BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 954|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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CONSENT
Bill No: SB 954
Author: Liu (D)
Amended: 3/1/12
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 4/11/12
AYES: Wolk, Dutton, DeSaulnier, Fuller, Hancock,
Hernandez, Kehoe, La Malfa, Liu
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Controller: offset payments
SOURCE : Office of the State Controller
DIGEST : This bill allows the State Controller to offset
debts owed to cities and counties against payments from the
Unclaimed Property Program.
ANALYSIS : The State Controller may withhold (offset)
money from a person's state tax refunds and winnings from
the California State Lottery to settle local debts, if a
person owes money to a city or county. The Controller can
withhold money only when the amount is a judgment, a court
order, or a lien for delinquent unsecured property taxes,
and must withhold money when the amount is a bench warrant
for payment of a fine, penalty, or assessment.
The Controller also runs the Unclaimed Property Program.
California's Unclaimed Property Law requires corporations,
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businesses, associations, financial institutions, and
insurance companies to refer accounts of property that have
been inactive for a specified number of years (usually
three) to the State Controller. Unclaimed property
commonly includes: bank accounts, safe deposit box
contents, stocks, mutual funds, bonds, dividends, cashier's
checks, money orders, certificates of deposit, estates,
trust funds, and escrow accounts. Oftentimes, owners of
these properties forget the account exists, move but do not
leave a forwarding address, or die and the heirs have no
knowledge of the property. The Controller safeguards all
unclaimed property until its owner claims it. After
receiving a claim, the Controller evaluates the validity of
those claims and authorizes payments to the rightful
owners.
This bill allows the State Controller to offset any amount
a person or entity owes to a city or county against any
amount owing the person or entity on a claim for payment of
money from unclaimed property held by the state.
Comments
The Senate Governance and Finance Committee indicates that
this bill expands an authority that the Controller already
uses to recover debts. Existing law ensures that offset
occurs only in cases where debtors have an outstanding
judgment, court order, lien, or bench warrant. This bill
authorizes the Controller to apply an unclaimed property
payment towards an outstanding city or county debt only
when that unclaimed property is claimed and matched with
someone owing city or county debt. If the claimant feels
he or she was wrongfully billed, he or she can appeal to
the authority issuing the judgment, court order, lien, or
bench warrant, and if successful, repossess the property.
The Controller's office and the Franchise Tax Board can
recoup any costs associated with implementing this program.
In a feasibility study, the Controller's Office found that
had this bill been in place, it would have recovered $2.3
million for cities and counties in FY 2009-10 and $3.5
million in FY 2010-11. The Controller's assistance will
help cities and counties save on the 50 percent collection
fee that they would have had to pay to hire private
collection agencies. With their current budget
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constraints, cities and counties need as much help as
possible in recovering outstanding debts.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 4/30/12)
Office of the State Controller (source)
California State Association of Counties
League of California Cities
AGB:nl 5/1/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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