BILL NUMBER: AB 1291 CHAPTERED
BILL TEXT
CHAPTER 522
FILED WITH SECRETARY OF STATE OCTOBER 11, 2009
APPROVED BY GOVERNOR OCTOBER 11, 2009
PASSED THE SENATE SEPTEMBER 10, 2009
PASSED THE ASSEMBLY SEPTEMBER 11, 2009
AMENDED IN SENATE SEPTEMBER 4, 2009
AMENDED IN SENATE SEPTEMBER 1, 2009
AMENDED IN SENATE JULY 6, 2009
AMENDED IN ASSEMBLY JUNE 1, 2009
AMENDED IN ASSEMBLY APRIL 2, 2009
INTRODUCED BY Assembly Member Niello
FEBRUARY 27, 2009
An act to amend Sections 1513, 1513.5, 1514, 1516, 1520, 1532,
1560, and 1577 of the Code of Civil Procedure, relating to unclaimed
property.
LEGISLATIVE COUNSEL'S DIGEST
AB 1291, Niello. Unclaimed property.
Existing law, the Unclaimed Property Law, governs the disposition
of unclaimed property, including the escheat of certain property to
the state. Those provisions require a person holding funds or other
property escheated to the state to report to the Controller certain
information regarding the property and the owner.
Existing law provides for the escheat to the state of (1) certain
deposits or accounts made with a banking organization, together with
other specified sums, (2) certain deposits, accounts, investment
certificates, or other interests in or deposits made with a financial
organization, together with other specified sums, and (3) certain
funds held by a business association in specified retirement accounts
or plans, when the owner, for more than 3 years, has not taken any
of certain actions, except as specified.
Existing law requires certain entities to make reasonable efforts
to notify owners of certain property, by mail, that the property will
escheat to the state under specified provisions of law.
This bill would allow those entities to notify an owner described
above electronically if the owner has consented to electronic notice.
Existing law requires the holder of certain property, including
certain property held by a banking or financial organization, certain
sums held or owing by a business association to shareholders or
other specified persons, and tangible property that is held in the
ordinary course of the holder's business, to notify the owner, at
prescribed times, of information regarding escheat and to include a
form by which the owner may declare an intention to maintain the
deposit, account, shares, or other interest.
This bill would require that those notices contain certain
information, and would allow the holder to provide a telephone number
or other electronic means to enable the owner to contact the
organization in lieu of returning the above-described form to declare
the owner's intent. The bill would authorize the holder to give
additional notices, as specified. The bill, commencing January 1,
2011, would require that, at the time a new account is opened with a
banking or financial organization, the organization provide a written
notice to the person opening the account regarding escheat.
Existing law provides that the contents of any safe deposit box or
any other safekeeping repository held in this state by a bank,
financial organization, or business association escheat to the state
if unclaimed by the owner for more than 3 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 another specified
agreement, whichever occurs last.
This bill would require a bank, financial organization, or
business association to notify the owner of the contents of a safe
deposit box, at either of 2 specified times, regarding escheat, and
would specify the contents of the notice. The bill would require that
notice to include a form by which the customer may declare an
intention to maintain the safe deposit box or other safekeeping
repository, and would authorize the bank, financial organization, or
business association to impose a service charge for the notice and
form. The bill would provide that the contents of a safe deposit box
shall not escheat to the state under certain circumstances. The bill
would also require a bank, financial organization, or business
association to provide a notice regarding escheat to a person opening
a new account for a safe deposit box or other safekeeping
repository.
Existing law requires every person holding funds or other property
escheated to the state to report to the Controller, as specified.
Existing law requires every person filing such a report to pay or
deliver to the Controller all escheated property specified in the
report within a certain period.
This bill would allow the Controller to postpone the date for
payment or delivery of the property, and the date for any report
required by the above provisions, upon his or her own motion or upon
written request by any person required to pay or deliver the property
or file a report.
Existing law provides that a person who pays or delivers escheated
property to the Controller under the above provisions is relieved of
all liability to the extent of the value of the property paid or
delivered for any claim that then exists or that thereafter may
arise.
This bill would provide, instead, that a person who pays or
delivers escheated property to the Controller under the above
provisions and who, prior to escheat, if the person's records contain
an address for the apparent owner, which the holder's records do not
disclose to be inaccurate, has made reasonable efforts to notify the
owner by mail or electronically that the owner's property, deposit,
account, shares, or other interest will escheat to the state, is
relieved of all liability to the extent of the value of the property
paid or delivered for any claim that then exists or that thereafter
may arise.
Existing law requires that any person who fails to report, pay, or
deliver unclaimed property within the time prescribed by these
provisions, unless that failure is due to reasonable cause, pay to
the Controller interest at the rate of 12% per annum on that property
or value thereof from the date the property should have been
reported, paid, or delivered.
This bill would require, in addition, that any person who fails to
file a report substantially in the time and manner required by
specified provisions of law, unless that failure is due to reasonable
cause, pay to the Controller interest as described above. The bill
would limit the interest payable to the Controller if a holder has
failed to file a report in a required manner, but has timely paid or
delivered the property to the Controller.
This bill would make other related and conforming changes.
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
not (where made in this state) exceed those set forth in schedules
filed by the banking organization from time to time with the
Controller, when 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
clauses (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,
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) 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 not (where made in this state) exceed those set forth in
schedules filed by the financial organization from time to time with
the Controller, when 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
clauses (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,
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) 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, when 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, when 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
association (including a banking or financial organization), 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, when 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, when 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 or plan with the business
association and, with respect to that 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 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, under the terms of the account or
plan, distribution of all or a part of the funds would then be
mandatory.
(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 "service charges" means service
charges imposed because of the inactivity contemplated by this
section.
SEC. 2. Section 1513.5 of the Code of Civil Procedure is amended
to read:
1513.5. (a) Except as provided in subdivision (c), if the holder
has in its records an address for the apparent owner, which the
holder's records do not disclose to be inaccurate, every banking or
financial organization shall make reasonable efforts to notify any
owner by mail or, if the owner has consented to electronic notice,
electronically, that the owner's deposit, account, shares, or other
interest in the banking or financial organization will escheat to the
state pursuant to clause (i), (ii), or (iii) of subparagraph (A) of
paragraphs (1), (2), or (6) of subdivision (a) of Section 1513. The
holder shall give notice either:
(1) Not less than two years nor more than two and one-half years
after the date of last activity by, or communication with, the owner
with respect to the account, deposit, shares, or other interest, as
shown on the record of the banking or financial organization.
(2) Not less than six nor more than 12 months before the time the
account, deposit, shares, or other interest becomes reportable to the
Controller in accordance with this chapter.
(b) The notice required by this section shall specify the time
that the deposit, account, shares, or other interest will escheat and
the effects of escheat, including the necessity for filing a claim
for the return of the deposit, account, shares, or other interest.
The face of the notice shall contain a heading at the top that reads
as follows: "THE STATE OF CALIFORNIA REQUIRES US TO NOTIFY YOU THAT
YOUR UNCLAIMED PROPERTY MAY BE TRANSFERRED TO THE STATE IF YOU DO NOT
CONTACT US," or substantially similar language. The notice required
by this section shall, in boldface type or in a font a minimum of two
points larger than the rest of the notice, exclusive of the heading,
(1) specify that since the date of last activity, or for the last
two years, there has been no owner activity on the deposit, account,
shares, or other interest; (2) identify the deposit, account, shares,
or other interest by number or identifier, which need not exceed
four digits; (3) indicate that the deposit, account, shares, or other
interest is in danger of escheating to the state; and (4) specify
that the California Unclaimed Property Law requires banks, banking
organizations, and financial organizations to transfer funds of a
deposit, account, shares, or other interest if it has been inactive
for three years. It shall also include a form, as prescribed by the
Controller, by which the owner may declare an intention to maintain
the deposit, account, shares, or other interest. If that form is
filled out, signed by the owner, and returned to the banking or
financial organization, it shall satisfy the requirement of clause
(iii) of subparagraph (A) of paragraph (1), clause (iii) of
subparagraph (A) of paragraph (2), or clause (iii) of subparagraph
(A) of paragraph (6) of subdivision (a) of Section 1513. In lieu of
returning the form, the banking or financial organization may provide
a telephone number or other electronic means to enable the owner to
contact that organization. The contact, as evidenced by a memorandum
or other record on file with the banking or financial organization,
shall satisfy the requirement of clause (iii) of subparagraph (A) of
paragraph (1), clause (iii) of subparagraph (A) of paragraph (2), or
clause (iii) of subparagraph (A) of paragraph (6) of subdivision (a)
of Section 1513. The banking or financial organization may impose a
service charge on the deposit, account, shares, or other interest for
this notice in an amount not to exceed the administrative cost of
mailing or electronically sending the notice and form and in no case
to exceed two dollars ($2).
(c) Notice as provided by subdivisions (a) and (b) shall not be
required for deposits, accounts, shares, or other interests of less
than fifty dollars ($50), and no service charge may be made for
notice on these items.
(d) In addition to the notices required pursuant to subdivision
(a), the holder may give additional notice as described in
subdivision (b) at any time between the date of last activity by, or
communication with, the owner and the date the holder transfers the
deposit, account, shares, or other interest to the Controller.
(e) At the time a new account is opened with a banking or
financial organization, the organization shall provide a written
notice to the person opening the account informing the person that
his or her property may be transferred to the appropriate state if no
activity occurs in the account within the time period specified by
state law. If the person opening the account has consented to
electronic notice, that notice may be provided electronically. This
subdivision shall become effective on January 1, 2011.
SEC. 3. Section 1514 of the Code of Civil Procedure is amended to
read:
1514. (a) 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.
(b) If a business association has in its records an address for an
apparent owner of the contents of, or the proceeds of sale of the
contents of, a safe deposit box or other safekeeping repository
described in subdivision (a), and the records of the business
association do not disclose the address to be inaccurate, the
business association shall make reasonable efforts to notify the
owner by mail, or, if the owner has consented to electronic notice,
electronically, that the owner's contents, or the proceeds of the
sale of the contents, will escheat to the state pursuant to this
section. The business association shall give notice not less than six
months and not more than 12 months before the time the contents, or
the proceeds of the sale of the contents, become reportable to the
Controller in accordance with this chapter.
(c) The face of the notice shall contain a heading at the top that
reads as follows: "THE STATE OF CALIFORNIA REQUIRES US TO NOTIFY YOU
THAT YOUR UNCLAIMED PROPERTY MAY BE TRANSFERRED TO THE STATE IF YOU
DO NOT CONTACT US," or substantially similar language. The notice
required by this subdivision shall specify the date that the property
will escheat and the effects of escheat, including the necessity for
filing a claim for the return of the property. The notice required
by this section shall, in boldface type or in a font a minimum of two
points larger than the rest of the notice, exclusive of the heading,
do all of the following:
(1) Identify the safe deposit box or other safekeeping repository
by number or identifier.
(2) State that the lease or rental period on the box or repository
has expired or the agreement has terminated.
(3) Indicate that the contents of, or the proceeds of sale of the
contents of, the safe deposit box or other safekeeping repository
will escheat to the state unless the owner requests the contents or
their proceeds.
(4) Specify that the California Unclaimed Property Law requires
business associations to transfer the contents of, or the proceeds of
sale of the contents of, a safe deposit box or other safekeeping
repository to the Controller if they remain unclaimed for more than
three years.
(5) Advise the owner to make arrangements with the business
association to either obtain possession of the contents of, or the
proceeds of sale of the contents of, the safe deposit box or other
safekeeping repository, or enter into a new agreement with the
business association to establish a leasing or rental arrangement. If
an owner fails to establish such an arrangement prior to the end of
the period described in subdivision (a), such contents or proceeds
shall escheat to this state.
(d) In addition to the notice required pursuant to subdivision
(b), the business association may give additional notice in
accordance with subdivision (c) at any time between the date on which
the lease or rental period for the safe deposit box or repository
expired, or from the date of the termination of any agreement,
through which the box or other repository was furnished to the owner
without cost, whichever is earlier, and the date the business
association transfers the contents of, or the proceeds of sale of the
contents of, the safe deposit box or other safekeeping repository to
the Controller.
(e) The contents of, or the proceeds of sale of the contents of, a
safe deposit box or other safekeeping repository shall not escheat
to the state if, as of June 30 or the fiscal yearend next preceding
the date on which a report is required to be filed under Section
1530, the owner has owned, with a banking organization providing the
safe deposit box or other safekeeping repository, any demand,
savings, or matured time deposit, or account subject to a negotiable
order of withdrawal, which has not escheated under Section 1513 and
is not reportable under subdivision (d) of Section 1530.
(f) The contents of, or the proceeds of sale of the contents of, a
safe deposit box or other safekeeping repository shall not escheat
to the state if, as of June 30 or the fiscal yearend next preceding
the date on which a report is required to be filed under Section
1530, the owner has owned, with a financial organization providing
the safe deposit box or other safekeeping repository, 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, which has not escheated under
Section 1513 and is not reportable under subdivision (d) of Section
1530.
(g) The contents of, or the proceeds of sale of the contents of, a
safe deposit box or other safekeeping repository shall not escheat
to the state if, as of June 30 or the fiscal yearend next preceding
the date on which a report is required to be filed under Section
1530, the owner has owned, with a banking or financial organization
providing the safe deposit box or other safekeeping repository, any
funds in an individual retirement account or under a retirement plan
for self-employed individuals or similar account or plan pursuant to
the internal revenue laws of the United States or the income tax laws
of this state, which has not escheated under Section 1513 and is not
reportable under subdivision (d) of Section 1530.
(h) In the event the owner is in default under the safe deposit
box or other safekeeping repository agreement and the owner has owned
any demand, savings, or matured time deposit, account, or plan
described in subdivisions (e), (f), or (g), the banking or financial
organization may pay or deliver the contents of, or the proceeds of
sale of the contents of, the safe deposit box or other safekeeping
repository to the owner after deducting any amount due and payable
from those proceeds under that agreement. Upon making that payment or
delivery under these subdivisions, the banking or financial
organization shall be relieved of all liability to the extent of the
value of those contents or proceeds.
(i) For new accounts opened for a safe deposit box or other
safekeeping repository with a business association on and after
January 1, 2011, the business association shall provide a written
notice to the person leasing the safe deposit box or safekeeping
repository informing the person that his or her property, or the
proceeds of sale of such property, may be transferred to the
appropriate state upon running of the time period specified by state
law from the date the lease or rental period on the safe deposit box
or 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 is earlier.
(j) A business association may directly escheat the contents of a
safe deposit box or other safekeeping repository without exercising
its rights under Article 2 (commencing with Section 1660) of Chapter
13 of Division 1 of the Financial Code.
SEC. 4. Section 1516 of the Code of Civil Procedure is amended to
read:
1516. (a) Subject to Section 1510, any dividend, profit,
distribution, interest, payment on principal, or other sum held or
owing by a business association for or to its shareholder,
certificate holder, member, bondholder, or other security holder, or
a participating patron of a cooperative, who has not claimed it, or
corresponded in writing with the business association concerning it,
within three years after the date prescribed for payment or delivery,
escheats to this state.
(b) Subject to Section 1510, any intangible interest in a business
association, as evidenced by the stock records or membership records
of the association, escheats to this state if (1) the interest in
the association is owned by a person who for more than three years
has neither claimed a dividend or other sum referred to in
subdivision (a) nor corresponded in writing with the association or
otherwise indicated an interest as evidenced by a memorandum or other
record on file with the association, and (2) the association does
not know the location of the owner at the end of the three-year
period. With respect to the interest, the business association shall
be deemed the holder.
(c) Subject to Section 1510, any dividends or other distributions
held for or owing to a person at the time the stock or other security
to which they attach escheats to this state also escheat to this
state as of the same time.
(d) If the business association has in its records an address for
the apparent owner, which the business association's records do not
disclose to be inaccurate, with respect to any interest that may
escheat pursuant to subdivision (b), the business association shall
make reasonable efforts to notify the owner by mail or, if the owner
has consented to electronic notice, electronically, that the owner's
interest in the business association will escheat to the state. The
notice shall be given not less than 6 nor more than 12 months before
the time the interest in the business association becomes reportable
to the Controller in accordance with this chapter. The face of the
notice shall contain a heading at the top that reads as follows: "THE
STATE OF CALIFORNIA REQUIRES US TO NOTIFY YOU THAT YOUR UNCLAIMED
PROPERTY MAY BE TRANSFERRED TO THE STATE IF YOU DO NOT CONTACT US,"
or substantially similar language. The notice required by this
subdivision shall specify the time that the interest will escheat and
the effects of escheat, including the necessity for filing a claim
for the return of the interest. The notice required by this section
shall, in boldface type or in a font a minimum of two points larger
than the rest of the notice, exclusive of the heading, (1) specify
that since the date of last activity, or for the last two years,
there has been no customer activity on the deposit, account, shares,
or other interest; (2) identify the deposit, account, shares, or
other interest by number or identifier, which need not exceed four
digits; (3) indicate that the deposit, account, shares, or other
interest is in danger of escheating to the state; and (4) specify
that the California Unclaimed Property Law requires banks, banking
organizations, and financial organizations to transfer funds of a
deposit, account, shares, or other interest if it has been inactive
for three years. It shall also include a form, as prescribed by the
Controller, by which the owner may confirm the owner's current
address. If that form is filled out, signed by the owner, and
returned to the holder, it shall be deemed that the business
association knows the location of the owner. In lieu of returning the
form, the business association may provide a telephone number or
other electronic means to enable the owner to contact the
association. With that contact, as evidenced by a memorandum or other
record on file with the business association, the business
association shall be deemed to know the location of the owner. The
business association may impose a service charge on the deposit,
account, shares, or other interest for this notice and form in an
amount not to exceed the administrative cost of mailing or
electronically sending the notice and form, and in no case to exceed
two dollars ($2).
(e) In addition to the notice required pursuant to subdivision
(d), the holder may give additional notice as described in
subdivision (d) at any time between the date of last activity by, or
communication with, the owner and the date the holder transfers the
deposit, shares, or other interest to the Controller.
SEC. 5. Section 1520 of the Code of Civil Procedure is amended to
read:
1520. (a) All tangible personal property located in this state
and, subject to Section 1510, all intangible personal property,
except property of the classes mentioned in Sections 1511, 1513,
1514, 1515, 1515.5, 1516, 1517, 1518, 1519, and 1521, including any
income or increment thereon and deducting any lawful charges, that is
held or owing in the ordinary course
of the holder's business and has remained unclaimed by
the owner for more than three years after it became payable or
distributable escheats to this state.
(b) Except as provided in subdivision (a) of Section 1513.5,
subdivision (b) of Section 1514, and subdivision (d) of Section 1516,
if the holder has in its records an address for the apparent owner
of property valued at fifty dollars ($50) or more, which the holder's
records do not disclose to be inaccurate, the holder shall make
reasonable efforts to notify the owner by mail or, if the owner has
consented to electronic notice, electronically, that the owner's
property will escheat to the state pursuant to this chapter. The
notice shall be mailed not less than six nor more than 12 months
before the time when the owner's property held by the business
becomes reportable to the Controller in accordance with this chapter.
The face of the notice shall contain a heading at the top that reads
as follows: "THE STATE OF CALIFORNIA REQUIRES US TO NOTIFY YOU THAT
YOUR UNCLAIMED PROPERTY MAY BE TRANSFERRED TO THE STATE IF YOU DO NOT
CONTACT US," or substantially similar language. The notice required
by this subdivision shall specify the time when the property will
escheat and the effects of escheat, including the need to file a
claim in order for the owner's property to be returned to the owner.
The notice required by this section shall, in boldface type or in a
font a minimum of two points larger than the rest of the notice,
exclusive of the heading, (1) specify that since the date of last
activity, or for the last two years, there has been no owner activity
on the deposit, account, shares, or other interest; (2) identify the
deposit, account, shares, or other interest by number or identifier,
which need not exceed four digits; (3) indicate that the deposit,
account, shares, or other interest is in danger of escheating to the
state; and (4) specify that the California Unclaimed Property Law
requires banks, banking organizations, and financial organizations to
transfer funds of a deposit, account, shares, or other interest if
it has been inactive for three years. It shall also include a form,
as prescribed by the Controller, by which the owner may confirm the
owner's current address. If that form is filled out, signed by the
owner, and returned to the holder, it shall be deemed that the
account, or other device in which the owner's property is being held,
remains currently active and recommences the escheat period. In lieu
of returning the form, the holder may provide a telephone number or
other electronic means to enable the owner to contact the holder.
With that contact, as evidenced by a memorandum or other record on
file with the holder, the account or other device in which the owner'
s property is being held shall be deemed to remain currently active
and shall recommence the escheat period. The holder may impose a
service charge on the deposit, account, shares, or other interest for
this notice in an amount not to exceed the administrative cost of
mailing or electronically sending the notice and form, and in no case
to exceed two dollars ($2).
(c) In addition to the notice required pursuant to subdivision
(b), the holder may give additional notice as described in
subdivision (b) at any time between the date of last activity by, or
communication with, the owner and the date the holder transfers the
property to the Controller.
(d) For purposes of this section, "lawful charges" means charges
which are specifically authorized by statute, other than the
Unclaimed Property Law, or by a valid, enforceable contract.
SEC. 6. Section 1532 of the Code of Civil Procedure is amended to
read:
1532. (a) Every person filing a report as provided by Section
1530 shall, no sooner than seven months and no later than seven
months and 15 days after the final date for filing the report, pay or
deliver to the Controller all escheated property specified in the
report. Any payment of unclaimed cash in an amount of at least twenty
thousand dollars ($20,000) shall be made by electronic funds
transfer pursuant to regulations adopted by the Controller. The
Controller may postpone the date for payment or delivery of the
property, and the date for any report required by subdivision (b),
upon his or her own motion or upon written request by any person
required to pay or deliver the property or file a report as required
by this section.
(b) If a person establishes his or her right to receive any
property specified in the report to the satisfaction of the holder
before that property has been delivered to the Controller, or it
appears that, for any other reason, the property may not be subject
to escheat under this chapter, the holder shall not pay or deliver
the property to the Controller but shall instead file a report with
the Controller, on a form and in a format prescribed or approved by
the Controller, containing information pertaining to the property not
subject to escheat.
(c) Any property not paid or delivered pursuant to subdivision (b)
that is later determined by the holder to be subject to escheat
under this chapter shall not be subject to the interest provision of
Section 1577.
(d) The holder of any interest under subdivision (b) of Section
1516 shall deliver a duplicate certificate to the Controller or shall
register the securities in uncertificated form in the name of the
Controller. Upon delivering a duplicate certificate or providing
evidence of registration of the securities in uncertificated form to
the Controller, the holder, any transfer agent, registrar, or other
person acting for or on behalf of the holder in executing or
delivering the duplicate certificate or registering the
uncertificated securities, shall be relieved from all liability of
every kind to any person including, but not limited to, any person
acquiring the original certificate or the duplicate of the
certificate issued to the Controller for any losses or damages
resulting to that person by the issuance and delivery to the
Controller of the duplicate certificate or the registration of the
uncertificated securities to the Controller.
(e) Payment of any intangible property to the Controller shall be
made at the office of the Controller in Sacramento or at another
location as the Controller by regulation may designate. Except as
otherwise agreed by the Controller and the holder, tangible personal
property shall be delivered to the Controller at the place where it
is held.
(f) Payment is deemed complete on the date the electronic funds
transfer is initiated if the settlement to the state's demand account
occurs on or before the banking day following the date the transfer
is initiated. If the settlement to the state's demand account does
not occur on or before the banking day following the date the
transfer is initiated, payment is deemed to occur on the date
settlement occurs.
(g) Any person required to pay cash by electronic funds transfer
who makes the payment by means other than an authorized electronic
funds transfer shall be liable for a civil penalty of 2 percent of
the amount of the payment that is due pursuant to this section, in
addition to any other penalty provided by law. Penalties are due at
the time of payment. If the Controller finds that a holder's failure
to make payment by an appropriate electronic funds transfer in
accordance with the Controller's procedures is due to reasonable
cause and circumstances beyond the holder's control, and occurred
notwithstanding the exercise of ordinary care and in the absence of
willful neglect, that holder shall be relieved of the penalties.
(h) An electronic funds transfer shall be accomplished by an
automated clearinghouse debit, an automated clearinghouse credit, a
Federal Reserve Wire Transfer (Fedwire), or by an international funds
transfer. Banking costs incurred for the automated clearinghouse
debit transaction by the holder shall be paid by the state. Banking
costs incurred by the state for the automated clearinghouse credit
transaction may be paid by the holder originating the credit. Banking
costs incurred for the Fedwire transaction charged to the holder and
the state shall be paid by the person originating the transaction.
Banking costs charged to the holder and to the state for an
international funds transfer may be charged to the holder.
(i) For purposes of this section:
(1) "Electronic funds transfer" means any transfer of funds, other
than a transaction originated by check, draft, or similar paper
instrument, that is initiated through an electronic terminal,
telephonic instrument, modem, computer, or magnetic tape, so as to
order, instruct, or authorize a financial institution to credit or
debit an account.
(2) "Automated clearinghouse" means any federal reserve bank, or
an organization established by agreement with the National Automated
Clearing House Association or any similar organization, that operates
as a clearinghouse for transmitting or receiving entries between
banks or bank accounts and that authorizes an electronic transfer of
funds between those banks or bank accounts.
(3) "Automated clearinghouse debit" means a transaction in which
the state, through its designated depository bank, originates an
automated clearinghouse transaction debiting the holder's bank
account and crediting the state's bank account for the amount of
payment.
(4) "Automated clearinghouse credit" means an automated
clearinghouse transaction in which the holder, through its own bank,
originates an entry crediting the state's bank account and debiting
the holder's bank account.
(5) "Fedwire" means any transaction originated by the holder and
utilizing the national electronic payment system to transfer funds
through federal reserve banks, pursuant to which the holder debits
its own bank account and credits the state's bank account.
(6) "International funds transfer" means any transaction
originated by the holder and utilizing the international electronic
payment system to transfer funds, pursuant to which the holder debits
its own bank account, and credits the funds to a United States bank
that credits the Unclaimed Property Fund.
SEC. 7. Section 1560 of the Code of Civil Procedure is amended to
read:
1560. (a) Upon the payment or delivery of escheated property to
the Controller, the state shall assume custody and shall be
responsible for the safekeeping of the property. Any person who pays
or delivers escheated property to the Controller under this chapter
and who, prior to escheat, if the person's records contain an address
for the apparent owner, which the holder's records do not disclose
to be inaccurate, has made reasonable efforts to notify the owner by
mail or, if the owner has consented to electronic notice,
electronically, in substantial compliance with Sections 1513.5, 1514,
1516, and 1520, that the owner's property, deposit, account, shares,
or other interest will escheat to the state, is relieved of all
liability to the extent of the value of the property so paid or
delivered for any claim which then exists or which thereafter may
arise or be made in respect to the property. Property removed from a
safe deposit box or other safekeeping repository shall be received by
the Controller subject to any valid lien of the holder for rent and
other charges, such rent and other charges to be paid out of the
proceeds remaining after the Controller has deducted therefrom his or
her selling cost.
(b) Any holder who has paid moneys to the State Controller
pursuant to this chapter may make payment to any person appearing to
such holder to be entitled thereto, and upon filing proof of such
payment and proof that the payee was entitled thereto, the Controller
shall forthwith reimburse the holder for the payment without
deduction of any fee or other charges. Where reimbursement is sought
for a payment made on a negotiable instrument (including a traveler's
check or money order), the holder shall be reimbursed under this
subdivision upon filing proof that the instrument was duly presented
to him or her and that payment was made thereon to a person who
appeared to the holder to be entitled to payment.
(c) The holder shall be reimbursed under this section even if he
made the payment to a person whose claim against him was barred
because of the expiration of any such period of time as those
described in Section 1570.
(d) Any holder who has delivered personal property, including a
certificate of any interest in a business association, to the
Controller pursuant to this chapter may reclaim such personal
property if still in the possession of the Controller without payment
of any fee or other charges upon filing proof that the owner thereof
has claimed such personal property from such holder. The Controller
may, in his or her discretion, accept an affidavit of the holder
stating the facts that entitle the holder to reimbursement under this
subdivision as sufficient proof for the purposes of this
subdivision.
SEC. 8. Section 1577 of the Code of Civil Procedure is amended to
read:
1577. In addition to any damages, penalties, or fines for which a
person may be liable under other provisions of law, any person who
fails to report, pay, or deliver unclaimed property within the time
prescribed by this chapter, unless that failure is due to reasonable
cause, shall pay to the Controller interest at the rate of 12 percent
per annum on that property or value thereof from the date the
property should have been reported, paid, or delivered. If a holder
pays or delivers unclaimed property in a timely manner, but files a
report that is not in substantial compliance with the requirements of
Section 1530, the interest payable shall not exceed ten thousand
dollars ($10,000). The holder shall not be subject to any interest
payment if the holder's failure to report in substantial compliance
with the requirements of Section 1530 is due to reasonable cause.