NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10118
SPONSOR: Weinstein TITLE OF BILL: An act to amend the abandoned property law, in
relation to conforming language relating to the preliminary reporting
requirement for unclaimed amounts of money or other property; precluding
abandonment based upon undeliverable mail; authorizing the accrual of
interest on life insurance policies after payment of abandoned property
to the state comptroller; increasing the minimum amount of an abandoned
property claim; increasing the threshold for certified mailings; recog-
nizing electronic contact by an owner as written contact; to amend the
abandoned property law and the surrogate's court procedure act, in
relation to authorizing the payment of interest on monies received
directly from surrogate's court and held by the state comptroller as
abandoned property; and to amend the state finance law, in relation to
annual reports to the state comptroller of custodian of court funds
PURPOSE:
The purpose of this proposed legislation is to make technical amendments
to the abandoned property law.
SUMMARY OF PROVISIONS:
Section 1 of this bill would amend Paragraph a of subdivision 3 of
section 402 of the abandoned property law to conform language to 2011
amendments removing the preliminary reporting requirements.
Section 2 amends Paragraph c of subdivision 3 of section 501 of the
abandoned property law to eliminate the requirement of the return of
undelivered mail to the holder prior to wages becoming abandoned.
Section 3 amends Subdivision 1-a of section 1315 of the abandoned prop-
erty law to clarify language relating to checks issued on behalf of a
corporation.
Section 4 amends Paragraph a of subdivision 1 of section 1405 of the
abandoned property law to authorize the payment of interest for life
insurance policy claims and funds received directly from Surrogate's
Court.
Section 5 amends the opening paragraph of paragraph a of subdivision 1
of section 1406 of the abandoned property law to raise the threshold for
claims to abandoned property from 3 dollars to twenty dollars.
Section 6 amends Subdivision 2 of section 1422 of the abandoned property
law to raise the threshold on the requirement of certified mailings from
1 thousand to 3 thousand dollars.
Section 7 adds a new section 1423 to the abandoned property law express-
ly authorizing the promulgation of rules and regulations related to
electronic contact that would toll the dormancy period.
Section 8 amends Subdivision 2 of section 2222 of the surrogate's court
procedure act to provide for the payment of interest on monies from the
Surrogate's Court paid into the Abandoned Property Fund.
Section 9 amends section 184 of the state finance law to provide privacy
protection for owners of funds held by the courts.
Section 10 provides for an immediate effective date.
PRIOR LEGISLATIVE HISTORY:
S.5003-A and A.6080-A (Passed Assembly) of 2015-2016
A.1881 (Passed Assembly) 2017
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 correcting the
provisions of the Abandoned Property Law (APL) as, from time to time,
may be necessary.
Reporting by Utilities: The technical amendment relating to the publica-
tion requirement for utilities is intended to conform language to chang-
es made in 2011 to the APL by removing language related to the prelimi-
nary reporting requirement that was previously, but is no longer,
required prior to publication.
Undelivered Mail: The elimination of the requirement that undelivered
mail be returned to the holder prior to wages becoming abandoned is
intended to increase consistency with respect to the treatment of wages
and other uncashed checks. Additionally, this change recognizes the
increased use of direct deposit. Due diligence mailings will still be
required under other provisions of the APL.
Clarification of Property Types: The amendment relating to outstanding
checks clarifies that a check held on behalf of a corporation, (other
than a public corporation), joint stock company, individual, association
of two or more individuals, committee or business trust in this state,
and which has remained unclaimed by the owner of such amount for three
years, shall be deemed abandoned property.
Payment of Interest; Life Insurance: The authorization for payment of
interest for life insurance policy claims and funds received directly
from Surrogate's Court is intended to create consistency/fairness with
respect to the payment of claims. Currently, certain accounts that bear
interest prior to being reported to the Office of Unclaimed Funds (OUF)
receive interest from OUF for up to five years when claimed. However,
insurance death benefits do not receive interest and this amendment
would correct that inequity.
Payment of Interest; Surrogate's Court Monies: Authorizing the payment
of interest on monies received directly from surrogate's court and held
by the State Comptroller as abandoned property allows the distributees
of estates whose decedent died a resident of a county outside of the
City of New York to receive the same interest that the distributees of
estates whose decedent died a resident of a county within the City of
New York presently receive.
Increase Threshold for Return of Property: Raising the threshold for
mandated return of property from 3 dollars to twenty dollars is intended
to bring the statute up to date with inflation. The APL's 3 dollar mini-
mum claim amount was set in 1952. According to the consumer price index
(CPI), 3 dollars in 1952 was equal to twenty-six dollars in 2014. This
change will significantly reduce the cost to the State of processing
claims which cost more to process than is returned to the claimant and
alleviate the potential for frustration of claimants at having to invest
time and money to recoup small dollar values.
Increase Threshold for Certified Mailings: Raising the threshold on
certified mailings from one thousand dollars to three thousand dollars
is intended to reduce the burden on holders of having to perform such
mailings.
Electronic Communication as Written Contact: The ability of the State
Comptroller to promulgate rules and regulations establishing when an
electronic communication from the apparent owner of amounts or securi-
ties shall constitute "written contact" for purposes of tolling the
dormancy period recognizes that individuals frequently access their
financial accounts through electronic means. However, the current stat-
ute does not recognize electronic communication as customer contact
sufficient to prevent property from becoming abandoned. This change to
the APL would recognize electronic communication from the owner as writ-
ten contact under the APL, thereby tolling the dormancy period.
Privacy Protection for Owners of Funds Held by the Courts: State Finance
Law section 184 is a mechanism finders use to learn the amount of funds
deposited in court actions and held by county depositories which may, in
the near future, be held by the Office of Unclaimed Funds (OUF) pursuant
to the APL. By learning the amounts held, these parties attempt to
recover the funds from the depositories where they are unencumbered by
any restriction on the amount of finder fee they can charge (33 1/3 to
50% is the norm). Once the funds are held by OUF, the APL both prohib-
its the disclosure of amounts held for individual reported properties
other than to the owner of the property (§ 1401) and sets a maximum
finder fee (. 1416). State Finance Law section 184 is being amended to
provide that the dollar amounts on such section 184 reports should be
exempt from disclosure. There is no issue with the aggregate amount
being disclosed; in fact, OUF releases this figure whenever a FOIL
request is made for a given report by a reporting organization.
The State Comptroller urges the passage of this proposed legislation.
FISCAL IMPLICATIONS FOR STATE:
Certain provisions of this proposal may result in modest increases in
receipts, while others would result in modest increases in amounts paid
to claimants. Overall, the fiscal impact of this proposal would be
negligible.
EFFECTIVE DATE:
This act shall take effect immediately.
