Tax News

CCH (cch.taxgroup.com) reports:

Changes to the California unclaimed property program are enacted in conjunction with the Budget Act of 2007. In order to inform owners about the possible existence of identified unclaimed property, the Controller is required to mail, within 165 days after the final date for filing the report of escheated funds or property, a notice to each person having an address listed in the report who appears to be entitled to property with a value of $50 or more that has been escheated. If the report includes a Social Security number, the Controller is required to request that the California Franchise Tax Board (FT provide a current address for the apparent owner on the basis of that number.
The Controller must mail the notice to the apparent owner for whom a current address is obtained if the address is different from the address previously reported to the Controller. If the FTB does not provide an address or a different address, then the Controller must mail the notice to the address listed in the report. The mailed notice must contain (1) a statement that, according to a report filed with the Controller, property is being held to which the addressee appears entitled; (2) the name and address of the person holding the property and any necessary information regarding changes of name and address of the holder; (3) a statement that, if satisfactory proof of claim is not presented by the owner to the holder by the date specified in the notice, the property will be placed in the custody of the Controller and may be sold or destroyed, and all further claims concerning the property or, if sold, the net proceeds of its sale, must be directed to the Controller.
The Controller is also required to establish and conduct a notification program designed to inform owners about the possible existence of unclaimed property that has been received. Upon the request of the Controller, a state or local governmental agency may furnish to the Controller from its records the address or other identification or location information that could reasonably be used to locate an owner of unclaimed property. If the address or other information requested is deemed confidential under any California laws or regulations, it shall nevertheless be furnished to the Controller. However, neither the Controller nor any officer, agent, or employee of the Controller shall use or disclose that information except as may be necessary in attempting to locate the owner of the unclaimed property.
Every person filing a report is required to, 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. 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, the holder is not required to pay or deliver the property to the Controller but is instead required to file a report with the Controller that contains information regarding the property not subject to escheat. Any property not paid or delivered that is later determined by the holder to be subject to escheat is subject to interest, as provided.
No sale of escheated property may be made until 18 months after the final date for filing the report. Securities listed on an established stock exchange and other securities may be sold by the Controller no sooner than 18 months, but no later than 20 months, after the final date for filing the report. Any property delivered to the Controller that has no apparent commercial value must be retained by the Controller for a period of not less than 18 months from the date the property is delivered to the Controller.
In making changes to the California unclaimed property program, the Legislature intends to reunite property owners with their property and adopt a more expansive notification program that will provide (1) notification by the state to all owners of unclaimed property prior to escheatment; (2) a more expansive post-escheatment policy that takes action to identify those owners of unclaimed property; and (3) a waiting period of not less than 18 months from delivery of property to the state prior to disposal of any unclaimed property deemed to have no commercial value.
Ch. 179 (S.B. 86), Laws 2007, effective August 24, 2007.