AB 1011, as amended, 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 propertybegin insert, as specified,end insert 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 1540 of the Code of Civil Procedure is
2amended to read:
(a) Any person, excluding another state, who claims an
4interest in property paid or delivered to the Controller under this
5chapter may file a claim to the property or to the net proceeds from
6its sale. The claim shall be on a form prescribed by the Controller
7and shall be verified by the claimant.
8(b) The Controller shall consider each claim within 180 days
9after it is filed and may hold a hearing and receive evidence. The
10Controller shall give written notice to the claimant if he or she
11denies the claim in whole or in part. The notice may be given by
12mailing it to the address, if any, stated in the claim as the address
13to which notices are to be sent. If no address is stated in the claim,
14the notice may be mailed to the
address, if any, of the claimant as
15stated in the claim. No notice of denial need be given if the claim
16fails to state either an address to which notices are to be sent or an
17address of the claimant.
18(c) (1) The Controller shall add interest at the rate of 5 percent
19per year or the bond equivalent rate of 13-week United States
20Treasury bills, whichever is lower, to the amount of any claim paid
21the owner under this section for the period the property was on
22deposit in the Unclaimed Property Fund. No interest shall be
23payable for any period prior to January 1, 2014. Any interest
24required to be paid by the state pursuant to this section shall be
25computed as simple interest, not as compound interest.
26(2) For purposes of this section, the bond equivalent rate of
2713-week United States Treasury bills shall be defined in accordance
28with the following criteria:
29(A) The bond equivalent rate of 13-week United States Treasury
30bills established at the first auction held during the month of
31January shall apply for the following July 1 to December 31,
32inclusive.
33(B) The bond equivalent rate of 13-week United States Treasury
34bills established at the first auction held during the month of July
35shall apply for the following January 1 to June 30, inclusive.
36(d) A former holder of property, whobegin insert, pursuant to subdivision
37(b) of Section 1560,end insert
compensates the owner of property that has
38escheated and been remitted to the state, shall also pay interest as
P3 1provided in subdivision (c) in addition to the value of the property.
2Upon payment of the principal and interest pursuant to this
3subdivision, the owner shall be deemed to have forfeited his or
4her interest in the escheated property and the former holder may
5seek and receive reimbursement from the Controller in the amount
6that the former holder paid to the owner of the escheated property.
7The request for reimbursement must be properly submitted in the
8form prescribed by the Controller.
9(e) For the purposes of this section, “owner” means the person
10who had legal right to the property prior to its escheat, his or her
11heirs, his or her legal representative, or a public administrator
12acting pursuant to the authority granted in Sections 7660 and 7661
13of the Probate Code.
14(f) Following a public hearing, the Controller shall adopt
15guidelines and forms that shall provide specific instructions to
16assist owners in filing claims pursuant to this article.
Section 12419.8 of the Government Code is amended
18to read:
(a) The Controller may, in his or her discretion, offset
20any amount due a city or county from a person or entity pursuant
21to paragraph (1), (2), or (4) of subdivision (c), and shall, at the
22request of the city or county, offset any amount due a city or county
23from a person or entity pursuant to paragraph (3) of subdivision
24(c), against any amount owing the person or entity by a state agency
25on a claim for a refund from the Franchise Tax Board under the
26Personal Income Tax Law or the Bank and Corporation Tax Law,
27a claim for refund from the State Board of Equalization under the
28Sales and Use Tax Law, from winnings in the California State
29Lottery, or a claim filed by the owner, as described in subdivision
30(e) of Section 1540 of the Code of Civil Procedure, for payment
31of money from unclaimed property held by the state. Standards
32
and procedures for submission of requests for offsets shall be as
33prescribed by the Controller. Whenever insufficient funds are
34available to satisfy an offset request, the Controller, after first
35applying the amounts available to any amount due a state agency,
36may allocate the balance among any other requests for offset.
37(b) The Controller shall deduct and retain from any amount
38offset in favor of a city or county an amount sufficient to reimburse
39the Controller, the Franchise Tax Board, the State Board of
P4 1Equalization, or the California State Lottery for their administrative
2costs of processing the offset payment.
3(c) This section shall apply only to any of the following
4situations:
5(1) Where the amount has been reduced to a judgment.
6(2) Where the amount is contained in an order of a court.
7(3) Where the amount is from a bench warrant for payment of
8any fine, penalty, or assessment.
9(4) Where the amount is delinquent unsecured property taxes
10on which a certificate lien has been filed for record in the office
11of the county recorder pursuant to Section 2191.3 of the Revenue
12and Taxation Code.
13(d) For purposes of paragraph (4) of subdivision (c):
14(1) Upon the tax collector’s request for taxpayer identification
15numbers required by the Controller’s procedures, the tax collector
16shall immediately notify the appropriate assessee, by registered or
17certified mail, that the request has been made for the purpose of
18intercepting refunds from the state government due the taxpayer,
19in order to offset the
delinquent property tax obligation. The letter
20shall state that if the assessee does not pay the outstanding tax
21amount to the tax collector within 20 days, the required taxpayer
22identification number will be so provided.
23(2) The tax collector shall not be named in any action that may
24be brought as a result of compliance with this subdivision.
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