BILL NUMBER: SB 495	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 10, 2011
	AMENDED IN SENATE  APRIL 25, 2011

INTRODUCED BY   Senator Fuller

                        FEBRUARY 17, 2011

   An act to amend Sections 1513, 1513.5, 1514, 1516, 1518, 1520,
 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 amended, 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 specify additional circumstances
under which certain funds in retirement accounts and plans become due
and payable for purposes of escheat. 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. The bill would make additional technical
changes. 
   (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) 
    (2)  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   no
 . Fiscal committee: yes. State-mandated local program: no.


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

  SECTION 1.  Section 1513 of the Code of Civil Procedure is amended
to read:
   1513.  (a) Subject to Sections 1510 and 1511, the following
property held or owing by a business association escheats to this
state:
   (1) (A) Except as provided in paragraph (6), any demand, savings,
or matured time deposit, or account subject to a negotiable order of
withdrawal, made with a banking organization, together with any
interest or dividends thereon, excluding, from demand deposits and
accounts subject to a negotiable order of withdrawal only, any
reasonable service charges that may lawfully be withheld and that do
not (where made in this state) exceed those set forth in schedules
filed by the banking organization from time to time with the
Controller, when the owner, for more than three years, has not done
any of the following:
   (i) Increased or decreased the amount of the deposit, cashed an
interest check, or presented the passbook or other similar evidence
of the deposit for the crediting of interest.
   (ii) Corresponded electronically or in writing with the banking
organization concerning the deposit.
   (iii) Otherwise indicated an interest in the deposit as evidenced
by a memorandum or other record on file with the banking
organization.
   (B) A deposit or account shall not, however, escheat to the state
if, during the previous three years, the owner has owned another
deposit or account with the banking organization or the owner has
owned an individual retirement account or funds held by the banking
organization under a retirement plan for self-employed individuals or
a similar account or plan established pursuant to the internal
revenue laws of the United States or the laws of this state, as
described in paragraph (6), and, with respect to that deposit,
account, or plan, the owner has done any of the acts described in
clauses (i), (ii) or (iii) of subparagraph (A), and the banking
organization has communicated electronically or in writing with the
owner, at the address to which communications regarding that deposit,
account, or plan are regularly sent, with regard to the deposit,
account, or plan that would otherwise escheat under subparagraph (A).
For purposes of this subparagraph, "communications" includes account
statements or statements required under the internal revenue laws of
the United States.
   (C) No banking organization may discontinue any interest or
dividends on any savings deposit because of the inactivity
contemplated by this section.
   (2) (A) Except as provided in paragraph (6), 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, excluding, from demand
deposits and accounts subject to a negotiable order of withdrawal
only, any reasonable service charges that may lawfully be withheld
and that do not (where made in this state) exceed those set forth in
schedules filed by the financial organization from time to time with
the Controller, when the owner, for more than three years, has not
done any of the following:
   (i) Increased or decreased the amount of the funds or deposit,
cashed an interest check, or presented an appropriate record for the
crediting of interest or dividends.
   (ii) Corresponded electronically or in writing with the financial
organization concerning the funds or deposit.
   (iii) Otherwise indicated an interest in the funds or deposit as
evidenced by a memorandum or other record on file with the financial
organization.
   (B) A deposit or account shall not, however, escheat to the state
if, during the previous three years, the owner has owned another
deposit or account with the financial organization or the owner has
owned an individual retirement account or funds held by the financial
organization under a retirement plan for self-employed individuals
or a similar account or plan established pursuant to the internal
revenue laws of the United States or the laws of this state, as
described in paragraph (6), and, with respect to that deposit,
account, or plan, the owner has done any of the acts described in
clauses (i), (ii) or (iii) of subparagraph (A), and the financial
organization has communicated electronically or in writing with the
owner, at the address to which communications regarding that deposit,
account, or plan are regularly sent, with regard to the deposit,
account, or plan that would otherwise escheat under subparagraph (A).
For purposes of this subparagraph, "communications" includes account
statements or statements required under the internal revenue laws of
the United States.
   (C) No financial organization may discontinue any interest or
dividends on any funds paid toward purchase of shares or other
interest, or on any deposit, because of the inactivity contemplated
by this section.
   (3) Any sum payable on a traveler's check issued by a business
association that has been outstanding for more than 15 years from the
date of its issuance, when the owner, for more than 15 years, has
not corresponded in writing with the business association concerning
it, or otherwise indicated an interest as evidenced by a memorandum
or other record on file with the association.
   (4) Any sum payable on any other written instrument on which a
banking or financial organization is directly liable, including, by
way of illustration but not of limitation, any draft, cashier's
check, teller's check, or certified check, that has been outstanding
for more than three years from the date it was payable, or from the
date of its issuance if payable on demand, when the owner, for more
than three years, has not corresponded electronically or in writing
with the banking or financial organization concerning it, or
otherwise indicated an interest as evidenced by a memorandum or other
record on file with the banking or financial organization.
   (5) Any sum payable on a money order issued by a business
association (including a banking or financial organization), that has
been outstanding for more than seven years from the date it was
payable, or from the date of its issuance if payable on demand,
excluding any reasonable service charges that may lawfully be
withheld and that do not, when made in this state, exceed those set
forth in schedules filed by the business association from time to
time with the Controller, when the owner, for more than seven years,
has not corresponded electronically or in writing with the business
association, banking, or financial organization concerning it, or
otherwise indicated an interest as evidenced by a memorandum or other
record on file with the business association. For the purposes of
this subdivision, "reasonable service charge" means a service charge
that meets all of the following requirements:
   (A) It is uniformly applied to all of the issuer's money orders.
   (B) It is clearly disclosed to the purchaser at the time of
purchase and to the recipient of the money order.
   (C) It does not begin to accrue until three years after the
purchase date, and it stops accruing after the value of the money
order escheats.
   (D) It is permitted by contract between the issuer and the
purchaser.
   (E) It does not exceed 25 cents ($0.25) per month or the aggregate
amount of twenty-one dollars ($21).
   (6) (A) Any funds held by a business association in an individual
retirement account or under a retirement plan for self-employed
individuals or similar account or plan established pursuant to the
internal revenue laws of the United States or of this state, when the
owner, for more than three years after the funds become payable or
distributable, has not done any of the following:
   (i) Increased or decreased the principal.
   (ii) Accepted payment of principal or income.
   (iii) Corresponded electronically or in writing concerning the
property or otherwise indicated an interest.
   (B) Funds held by a business association in an individual
retirement account or under a retirement plan for self-employed
individuals or a similar account or plan created pursuant to the
internal revenue laws of the United States or the laws of this state
shall not escheat to the state if, during the previous three years,
the owner has owned another such account or plan with the business
association and, with respect to that account or plan, the owner has
done any of the acts described in clause (i), (ii), or (iii) of
subparagraph (A), and the business association has communicated
electronically or in writing with the owner, at the address to which
communications regarding that account or plan are regularly sent,
with regard to the account or plan that would otherwise escheat under
subparagraph (A). For purposes of this subparagraph, "communications"
includes account statements or statements required under the
internal revenue laws of the United States.
   (C) These funds are not payable or distributable within the
meaning of this subdivision unless either of the following is true:
   (i) Under the terms of the account or plan, distribution of all or
a part of the funds would then be mandatory.
   (ii) For an account or plan not subject to mandatory distribution
requirement under the internal revenue laws of the United States or
the laws of this state, the owner has attained 701/2 years of age.
   (7) Any wages or salaries that have remained unclaimed by the
owner for more than one year after the wages or salaries become
payable.
   (b) For purposes of this section "service charges" means service
charges imposed because of the inactivity contemplated by this
section.
  SEC. 2.  Section 1513.5 of the Code of Civil Procedure is amended
to read:
   1513.5.  (a) Except as provided in subdivision (c), if the holder
has in its records an address for the apparent owner, which the
holder's records do not disclose to be inaccurate, every banking or
financial organization shall make reasonable efforts to notify any
owner by mail or, if the owner has consented to electronic notice,
electronically, that the owner's deposit, account, shares, or other
interest in the banking or financial organization will escheat to the
state pursuant to clause (i), (ii), or (iii) of subparagraph (A) of
paragraphs (1), (2), or (6) of subdivision (a) of Section 1513. The
holder shall give notice either:
   (1) Not less than two years nor more than two and one-half years
after the date of last activity by, or communication with, the owner
with respect to the account, deposit, shares, or other interest, as
shown on the record of the banking or financial organization.
   (2) Not less than six nor more than 12 months before the time the
account, deposit, shares, or other interest becomes reportable to the
Controller in accordance with this chapter.
   (b) The notice required by this section shall specify the time
that the deposit, account, shares, or other interest will escheat and
the effects of escheat, including the necessity for filing a claim
for the return of the deposit, account, shares, or other interest.
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 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,
(1) specify that since the date of last activity, or for the last
two years, there has been no owner activity on the deposit, account,
shares, or other interest; (2) identify the deposit, account, shares,
or other interest by number or identifier, which need not exceed
four digits; (3) indicate that the deposit, account, shares, or other
interest is in danger of escheating to the state; and (4) specify
that the California Unclaimed Property Law requires banking and
financial organizations to transfer funds of a deposit, account,
shares, or other interest if it has been inactive for three years. It
shall also include a form, as prescribed by the Controller, by which
the owner may declare an intention to maintain the deposit, account,
shares, or other interest. If that form is filled out, signed by the
owner, and returned to the banking or financial organization, it
shall satisfy the requirement of clause (iii) of subparagraph (A) of
paragraph (1), clause (iii) of subparagraph (A) of paragraph (2), or
clause (iii) of subparagraph (A) of paragraph (6) of subdivision (a)
of Section 1513. In lieu of returning the form, the banking or
financial organization 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 banking or financial organization, shall satisfy the
requirement of clause (iii) of subparagraph (A) of paragraph (1),
clause (iii) of subparagraph (A) of paragraph (2), or clause (iii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
1513. The banking or financial organization may impose a service
charge on the deposit, account, shares, or other interest for this
notice in an amount not to exceed the administrative cost of mailing
or electronically sending the notice and form and in no case to
exceed two dollars ($2).
   (c) Notice as provided by subdivisions (a) and (b) shall not be
required for deposits, accounts, shares, or other interests of less
than fifty dollars ($50), and no service charge may be made for
notice on these items.
   (d) In addition to the notices required pursuant to subdivision
(a), the holder may give additional notice as described in
subdivision (b) at any time between the date of last activity by, or
communication with, the owner and the date the holder transfers the
deposit, account, shares, or other interest to the Controller.
   (e) At the time a new account is opened with a banking or
financial organization, the organization shall provide a written
notice to the person opening the account informing the person that
his or her property may be transferred to the appropriate state if no
activity occurs in the account within the time period specified by
state law. If the person opening the account has consented to
electronic notice, that notice may be provided electronically. This
subdivision shall become effective on January 1, 2011.
  SEC. 3.  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 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 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 months 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
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.
    (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.
   (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.
   (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.
   (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.
   (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 (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 this subdivision, the banking or financial
organization shall be relieved of all liability to the extent of the
value of those contents or proceeds.
   (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. If the person
opening the account consented to electronic notice, that notice may
be provided electronically.  If the electronic notice is returned
as undeliverable, notice shall be provided in writing in person or
by mail. 
   (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. 4.  Section 1516 of the Code of Civil Procedure is amended to
read:
   1516.  (a) Subject to Section 1510, any dividend, profit,
distribution, interest, payment on principal, or other sum held or
owing by a business association for or to its shareholder,
certificate holder, member, bondholder, or other security holder, or
a participating patron of a cooperative, who has not claimed it, or
corresponded in writing with the business association concerning it,
within three years after the date prescribed for payment or delivery,
escheats to this state.
   (b) Subject to Section 1510, any intangible interest in a business
association, as evidenced by the stock records or membership records
of the association, escheats to this state if (1) the interest in
the association is owned by a person who for more than three years
has neither claimed a dividend or other sum referred to in
subdivision (a) nor corresponded in writing with the association or
otherwise indicated an interest as evidenced by a memorandum or other
record on file with the association, and (2) the association does
not know the location of the owner at the end of the three-year
period. With respect to the interest, the business association shall
be deemed the holder.
   (c) Subject to Section 1510, any dividends or other distributions
held for or owing to a person at the time the stock or other security
to which they attach escheats to this state also escheat to this
state as of the same time.
   (d) If the business association has in its records an address for
the apparent owner, which the business association's records do not
disclose to be inaccurate, with respect to any interest that may
escheat pursuant to subdivision (b), 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
interest in the business association will escheat to the state. The
notice shall be given not less than 6 nor more than 12 months before
the time the interest in the business association becomes reportable
to the Controller in accordance with this chapter. 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 time that the interest will escheat and
the effects of escheat, including the necessity for filing a claim
for the return of the interest. 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, (1) specify
that since the date of last activity, or for the last two years,
there has been no owner activity on the deposit, account, shares, or
other interest; (2) identify the deposit, account, shares, or other
interest by number or identifier, which need not exceed four digits;
(3) indicate that the deposit, account, shares, or other interest is
in danger of escheating to the state; and (4) specify that the
California Unclaimed Property Law requires business associations to
transfer funds of a deposit,
     account, shares, or other interest if it has been inactive for
three years. It shall also include a form, as prescribed by the
Controller, by which the owner may confirm the owner's current
address. If that form is filled out, signed by the owner, and
returned to the holder, it shall be deemed that the business
association knows the location of the owner. In lieu of returning the
form, the business association may provide a telephone number or
other electronic means to enable the owner to contact the
association. With that contact, as evidenced by a memorandum or other
record on file with the business association, the business
association shall be deemed to know the location of the owner. The
business association may impose a service charge on the deposit,
account, shares, or other interest for this notice and form in an
amount not to exceed the administrative cost of mailing or
electronically sending the notice and form, and in no case to exceed
two dollars ($2).
   (e) In addition to the notice required pursuant to subdivision
(d), the holder may give additional notice as described in
subdivision (d) at any time between the date of last activity by, or
communication with, the owner and the date the holder transfers the
deposit, shares, or other interest to the Controller.
  SEC. 5.  Section 1518 of the Code of Civil Procedure is amended to
read:
   1518.  (a) All tangible personal property located in this state
and, subject to Section 1510, all intangible personal property, and
the income or increment on such tangible or intangible property, held
in a fiduciary capacity for the benefit of another person escheats
to this state if after it becomes payable or distributable, the owner
has not, within a period of three years, increased or decreased the
principal, accepted payment of principal or income, corresponded in
writing concerning the property, or otherwise indicated an interest
as evidenced by a memorandum or other record on file with the
fiduciary.
   (b) Funds in an individual retirement account or a retirement plan
for self-employed individuals or similar account or plan established
pursuant to the internal revenue laws of the United States or of
this state are not payable or distributable within the meaning of
subdivision (a) unless either of the following is true:
   (1) Under the terms of the account or plan, distribution of all or
part of the funds would then be mandatory.
   (2) For an account or plan not subject to mandatory distribution
requirement under the internal revenue laws of the United States or
the laws of this state, the owner has attained 701/2 years of age.
   (c) For the purpose of this section, when a person holds property
as an agent for a business association, he or she is deemed to hold
the property in a fiduciary capacity for the business association
alone, unless the agreement between him or her and the business
association clearly provides the contrary. For the purposes of this
chapter, if a person holds property in a fiduciary capacity for a
business association alone, he or she is the holder of the property
only insofar as the interest of the business association in the
property is concerned and the association is deemed to be the holder
of the property insofar as the interest of any other person in the
property is concerned.
  SEC. 6.  Section 1520 of the Code of Civil Procedure is amended to
read:
   1520.  (a) All tangible personal property located in this state
and, subject to Section 1510, all intangible personal property,
except property of the classes mentioned in Sections 1511, 1513,
1514, 1515, 1515.5, 1516, 1517, 1518, 1519, and 1521, including any
income or increment thereon and deducting any lawful charges, that is
held or owing in the ordinary course of the holder's business and
has remained unclaimed by the owner for more than three years after
it became payable or distributable escheats to this state.
   (b) Except as provided in subdivision (a) of Section 1513.5,
subdivision (b) of Section 1514, and subdivision (d) of Section 1516,
if the holder has in its records an address for the apparent owner
of property valued at fifty dollars ($50) or more, which the holder's
records do not disclose to be inaccurate, the holder shall make
reasonable efforts to notify the owner by mail or, if the owner has
consented to electronic notice, electronically, that the owner's
property will escheat to the state pursuant to this chapter. The
notice shall be mailed not less than six nor more than 12 months
before the time when the owner's property held by the business
becomes reportable to the Controller in accordance with this chapter.
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 time when the property will
escheat and the effects of escheat, including the need to file a
claim in order for the owner's property to be returned to the owner.
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, (1) specify that since the date of last
activity, or for the last two years, there has been no owner activity
on the deposit, account, shares, or other interest; (2) identify the
deposit, account, shares, or other interest by number or identifier,
which need not exceed four digits; (3) indicate that the deposit,
account, shares, or other interest is in danger of escheating to the
state; and (4) specify that the California Unclaimed Property Law
requires holders to transfer funds of a deposit, account, shares, or
other interest if it has been inactive for three years. It shall also
include a form, as prescribed by the Controller, by which the owner
may confirm the owner's current address. If that form is filled out,
signed by the owner, and returned to the holder, it shall be deemed
that the account, or other device in which the owner's property is
being held, remains currently active and recommences the escheat
period. In lieu of returning the form, the holder may provide a
telephone number or other electronic means to enable the owner to
contact the holder. With that contact, as evidenced by a memorandum
or other record on file with the holder, the account or other device
in which the owner's property is being held shall be deemed to remain
currently active and shall recommence the escheat period. The holder
may impose a service charge on the deposit, account, shares, or
other interest for this notice in an amount not to exceed the
administrative cost of mailing or electronically sending the notice
and form, and in no case to exceed two dollars ($2).
   (c) In addition to the notice required pursuant to subdivision
(b), the holder may give additional notice as described in
subdivision (b) at any time between the date of last activity by, or
communication with, the owner and the date the holder transfers the
property to the Controller.
   (d) For purposes of this section, "lawful charges" means charges
which are specifically authorized by statute, other than the
Unclaimed Property Law, or by a valid, enforceable contract. 

  SEC. 7.    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) (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.
   (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.
   (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. 8.   SEC. 7.   Section 1565 of the
Code of Civil Procedure is amended to read:
   1565.  Any property delivered to the Controller pursuant to this
chapter that has no apparent commercial value shall be retained by
the Controller for a period of not less than 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. 9.   SEC. 8.   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.