BILL ANALYSIS Ó
AB 355
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
355 (Eduardo Garcia)
As Amended August 19, 2015
Majority vote
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|ASSEMBLY: |76-0 |(March 26, |SENATE: |40-0 |(August 31, |
| | |2015) | | |2015) |
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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.
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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
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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
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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
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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.
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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