PDF version of this analysis
Fiscal Note for this version of analysis
Text of latest version of this bill

Bill Analysis

Legislative Service Commission


Sub. H.B. 108
125th General Assembly
(As Passed by the General Assembly)

ACT SUMMARY CONTENT AND OPERATION
Continuing and former law
Former law generally required a holder of unclaimed funds (see comment) to send notice by first class mail to each owner of each item of unclaimed funds having a value of $50 or more. In the case of life insurance policies, the holder similarly was required to mail notice to each beneficiary unless the address and the surname of the beneficiary were the same as that of the insured. (Sec. 169.03(D).)
Continuing law requires the holder to mail the notice of the unclaimed funds' existence to the owner's or beneficiary's last known address as shown by the holder's records. The holder must not report an item of unclaimed funds in its annual report to the Director of commerce earlier than the 30th day after the notice's mailing. (Sec. 169.03(D).)
A notice of the existence of unclaimed funds, under continuing law, must (1) set forth the nature and identifying number or description of the unclaimed funds, and the amount appearing on the holder's records as being due the owner or beneficiary and (2) inform the owner or beneficiary that the unclaimed funds will be reported to the Director of Commerce 30 days after the notice's mailing. The notice also must include a self-addressed, stamped envelope for the recipient to inform the holder of the recipient's continued interest in the unclaimed funds and to prevent them from being reported as unclaimed funds to the Director. (Sec. 169.03(D).)
Under continuing law, the mailing of the notice as specified in the Unclaimed Funds Law discharges the holder from any further responsibility to give notice. And, if there is no address of record for an owner or a beneficiary, the holder has no responsibility to provide notice to that person. An officer of the holder must execute verification of the mailing of the notice as specified in the Unclaimed Funds Law, apparently when making an annual report to the Director of Commerce. (Sec. 169.03(D) and (E).)
Changes made by the act
Notice mailing changes
The act generally requires that the notice of the existence of an item of unclaimed funds be mailed (1) by first class mail if the item has a value of $50 or more but less than $1,000 or (2) by certified mail, return receipt requested, if the item has a value of $1,000 or more. But the certified mailing requirement generally does not apply if the last known address of the owner or beneficiary in the holder's records is verified as being inaccurate. The act provides that a holder has verified that the last known address of the owner or beneficiary is not accurate by documenting at least two of the following: (1) the owner or beneficiary failed to respond to a first class mail notice sent to his or her last known address, (2) a first class mail notice sent by the holder to the last known address of the owner or beneficiary was returned as undeliverable, or (3) an electronic or manual search of available public records failed to confirm that the last known address of the owner or beneficiary is accurate. In the latter case, the holder must maintain documentation of its search efforts. And, if a search of public records or databases identifies a more recent address for the owner or beneficiary than the address in the holder's records, the holder must send notice of the unclaimed funds' existence to the owner or beneficiary at that more recent address in accordance with the act's mailing requirements. (Sec. 169.03(D).)
A holder that sends the notice by certified mail, return receipt requested, may charge the item of unclaimed funds up to $20 for providing that notice (sec. 169.03(D)).
Annual report change
Under the act, if an item of unclaimed funds has a value of $1,000 or more and the holder has verified that the owner's or beneficiary's last known address as shown by the holder's records is not accurate, the holder's annual report to the Director of Commerce must state that efforts were undertaken by the holder to verify that the address is not accurate. Any verifying documentation must be maintained by the holder for five years from the date of the report and be available upon request to the Director or the Director's designee. (Sec. 169.03(A)(2)(f).)
COMMENT
"Unclaimed funds" are moneys, rights to moneys, or intangible property as described in existing law when, as shown by the records of their holder, the owner has not done any of the following within specified time periods: (1) increased, decreased, or adjusted their amount, (2) assigned, paid premiums on, or encumbered them, (3) presented an appropriate record for their crediting or received payment of them by check, draft, or otherwise, (4) corresponded with their holder concerning them, (5) indicated an interest in or knowledge of them, or (6) transacted business with their holder (sec. 169.01(B)(1), not in the act).
HISTORY

ACTIONDATEJOURNAL ENTRY
    Introduced
03-06-03p. 213
    Reported, H. State Government
05-01-03p. 446
    Passed House (97-2)
05-07-03pp. 466-467
    Reported, S. State & Local Gov't & Veterans Affairs

06-11-03

p. 448
    Passed Senate (32-0)
06-11-03pp. 452-453
    Housed concurred in Senate amendments (97-1)

06-17-03

pp. 601-602







* The Legislative Service Commission had not received formal notification of the effective date at the time this analysis was prepared. Additionally, the analysis may not reflect action taken by the Governor.