NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6080A
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 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; and 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
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 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 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
changes made in 2011 to the APL by removing language related to the
preliminary 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 to the relating to
outstanding checks clarifies that a check held on behalf of a corpo-
ration, (other than a public corporation), joint stock company, individ-
ual, 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.
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.
