HomeMy WebLinkAbout2019-05-28 - AGENDA REPORTS - STATE LEGISLATION: AB 1637 (2)Agenda Item: 6
DATE: May 28, 2019
SUBJECT: STATE LEGISLATION: ASSEMBLY BILL 1637
DEPARTMENT: City Manager's Office
PRESENTER: Masis Hagobian
RECOMMENDED ACTION
City Council adopt the City Council Legislative Committee recommendation to support
Assembly Bill 1637 (Smith) and transmit position statements to Assembly Member Smith, Santa
Clarita's state legislative delegation, appropriate legislative committees, Governor Newsom, and
the League of California Cities.
BACKGROUND
California's Unclaimed Property Law requires banks, insurance companies, corporations, and
certain other entities to report and submit property to the State Controller's Office (SCO) when
there has been no activity on the account for a period (usually three years), and the customer has
failed to claim the property after receiving notice from the bank or other business. The SCO then
holds the property, posts public notices about the property, and maintains a website that allows
individuals and agencies to search for property held in their name.
An unclaimed property may only be returned to an individual or agency, including a local
government agency, after a claim is filed with and verified by the SCO. Staff at the City of
Santa Clarita (City) regularly monitor the SCO website and file claims when an unclaimed
property under the City's name is posted on the site.
However, this bill would allow the SCO to return property held in the name of a state or local
agency directly to that agency without the agency having to file a claim. Unlike an individual,
there is no question as to the "identity" of a state or local agency.
According to State Controller Betty Yee, the SCO holds 48.1 million unclaimed properties worth
an estimated $9.3 billion owed to individuals and public agencies. This measure will allow the
SCO to be more proactive in returning property that it knows belongs to a state or local agency,
without requiring the state or local agency to discover this fact and then go through the process
of filing a claim.
Page 1
Assembly Bill 1637 was introduced on February 22, 2019, and passed the Assembly (78-0-2) on
April 22, 2019, and ordered to the Senate Committee on Judiciary. Assembly Members Smith
and Lackey voted in support of the bill. This bill is scheduled to be heard in the Senate
Committee on Judiciary on June 4, 2019.
The City Council Legislative Committee met on May 6, 2019, and recommends that the City
Council adopt a "support" position on Assembly Bill 1637.
ALTERNATIVE ACTION
Adopt a "neutral" position on Assembly Bill 1637
2. Adopt an "oppose" position on Assembly Bill 1637
3. Take no action on Assembly Bill 1637
4. Refer Assembly Bill 1637 back to the Legislative Committee
5. Other action, as determined by the City Council
FISCAL IMPACT
The resources required to implement the recommended action are contained within the City of
Santa Clarita's adopted Fiscal Year 2018-19 budget.
ATTACHMENTS
Assembly Bill 1637 Bill Text
Page 2
CALIFORNIA LEGISLATURE -2019-20 REGULAR SESSION
ASSEMBLY BILL No. 1637
Introduced by Assembly Member Smith
(Coauthor: Senator Wilk)
February 22, 2019
An act to amend Section 1540 of the Code of Civil Procedure, relating
to civil actions.
LEGISLATIVE COUNSEL'S DIGEST
AB 1637, as introduced, Smith. Unclaimed Property Law.
The Unclaimed Property Law provides that all tangible personal
property located in this state, and, subject to specified conditions, all
intangible personal property held for the owner by any government or
governmental subdivision or agency, that has remained unclaimed by
the owner for more than 3 years escheats to the state. Under existing
law, a person who claims to have been the owner, as defined, of property
paid or delivered to the Controller under that law may file a claim to
the property or to the net proceeds from its sale. Existing law requires
to Controller to consider each claim, as specified, to determine if the
claimant is the owner.
This bill would permit property reported to, and received by, the
Controller in the name of a state or local agency, as defined, to be
transferred by the Controller directly to that agency without the filing
of a claim.
Vote: majority. Appropriation: no. Fiscal committee: no.
State -mandated local program: no.
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AB 1637 —�—
The people of the State of California do enact as follows:
1 SECTION 1. Section 1540 of the Code of Civil Procedure is
2 amended to read:
3 1540. (a) Any person, excluding another state, who claims to
4 have been the owner, as defined in subdivision (d), of property
5 paid or delivered to the Controller under this chapter may file a
6 claim to the property or to the net proceeds from its sale. The claim
7 shall be on a form prescribed by the Controller and shall be verified
8 by the claimant.
9 (b) The Controller shall consider each claim within 180 days
10 after it is filed to determine if the claimant is the owner, as defined
11 in subdivision (d), and may hold a hearing and receive evidence.
12 The Controller shall give written notice to the claimant if-he-er
13 slie the Controller denies the claim in whole or in part. The notice
14 may be given by mailing it to the address, if any, stated in the claim
15 as the address to which notices are to be sent. If no address is stated
16 in the claim, the notice may be mailed to the address, if any, of
17 the claimant as stated in the claim. A notice of denial need not be
18 given if the claim fails to state either an address to which notices
19 are to be sent or an address of the claimant.
20 (c) Interest shall not be payable on any claim paid under this
21 chapter.
22 (d) Notwithstanding subdivision (g) of Section 1501, for
23 purposes of filing a claim pursuant to this section, "owner" means
24 the person who had legal right to the property-pfiof-to before its
25 escheat, his or he the person's heirs or estate representative,4ti-s
26 or her the person's guardian or conservator, or a public
27 administrator acting pursuant to the authority granted in Sections
28 7660 and 7661 of the Probate Code. An "owner" also means a
29 nonprofit civic, charitable, or educational organization that granted
30 a charter, sponsorship, or approval for the existence of the
31 organization that had the legal right to the property-pfiopa before
32 its escheat but that has dissolved or is no longer in existence, if
33 the charter, sponsorship, approval, organization bylaws, or other
34 governing documents provide that unclaimed or surplus property
35 shall be conveyed to the granting organization upon dissolution
36 or cessation to exist as a distinct legal entity. Only an owner, as
37 defined in this subdivision, may file a claim with the Controller
38 pursuant to this article.
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— 3 — AB 1637
1 (e) Following a public hearing, the Controller shall adopt
2 guidelines and forms that shall provide specific instructions to
3 assist owners in filing claims pursuant to this article.
4 (f) Notwithstanding any other provision, property reported to,
5 and received by, the Controller pursuant to this chapter in the
6 name of a state agency, including the University of California and
7 the California State University, or local agency, may be transferred
8 by the Controller directly to the state or local agency without the
9 filing of a claim. Property transferred pursuant to this subdivision
10 is immune from suit pursuant to Section 1566 in the same manner
11 as if the state or local agency had filed a claim to the property.
12 For purposes of this subdivision, "local agency" means a city,
13 county, city and county, or district.
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