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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
unclaimed property locators; registration
Purpose
Allows a locator to register with the Arizona Department of Revenue (ADOR) to locate unclaimed property for an owner for a fee of no more than 30 percent of the unclaimed property value and outlines requirements for the locator application and registration. Establishes the Locator Registration Fund (Fund) consisting of monies received from locator registration and renewal fees.
Background
An agreement entered into by an owner with another person for the primary purpose of locating, delivering, recovering or assisting in the recovery of unclaimed property (agreement) is enforceable if the agreement: 1) is in writing; 2) clearly states the nature of the property and the services to be performed; 3) is signed by the apparent owner; and 4) states the value of the property before and after a fee or other compensation has been deducted. An agreed upon fee or payment may not be more than 30 percent of the value of the recoverable unclaimed property. An agreement is unenforceable if it provides for compensation of more than 30 percent of the value of the unclaimed property, except by the owner.
An owner who has agreed to pay compensation of more than 30 percent of the value of the recoverable unclaimed property, or ADOR on behalf of the owner, may maintain an action to reduce the compensation. A court may award reasonable attorney fees to an owner who prevails in the action. A provision in an agreement is void and unenforceable if it requires an owner to pay compensation that includes a portion of the underlying minerals or mineral proceeds that are not presumed abandoned (A.R.S. § 44-327).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Locator Registration
1. Allows a locator to register with, and pay a fee to, ADOR for a four-year locator registration in a form, manner and amount determined by ADOR.
2. Requires a locator, on the registration application, to provide the:
a) locator's primary business address, telephone number and name; and
b) name, telephone number and email address of the ADOR primary point of contact.
3. Determines that a locator is ineligible for registration if any of the following were convicted of a felony involving dishonesty, deceit, fraud or a breach of fiduciary duty in the immediately preceding 10-year period:
a) the locator, if an individual;
b) a current officer or owner of the locator if an entity; and
c) a current employee of the individual locator or entity locator that performs or directs locator services.
4. Requires ADOR to determine a renewal registration fee and allows a locator to renew its registration in a manner prescribed by ADOR.
Locator Registration Fund
5. Establishes the Fund consisting of monies received from locator registration and renewal fees and requires ADOR to administer the Fund.
6. Requires the initial registration and renewal registration fees collected to be deposited in the Fund.
7. Requires monies in the Fund to be used to register and monitor locators and specifies that monies in the Fund are continuously appropriated.
Unclaimed Property Account Information
8. Requires ADOR, on written request, to provide the unclaimed property account information for all unclaimed accounts to a registered locator.
9. Prohibits ADOR from providing the information to an unregistered locator.
10. Allows ADOR to charge a fee for each request in an amount determined by ADOR.
11. Requires ADOR to provide the unclaimed property account information in a searchable electronic or digital format on the ADOR website.
12. Requires the unclaimed property account information to include:
a) the name of the apparent owner and the complete last known address of the apparent owner as reported by the holder;
b) the name and contact information of the holder;
c) the relationship code, if any;
d) the type of property;
e) the cash value of the property if the property is not cash;
f) the number of shares or items and the exchange ticker symbol or fund name, if reported, if the property is securities or mutual fund shares;
g) the year the property was reported to ADOR; and
h) a general description of the safe deposit box contents and the liquidation amount, if applicable.
13. Prohibits a locator that receives unclaimed property account information from ADOR from distributing the information to other locators or persons, other than the owner, for compensation.
Agreement to Locate Property
14. Modifies the information required for an agreement to be enforceable by including the following information in at least 10-point type:
a) the signature of the owner, rather than the apparent owner;
b) a list of the unclaimed property account numbers being claimed; and
c) a description of the services to be performed, rather than the nature of the property.
15. Requires ADOR, if an owner has entered into a written agreement authorizing a registered locator to claim unclaimed property on the owner's behalf or if the owner sold the right to claim the unclaimed property to a locator, to distribute the property or monies in accordance with the agreement.
16. Requires a written agreement authorizing a registered locator to claim unclaimed property on the owner's behalf or the owner sold the right to claim the unclaimed property to a locator to be executed by the owner and be filed with ADOR.
Miscellaneous
17. Excludes, from the 30 percent fee restriction, recovery of an account that requires judicial determination of ownership to establish entitlement.
18. Makes technical and conforming changes.
19. Becomes effective on the general effective date.
House Action
WM 2/19/20 DP 7-3-0-0
3rd Read 2/27/20 31-29-0
Prepared by Senate Research
March 9, 2020
MG/gs