Brief ⁽¹⁾

HB 2648 provides that United States savings bonds which are unclaimed property shall escheat to the State of Kansas three years after becoming unclaimed property and all property rights to the bonds or proceeds shall vest solely in the State of Kansas. The bill also makes other changes to the Unclaimed Property Act.

Within 180 days after the three years noted above, if no claim has been filed under the Unclaimed Property Act for savings bonds, the administrator shall commence a civil action in the District Court of Shawnee County for a determination that the United States savings bonds shall escheat to the state.

Notice must be published once each week for two successive weeks in a newspaper having general circulation in the county in which is situated the last known address of the bond owner, except that the notice shall be limited to those items having a fair market value, on the date of the action, of more than $50. The administrator also shall mail a notice to the last known address of the owner.

If no person files a claim or appears at the hearing, to substantiate a claim or where the court determines that a claimant is not entitled to the property, then the court shall enter a judgement that the United States savings bonds have escheated to the state.

The administrator shall redeem the savings bonds and the proceeds shall be deposited in the State General Fund.

Any person may make a claim for the savings bonds which have escheated to the state or for the proceeds under the Unclaimed Property Act and upon providing sufficient proof of the validity of their claim, the administrator may pay the claim.

The unclaimed property administrator is authorized to commence an action against the United States government or any agency or subdivision for an adjudication that the proceeds of United States savings bonds subject to the Unclaimed Property Act are payable or distributable to the administrator.

The bill also does the following:

• Clarifies that property held by a financial organization (a savings and loan association, a credit union, or a bank) would not be presumed abandoned if the owner of the property owns other property held by the institution, has another relationship with the organization, and has communicated in writing or otherwise expressed to the organization an interest in the property;



• Clarifies that any unclaimed property that would be subject to a penalty or forfeiture of interest if reported on the date required (generally by November 1 of each year), may be reported at a later time when a penalty or forfeiture would no longer apply;



• Requires all presumed abandoned securities delivered to the administrator to be held for six months and sold within one year of the date of delivery; and



• Authorizes the administrator to require third party heir finders to provide a signed agreement with the owner (claimant) of the property before releasing any information regarding the property to the third party finder.

The House Committee amendment deleted from the bill the provisions which would have made all canceled warrants unclaimed property and handled under the Unclaimed Property Act.

The Senate Committee amendment added provisions dealing with savings bonds and escheat.

The bill is effective upon publication in the Kansas Register.

Background

HB 2648, including the Senate Committee amendments, was requested by the State Treasurer who is the administrator of the Unclaimed Property Act. The Director of the Unclaimed Property Division of the Treasurer's office explained that the bill may allow the state access to millions of dollars in unclaimed United States savings bonds and makes technical and clarifying amendments to the act and streamlines the procedure for handling securities delivered to the administrator.

The amendment also was requested by the Treasurer upon the discovery of certain impediments which currently would prevent all canceled warrants from being handled under the Unclaimed Property Act.

The fiscal note prepared by the Division of the Budget indicates an impact associated with the canceled warrants portion of the bill. Since those provisions have been deleted from the bill, it would appear that no fiscal impact would occur from passage of the bill as amended.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html