CBA Publications >> CBA Regulatory Compliance Bulletin >> Vol 2002 No. 8 June 18, 2002

Vol 2002 No. 8 June 18, 2002

Escheat Amnesty Program Extended to December 31, 2002

In September of 2000, AB 1888 was passed that relieved businesses that are late in paying or delivering unclaimed property to the State Controller's Office from paying interest assessments (at the statutory annual rate of 12%). The bill gave delinquent holders until December 31, 2001 to deliver unpaid property that was reportable on or before November 1, 1999. Governor Davis just passed a new bill (AB 227), supported by CBA, that extends the amnesty period to December 31, 2002.

To take advantage of the amnesty program provided by the earlier bill, businesses had to meet the following conditions:

• The property was required to be reported on or before November 1, 1999.

• The affected property must be paid to the Controller on or before December 31, 2001.

• As relating to the property, as of January 3, 2000, the holder: (i) is not the subject of an investigation by the Attorney General; (ii) is not the subject of a formal field audit by the Controller; and (iii) is not a party to litigation with the Controller.

The property must be surrendered directly to the state or its authorized agent together with the report. The report must be submitted in electronic media (paper isacceptable for holders reporting fewer than 50 items), and reports submitted after the effective date of the earlier bill must be segregated by property that is eligible for the amnesty program and property that is currently reportable (that is, not affected by the amnesty program). Property that is eligible for the program may not be reported with property that is not eligible.

The new bill gives businesses until the end of this year (December 31, 2002) to return property that should have been escheated but was not. However, the affected property remains unchanged; only property that was required to be reported before November 1, 1999 is covered by the amnesty program, as amended. A major impetus for the bill was recognition that the events of September 11 may have caused businesses to fall behind in their compliance efforts.

The bill also extends the date in which the Controller must submit a report to the Legislature on the amnesty program by one year from December 31, 2002 to December 31, 2003. The bill is effective immediately.

If you have any questions, you may call James Clark, VP/Government Relations and lead lobbyist on this bill, at 916-441-7377 x209.