California Legislature—2015–16 Regular Session

Assembly Bill No. 2258

Introduced by Assembly Member Eggman

February 18, 2016

An act to amend Section 1513 of the Code of Civil Procedure, relating to unclaimed property.

LEGISLATIVE COUNSEL’S DIGEST

AB 2258, as introduced, Eggman. Unclaimed property.

Existing law prescribes the circumstances under which property held or owing by a business association escheats to the state. Existing law specifies that any demand, savings, or matured time deposit, or account subject to a negotiable order of withdrawal, made with a banking organization escheats to the state if the owner, for more than three years, has not increased or decreased the amount of the deposit. Existing law specifies that any demand, savings, or matured time deposit, or matured investment certificate, or account subject to a negotiable order of withdrawal, or other interest in a financial organization, escheats to the state when the owner, for more than three years, has not increased or decreased the amount of the funds or deposit.

This bill would provide that, for purposes of determining whether the above-described property escheats to the state, specified transactions that are initiated electronically through automated clearing house (ACH) transactions and are reflected in the books and records of a banking or financial organization would constitute an increase or decrease in the amount of the funds or deposit held by the banking or financial organization.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1513 of the Code of Civil Procedure is
amended to read:

1513.  

(a) Subject to Sections 1510 and 1511, the following
property held or owing by a business association escheats to this
state:

(1) (A) Except as provided in paragraph (6), any demand,
savings, or matured time deposit, or account subject to a negotiable
order of withdrawal, made with a banking organization, together
with any interest or dividends thereon, excluding, from demand
deposits and accounts subject to a negotiable order of withdrawal
only, any reasonable service charges that may lawfully be withheld
and that do begin delete not (where end delete begin insert not, where end insert made in this begin delete state) end delete begin insert state, end insert exceed
those set forth in schedules filed by the banking organization from
time to time with the Controller, begin delete when end delete begin insert if end insert the owner, for more than
three years, has not done any of the following:

(i) Increased or decreased the amount of the deposit, cashed an
interest check, or presented the passbook or other similar evidence
of the deposit for the crediting of interest.

(ii) Corresponded electronically or in writing with the banking
organization concerning the deposit.

(iii) Otherwise indicated an interest in the deposit as evidenced
by a memorandum or other record on file with the banking
organization.

(B) A deposit or account shall not, however, escheat to the state
if, during the previous three years, the owner has owned another
deposit or account with the banking organization or the owner has
owned an individual retirement account or funds held by the
banking organization under a retirement plan for self-employed
individuals or a similar account or plan established pursuant to the
internal revenue laws of the United States or the laws of this state,
as described in paragraph (6), and, with respect to that deposit,
account, or plan, the owner has done any of the acts described in
clause (i), (ii), or (iii) of subparagraph (A), and the banking
organization has communicated electronically or in writing with
the owner, at the address to which communications regarding that
deposit, account, or plan are regularly sent, with regard to the
deposit or account that would otherwise escheat under
subparagraph (A). For purposes of this subparagraph,
“communications” includes account statements or statements
required under the internal revenue laws of the United States.

(C) No banking organization may discontinue any interest or
dividends on any savings deposit because of the inactivity
contemplated by this section.

(2) (A) Except as provided in paragraph (6), any demand,
savings, or matured time deposit, or matured investment certificate,
or account subject to a negotiable order of withdrawal, or other
interest in a financial organization or any deposit made therewith,
and any interest or dividends thereon, excluding, from demand
deposits and accounts subject to a negotiable order of withdrawal
only, any reasonable service charges that may lawfully be withheld
and that do begin delete not (where end delete begin insert not, where end insert made in this begin delete state) end delete begin insert state, end insert exceed
those set forth in schedules filed by the financial organization from
time to time with the Controller, begin delete when end delete begin insert if end insert the owner, for more than
three years, has not done any of the following:

(i) Increased or decreased the amount of the funds or deposit,
cashed an interest check, or presented an appropriate record for
the crediting of interest or dividends.

(ii) Corresponded electronically or in writing with the financial
organization concerning the funds or deposit.

(iii) Otherwise indicated an interest in the funds or deposit as
evidenced by a memorandum or other record on file with the
financial organization.

(B) A deposit or account shall not, however, escheat to the state
if, during the previous three years, the owner has owned another
deposit or account with the financial organization or the owner
has owned an individual retirement account or funds held by the
financial organization under a retirement plan for self-employed
individuals or a similar account or plan established pursuant to the
internal revenue laws of the United States or the laws of this state,
as described in paragraph (6), and, with respect to that deposit,
account, or plan, the owner has done any of the acts described in
clause (i), (ii), or (iii) of subparagraph (A), and the financial
organization has communicated electronically or in writing with
the owner, at the address to which communications regarding that
deposit, account, or plan are regularly sent, with regard to the
deposit or account that would otherwise escheat under
subparagraph (A). For purposes of this subparagraph,
“communications” includes account statements or statements
required under the internal revenue laws of the United States.

(C) No financial organization may discontinue any interest or
dividends on any funds paid toward purchase of shares or other
interest, or on any deposit, because of the inactivity contemplated
by this section.

(3) Any sum payable on a traveler’s check issued by a business
association that has been outstanding for more than 15 years from
the date of its issuance, begin delete when end delete begin insert if end insert the owner, for more than 15 years,
has not corresponded in writing with the business association
concerning it, or otherwise indicated an interest as evidenced by
a memorandum or other record on file with the association.

(4) Any sum payable on any other written instrument on which
a banking or financial organization is directly liable, including, by
way of illustration but not of limitation, any draft, cashier’s check,
teller’s check, or certified check, that has been outstanding for
more than three years from the date it was payable, or from the
date of its issuance if payable on demand, begin delete when end delete begin insert if end insert the owner, for
more than three years, has not corresponded electronically or in
writing with the banking or financial organization concerning it,
or otherwise indicated an interest as evidenced by a memorandum
or other record on file with the banking or financial organization.

(5) Any sum payable on a money order issued by a business begin delete association (including end delete begin insert association, including end insert a banking or financial
begin delete organization), end delete begin insert organization, end insert that has been outstanding for more
than seven years from the date it was payable, or from the date of
its issuance if payable on demand, excluding any reasonable service
charges that may lawfully be withheld and that do not, when made
in this state, exceed those set forth in schedules filed by the
business association from time to time with the Controller, begin delete when end delete
begin insert if end insert the owner, for more than seven years, has not corresponded
electronically or in writing with the business association, banking,
or financial organization concerning it, or otherwise indicated an
interest as evidenced by a memorandum or other record on file
with the business association. For the purposes of this subdivision,
“reasonable service charge” means a service charge that meets all
of the following requirements:

(A) It is uniformly applied to all of the issuer’s money orders.

(B) It is clearly disclosed to the purchaser at the time of purchase
and to the recipient of the money order.

(C) It does not begin to accrue until three years after the
purchase date, and it stops accruing after the value of the money
order escheats.

(D) It is permitted by contract between the issuer and the
purchaser.

(E) It does not exceed 25 cents ($0.25) per month or the
aggregate amount of twenty-one dollars ($21).

(6) (A) Any funds held by a business association in an
individual retirement account or under a retirement plan for
self-employed individuals or similar account or plan established
pursuant to the internal revenue laws of the United States or of
this state, begin delete when end delete begin insert if end insert the owner, for more than three years after the
funds become payable or distributable, has not done any of the
following:

(i) Increased or decreased the principal.

(ii) Accepted payment of principal or income.

(iii) Corresponded electronically or in writing concerning the
property or otherwise indicated an interest.

(B) Funds held by a business association in an individual
retirement account or under a retirement plan for self-employed
individuals or a similar account or plan created pursuant to the
internal revenue laws of the United States or the laws of this state
shall not escheat to the state if, during the previous three years,
the owner has owned another such account, plan, or any other
deposit or account with the business association and, with respect
to that deposit, account, or plan, the owner has done any of the
acts described in clause (i), (ii), or (iii) of subparagraph (A), and
the business association has communicated electronically or in
writing with the owner, at the address to which communications
regarding that deposit, account, or plan are regularly sent, with
regard to the account or plan that would otherwise escheat under
subparagraph (A). For purposes of this subparagraph,
“communications” includes account statements or statements
required under the internal revenue laws of the United States.

(C) These funds are not payable or distributable within the
meaning of this subdivision unless either of the following is true:

(i) Under the terms of the account or plan, distribution of all or
a part of the funds would then be mandatory.

(ii) For an account or plan not subject to mandatory distribution
requirement under the internal revenue laws of the United States
or the laws of this state, the owner has attained 701⁄2 years of age.

(7) Any wages or salaries that have remained unclaimed by the
owner for more than one year after the wages or salaries become
payable.

(b) For purposes of this section begin delete “service end delete begin insert , the following terms
have the following meanings: end insert

begin insert

(1) “Increased or decreased the amount of the deposit” and
“increased or decreased the amount of the funds or deposit”
includes the following transactions that are initiated electronically
through automated clearing house (ACH) transactions and are
reflected in the books and records of the banking or financial
organization:

end insert begin insert

(A) A single or recurring debit transaction authorized by the
owner.

end insert begin insert

(B) A single or recurring credit transaction authorized by the
owner.

end insert begin insert

(C) Recurring transactions authorized by the owner that
represent payroll deposits or deductions.

end insert begin insert

(D) Recurring credits authorized by the owner or a responsible
party that represent the deposit of any federal benefits, including
social security benefits, veterans’ benefits, and pension payments.

end insert

begin insert (2) end insert begin insert   end insert begin insert “Service end insert charges” means service charges imposed because
of the inactivity contemplated by this section.