On March 19, 2018, the California Assembly introduced a bill, AB 2773, that proposed the creation of a voluntary disclosure program through the introduction of a new section, 1577.6, into California’s Code of Civil Procedures.
Under existing law, property held by a person that belongs to another and that is unclaimed for more than specified periods escheats to the state. Existing law requires persons holding unclaimed property to report and deliver it to the Controller within a prescribed time-period, and imposes interest payments, at a 12% statutory rate, and penalties, for a failure to do so.
AB 2773 would require the Controller to create a program for the voluntary disclosure of unclaimed property consistent with specified requirements. The bill would require the Controller to waive interest and penalty charges for holders who are accepted into the program, complete the voluntary disclosures in good faith, and act consistent with program requirements. The program would be open to all holders who aren’t currently under audit, whether they have previously filed or not, and the look-back period would cover 10 prior report years.The program would repeal on January 1, 2024, unless a later statute is enacted before the repeal date that ends or extends the program.
This bill is significant for any company with potential unclaimed property issues in California, because it provides a mechanism for a company to come into compliance free from interest and penalty charges while allowing a limited look-back.
MarketSphere will continue to monitor the progress of the bill and will provide updates as changes occur. Should you have any questions on this or any other unclaimed property matter, please contact us at 844.357.1099 or upcontact@marketsphere.com
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