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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
unclaimed property; transfer; state treasurer
Purpose
Transfers administration of the collection, maintenance, sale and payment of unclaimed property from the Arizona Department of Revenue (ADOR) to the State Treasurer. Establishes the State Treasurer Administrative Fund, repeals the ADOR Administrative Fund and transfers any unexpended and unencumbered monies in the ADOR Administrative Fund to the State Treasurer Administrative Fund.
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).
ADOR serves as the custodian of unclaimed property and unclaimed property holders must make an annual report to ADOR regarding unclaimed property and pay and deliver the property to ADOR. Unclaimed property includes tangible property such as property held in a safe deposit box or other safekeeping depository and intangible property including, but not limited to, traveler's checks, money orders, any stock or equity interest, principal on debt, demand or savings deposit and customer credits that are presumed abandoned for anytime between one and fifteen years depending on the property (A.R.S §§ 44-302 and 44-303).
By November 30 of the year following the year of the delivery of unclaimed property, ADOR's website must contain information on: 1) the name and last known address of the apparent owner of the property as outlined in the holder's report; 2) a statement which explains that the property is presumed abandoned and in protective custody of ADOR; and 3) a statement that information about the property and its return to the owner is available to a person who has a legal or beneficial interest in the property. ADOR must publish a notice at least semiannually in a newspaper of general circulation in each county and on either, social media or the radio directing the public to ADOR's website on abandoned property that has been delivered to ADOR (A.R.S. §§ 44-308 and 44-309).
Within three years after receiving abandoned property, ADOR must sell the
property to the highest bidder at a public sale, which would provide the most
favorable market for the property. All monies collected from unclaimed
property, including proceeds from the sale of abandoned property, are deposited
by ADOR in the state General Fund, except that in each fiscal year: 1) the
first $2,000,000 is deposited in the Seriously Mentally Ill Housing Trust Fund;
2) the second $2,000,000 is deposited in the Housing Trust Fund; and 3) the
next $24,500,000 is deposited in the ADOR Administrative Fund. Monies from
unclaimed shares and dividends of any corporation domiciled in Arizona are
deposited by ADOR in the Permanent State School Fund. Monies from unclaimed
victim restitution payments are deposited by ADOR in the Victim Compensation
and Assistance Fund. ADOR must also retain at least $100,000 in a separate
trust fund, from which unclaimed property claims are paid to a claimant of
unclaimed property (A.R.S. §§ 44-312
and
44-313).
If an insured depositor fails to claim a deposit within 18 months after the Federal Insurance Deposit Corporation (FDIC) initiates payment, the deposit must be transferred to the state of the depositor's last known address. ADOR administers the FDIC Trust Fund consisting of such monies from unclaimed FDIC deposits. If the monies are not claimed by an FDIC depositor within 10 years of being surrendered, ADOR must return the monies to the FDIC. The state retains all interest earned on the monies in the FDIC Trust Fund and credits 65 percent of the interest to the state General Fund and 35 percent of the interest to the Housing Trust Fund (12 U.S.C. § 1822 (e) and A.R.S § 44-314).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Transfers the administration of the collection, maintenance, sale and payment of unclaimed property from ADOR to the State Treasurer.
2. Establishes the State Treasurer Administrative Fund, administered by the State Treasurer, and consisting of the annual $24,500,000 deposit from unclaimed property collections.
3. Requires the State Treasurer, subject to legislative appropriation, to use monies in the State Treasurer Administrative Fund solely for administrative costs of the State Treasurer's Office.
4. Repeals the ADOR Administrative Fund and transfers all remaining unexpended and unencumbered monies to the State Treasurer Administrative Fund.
5. Transfers administration of the FDIC Trust Fund from ADOR to the State Treasurer.
6. Requires Legislative Council Staff to prepare conforming legislation that transfers the unclaimed property administrative responsibilities from ADOR to the State Treasurer for consideration in the Fifty-Seventh Legislature, Second Regular Session.
7. Makes technical and conforming changes.
8. Becomes effective on the general effective date.
House Action
WM 2/12/25 DP 5-4-0-0
3rd Read 2/20/25 32-26-2
Prepared by Senate Research
March 5, 2025
MG/AL/ci