BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 355|
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THIRD READING
Bill No: AB 355
Author: Eduardo Garcia (D), et al.
Amended: 8/19/15 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE: 7-0, 6/16/15
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 76-0, 3/26/15 - See last page for vote
SUBJECT: Unclaimed property: safe deposit boxes
SOURCE: Author
DIGEST: This bill authorizes the State Controller to mail a
separate notice to an apparent owner of a United States savings
bond, war bond, or military award inside a safe deposit box or
other safekeeping repository whose name is shown on or can be
associated with the contents of a safe deposit box or other
safekeeping repository and is different from the name of the
reported owner. This bill incorporates provisions found in
other sections of the Unclaimed Property Law pertaining to
notices, such as prohibiting the inclusion of photographs of
elected officials on notices, as well as authorizing the
controller to request information from other state or local
government agencies for the limited purpose of locating owners
of unclaimed property. This bill states that the costs for
sending additional notices pursuant to this section shall be
subject to the level of appropriation in the annual Budget Act.
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Page 2
Senate Floor Amendments of 8/19/15 make technical corrections
and add a coauthor.
ANALYSIS:
Existing law:
1)Requires, pursuant to the Unclaimed Property Law (UPL),
property held or owing by a business association that is
unclaimed for more than three years, as specified, to be
reported to the State Controller and turned over to the state.
(Code Civ. Proc. Secs. 1513, 1513.5, 1530-1532.)
2)Provides that 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
three 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. (Code Civ. Proc. Sec. 1514.)
3)Provides that, except as specified, when the holder of
unclaimed property has in its records an address for the
apparent owner of property valued at fifty dollars ($50) or
more, the holder shall make reasonable efforts to notify the
owner that the owner's property will escheat to the state on a
specified date. The notice shall be mailed not less than 6
nor more than 12 months before the time when the owner's
property would escheat and become reportable to the
Controller. (Code Civ. Proc. Sec. 1520.)
4)Provides that tangible personal property may be excluded from
the notices required by the UPL, shall not be delivered to the
State Controller, and shall not escheat to the state, if the
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State Controller, in his discretion, determines that it is not
in the interest of the state to take custody of the property
and notifies the holder in writing of his determination not to
take custody of the property. (Code Civ. Proc. Sec. 1533.)
5)Provides that within one year after payment or delivery of
escheated property, the Controller shall cause a notice to be
published, in a newspaper of general circulation which the
Controller determines is most likely to give notice to the
apparent owner of the property, that information concerning
the amount or description of the property may be obtained by
any persons possessing an interest in the property by
addressing an inquiry to the Controller. (Code Civ. Proc.
Sec. 1531.)
6)Provides that the Controller shall also mail a notice to each
person having an address listed in the report from the holder
who appears to be entitled to property of the value of fifty
dollars ($50) or more that has escheated under the UPL. The
Controller shall mail the notice to the apparent owner for
whom a current address is obtained if the address is different
from the address previously reported to the Controller. (Code
Civ. Proc. Sec. 1531.)
7)Provides that all escheated property consisting of military
awards, decorations, equipment, artifacts, memorabilia,
documents, photographs, films, literature, and any other item
relating to the military history of California and
Californians that is delivered to the Controller shall be held
in trust for the Controller at the California State Military
Museum and Resource Center. Existing law states that the
California State Military Museum and Resource Center shall be
responsible for the costs of storage and maintenance of
escheated property delivered by the Controller. (Code Civ.
Proc. Sec. 1563.)
8)Authorizes the Controller to bring an action to enforce
provisions of the UPL and provides for the imposition of
penalties and interest against holders who willfully fail to
comply with its provisions. (Code Civ. Proc. Sec. 1576.)
9)Authorizes any person, except another state, who claims an
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interest in property paid or delivered to the Controller to
file a claim to the property. (Code Civ. Proc. Sec. 1540(a).)
This bill:
1)Authorizes the Controller to mail a separate notice to an
apparent owner of a United States savings bond, war bond, or
military award whose name is shown on or can be associated
with the contents of a safe deposit box or other safekeeping
repository and is different from the reported owner of the
safe deposit box or other safekeeping repository.
2)States that a notice sent pursuant to this section shall not
contain a photograph or likeness of an elected official.
3)Provides that upon request of the Controller, a state or local
governmental agency may furnish to the Controller from its
records the address or other identification or location
information that could reasonably be used to locate an owner
of unclaimed property, as specified.
4)Provides that the costs for sending a notice pursuant to this
section shall be subject to the level of appropriation in the
annual Budget Act.
5)Provides that all escheated property consisting of military
awards, decorations, equipment, artifacts, memorabilia,
documents, photographs, films, literature, and any other item
relating to the military history of California and
Californians that is delivered to the Controller may be held
in trust for the Controller at the California State Military
Museum and Resource Center or successor entity, and that the
California State Military Museum and Resource Center or
successor entity shall be responsible for the costs of storage
and maintenance of escheated property delivered by the
Controller.
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Background
The Unclaimed Property Law (UPL), enacted in 1958, establishes
procedures for the escheat of unclaimed personal property.
Under the UPL, unclaimed property "escheats" to the state, which
means the state has custody of the property in perpetuity, until
the owner claims the property. The UPL assigns rights and
responsibilities for the owners and holders of unclaimed
property, as well as the state. The "owner" is the person to
whom the property actually belongs. The "holder" is the person
who has possession of the property. A holder might be a bank or
other money depositary (e.g. one that holds deposits of owner's
money or holds property in a safe deposit box), a business that
has issued a check to an individual or other business, or the
issuer of a life insurance policy or an annuity. The holders of
unclaimed property have no interest in that property. (See Bank
of America v. Cory (1985) 164 Cal.App.3d 66, 74.) A holder acts
rather as a trustee of the property while it is in the holder's
possession.
The UPL has dual objectives: (1) to reunite owners with
unclaimed funds or property; and (2) to give the state, rather
than the holder, the benefit of the use of unclaimed funds or
property. (Bank of America v. Cory, 164 Cal.App.3d at 74;
Douglas Aircraft Co. v. Cranston (1962) 58 Cal.2d 462, 463.)
The state, through the Controller, acts as the protector of the
rights of the true owner. (Bank of America at 74.)
The UPL establishes procedures to be followed when property goes
unclaimed, generally for a period of three years, and escheats
to the state. Under existing law, the holder must annually
report on unclaimed property and turn the property over to the
Controller. (Code Civ. Proc. Secs. 1530 and 1532.) The
Controller is then required to mail a notice to each person who
appears to be entitled to unclaimed property according to the
report filed by the holder, and must publish notice to apparent
owners of the property in newspapers of general circulation.
(Code of Civ. Proc. Secs. 1531, 1531.5.) The UPL also
delineates the procedure by which a person with an interest in
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escheated property may file a claim to recover the property from
the state. The Controller maintains a public web site where
individuals may discover whether or not the state is holding any
of their funds or property, and may submit claims to recover the
funds or property. (See https://ucpi.sco.ca.gov/ucp/)
This bill authorizes the State Controller to send a notice to
the apparent owner of a United States savings bond, war bond, or
military award whose name is shown on or can be associated with
the contents of a safe deposit box or other safekeeping
repository, in addition to sending a notice to the reported
owner of the safe deposit box or other safekeeping repository.
This bill also authorizes the State Controller to, at his or her
discretion, have all escheated property consisting of military
awards, decorations, equipment, artifacts, memorabilia,
documents, photographs, films, literature, and any other item
relating to the military history of California held in trust for
the Controller at the California State Military Museum and
Resource Center, or successor entity.
Comments
The author writes:
As a general rule, property that goes unclaimed or is
untouched for three years escheats, or reverts to, the State
Controller's Office. The State Controller's Office attempts
to contact people and maintains a list of everyone whose
property has reverted to the state. People can go to
www.claimit.ca.gov to see if there is any unclaimed property
being held in their name. Often the owner forgets that the
account exists, or moves and does not leave a forwarding
address or the forwarding order expires. In some cases, the
owner dies and the heirs have no knowledge of the property.
Currently, the State Controller may only list the owner of the
property that has reverted to the state, not an owner of a
separate piece of property that is a subset of the larger
property. This becomes a problem in the case of a safe
deposit box, where the box itself may be in one person's name,
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but some of the contents - for example, military awards or
U.S. Savings Bonds - may clearly be in another person's name.
The State Controller is currently holding about 70,000 U.S.
Savings Bonds, the majority of which have reached maturity and
are no longer earning interest.
Institutions that must escheat safe deposit boxes to the State
Controller currently have to report to the Controller a
description of the items in the box and a place where the
items can be inspected, the name of the owner of the safe
deposit box, but they do not report any other name associated
with the items inside the safe deposit box.
This bill will allow the Controller to contact not only the
safe deposit box owner, but an apparent owner whose name is
listed on a U.S. Savings Bond, War Bond or Military Award and
is different than the owner of the safe deposit box or other
safe keeping repository. This bill will also give the
Controller flexibility to make provisions for military items
and memorabilia from the California State Military Museum and
Resource Center, since the museum has been closed.
Related/Prior Legislation
AB 318 (Chau, 2015) requires a person who finds property on a
vehicle of public conveyance or on public transit property that
is valued at $100 or more to turn the property in to the public
transit agency within a reasonable time. If, after 90 days, no
owner appears and proves ownership of the property, this bill
provides that title to the property vests in the person who
found it, as specified. This bill provides that, in the case of
lost or unclaimed bicycles turned in to or held by a public
transit agency, if the bicycle remains unclaimed after 45 days,
the public transit agency may dispose of it by sale at public
auction to the highest bidder. This bill is pending in the
Senate Judiciary Committee.
AB 1275 (Chau, Chapter 128, Statutes of 2013) revised the
Unclaimed Property Law (UPL) to only allow an owner of, instead
of a person with an interest in, property to file a claim with
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the State Controller's Office for recovery of property that has
escheated to the state. This bill also revised the definition
of "owner" to remove a personal representative and include an
estate representative, conservator, or guardian.
AB 1011 (Salas, 2013) would have required the Controller to add
interest, at specified rates, to the amount of any claim paid by
the Controller to an owner under the UPL. This bill died in the
Assembly Committee on Appropriations.
AB 2117 (Niello, 2010) would have eliminated the regular
transfer of unclaimed property funds from the Abandoned Property
Fund to the General Fund, would have required the Controller to
add an interest payment to any claim for unclaimed property that
the Controller pays to an owner, and would have extended the
escheatment period for most types of unclaimed property from
three years to five years. This bill failed passage in the
Assembly Committee on Judiciary.
AB 1291 (Niello, Chapter 522, Statutes of 2009) made various
reforms to the UPL to strengthen property owners' rights and
ensure that property holders reasonably inform customers about
risks associated with leaving accounts dormant and the potential
for escheatment of property after a period of inactivity.
SB 1319 (Machado, 2008) would have relieved a holder of
escheated property of liability if the holder complied with
notification requirements, would have increased civil penalties
for non-compliance with the UPL, and would have revised
notification requirements for holders of unclaimed property.
This bill was vetoed by Governor Schwarzenegger.
SB 86 (Committee on Budget and Fiscal Review, Chapter 179,
Statutes of 2007) modified the procedures governing the
disposition of unclaimed property by, among other things,
requiring the Controller to mail a notice, as specified, to each
person having an address listed for property reported to the
Controller under the UPL who appears to be entitled to escheated
property valued at $50 or more. This bill requires the
Controller to establish and conduct a notification program
designed to inform owners about the possible existence of
unclaimed property received pursuant to the UPL, and made
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specified changes regarding the duties of a holder of property
that has escheated and the duties of the Controller after
receiving the property, including a requirement that the
Controller retain the property for 18 months from specified
dates.
AB 378 (Steinberg, Chapter 304, Statutes of 2003) reduced the
escheatment period from five years to three years for bank
checks and deposit accounts, and from three years to one year
for wages and salaries.
AB 1772 (Harman, Chapter 813, Statutes of 2002) prescribed the
notice and information that a bank or financial institution must
give to owners of financial accounts that are about to escheat
to the state, and required the same notice by other holders of
tangible and intangible property subject to the UPL.
SB 673 (Speier, 2001) would have provided for notices to be sent
by mail from the Controller to apparent owners of unclaimed
property, and for the Controller to take further steps,
including searches of other governmental records and outreach to
the general public, to alert owners that their unclaimed
property had escheated to the state. This bill was held in the
Assembly Committee on Appropriations.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified8/21/15)
California State Controller (source)
OPPOSITION: (Verified8/21/15)
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None received
ASSEMBLY FLOOR: 76-0, 3/26/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes,
McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Perea, Quirk, Ridley-Thomas,
Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,
Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Gallagher, Jones-Sawyer, Mathis, Rendon
Prepared by:Tobias Halvarson / JUD. / (916) 651-4113
8/21/15 15:53:40
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