California AB 1291 Signed Into Law

California Governor Schwarzenegger signed AB 1291, which impacts holders of unclaimed property.

Major revisions include:

• Allowing holders to notify owners electronically if the owner has previously consented to electronic notice.
• Requiring that those notices contain certain information, but the holder is required to provide a telephone number or other electronic means to enable the owner to contact the organization in lieu of returning the required form.
• Authorizing the holder to give additional notices, as specified.
• Beginning January 1, 2011, requiring that, at the time a new account is opened with a banking or financial organization, the organization provide a written notice to the person opening the account regarding escheat.
• Requiring a bank, financial organization, or business association to notify the owner of the contents of a safe deposit box, at either of two specified times, regarding escheat, and specifying the contents of the notice.
• Requiring that notice to include a form by which the customer may declare an intention to maintain the safe deposit box or other safekeeping repository, and authorizes the bank, financial organization, or business association to impose a service charge for the notice and form.
• Providing that the contents of a safe deposit box shall not escheat to the state under certain circumstances.
• Requiring a bank, financial organization, or business association to provide a notice regarding escheat to a person opening a new account for a safe deposit box or other safekeeping repository.
• Allowing the Controller to postpone the date for payment or delivery of the property, and the date for any report required by the above provisions, upon his or her own motion or upon written request by any person required to pay or deliver the property or file a report.
• Limits holder relief of liability for property paid or delivered to the state.  Such relief will be extended to  holders who prior to escheat, if the holder’s records contain an address for an apparent owner which the holder’s records  do not disclose to be inaccurate, has made reasonable efforts to notify the owner by mail or electronically that the property will escheat to the state. Adding additional penalties for non-compliance unless failure is due to reasonable cause.
• Limiting the interest payable to the Controller if a holder has failed to file a report in a required manner, but has timely paid or delivered the property to the Controller.