New York State Assembly

 
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AB1881 Summary:

AB1881 Actions:

AB1881 Committee Votes:

Committee:WAYS AND MEANS   Chair:Farrell      
DATE:05/09/2017AYE/NAY:33/0  Action: Favorable         
Farrell
Aye
Oaks
Aye
Lentol
Aye
Crouch
Aye
Schimminger
Aye
Barclay
Aye
Gantt
Excused
Fitzpatrick
Aye
Weinstein
Aye
Hawley
Aye
Glick
Aye
Malliotakis
Aye
Nolan
Excused
Walter
Aye
Pretlow
Aye
Montesano
Aye
Perry
Aye
Curran
Aye
Colton
Aye
Ra
Aye
Cook
Aye
Cahill
Aye
Aubry
Aye
Hooper
Aye
Thiele
Aye
Cusick
Aye
Ortiz
Aye
Benedetto
Aye
Moya
Aye
Weprin
Aye
Rodriguez
Aye
Ramos
Aye
Braunstein
Aye
McDonald
Aye
Rozic
Aye

AB1881 Floor Votes:

AB1881 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A1881
 
SPONSOR: Farrell

 
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 insur-
ance policies after payment of abandoned property to the state comp-
troller; increasing the minimum amount of an abandoned property claim;
increasing the threshold for certified mailings; recognizing 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 501of the aban-
doned property law to eliminate the requirement of the return of unde-
livered 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
 
 
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 disclo-
sure. 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.
 
 
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.

AB1881 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1881
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 13, 2017
                                       ___________
 
        Introduced  by M. of A. FARRELL -- (at request of the State Comptroller)
          -- read once and referred to the Committee on Ways and Means
 
        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 prop-
          erty claim; increasing the threshold for certified mailings; recogniz-
          ing  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
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Paragraph (a) of subdivision 3 of section 402 of the  aban-
     2  doned property law is amended to read as follows:
     3    (a) that a report of unclaimed amounts of money or other property held
     4  or  owing  by it [has been made to] will be prepared for the state comp-
     5  troller and that a list of the names of the person or persons  appearing
     6  from  the  records of such corporation to be entitled thereto is on file
     7  and open to public inspection at its principal office or place of  busi-
     8  ness in any city, village or county where any such abandoned property is
     9  payable;
    10    §  2.  Paragraph  (c) of subdivision 3 of section 501 of the abandoned
    11  property law, as amended by chapter 61 of the laws of 1989,  is  amended
    12  to read as follows:
    13    [(c)  Notice  regarding such wages has been sent by the corporation or
    14  fiduciary, via first class mail, to such  resident  at  his  last  known

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06617-01-7
        A. 1881                             2

     1  address  and such notice has been returned to the corporation or fiduci-
     2  ary by the postal authorities for inability to locate such resident.]
     3    § 3. Subdivision 1-a of section 1315 of the abandoned property law, as
     4  amended  by  section  2 of part II of chapter 57 of the laws of 2010, is
     5  amended to read as follows:
     6    1-a. Any amount representing outstanding checks issued  on  and  after
     7  July  first,  nineteen hundred seventy-four [in payment for goods or for
     8  services, and owing in this state,] or held  by  or  on  behalf  of  any
     9  corporation  (other  than  a  public  corporation), joint stock company,
    10  individual, association of two or more individuals, committee  or  busi-
    11  ness  trust in this state, and which has remained unclaimed by the owner
    12  of such amount for three years, shall be deemed abandoned property.
    13    § 4. Paragraph (a) of subdivision 1 of section 1405 of  the  abandoned
    14  property  law,  as  amended by section 13 of part R of chapter 85 of the
    15  laws of 2002, is amended to read as follows:
    16    (a) Notwithstanding any other provision of law, no owner of  abandoned
    17  property  shall be entitled to receive interest on account of such aban-
    18  doned property from and after the date a payment of such abandoned prop-
    19  erty is hereafter made to the state comptroller pursuant to this chapter
    20  or any law relating to abandoned property, whether or not [he] the owner
    21  was entitled to interest on such property prior  to  such  date,  except
    22  that  interest  at the overpayment rate set by the commissioner of taxa-
    23  tion and finance pursuant to subsection (j) of section six hundred nine-
    24  ty-seven of the tax law, less one  percentage  point,  shall  accrue  to
    25  abandoned  property  hereafter  paid  to the state comptroller under the
    26  following provisions of this chapter, for  the  first  five  years  such
    27  property is held by [him] the state comptroller:
    28    (i)  paragraph (a) of subdivision one of section three hundred of this
    29  chapter; or
    30    (ii) subdivision one of section four hundred of this chapter; or
    31    (iii) paragraph (a) of subdivision one of section six hundred of  this
    32  chapter; or
    33    (iv) paragraph (c) of subdivision one of section seven hundred of this
    34  chapter; or
    35    (v) subdivision one of section ten hundred of this chapter; or
    36    (vi) subdivision one of section two thousand two hundred twenty-two of
    37  the surrogate's court procedure act.
    38    §  5.  The  opening  paragraph  of  paragraph  (a) of subdivision 1 of
    39  section 1406 of the abandoned property law, as amended by chapter 815 of
    40  the laws of 1963, is amended to read as follows:
    41    Claim may be filed with the state comptroller for any abandoned  prop-
    42  erty  amounting to over [three] twenty dollars, including any claim to a
    43  security delivered to the state comptroller on or after November  first,
    44  nineteen  hundred  ninety-one, with a fair market value exceeding twenty
    45  dollars at the time of claim heretofore paid to the state  or  hereafter
    46  paid  or  delivered  to  the state comptroller pursuant to this chapter,
    47  except abandoned property heretofore paid to the state pursuant to
    48    § 6. Subdivision 2 of section 1422 of the abandoned property  law,  as
    49  added  by  section  6  of  part  P of chapter 62 of the laws of 2003, is
    50  amended to read as follows:
    51    2. Where notice is required by subdivision one of this  section,  each
    52  holder shall, with respect to property listed in such report whose value
    53  is  in  excess  of  [one]  three thousand dollars, send a second written
    54  notice to the owner by certified mail, return receipt requested not less
    55  than sixty  days  prior  to  the  applicable  reporting  date  for  such
    56  unclaimed property, provided that no notice pursuant to this subdivision
        A. 1881                             3
 
     1  shall  be  required where: (a) such holder has received a claim from the
     2  owner of the property; or (b) the original mailing was returned as unde-
     3  liverable.
     4    §  7.  The  abandoned  property law is amended by adding a new section
     5  1423 to read as follows:
     6    § 1423. Electronic contact. Notwithstanding any  other  provisions  of
     7  this  chapter,  the  comptroller  shall promulgate rules and regulations
     8  establishing when an electronic communication from the apparent owner of
     9  amounts or securities as defined in this chapter shall constitute "writ-
    10  ten contact" for purposes of tolling the dormancy period.
    11    § 8. Subdivision 2 of section 2222 of the surrogate's court  procedure
    12  act,  as  amended by chapter 125 of the laws of 1972, is amended to read
    13  as follows:
    14    2. The court or the supreme court upon the petition of a person claim-
    15  ing to be so entitled and upon at least  14  days'  notice,  accompanied
    16  with  a  copy  of the petition, to the attorney general, the state comp-
    17  troller and the public administrator of the county or if there be  none,
    18  the county treasurer, may by a reference or by directing the trial of an
    19  issue by a jury or otherwise, ascertain the rights of the persons inter-
    20  ested  and  grant  an  order  directing  the  payment of any money which
    21  appears to be due to the claimant,  [but  without  interest  and]  after
    22  deducting all expenses incurred by the state with respect thereto.
    23    §  9.  Section 184 of the state finance law, as amended by chapter 655
    24  of the laws of 1978, is amended to read as follows:
    25    § 184. Annual reports to comptroller  of  custodian  of  court  funds.
    26  Every  treasurer  or  financial  officer  who  has  [in  his  charge or]
    27  possession of or [under his] control of, or who keeps a record of money,
    28  bonds, stocks, mortgages or any other securities or  property  deposited
    29  into court and held by [him] such officer, must, once in each year, make
    30  a report to the state comptroller at the time and in the form and manner
    31  which [he] the comptroller may prescribe, containing a true statement of
    32  [his]  the  accounts for the preceding year or from the time of the last
    33  report. This report must be verified by the oath of  such  officer,  and
    34  must  be  accompanied  by  the certificate of the proper officer of each
    35  bank or trust company, stating the exact amount  on  deposit  with  such
    36  corporation.  Every  savings  bank,  bank or trust company having in its
    37  possession, pursuant to an order of a court  of  record,  money,  bonds,
    38  stocks,  mortgages  or  any  other securities or property which were not
    39  first deposited in court and delivered to a county treasurer,  financial
    40  officer  or  commissioner of finance of the city of New York, must, once
    41  in each year, make a report to the comptroller at such time as [he]  the
    42  comptroller  shall  prescribe, stating separately for each case the name
    43  of the court, the title of the action or proceeding,  the  date  of  the
    44  receipt,  from whom received, for whom received, the amount of money, if
    45  any, a description of the securities or other property, each addition of
    46  interest and each change of investment, the amount so held at  the  date
    47  of  report, the date and description of each other directing payment and
    48  the dates and amounts of payments thereunder and to whom  made.    Every
    49  officer,  or  bank  or  trust  company  mentioned in this section, shall
    50  furnish any additional report to the comptroller or to the court at such
    51  time and in such detail as may be required.  The comptroller  shall  not
    52  disclose  any  amounts  listed  on any report, except that the aggregate
    53  amount of funds reported in any report may be disclosed.
    54    § 10. This act shall take effect immediately.