BILL ANALYSIS Ó AB 355 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 355 (Eduardo Garcia) As Amended August 19, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |76-0 |(March 26, |SENATE: |40-0 |(August 31, | | | |2015) | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: JUD. SUMMARY: Revises requirements for the handling of any United States (U.S.) savings bond, war bond, or military award found in a safe deposit box when the contents of that safe deposit box have escheated to the state. Specifically, this bill: 1)Authorizes the State Controller (Controller) to mail a separate notice to an apparent owner of a U.S. 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. 2)Provides that the above notice shall not contain a photograph or likeness of an elected official. AB 355 Page 2 3)Authorizes a state or local governmental agency, upon request of the Controller, to 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. Prohibits the use or disclosure of that information for any other purpose, and requires the Controller to pay any customary fees or charges. 4)Authorizes the Controller to deposit any military awards, decorations, equipment, artifacts, memorabilia, documents, photographs, films, literature, or any other item relating to the military history of California, in trust with the California State Military Museum and Resource Center or its successor entity. The Senate amendments: 1)Authorize the Controller to send an additional notice to the apparent owner of a U.S. savings bond, war bond, or military award whose name is shown on or can be associated with the contents of an escheated safe deposit box and is different from the name of the reported owner. 2)Mirror existing safeguards against including photographs of elected officials on notices sent under the Unclaimed Property Law. 3)Authorize the Controller to request information from other state or local government agencies for the limited purpose of locating owners of unclaimed property. 4)Clarify that the costs for sending additional notices pursuant to this bill shall be subject to the level of appropriation in the annual Budget Act. AB 355 Page 3 FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: This bill, sponsored by the State Controller's Office (SCO), seeks to help the SCO reunite owners of savings bonds or military awards with their property when that property was contained in a safe deposit box belonging to a different person that escheated to the state. The author explains: The State Controller can 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 piece of property. This becomes a problem in the case of a safe deposit box, where the box itself may be in one person's name, 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 must 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. Background of the Unclaimed Property Law: The Unclaimed Property Law (UPL), enacted in 1958, establishes procedures for the escheat of unclaimed personal property. Property escheated to the state means the state has custody of the property in perpetuity, until the owner claims the property. Under the UPL, there are three significant parties: the owner, the holder, and the state. The "owner" is the person to whom the property actually belongs. The "holder" is the person or entity who has possession of the property. The holder might be a bank or other money depositary (e.g., holds deposits of owner's money, holds property in a safe deposit box), or a business that has issued a check to an individual or other business, or a life insurance or annuity. The AB 355 Page 4 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. In turn, the Controller is required to mail a notice to each person who appears to be entitled to unclaimed property according to the report filed by a holder, as well as publish a notice to unclaimed property owners in a newspaper of general circulation. A person with an interest in escheated property may file a claim to recover the property from the state. The Controller maintains a Web site (http://www.sco.ca.gov) where members of the public may search a database to discover if the state is holding any of their property, and may submit claims to recover the funds or property. Limited name reporting requirement for U.S. savings bonds and military awards. Existing law requires the holder of escheated property to report to the Controller the name and last known address of each person appearing from the records of the holder to be the owner of the escheated property. In the case of a safe deposit box or other safekeeping repository, the holder's records generally indicate the name of the person who had opened the safe deposit account and was responsible for making rent payments on the box. With respect to the contents of a safe deposit box, however, existing law only requires the holder of the escheated property to report to the Controller a description of the property, the place where it is held and may be inspected, and any amounts owing to the holder for unpaid rent, storage charges, or the cost of opening the safe deposit box. As the author and sponsor point out, existing law does not require the report to the Controller to include any name attached to or appearing on a particular item found in the safe deposit box that may indicate ownership of that item. For example, a U.S. Savings Bond issued to Mary Smith that was discovered in a safe deposit box rented by her father John Brown would not itself be searchable in the Controller's database as unclaimed property belonging to Mary Smith. To address instances such as these, this bill would authorize the Controller to mail a separate notice to an apparent owner of a United States savings bond, war bond, or military award inside a AB 355 Page 5 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. In the case of U.S. savings bonds, the name of the holder of the bond appears on the bond itself, indicating its ownership and possibly distinguishing it from the deposit box owner. In the case of military awards or medals, however, the name of the recipient may or may not be inscribed on the award itself. For example, it may be housed in a small display carrying case with an accompanying certificate issued by the U.S. government naming the recipient. This bill would not give the apparent owner of the award any preferential claim to the property. Any claimant of property under the UPL, including those who receive additional notices pursuant to this bill, would have to file a claim to the property with the Controller. The UPL requires the Controller to consider each claim and determine whether the claimant is the true owner of the claimed property. This bill would not modify the existing process for determining ownership to unclaimed property held by the Controller. Rather, it would expand the universe of potential claimants who receive notice that the subject property has escheated to, and is being held by, the state. California State Military Museum. This bill would also modify existing law concerning escheated military awards, decorations, equipment, artifacts, memorabilia, documents, photographs, films, literature, and any other item relating to the military history of California. Existing law requires these items to be held in trust for the Controller at the California State Military Museum and Resource Center. However, following the loss of certain items in the collection and a dispute concerning the museum's management, the California National Guard closed the museum in March of 2014. Consequently, this bill would provide that the Controller may deposit such items in trust with the museum or its successor entity, thus giving the Controller some flexibility to make arrangements for the safekeeping of items that would have previously gone to the museum. AB 355 Page 6 Finally, technical amendments taken in the Senate incorporate existing prohibitions on including photographs of elected officials on notices sent pursuant to this bill, and authorize the Controller to request information from other state or local government agencies for the limited purpose of locating owners of unclaimed property. These amendments also clarify that the costs for sending additional notices under this bill shall be subject to the level of appropriation in the annual Budget Act. Analysis Prepared by: Anthony Lew / JUD. / (916) 319-2334FN: 0001488