California Amends Definition of “Owner” to Give Charities Greater Access to Unclaimed Funds

On September 15, California Assembly Bill 1712 became law.

This legislation expands the definition of an "owner" under the Act authorized to make a claim for unclaimed property in the Controller's possession.  In particular, the definition of "owner" was amended to add "a nonprofit civic, charitable, or educational organization that granted a charter, sponsorship, or approval for the existence of the organization that had the legal right to the property prior to its escheat but that has dissolved or is no longer in existence, if the charter, sponsorship, approval, organization bylaws, or other governing documents provide that unclaimed or surplus property shall be conveyed to the granting organization upon dissolution or cessation to exist as a distinct legal entity." 

In other words, if the California Controller's office is holding unclaimed property for the American [Charity] Association - LA Chapter, and that entity is dissolved or no longer exists, the property can be claimed by the nationwide American [Charity] Association.
According to a report on the bill by the Assembly Judiciary Committee, the bill arose from the acknowledgment that "there is a large amount of unclaimed property  . . . that is owned by nonprofit chapters or affiliates that have dissolved."  By amending the definition of owner to include the parent or sponsoring entity of the dissolved organization, the bill's sponsors intend to "retrun [the funds] to the charitable sector where it can once again benefit the community."

While the legislation is certainly laudable, insofar as it requires that the organizational documents of the dissolved entity to provide that unclaimed property will pass to the parent entity, it is unclear what impact it will have on the millions of dollars already in the Controller's possession.

Welcome to Fall (Reporting Season)

Labor Day has just passed, the kids are back at school (or will be, shortly) and the (unofficial) end of Summer has passed.  Next up for unclaimed property professionals is the Fall reporting season.  As of today, we are 60 days out from the November 1 reporting deadline in a few dozen states.  Due diligence letters have (hopefully) been sent out, and the process of preparing the Fall reports will now begin in earnest.  As we being the annual crunch to get the reports out the door on schedule, consider if there is anything you can do today to prevent the last minute rush, or to adopt new lessons learned.

Need to learn new lessons?  New to unclaimed property reporting?  Consider checking out the Unclaimed Property Professionals' Organization Holder Seminar in Atlanta, Georgia on September 17 & 18.  The agenda can be found here.  As always, the Seminar is designed for beginning and intermediate unclaimed property professionals and address a number of both general and specialized topics.  Full disclosure:  the author is a member of UPPO and will be one of the speakers.  (Completely unrelated aside:  the "Unclaimed Property Buzz" seminar on the first day should be fascinating and entertaining).

Whether you need to learn the basics or sharpen you the skills you've already learned, consider checking it out.