BILL ANALYSIS Ó AB 1712 Page 1 Date of Hearing: April 30, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 1712 (Gomez) - As Amended: April 8, 2014 Policy Committee: JudiciaryVote:9-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill clarifies authority for a parent nonprofit organization to file a claim for unclaimed property with the State Controller for property owned by a local chapter or affiliate no longer in existence, which had legal right to the property prior to its escheat to the state, but is no longer in existence, if the governing documents provide that surplus funds or property may be turned over to the granting organization. FISCAL EFFECT Costs would depend on the number of additional valid claims paid out as a result of the expanded eligibility for parent nonprofit organizations. These annual costs, which in essence are General Fund revenue losses, are unknown, but would likely be minor (under $100,000). The State Controller's administrative costs, associated with the additional claims, would also be minor. COMMENTS 1)Purpose . This bill seeks to authorize a parent nonprofit organization to file a claim with the State Controller for unclaimed property that, prior to escheat, was owned by an organization that was chartered or sponsored by the parent (typically a local chapter or affiliate) but that has dissolved or simply no longer exists. According to the author, "This bill will resolve the problem of unclaimed property that cannot be claimed under current law." 2)Background . The Unclaimed Property Law (UPL), enacted in 1958, establishes procedures for the escheat of unclaimed personal property, which means that the state has custody of the AB 1712 Page 2 property in perpetuity, until the owner claims the property. The UPL has dual objectives: (a) to protect unknown owners by locating them and restoring their property to them; and (b) to give the state, rather than the holders of unclaimed property, the benefit of its retention, since experience shows that most abandoned property will never be claimed. The State Controller receives approximately $600 million annually as escheated property. Existing law requires that all but $50,000 of these funds be transferred to the General Fund on a monthly basis. The Controller reports maintaining current accounts of approximately $6.4 billion for monies that have been remitted to the Controller and transferred to the General Fund. As of FY 2011-12, there were approximately 21.5 million owner accounts (individuals and organizations) in the Controller's database, and in that year a total of $240 million in cash was disbursed with an average payment of $837. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081