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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
written request; property locators
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 consisting of monies received from locator registration and renewal fees. Reduces the cap on the fee a locator may charge for recovering unclaimed property.
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 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. ยง 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 enforceable property recovery agreement that is entered into with another person by a claimant by including the unclaimed property account numbers being claimed, in at least 10-point type.
3. Reduces, from 30 percent of the recoverable property value to 20 percent of the recoverable property value, the maximum fee for an enforceable agreement to recover property.
4. Requires a locator, when a locator initially communicates with a potential customer, to disclose that the fee any locator charges is a negotiable rate that is capped at 20 percent.
5. Requires an agreement between a locator and customer to include a signed disclosure agreement signed by the customer in its own document without anything else on the document.
6. Requires the disclosure agreement to include, in at least 24-point font, a prescribed statement that the fee a locator charges is negotiable and capped at 20 percent of the property value.
7. 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.
8. Specifies that the 30 percent limit on the fee or payment for property recovery does not apply to recovery of accounts that require judicial determination of ownership to establish entitlement.
Locator Registration
9. Requires a locator, for the purpose of acquiring a valid four-year registration, to register with ADOR in a form and manner determined by ADOR and pay a registration fee determined by the Director of ADOR (Director).
10. 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.
11. Determines that a locator applicant is ineligible for registration if, in the last 10 years, the applicant was convicted of a felony involving dishonesty, deceit, fraud or a breach of fiduciary duty.
12. Allows a locator to renew the locator's registration by submitting an ADOR-prescribed renewal application and Director-determined renewal fee.
13. 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.
14. 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.
15. Requires the owner to execute the agreement that authorizes a registered locator to claim unclaimed property on the owner's behalf or sells the owner's right to claim unclaimed property to the locator, and the locator to file the agreement, with ADOR when a locator files a claim on the owner's behalf.
Locator Registration Fund
16. Establishes the Locator Registration Fund, administered by ADOR, and consisting of monies received from locator registration and renewal fees that ADOR must deposit in the Fund.
17. Requires Locator Registration Fund monies to be used to monitor locators and specifies that Fund monies are continuously appropriated.
Unclaimed Property Account Information
18. Requires the following unclaimed property account information to be made available in a public database:
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
19. Classifies disclosing confidential information as a class 1 misdemeanor and knowingly disclosing confidential information as a class 5 felony.
20. Requires ADOR to engage in promotional and informational activities relating to unclaimed property to raise awareness of unclaimed property throughout the state.
21. Declares that the Legislature intends the initial registration fee and the renewal fee for a locator to not exceed $100 for each registration and for each renewal.
22. Makes technical and conforming changes.
23. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Retains the statutory definition of confidential information.
2. Reduces, from 30 percent to 20 percent, the maximum fee for an enforceable agreement to recover property.
3. Stipulates that, when a locator initially communicates with a potential customer, the locator must disclose that the fee any locator charges is a negotiable rate and is capped at 20 percent.
4. Outlines the required description and statement of the disclosure agreement.
5. Classifies disclosing confidential information as a class 1 misdemeanor and knowingly disclosing confidential information as a class 5 felony.
6. Caps the registration and registration renewal fees at $100.
House Action Senate Action
WM 2/19/25 DP 5-4-0-0 FIN 3/10/25 DPA 4-3-0
3rd Read 2/26/25 31-29-0
Prepared by Senate Research
March 11, 2025
MG/AL/ci