NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7742
TITLE OF BILL:
An act to amend the abandoned property law, in relation to including
unclaimed virtual currency within the scope of property covered by such
law; authorizing the promulgation of regulations recognizing electronic
communication as written contact; and requiring reporting of unclaimed
property belonging to deceased persons
The purpose of this proposed legislation is to provide coverage for
virtual currency, authorize the promulgation of regulations related to
electronic communications, and recognizing the death of an owner as a
trigger for dormancy.
SUMMARY OF PROVISIONS:
Section 1 of this bill amends Section 103 of the abandoned property law
by adding two new subdivisions (h) and (i) defining the terms "virtual
currency" and "virtual currency business activity".
Section 2 amends the abandoned property law to add a new section 1423
authorizing regulations related to electronic communications.
Section 3 amends the abandoned property law to add a new section 1318
providing coverage for unclaimed virtual currency.
Section 4 amends the abandoned property law to add a new section 1424 to
begin applicable dormancy periods at the time of an owner's death.
Section 5 provides for an immediate effective date.
PRIOR LEGISLATIVE HISTORY:
It is the policy of the State of New York that while protecting the
interest of the owners thereof, to utilize escheated lands and unclaimed
property for the benefit of all the people of the state. In furtherance
of this policy, the State Comptroller, as custodian of the Abandoned
Property Fund, -is diligent with respect to updating and amending the
provisions of the Abandoned Property Law (APL) as, from time to time,
may be necessary. This legislation: provides coverage under the APL for
"virtual currency", a new type of property the use of which is growing;
authorizes the promulgation of regulations to recognize electronic
communications as sufficient owner contact to prevent property from
becoming abandoned; and recognizes the date of death of an owner as a
trigger for dormancy.
Unclaimed Virtual Currency: Consistent with the regulations issued by
the Department of Financial Services regulating virtual currency busi-
ness activity (Title 23, Part 200), this change provides statutory
coverage for unclaimed virtual currency and provides reporting
instructions to holders of such property. By providing coverage for
virtual currency under the Abandoned Property Law, the owner's rights
will be protected. Holders of such property will be subject to the same
due diligence requirements required of other holders under the APL Elec-
tronic Communication as Written Contact: The legislation specifically
authorizes the State Comptroller to promulgate rules and regulations
establishing when an electronic communication from the apparent owner of
amounts or securities shall constitute "written contact" for purposes of
tolling the dormancy period. This provision recognizes that individuals
frequently access their financial accounts through electronic means and
authorizes regulations that will establish the form of electronic
contact that will be considered sufficient customer contact to prevent
property from becoming abandoned.
Deceased Persons: the legislation establishes the date of death of the
apparent owner of amounts or securities for the purposes of commencing
the dormancy period. This provision recognizes that unclaimed funds owed
to deceased persons are susceptible to fraud and accounts may appear
active when in fact the owner is deceased. Clarifying that the account
activity must be generated by the owner will provide protection to the
entitled heirs and increase the likelihood that lost funds will be
The State Comptroller urges the passage of this proposed legislation.
FISCAL IMPLICATIONS FOR STATE:
The new coverage is estimated to increase receipts by $2-5 million annu-
ally in virtual currency and $200 million in FY21-22 as a one-shot
increase from dormant accounts owed to deceased owners and $15-20
million annually thereafter.
This act shall take effect immediately.