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CA SB 109 Enacted with Unclaimed Property Provisions

By: Cathleen A. Bucholtz Jim Sadik Steven Swaigenbaum Robert M. Tucci Troy R. Wangen |

California Senate Bill 109 (CA SB 109), an act to amend the California Budget Act of 2019, was approved by Governor Newsom on September 27, 2019.  Among the revisions included in CA SB 109, the following language was included:

“On or before March 1, 2020, the Controller shall provide the Joint Legislative Budget Committee and the chairpersons of the fiscal committees in each house of the Legislature with a report on plans to provide for a one-time unclaimed property amnesty, or other options to increase compliance with unclaimed property law in lieu of an amnesty program, and options for increasing the return of unclaimed property to rightful owners.”

There are several reasons why the addition of this language is so compelling:

  • First, this language was originally proposed in an earlier draft of the state’s budget (California Senate Bill 73) that was not enacted. Some sources have indicated that its omission from the final budget was an oversight, and that its inclusion in CA SB 109 remedies the error.
  • Second, is the “or” language in the provision. The Controller can provide a report with plans for an amnesty, OR another option to increase compliance.  This appears to allow the Controller to use a “carrot” with holders to increase compliance with the state’s unclaimed property laws, such as an information outreach program or allowing holders to enter into voluntary disclosure agreements (VDAs) with the state, or a “stick”, in the form of increased audits.
  • Finally, it’s interesting to note that inclusion of this language in the amendment to the California budget in CA SB 109 seems to be part of new focus on unclaimed property in the state. California Assembly Bill 1637, which was approved by the Governor on September 20, 2019 provided that unclaimed property reported and received by the Controller in the name of a state or local agency is to be transferred by the Controller directly to that agency without the filing of a claim.  In addition, the California Budget Act of 2019, California Assembly Bill 74, approved by the Governor on June 27, 2019, included language requiring the Franchise Tax Board to report to the Joint Legislative Budget Committee on plans to include a question regarding unclaimed property on business tax forms.

Please reach out to any member of the True Partners Unclaimed Property Management Team if you have any questions about this or any other unclaimed property developments likely to impact your company.