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News & Press: UPPO Advocacy Activity

UPPO Sponsors California Unclaimed Property Voluntary Disclosure Program Bill (AB 2773)

Thursday, March 22, 2018   (0 Comments)
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California Assembly Bill 2773 (AB 2773), introduced on Feb. 16, 2018, and updated on March 19, 2018, seeks to create an unclaimed property voluntary disclosure agreement (VDA) program in California. The VDA program would be available to all companies, including those with prior compliance filings, as long as they are not currently undergoing an unclaimed property audit. 

 

AB 2773, authored by Assembly Member Dante Acosta, allows the California State Controller’s Office (Controller) to waive interest and penalties on past-due unclaimed property for companies that have entered into a VDA with the Controller. Without help from AB 2773, the Controller couldn’t develop an unclaimed property VDA program because it is currently required by statute to assess interest at 12 percent per year on past-due unclaimed property in most cases. 

 

If enacted, the VDA program would start on Jan. 1, 2019, and last until Dec. 31, 2023, unless it is extended by California legislators. The proposed VDA review period would cover 10 prior report years, starting from the date when a company entered into a VDA with the Controller.

 

The Unclaimed Property Professionals Organization (UPPO) is sponsoring California AB 2773.

 

“AB 2773 is of potential importance to most companies, as even those that are not incorporated or located in California can have significant unclaimed property reporting obligations to the state,” said 2018/19 UPPO President Marilyn Henry. “Companies not currently reporting unclaimed property in California, those that overlooked certain property types in the past, or those that acquired unclaimed property liabilities during acquisitions, may have an opportunity to report without being assessed interest.”

 

Both companies and owners are likely to be excited about a California unclaimed property VDA program. Cathleen Bucholtz, the National Practice Leader for Unclaimed Property at True Partners Consulting LLC explained some of the reasons for the excitement. “It’s been over 15 years since California had a program that allowed holders to report past due unclaimed property to the state without being assessed interest and penalties,” she said. “In addition, the VDA program would increase the amount of property that the state of California is able to reunite with its citizens.”

 

AB 2773 may also raise revenue without the imposition of taxes as even before the adoption of a VDA program, unclaimed property currently constitutes the fifth largest source of the state’s general fund.


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