California Legislature—2013–14 Regular Session

Assembly Bill No. 1011

Introduced by Assembly Member Salas

February 22, 2013

An act to amend Section 1540 of the Code of Civil Procedure and Section 12419.8 of the Government Code, relating to unclaimed property.

LEGISLATIVE COUNSEL’S DIGEST

AB 1011, as introduced, Salas. Unclaimed property: interest payment.

The Unclaimed Property Law, which is administered by the Controller, governs the disposition of unclaimed property, including the escheat of certain property to the state. Existing law specifies the procedures for transferring the property from the holder of the property to the state and for administering the property. Existing law sets forth procedures whereby a person may file a claim to the property or to the net proceeds from its sale. Existing law prohibits the payment of interest on a claim paid by the Controller under the Unclaimed Property Law.

This bill would require that the Controller add interest, at specified rates, to the amount of any claim paid by the Controller to an owner under the Unclaimed Property Law. The bill would also impose the requirement to pay interest on a former holder of property who compensates an owner of property that has escheated and been remitted to the Controller. The bill would allow a former holder who makes such a payment to seek reimbursement in that amount from the Controller, as specified.

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 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.

begin delete

(c) No interest shall be payable on any claim paid under this
chapter.

end delete begin insert

(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
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, 2014. Any interest
required to be paid by the state pursuant to this section shall be
computed as simple interest, not as compound interest.

end insert begin insert

(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:

end insert begin insert

(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.

end insert begin insert

(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.

end insert begin insert

(d) A former holder of property, who compensates the owner
of property that has escheated and been remitted to the state, shall
also pay interest as provided in subdivision (c) in addition to the
value of the property. Upon payment of the principal and interest
pursuant to this subdivision, the owner shall be deemed to have
forfeited his or her interest in the escheated property and the
former holder may seek and receive reimbursement from the
Controller in the amount that the former holder paid to the owner
of the escheated property. The request for reimbursement must be
properly submitted in the form prescribed by the Controller.

end insert begin delete

(d)

end delete

begin insert (e) end insert begin insert   end insert 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.

begin delete

(e)

end delete

begin insert (f) end insert begin insert   end insert 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. 2.  

Section 12419.8 of the Government Code is amended
to read:

12419.8.  

(a) The Controller may, in his or her discretion, offset
any amount due a city or county from a person or entity pursuant
to paragraph (1), (2), or (4) of subdivision (c), and shall, at the
request of the city or county, offset any amount due a city or county
from a person or entity pursuant to paragraph (3) of subdivision
(c), against any amount owing the person or entity by a state agency
on a claim for a refund from the Franchise Tax Board under the
Personal Income Tax Law or the Bank and Corporation Tax Law,
a claim for refund from the State Board of Equalization under the
Sales and Use Tax Law, from winnings in the California State
Lottery, or a claim filed by the owner, as described in subdivision
begin delete (d) end delete begin insert (e) end insert of Section 1540 of the Code of Civil Procedure, for payment
of money from unclaimed property held by the state. Standards
and procedures for submission of requests for offsets shall be as
prescribed by the Controller. Whenever insufficient funds are
available to satisfy an offset request, the Controller, after first
applying the amounts available to any amount due a state agency,
may allocate the balance among any other requests for offset.

(b) The Controller shall deduct and retain from any amount
offset in favor of a city or county an amount sufficient to reimburse
the Controller, the Franchise Tax Board, the State Board of
Equalization, or the California State Lottery for their administrative
costs of processing the offset payment.

(c) This section shall apply only to any of the following
situations:

(1) Where the amount has been reduced to a judgment.

(2) Where the amount is contained in an order of a court.

(3) Where the amount is from a bench warrant for payment of
any fine, penalty, or assessment.

(4) Where the amount is delinquent unsecured property taxes
on which a certificate lien has been filed for record in the office
of the county recorder pursuant to Section 2191.3 of the Revenue
and Taxation Code.

(d) For purposes of paragraph (4) of subdivision (c):

(1) Upon the tax collector’s request for taxpayer identification
numbers required by the Controller’s procedures, the tax collector
shall immediately notify the appropriate assessee, by registered or
certified mail, that the request has been made for the purpose of
intercepting refunds from the state government due the taxpayer,
in order to offset the delinquent property tax obligation. The letter
shall state that if the assessee does not pay the outstanding tax
amount to the tax collector within 20 days, the required taxpayer
identification number will be so provided.

(2) The tax collector shall not be named in any action that may
be brought as a result of compliance with this subdivision.