BILL NUMBER: AB 2117 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Niello
FEBRUARY 18, 2010
An act to amend Sections 1513, 1513.5, 1514, 1515, 1515.5, 1516,
1517, 1518, 1519, 1520, 1521, 1540, and 1564 of the Code of Civil
Procedure, relating to unclaimed property.
LEGISLATIVE COUNSEL'S DIGEST
AB 2117, as introduced, Niello. Unclaimed property.
(1) The Unclaimed Property Law provides for the escheat to the
state of abandoned property, including certain deposits, accounts,
shares, or other interests with a banking or financial organization,
business association, or other holder of personal property. Under
existing law, the holder of abandoned property transfers the property
to the Controller after the property is inactive for a period of 3
years, including when the owner has not increased or decreased the
amount of a deposit, cashed an interest check, or presented a
passbook or other similar evidence of a deposit for the crediting of
interest.
This bill would extend this 3-year period to require that the
holder transfer the abandoned property to the Controller after the
property is inactive for a period of 5 years.
(2) Existing law allows any person, excluding another state, who
claims an interest in property paid or delivered to the Controller
under the above provisions of law to file a claim to the property or
to the net proceeds from its sale. Existing law requires the
Controller to consider each claim within 180 days after it is filed.
This bill would require the Controller to add interest, at a
prescribed rate, to the amount of any claim paid to the owner under
these provisions for the period the property was on deposit in the
Unclaimed Property Fund, except as specified. It would require a
holder who pays to the owner property that has escheated to the state
and that, if claimed from the Controller, would be subject to the
provisions regarding the payment of interest to add interest in
accordance with those provisions, and would require the Controller to
repay that interest to the holder.
(3) Existing law requires that all money received pursuant to the
Unclaimed Property Law, including proceeds from the sale of property,
be deposited in the Abandoned Property Account in the Unclaimed
Property Fund. This fund is continuously appropriated to the
Controller, who is required to transfer all money in the fund in
excess of $50,000 to the General Fund at the end of each month, as
specified. Existing law requires the Controller to record the names
and last known addresses of each person in connection with the
escheated property, as specified, and to make this record available
for public inspection.
This bill would delete the requirement that the Controller
transfer all money in the Unclaimed Property Fund in excess of
$50,000 to the General Fund and to record and make available
specified names and addresses, as described above.
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
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
five 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 five
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 where 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
five 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 five
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 where 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 where 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
five 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 five 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
five 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 where
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 five years
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
and the holder's records do not disclose it
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
that 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
five 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
five years from the date on which
when 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 five 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 when 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
when 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 when 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 that 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 when 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 that 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 when 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
that 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 1515 of the Code of Civil Procedure is amended to
read:
1515. (a) Subject to Section 1510, funds held or owing by a life
insurance corporation under any life or endowment insurance policy or
annuity contract which that has
matured or terminated escheat to this state if unclaimed and unpaid
for more than three five years after
the funds became due and payable as established from the records of
the corporation.
(b) If a person other than the insured or annuitant is entitled to
the funds and no address of that person is known to the corporation
or if it is not definite and certain from the records of the
corporation what person is entitled to the funds, it is presumed that
the last known address of the person entitled to the funds is the
same as the last known address of the insured or annuitant according
to the records of the corporation. This presumption is a presumption
affecting the burden of proof.
(c) A life insurance policy not matured by actual proof of the
death of the insured according to the records of the corporation is
deemed to be matured and the proceeds due and payable if:
(1) The insured has attained, or would have attained if he or she
were living, the limiting age under the mortality table on
which that the reserve is based on .
(2) The policy was in force at the time the insured attained, or
would have attained, the limiting age specified in paragraph (1).
(3) Neither the insured nor any other person appearing to have an
interest in the policy has, within the preceding three
five years, according to the records of the
corporation (i) assigned, readjusted, or paid premiums on the policy,
(ii) subjected the policy to loan, or (iii) corresponded in writing
with the life insurance corporation concerning the policy.
(d) Any funds otherwise payable according to the records of the
corporation are deemed due and payable although the policy or
contract has not been surrendered as required.
SEC. 5. Section 1515.5 of the Code of Civil Procedure is amended
to read:
1515.5. Property distributable in the course of a demutualization
or related reorganization of an insurance company is deemed
abandoned as follows:
(a) On the date of the demutualization or reorganization, if the
instruments or statements reflecting the distribution are not mailed
to the owner because the address on the books and records for the
holder is known to be incorrect.
(b) Two years after the date of the demutualization or
reorganization, if instruments or statements reflecting the
distribution are mailed to the owner and returned by the post office
as undeliverable and the owner has done neither of the following:
(1) Communicated in writing with the holder or its agent regarding
the property.
(2) Otherwise communicated with the holder or its agent regarding
the property as evidenced by a memorandum or other record on file
with the holder or its agent.
(c) Three Five years after the date
of the demutualization or reorganization, if instruments or
statements reflecting the distribution are mailed to the owner and
not returned by the post office as undeliverable and the owner has
done neither of the following:
(1) Communicated in writing with the holder or its agent regarding
the property.
(2) Otherwise communicated with the holder or its agent regarding
the property as evidenced by a memorandum or other record on file
with the holder or its agent.
SEC. 6. 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 five 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
five 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 five-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 that 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 that 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 that 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 five 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. 7. Section 1517 of the Code of Civil Procedure is amended to
read:
1517. (a) All property distributable in the course of a voluntary
or involuntary dissolution or liquidation of a business association
that is unclaimed by the owner within six months
five years after the date of final distribution or
liquidation escheats to this state.
(b) All property distributable in the course of voluntary or
involuntary dissolution or liquidation of an insurer or other person
brought under Article 14 (commencing with Section 1010) of Chapter 1
of Part 2 of Division 1 of the Insurance Code, that is unclaimed by
the owner after six months five years
of the date of final distribution, shall be transferred to the
Department of Insurance, with any proceeds of sale of property and
other funds to be deposited in the Insurance Fund for expenditure as
provided in Section 12937 of the Insurance Code.
(c) This section applies to all tangible personal property located
in this state and, subject to Section 1510, to all intangible
personal property.
SEC. 8. Section 1518 of the Code of Civil Procedure is amended to
read:
1518. (a) All tangible personal property located in this state
and, subject to Section 1510, all intangible personal property, and
the income or increment on such that
tangible or intangible property, held in a fiduciary capacity for the
benefit of another person escheats to this state if after it becomes
payable or distributable, the owner has not, within a period of
three five years, increased or
decreased the principal, accepted payment of principal or income,
corresponded in writing concerning the property, or otherwise
indicated an interest as evidenced by a memorandum or other record on
file with the fiduciary.
(b) Funds in an individual retirement account or 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 are not payable or distributable within the meaning of
subdivision (a) unless, under the terms of the account or plan,
distribution of all or part of the funds would then be mandatory.
(c) For the purpose of this section, when
if a person holds property as an agent for a business
association, he or she is deemed to hold the property in a fiduciary
capacity for the business association alone, unless the agreement
between him or her and the business association clearly provides the
contrary. For the purposes of this chapter, if a person holds
property in a fiduciary capacity for a business association alone, he
or she is the holder of the property only insofar as the interest of
the business association in the property is concerned and the
association is deemed to be the holder of the property insofar as the
interest of any other person in the property is concerned.
SEC. 9. Section 1519 of the Code of Civil Procedure is amended to
read:
1519. All tangible personal property located in this state, and,
subject to Section 1510, all intangible personal property, held for
the owner by any government or governmental subdivision or agency,
that has remained unclaimed by the owner for more than three
five years escheats to this state.
SEC. 10. 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
five 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 five
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 that are specifically authorized
by statute, other than the Unclaimed Property Law, or by a valid,
enforceable contract.
SEC. 11. Section 1521 of the Code of Civil Procedure is amended to
read:
1521. (a) Except as provided in subdivision (b), and subject to
Section 1510, all employee benefit plan distributions and any income
or other increment thereon escheats to the state if the owner has
not, within three five years after it
becomes payable or distributable, accepted the distribution,
corresponded in writing concerning the distribution, or otherwise
indicated an interest as evidenced by a memorandum or other record on
file with the fiduciary of the trust or custodial fund or
administrator of the plan under which the trust or fund is
established. As used in this section, "fiduciary" means any person
exercising any power, authority, or responsibility of management or
disposition with respect to any money or other property of a
retirement system or plan, and "administrator" means the person
specifically so designated by the plan, trust agreement, contract, or
other instrument under which the retirement system or plan is
operated, or if none is designated, the employer.
(b) Except as provided in subdivision (c), an employee benefit
plan distribution and any income or other increment thereon shall not
escheat to this state if, at the time the distribution shall become
payable to a participant in an employee benefit plan, the plan
contains a provision for forfeiture or expressly authorizes the
administrator to declare a forfeiture of a distribution to a
beneficiary thereof who cannot be found after a period of time
specified in the plan, and the trust or fund established under the
plan has not terminated prior to the date on which the distribution
would become forfeitable in accordance with the provision.
(c) A participant entitled to an employee benefit plan
distribution in the form of residuals shall be relieved from a
forfeiture declared under subdivision (b) upon the making of a claim
therefor.
SEC. 12. Section 1540 of the Code of Civil Procedure is amended to
read:
1540. (a) Any person, excluding another state, who claims an
interest in property paid or delivered to the Controller under this
chapter may file a claim to the property or to the net proceeds from
its sale. The claim shall be on a form prescribed by the Controller
and shall be verified by the claimant.
(b) The Controller shall consider each claim within 180 days after
it is filed and may hold a hearing and receive evidence. The
Controller shall give written notice to the claimant if he or she
denies the claim in whole or in part. The notice may be given by
mailing it to the address, if any, stated in the claim as the address
to which notices are to be sent. If no address is stated in the
claim, the notice may be mailed to the address, if any, of the
claimant as stated in the claim. No notice of denial need be given if
the claim fails to state either an address to which notices are to
be sent or an address of the claimant.
(c) No interest shall be payable on any claim paid under this
chapter.
(c) (1) The Controller shall add interest at the rate of 5 percent
per year or the bond equivalent rate of 13-week United States
Treasury bills, whichever is lower, to the amount of any claim paid
to the owner under this section for the period the property was on
deposit in the Unclaimed Property Fund. No interest shall be payable
for any period prior to January 1, 1977. Any interest required to be
paid by the state pursuant to this section shall be computed as
simple interest, not as compound interest.
(2) For purposes of this section, the bond equivalent rate of
13-week United States Treasury bills shall be defined in accordance
with the following criteria:
(A) The bond equivalent rate of 13-week United States Treasury
bills established at the first auction held during the month of
January shall apply for the following July 1 to December 31,
inclusive.
(B) The bond equivalent rate of 13-week United States Treasury
bills established at the first auction held during the month of July
shall apply for the following January 1 to June 30, inclusive.
(d) A holder who pays to the owner property that has escheated and
been remitted to the state, and that, if claimed from the
Controller, would be subject to subdivision (c) shall add interest as
provided in subdivision (c). If interest is added, that interest
shall be repaid to the holder by the Controller in the same manner as
the principal.
(d)
(e) For the purposes of this section, "owner" means the
person who had legal right to the property prior to its escheat, his
or her heirs, his or her legal representative, or a public
administrator acting pursuant to the authority granted in Sections
7660 and 7661 of the Probate Code.
(e)
(f) Following a public hearing, the Controller shall
adopt guidelines and forms that shall provide specific instructions
to assist owners in filing claims pursuant to this article.
SEC. 13. Section 1564 of the Code of Civil Procedure is amended to
read:
1564. (a) All money received under this chapter, including the
proceeds from the sale of property under Section 1563, shall be
deposited in the Unclaimed Property Fund in an account titled
"Abandoned Property."
(b) Notwithstanding Section 13340 of the Government Code, all
money in the Abandoned Property Account in the Unclaimed Property
Fund is hereby continuously appropriated to the Controller, without
regard to fiscal years, for expenditure in accordance with law in
carrying out and enforcing the provisions of this chapter, including,
but not limited to, the following purposes:
(1) For payment of claims allowed by the Controller under the
provisions of this chapter.
(2) For refund, to the person making such
the deposit, of amounts, including overpayments, deposited in
error in such the fund.
(3) For payment of the cost of appraisals incurred by the
Controller covering property held in the name of an account in
such the fund.
(4) For payment of the cost incurred by the Controller for the
purchase of lost instrument indemnity bonds, or for payment to the
person entitled thereto, for any unpaid lawful charges or costs
which that arose from holding any
specific property or any specific funds which
that were delivered or paid to the Controller, or
which that arose from complying with this
chapter with respect to such that
property or funds.
(5) For payment of amounts required to be paid by the state as
trustee, bailee, or successor in interest to the preceding owner.
(6) For payment of costs incurred by the Controller for the
repair, maintenance, and upkeep of property held in the name of an
account in such the fund.
(7) For payment of costs of official advertising in connection
with the sale of property held in the name of an account in
such the fund.
(8) For transfer to the General Fund as provided in subdivision
(c).
(9)
(8) For transfer to the Inheritance Tax Fund of the
amount of any inheritance taxes determined to be due and payable to
the state by any claimant with respect to any property claimed by him
or her under the provisions of this chapter.
(c) At the end of each month, or more often if he or she deems it
advisable, the Controller shall transfer all money in the Abandoned
Property Account in excess of fifty thousand dollars ($50,000) to the
General Fund. Before making this transfer, the Controller shall
record the name and last known address of each person appearing from
the holders' report to be entitled to the escheated property and the
name and last known address of each insured person or annuitant, and
with respect to each policy or contract listed in the report of a
life insurance corporation, its number, and the name of the
corporation. The record shall be available for public inspection at
all reasonable business hours.