BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1712
                                                                  Page  1

          Date of Hearing:   April 30, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 1712 (Gomez) - As Amended:  April 8, 2014 

          Policy Committee:                              JudiciaryVote:9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill clarifies authority for a parent nonprofit  
          organization to file a claim for unclaimed property with the  
          State Controller for property owned by a local chapter or  
          affiliate no longer in existence, which had legal right to the  
          property prior to its escheat to the state, but is no longer in  
          existence, if the governing documents provide that surplus funds  
          or property may be turned over to the granting organization.

           FISCAL EFFECT  

          Costs would depend on the number of additional valid claims paid  
          out as a result of the expanded eligibility for parent nonprofit  
          organizations. These annual costs, which in essence are General  
          Fund revenue losses, are unknown, but would likely be minor  
          (under $100,000). The State Controller's administrative costs,  
          associated with the additional claims, would also be minor.

           COMMENTS  

           1)Purpose  . This bill seeks to authorize a parent nonprofit  
            organization to file a claim with the State Controller for  
            unclaimed property that, prior to escheat, was owned by an  
            organization that was chartered or sponsored by the parent  
            (typically a local chapter or affiliate) but that has  
            dissolved or simply no longer exists.  According to the  
            author, "This bill will resolve the problem of unclaimed  
            property that cannot be claimed under current law."

           2)Background  . The Unclaimed Property Law (UPL), enacted in 1958,  
            establishes procedures for the escheat of unclaimed personal  
            property, which means that the state has custody of the  








                                                                  AB 1712
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            property in perpetuity, until the owner claims the property.  
            The UPL has dual objectives:  (a) to protect unknown owners by  
            locating them and restoring their property to them; and (b) to  
            give the state, rather than the holders of unclaimed property,  
            the benefit of its retention, since experience shows that most  
            abandoned property will never be claimed.

            The State Controller receives approximately $600 million  
            annually as escheated property.  Existing law requires that  
            all but $50,000 of these funds be transferred to the General  
            Fund on a monthly basis. The Controller reports maintaining  
            current accounts of approximately $6.4 billion for monies that  
            have been remitted to the Controller and transferred to the  
            General Fund.  As of FY 2011-12, there were approximately 21.5  
            million owner accounts (individuals and organizations) in the  
            Controller's database, and in that year a total of $240  
            million in cash was disbursed with an average payment of $837.  
             
           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081