GORDON ROBERTSON LEGISLATIVE RESEARCH INTERN |
LIAM MAHER |
LEGISLATIVE RESEARCH ANALYST APPROPRIATIONS COMMITTEE Telephone: (602) 926-3171 |
ARIZONA STATE SENATE
RESEARCH STAFF
TO: MEMBERS OF THE SENATE
APPROPRIATIONS COMMITTEE
DATE: March 31, 2023
SUBJECT: Strike everything amendment to H.B. 2623, relating to relating to unclaimed property; locator registration
Purpose
Outlines requirements for a locator to register with the Arizona Department of Revenue (ADOR) to provide recovery services to the apparent owner of unclaimed property. Establishes the Locator Registration Fund (Fund) consisting of monies received from locator registration and renewal fees.
Background
ADOR's Unclaimed Property Program seeks to efficiently and effectively collect, safeguard and distribute unclaimed property to property owners by: 1) sending notices to potential property owners; 2) featuring claimant information through a search function on ADOR's website; 3) advertising in Arizona media; and 4) working with other state agencies in Arizona and nationally to track unclaimed property owners (ADOR).
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
Agreements to Recover Property
1. Allows a claimant, rather than an owner, to enter into an agreement to recover property and applies the associated authorizations and requirements to a claimant.
2. Modifies the information required for an agreement to recover property that is entered into with another person by a claimant by including the following, in at least 10-point type:
a) the unclaimed property account numbers being claimed;
b) the services to be performed; and
c) the signature of the claimant.
3. Removes the specification that an agreement to recover property is void and unenforceable if the agreement was entered into during the period commencing on the date the property was presumed abandoned and extending until 24 months after the property is paid or delivered to ADOR.
4. Specifies that the agreed upon fee or payment in an agreement to recover property does not apply to recovery of accounts that require judicial determination of ownership to establish entitlement.
Locator Registration
5. Requires, to acquire a valid four-year registration, a locator to register with ADOR in a form and manner determined by ADOR and pay a registration fee determined by the Director of ADOA (Director).
6. Requires a locator applicant, on the registration application, to provide the:
a) applicant's primary business address and telephone number; and
b) name, telephone number and email address of the individual who will be the primary point of contact with ADOR.
7. Determines that a locator is ineligible for registration if, in the last 10 years, the locator was convicted of a felony involving dishonesty, deceit, fraud or a breach of fiduciary duty.
8. Allows a locator to renew the locator's registration by submitting an ADOR-prescribed renewal application and Director-determined renewal fee.
9. Prohibits a locator that receives unclaimed property account information from ADOR from distributing that information to other locators or persons, other than the owner, for compensation.
10. Requires ADOR, if an owner has entered into a written agreement that authorizes a registered locator to claim unclaimed property on the owner's behalf or if the owner has sold the right to claim unclaimed property to a locator, to distribute the property or monies in accordance with the written agreement.
11. Requires the owner to execute the agreement, and the locator to file the agreement, with ADOR when a locator files a claim on the owner's behalf.
Locator Registration Fund
12. Establishes the Fund, administered by ADOR, consisting of monies received from locator registration and renewal fees that ADOR must deposit in the Fund.
13. Requires Fund monies to be used to monitor locators and specifies that Fund monies are continuously appropriated.
Unclaimed Property Account Information
14. Requires ADOR, on written request, to provide all unclaimed property account information for all unclaimed accounts only to a registered locator in a searchable electronic or digital format.
15. Allows ADOR to charge a fee in an amount determined by the Director for each property information request.
16. Requires the unclaimed property account information to include:
a) the name and, as reported by the holder, the complete last known address of the apparent owner;
b) the relationship code, if any;
c) the type and cash value of the property;
d) if the property is securities or mutual fund shares, the number of shares or items and the exchange ticker symbol or fund name, if reported;
e) the year that the property was reported to ADOR;
f) the name and contact information of the holder;
g) a general description of the safe deposit box contents and the liquidation amount, if applicable; and
h) the last contact date with the apparent owner.
Miscellaneous
17. Expands the parties to which ADOR may disclose confidential information to include a registered locator.
18. Modifies the definition of confidential information by:
a) removing reports filed by holders of property presumed abandoned, a claimant's application and documents submitted to support a claim and information discovered by ADOR concerning claims, claimants, holder reports or holders; and
b) including a social security number, tax identification number, date of birth and holder account number in a report that is filed by the holder of property assumed abandoned.
19. Makes technical and conforming changes.
20. Becomes effective on the general effective date.