NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8314
SPONSOR: Weinstein 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; reducing the dormancy for wages; and
authorizing the promulgation of regulations recognizing electronic
communication as written contact
PURPOSE:
The purpose of this proposed legislation is to provide coverage for
virtual currency, shorten the dormancy period for wages, and authorize
the promulgation of regulations related to electronic communications.
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 opening paragraph of section subdivision 3 of
section 501 of the abandoned property law shortening the dormancy for
wages paid by corporations from three years to one year.
Section 4 amends the opening paragraph and paragraphs (b) and (c) of
subdivision 5 of section 511 of the abandoned property law shortening
the dormancy period for wages paid by broker dealers from three years to
one year.
Section 5 amends the abandoned property law to add a new section 1318
providing coverage for unclaimed virtual currency.
Section 6 provides for an immediate effective date.
PRIOR LEGISLATIVE HISTORY:
New Bill.
JUSTIFICATION:
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;
reduces the dormancy period for wages consistent with the treatment.of
wages by most other states; and authorizes the promulgation of regu-
lations to recognize electronic communications as sufficient owner
contact to prevent property from becoming abandoned.
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.
Reduction of Dormancy Period for Wages and Removing Undeliverable Mail
Requirement: By shortening the dormancy period for wages, the holder
will be required to conduct due diligence sooner. As a result, the like-
lihood that unclaimed wages will be returned to their rightful owner is
increased. For this reason, a one year dormancy for unclaimed wages is
used in 40 states. Additionally, the elimination of the requirement that
undelivered mail be returned to the holder prior to wages becoming aban-
doned is intended to eliminate a requirement that is not present in
other jurisdictions, thereby increasing consistency with respect to the
treatment of wages.
Electronic Communication as Written Contact: The legislation specif-
ically authorizes the State Comptroller to promulgate rules and regu-
lations 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 electron-
ic 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.
The State Comptroller urges the passage of this proposed legislation.
FISCAL IMPLICATIONS FOR STATE:
The reduction of the dormancy period for wages will result in a one-
time increase in receipts of approximately $20 million. In addition, the
new coverage for virtual currency would increase receipts an estimated.
$2 to $5 million annually, but it is difficult to quantify.
EFFECTIVE DATE:
This act shall take effect immediately.
