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