BILL ANALYSIS Ó
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1634|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1634
Author: Bonnie Lowenthal (D)
Amended: 6/18/12 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-1, 6/12/12
AYES: Evans, Corbett, Leno
NOES: Harman
NO VOTE RECORDED: Blakeslee
ASSEMBLY FLOOR : 73-0, 4/12/12 - See last page for vote
SUBJECT : Unclaimed property
SOURCE : Office of the State Controller
DIGEST : This bill provides that any solicitation made to
the owner of escheated property to locate, deliver,
recover, or assist in the recovery of that property shall
be in writing, disclose the nature and value of the
property and the name, current mailing address, and
telephone number or Internet Web site of the person or
entity in possession of the property on the front page of
the solicitation in at least a 12-point type. This bill
provides that an agreement to recover escheated property is
not valid unless the other party complied with those
solicitations requirements.
ANALYSIS : Existing law, the Unclaimed Property Law,
requires that every person holding funds or other property
CONTINUED
AB 1634
Page
2
escheated to the state must report specific information to
the State Controller, including the last known address of
each person appearing from records to be the owner of any
property with a value of at least $50 that has escheated
under the Unclaimed Property Law, as specified. (Code of
Civil Procedure (CCP) Section 1530.) The State Controller
is required to publish a publish notice within one year
after payment or delivery of the escheated property, as
specified. (CCP Section 1531)
Existing law states that no agreement to locate, deliver,
recover, or assist in the recovery of escheated property is
valid if it is entered into between the date the above
report is filed with the State Controller and the
publication of the notice. Such an agreement is valid if
made after publication of the notice if the fee or
compensation agreed upon is not more than 10% of the
recoverable property and the agreement is in writing and
signed by the owner after disclosure of the nature and
value of the property and the name and address of the
person or entity in possession of the property. (CCP
Section 1582)
This bill provides that any solicitation made to locate,
delivery, recover, or assist in the recovery of property
reported to the State Controller must be in writing, and
shall disclose the nature and value of the property and the
name, current mailing address, and telephone number or
Internet Web site of the person or entity in possession of
the property on the front page of the solicitation in at
least a 12-point type.
This bill provides that, in addition to the above existing
requirements, any agreement to locate, deliver, recover, or
assist in the recovery of escheated property that is made
after publication of the notice is valid only if any
solicitation made to the owner by the other party to the
agreement complies with the above requirements.
Prior Legislation
SB 495 (Fuller), Chapter 305, Statutes of 2011, made
several changes to the Unclaimed Property Law to increase
the period of time the State Controller must hold property
AB 1634
Page
3
that has been delivered to the state under the Unclaimed
Property Law.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/18/12)
Office of the State Controller (source)
Congress of California Seniors
OPPOSITION : (Verified 6/18/12)
Vanacore International
U.S. Claims Services
ARGUMENTS IN SUPPORT : According to the author:
Currently, when financial property (e.g. bank
accounts, stocks, etc) in California has no activity
or contact with the owner for three years, the
property holder is required to forward it to the State
Controller's OfficeÝ(SCO)]. The ÝSCO] then attempts
to find the owner or heir and return the property.
Some investigators purchase the data of the property
the ÝSCO] holds and send solicitations to owners to
retrieve their lost property for them for a fee.
While investigator contracts are legally required to
identify where the property is being held, their
solicitations are under no such requirement.
Investigator solicitations may not mention the
description of the property held or that it is held by
the ÝSCO]. When a property owner responds to the
solicitation and receives a contract, they may sign
the contract without reading that their property is
being held by the ÝSCO]. Without this notice, the
property owner doesn't know they have the option to
reclaim their property themselves at no charge. In
addition, fewer property owners may respond to the
solicitations because they are unsure if the
solicitations are legitimate or a scam.
AB 1634 remedies this by requiring investigators to
AB 1634
Page
4
include the nature, value and location of the property
described on their solicitations to return the
property to its owner.
The Congress of California Seniors states, "Solicitation
letters from investigators sometimes upset claimants who
may worry that if they don't hire the investigator, their
money or property will not be returned to them. AB 1634
clarifies this matter by requiring that solicitation
letters state simply where they can retrieve their
property."
ARGUMENTS IN OPPOSITION : Vanacore International argues
that "ÝAB 1634] limits contracts to recover assets to 10
percent of the recoverable assets, regardless of the
process involved or costs to recover such assets. Asset
recovery firms provide a valuable service of locating lost
account owners and heirs of deceased account owners, which
supplements efforts made by the State Controller. Instead
of legislating in this area, we believe the validity of
each agreement should be decided on a case-by-case basis
under current contract law." Vanacore International
further contends that legislation is "better focused on . .
. unclaimed property reforms and streamlining processes to
speed up the payment of claims," and recommends changes to
procedures for claiming property and SCO processing of
claims.
In response, the SCO notes that "AB 1634 does not expand
the 10 Ýpercent] restriction (prior legislation enacted by
SB 86). Current law, ÝCode of Civil Procedure Section]
1582, already restricts compensation to 10 Ýpercent] or
less for properties reported under 1530. We are not
expanding the category of properties which are affected by
the 10 Ýpercent] restriction."
ASSEMBLY FLOOR : 73-0, 4/12/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Conway, Davis, Dickinson, Eng, Feuer,
Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Gatto,
Gordon, Gorell, Hagman, Halderman, Hall, Harkey, Hayashi,
AB 1634
Page
5
Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries,
Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma,
Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel
Pérez, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Williams, Yamada, John
A. Pérez
NO VOTE RECORDED: Cedillo, Cook, Donnelly, Fletcher,
Garrick, Grove, Wieckowski
RJG:n 6/19/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****