Amended in Senate June 24, 2013

Amended in Assembly May 24, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 212

Introduced by Assembly Member Lowenthal

January 31, 2013

An act to amend Sections 1513.5 and 1530 of the Code of Civil Procedure, relating to unclaimed property.

LEGISLATIVE COUNSEL’S DIGEST

AB 212, as amended, Lowenthal. Unclaimed property.

The Unclaimed Property Law (UPL) specifies the circumstances under which unclaimed personal property held by a banking or financial institution, business association, or other holder of personal property escheats to the state. The UPL requires a banking or financial organization, if it has in its records an address for the apparent owner, which the records do not disclose to be inaccurate, to make reasonable efforts to notify by mail any customer that the customer’s deposit, account, shares, or other interest in the banking or financial organization will escheat to the state, as specified. The UPL authorizes a banking or financial organization to impose a service charge for the notice on the deposit, account, shares, or other interest in an amount up to $2 but not exceeding the administrative cost of mailing or electronically sending the notice, but prohibits a banking or financial institution from imposing a service charge for notice on items of less than $50. The UPL requires every person holding funds or other property that escheated to the state to submit a report to the Controller that includes, among other items, the name and last known address of each person appearing to be the owner of any property, except traveler’s checks and money orders, worth at least $50 that escheated to the state and, for items worth less than $50, the nature and identifying number, if any, or description of any intangible property reported in aggregate. The UPL requires that the report be filed before November 1 of each year, except with regard to the report of life insurance corporations and of all insurance corporation demutualization proceeds subject to a specified statute, in which case the UPL requires that the report be filed before May 1 of each year.

This bill would, beginning July 1, 2014, require a person holding escheated property to include in his or her report to the Controller the name and last known address of the apparent owner of any escheated property, except travelers checks and money orders, worth at least $25. The bill would allow the holder to report information regarding escheated items worth less than begin delete $50 end delete begin insert $25 end insert in aggregate begin delete if the name of the owner is not known and there is no last known address in the records of the holder end delete . The bill would authorize a banking or financial institution to impose a service charge for notice if the deposit, account, shares, or other interest has a value greater than $2.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

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 paragraph (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 6 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 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. If the deposit, account, shares, or other interest has a value
greater than two dollars ($2), 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, except as provided in subdivision (b),
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.

SEC. 2.  

Section 1530 of the Code of Civil Procedure is
amended to read:

1530.  

(a) Every person holding funds or other property
escheated to this state under this chapter shall report to the
Controller as provided in this section.

(b) The report shall be on a form prescribed or approved by the
Controller and shall include:

(1) Except with respect to traveler’s checks and money orders,
the name, if known, and last known address, if any, of each person
appearing from the records of the holder to be the owner of any
property of value of at least fifty dollars ($50) escheated under
this chapter. This paragraph shall become inoperative on July 1,
2014.

(2) Except with respect to traveler’s checks and money orders,
the name, if known, and last known address, if any, of each person
appearing from the records of the holder to be the owner of any
property of value of at least twenty-five dollars ($25) escheated
under this chapter. This paragraph shall become operative on July
1, 2014.

(3) In the case of escheated funds of life insurance corporations,
the full name of the insured or annuitant, and his or her last known
address, according to the life insurance corporation’s records.

(4) In the case of the contents of a safe deposit box or other
safekeeping repository or in the case of other tangible property, a
description of the property and the place where it is held and may
be inspected by the Controller. The report shall set forth any
amounts owing to the holder for unpaid rent or storage charges
and for the cost of opening the safe deposit box or other
safekeeping repository, if any, in which the property was contained.

(5) The nature and identifying number, if any, or description of
any intangible property and the amount appearing from the records
to be due, except that items of value under begin delete fifty dollars ($50) end delete begin insert twenty
five dollars ($25) end insert each may be reported in aggregate begin delete if the name
of the owner is unknown and there is no last known address in the
records of the holder end delete .

(6) Except for any property reported in the aggregate, the date
when the property became payable, demandable, or returnable,
and the date of the last transaction with the owner with respect to
the property.

(7) Other information which the Controller prescribes by rule
as necessary for the administration of this chapter.

(c) If the holder is a successor to other persons who previously
held the property for the owner, or if the holder has changed his
or her name while holding the property, he or she shall file with
his or her report all prior known names and addresses of each
holder of the property.

(d) The report shall be filed before November 1 of each year as
of June 30 or fiscal yearend next preceding, but the report of life
insurance corporations, and the report of all insurance corporation
demutualization proceeds subject to Section 1515.5, shall be filed
before May 1 of each year as of December 31 next preceding. The
initial report for property subject to Section 1515.5 shall be filed
on or before May 1, 2004, with respect to conditions in effect on
December 31, 2003, and all property shall be determined to be
reportable under Section 1515.5 as if that section were in effect
on the date of the insurance company demutualization or related
reorganization. The Controller may postpone the reporting date
upon his or her own motion or upon written request by any person
required to file a report.

(e) The report, if made by an individual, shall be verified by the
individual; if made by a partnership, by a partner; if made by an
unincorporated association or private corporation, by an officer;
and if made by a public corporation, by its chief fiscal officer or
other employee authorized by the holder.