The
business association may impose a service charge on the safe deposit
box or other safekeeping repository for this notice in an amount not
to exceed the administrative cost of mailing the notice and form, and
in no case to exceed two dollars ($2) per notice required by this
section.  
   (d) 
    (e)  In addition to the notice required pursuant to
subdivision (b), the business association may give additional notice
in accordance with subdivision (c) at any time between the date on
which the lease or rental period for the safe deposit box or
repository expired, or from the date of the termination of any
agreement, through which the box or other repository was furnished to
the owner without cost, whichever is earlier, and the date the
business association transfers the contents of, or the proceeds of
sale of the contents of, the safe deposit box or other safekeeping
repository to the Controller. 
   (e) 
    (f)  The contents of, or the proceeds of sale of the
contents of, a safe deposit box or other safekeeping repository shall
not escheat to the state if, as of June 30 or the fiscal yearend
next preceding the date on which a report is required to be filed
under Section 1530, the owner has owned, with a banking organization
providing the safe deposit box or other safekeeping repository, any
demand, savings, or matured time deposit, or account subject to a
negotiable order of withdrawal, which has not escheated under Section
1513 and is not reportable under subdivision (d) of Section 1530.

   (f) 
    (g)  The contents of, or the proceeds of sale of the
contents of, a safe deposit box or other safekeeping repository shall
not escheat to the state if, as of June 30 or the fiscal yearend
next preceding the date on which a report is required to be filed
under Section 1530, the owner has owned, with a financial
organization providing the safe deposit box or other safekeeping
repository, any demand, savings, or matured time deposit, or matured
investment certificate, or account subject to a negotiable order of
withdrawal, or other interest in a financial organization or any
deposit made therewith, and any interest or dividends thereon, which
has not escheated under Section 1513 and is not reportable under
subdivision (d) of Section 1530. 
   (g) 
    (h)  The contents of, or the proceeds of sale of the
contents of, a safe deposit box or other safekeeping repository shall
not escheat to the state if, as of June 30 or the fiscal yearend
next preceding the date on which a report is required to be filed
under Section 1530, the owner has owned, with a banking or financial
organization providing the safe deposit box or other safekeeping
repository, any funds in an individual retirement account or under a
retirement plan for self-employed individuals or similar account or
plan pursuant to the internal revenue laws of the United States or
the income tax laws of this state, which has not escheated under
Section 1513 and is not reportable under subdivision (d) of Section
1530. 
   (h) 
    (i)  In the event the owner is in default under the safe
deposit box or other safekeeping repository agreement and the owner
has owned any demand, savings, or matured time deposit, account, or
plan described in subdivisions  (e), (f), or (g) 
 (f), (g), or (h)  , the banking or financial organization
may pay or deliver the contents of, or the proceeds of sale of the
contents of, the safe deposit box or other safekeeping repository to
the owner after deducting any amount due and payable from those
proceeds under that agreement. Upon making that payment or delivery
under these subdivisions, the banking or financial organization shall
be relieved of all liability to the extent of the value of those
contents or proceeds. 
   (i) 
    (j)  For new accounts opened for a safe deposit box or
other safekeeping repository with a business association on and after
January 1, 2011, the business association shall provide a written
notice to the person leasing the safe deposit box or safekeeping
repository informing the person that his or her property, or the
proceeds of sale of such property, may be transferred to the
appropriate state upon running of the time period specified by state
law from the date the lease or rental period on the safe deposit box
or repository expired, or from the date of termination of any
agreement because of which the box or other repository was furnished
to the owner without cost, whichever is earlier. 
   (j) 
    (k)  A business association may directly escheat the
contents of a safe deposit box or other safekeeping repository
without exercising its rights under Article 2 (commencing with
Section 1660) of Chapter 13 of Division 1 of the Financial Code.
  SEC. 2.  Section 1540 of the Code of Civil Procedure is amended to
read:
   1540.  (a) Any person, excluding another state, who claims an
interest in property paid or delivered to the Controller under this
chapter may file a claim to the property or to the net proceeds from
its sale. The claim shall be on a form prescribed by the Controller
and shall be verified by the claimant.
   (b) The Controller shall consider each claim within 180 days after
it is filed and may hold a hearing and receive evidence. The
Controller shall give written notice to the claimant if he or she
denies the claim in whole or in part. The notice may be given by
mailing it to the address, if any, stated in the claim as the address
to which notices are to be sent. If no address is stated in the
claim, the notice may be mailed to the address, if any, of the
claimant as stated in the claim. No notice of denial need be given if
the claim fails to state either an address to which notices are to
be sent or an address of the claimant. 
   (c) No interest shall be payable on any claim paid under this
chapter.  
   (c) (1) The Controller shall add interest at the rate of 5 percent
per year or the bond equivalent rate of 13-week United States
Treasury bills, whichever is lower, to the amount of any claim paid
to the owner under this section for the period the property was on
deposit in the Unclaimed Property Fund. No interest shall be payable
for any period prior to January 1, 1977. Any interest required to be
paid by the state pursuant to this section shall be computed as
simple interest, not as compound interest.  
   (2) For purposes of this section, the bond equivalent rate of
13-week United States Treasury bills shall be defined in accordance
with the following criteria:  
   (A) The bond equivalent rate of 13-week United States Treasury
bills established at the first auction held during the month of
January shall apply for the following July 1 to December 31,
inclusive.  
   (B) The bond equivalent rate of 13-week United States Treasury
bills established at the first auction held during the month of July
shall apply for the following January 1 to June 30, inclusive. 

   (d) A former holder of property who compensates the owner of the
property for property that has escheated and been remitted to the
state shall also pay the owner for interest as provided in
subdivision (c). The former holder may apply for, and the Controller
shall pay upon a properly submitted request, reimbursements of the
principal and interest paid to the owner of the escheated property.
 
   (d) 
    (e)  For the purposes of this section, "owner" means the
person who had legal right to the property prior to its escheat, his
or her heirs, his or her legal representative, or a public
administrator acting pursuant to the authority granted in Sections
7660 and 7661 of the Probate Code. 
   (e) 
    (f)  Following a public hearing, the Controller shall
adopt guidelines and forms that shall provide specific instructions
to assist owners in filing claims pursuant to this article.
  SEC. 3.  Section 1565 of the Code of Civil Procedure is amended to
read:
   1565.  Any property delivered to the  State 
Controller pursuant to this chapter that has no apparent commercial
value shall be retained by the Controller for a period of not less
than  18 months   seven years  from the
date the property is delivered to the Controller. If the Controller
determines that any property delivered to him or her pursuant to this
chapter has no apparent commercial value, he or she may at any time
thereafter destroy or otherwise dispose of the property, and in that
event no action or proceeding shall be brought or maintained against
the state or any officer thereof, or against the holder for, or on
account of any action taken by, the Controller pursuant to this
chapter with respect to the property.
  SEC. 4.  Section 1576.5 is added to the Code of Civil Procedure, to
read:
   1576.5.  The Controller shall establish a compliance program to
identify holders of unclaimed property who are not in compliance with
the unclaimed property report filing requirements of Section 1530.