It’s been about 8 months since a federal court ordered California to stop collecting unclaimed property. During the past few months State Controller John Chiang has made several improvements to California’s unclaimed property process, including a new Web service that helps property owners track down their assets, all in an attempt to rebuild the controller’s office’s damaged image.
In June 2007 a judge ruled that California’s State Controller’s Office was not doing enough to locate unclaimed property owners before seizing their assets and adding them to state coffers. Following the ruling, the state was not allowed to collect unclaimed property again until it improved its notification process.
Unlike many states, California did not publish the names of unclaimed property owners in major newspapers. Instead, they published an advertisement pointing readers to the controller’s Web site, where they could search for their names in a database.
In an interview with Voice of America, the prosecutor in the case said “I don't know how you reunite people with their property if you don't even tell them that you've taken their property.â€
The unclaimed property ban left AP departments in California (and out-of-state departments holding California assets) scratching their heads over what to do with the uncashed checks and unclaimed payments they had.
During the months following the ban, the controller’s department took some major steps to improving property owner notification. These steps include:
- Requiring the controller’s office to contact the owners of unclaimed property worth $50 or more within 165 days of the reporting due date.
- Allowing businesses holding property to subscribe to an email list announcing any changes to unclaimed property reporting requirements.
- Requiring property holders to contact owners six to 12 months before reporting it to the state.
In addition, the controller’s office has launched a new Web site, www.ClaimIt.ca.gov, that not only allows owners to search for property that has been turned over to the state, but also for property still being held by businesses. Also, Chiang is sponsoring legislation that would require the state to pay interest on all unclaimed property and would extend the amount of time businesses must hold on to unclaimed property from three years to five.
These measures have gone a long way towards rebuilding the California public’s trust in the state’s escheatment practices. In fact, California will resume collecting unclaimed property this summer. Let’s hope that these reforms are the start of a trend towards stronger escheatment practices. With California earning about $400 million each year from unclaimed property, the state can’t afford another ban.
Additional information on California Escheatment Issue:
Comments
Uncashed payroll checks in CA
Would anyone have a good information resource on dealing with uncashed payroll checks in California? Even general information would be fine or links to specific reference sources. The state website is largely silent on payroll checks.
Thank you.