1. California State Controller’s Office
Unclaimed Property Division
Presented by: Joyanne Washington
Date: October 13, 2017

2. Our Mission The mission of the Unclaimed Property Division is
to reunite lost and abandoned property with its
rightful owners and to safeguard these properties
from being used by private interest for personal gain.

3. Today’s Topics California's Unclaimed Property Program
California’s Reporting Process
Potential Interest, Fines, and Penalties
Common Errors
Frequently Asked Questions
Resources
Questions
All materials and information contained within this presentation are for informational purposes only and do not constitute legal advice.

4. What is Your Experience?

5. Unclaimed Property in California
The Unclaimed Property Program started
in 1959 as part of a nationwide system
to provide customer protection.
The program exists to relieve businesses and financial institutions (holders) of the burden and liability of maintaining the property.
Each state has their own unclaimed property program.
In California, the State Controller manages this program.

6. Definitions
Unclaimed Property: Any financial asset that has been left inactive by the owner for a period of time specified in the law, generally three (3) years.
Holder: Any business entity in possession of property belonging to another is potentially a holder of unclaimed property.
Property Owner: A person or entity who appears to be entitled to the property held by the holder.
Escheat: To transfer or vesting in the state of title to property, the whereabouts of whose owner is unknown subject to the right of claim.

7. Types of Unclaimed Property
Payroll
Commissions
Customer Refunds
Vendor Payments
Payments for Goods and Services
Safe Deposit Boxes
Overpayments
Pre-Payments
Securities
Insurance Proceeds
Other property belonging to someone other than the entity holding it

8. unclaimed property claim paid by California in 2016?
Trivia
What was the average
unclaimed property claim paid by California in 2016?
a) $27 b) $136
c) $419 d) $542

9. Reporting Overview 1. Review Holder Books & Records
2. Perform Holder Due Diligence
3. Submit Holder Notice Report
4. Respond to Owner Inquiries
5. Submit Holder Remit Report & Remittance

10. Before You Begin
Determine where you will need to report the property to, and
Determine your “As of” Date.

11. Report based on the last known address
Where to Report
Report based on the last known address
of the property owner.
If the address is unknown or in a foreign country, report to the State where the holder is domiciled.

12. Determine “As of” Date Defines the end of a period of time
in which property is reportable and
determines which properties will be reported.
Must be your fiscal year-end date or the State’s fiscal year-end date (June 30).
Must be stated on the Universal Holder Face Sheet (UFS-1).
Must be used consistently.

13. Reporting Overview: Step 1
1. Review Holder Books & Records
2. Perform Holder Due Diligence
3. Submit Holder Notice Report
4. Respond to Owner Inquiries
5. Submit Holder Remit Report & Remittance

14. Review Books and Records for Unclaimed Property
Holders should review records annually.
Identify the property type and then the dormancy period.
Then determine the last transaction date.

15. Identify Property Type and Dormancy Period
Payroll Checks (1-year dormancy)
Accounts Payable Checks – vendor payments
(3-year dormancy)
Refunds (3-year dormancy)
Accounts Receivable – customer credit refunds, overpayments (3-year dormancy)
Credit Balances (3-year dormancy)
Customer Overpayments (3-year dormancy)
Insurance Proceeds (3-year dormancy)
Money Orders (7-year dormancy)
Travelers Checks (15-year dormancy)

16. Determine Date of Last Contact
This date determines when due diligence is performed and when the property is reportable.
The date the property became payable or distributable to the owner. For example:
Issue date of a check or direct deposit
Last date of employment
Date of last contact

17. Identify Unclaimed Property
2017 Report Cycle
Fiscal Year End
(“As of” Date)
One-Year Dormancy
Property
6/30/2017
7/1/2015 – 6/30/2016
12/31/2016
1/1/2015 – 12/31/2015
Considering the dormancy period,
last transaction date, and holder’s “As of” date.

18. Reporting Overview: Step 2
1. Review Holder Books & Records
2. Perform Holder Due Diligence
3. Submit Holder Notice Report
4. Respond to Owner Inquiries
5. Submit Holder Remit Report & Remittance

19. Perform Holder Due Diligence
Due Diligence is the process of attempting to locate owner(s) of dormant property before escheating property to the State Controller.
Mandated by California State law.
For properties valued $50 or more, securities, and safe deposit boxes.
In general, mail notice 6-12 months before reporting property.

20. Heading must appear at the top.
Clearly state the property is in danger of escheating to the State if the owner does not respond in a timely manner.
Include a form for owner to indicate interest.

21. Respond to Owner Claims
What if contact is made?
Ensure claimant is the entitled owner.
Reunite property.
Reinstate account
Reissue payment
Reset dormancy period.
Update holder records.

22. Reporting Overview: Step 3
1. Review Holder Books & Records
2. Perform Holder Due Diligence
3. Submit Holder Notice Report
4. Respond to Owner Inquiries
5. Submit Holder Remit Report & Remittance

23. Submit Holder Notice Report
Submit after Holder Due Diligence is performed
Due annually before November 1 (May 1 for Life Insurance Companies)
Do not remit property

24. Holder Notice Report Contents
Universal Holder Face Sheet (UFS-1)
Property Owner Details List

25. State Form: UFS-1 X Tax ID number Fiscal Year-End Company Name
Company Address
Your Name
Claims Contact Name
Claims Contact

26. State Form: UFS-1
Original Signature Required

27. Property Owners Detail List
Must be in Standard NAUPA II format.
Electronic Report must be used when reporting 10 or more properties.
Free reporting software at unclaimed.org/reporting
Paper Report may be used when reporting nine properties or less.
Must use State’s form:
Annual Report of Unclaimed
Personal Property Owner Detail
Sheet (UDS-1)

28. Required Fields Property Owner Name Last Transaction Date
Social Security Number/FEIN
Property Type Code
Relationship Type Code
Owner Type Code
Other helpful identifying information may include a date of birth or death, driver’s license number, address, or phone number.

29. State Form: UDS-1

30. Required Codes Property Type: Describes the type of property reported.
Relationship Type:
Describes the relationship between the reported property and owner.
Owner Type:
Describes the property owner classification (known, unknown, aggregate, or disputed).

31. UDS-1: Required Codes Property Type:
Describes the type of property reported.
Owner Type:
Describes the property owner classification (known, unknown, aggregate, or disputed).
Relationship Type:
Describes the relationship between the reported property and owner.

32. UDS-1: Example

33. Reporting Overview: Step 4
1. Review Holder Books & Records
2. Perform Holder Due Diligence
3. Submit Holder Notice Report
4. Respond to Owner Inquiries
5. Submit Holder Remit Report & Remittance

34. Remittance Reminder Letter (14F)
Contains Report ID number and Holder Remit Report due date
SAMPLE
Sign and return with the Holder Remit Report.

35. Reporting Overview: Step 5
1. Review Holder Books & Records
2. Perform Holder Due Diligence
3. Submit Holder Notice Report
4. Respond to Owner Inquiries
5. Submit Holder Remit Report & Remittance

36. Submit Holder Remit Report

37. Update UFS-1
########
Tax ID number

38. Update UFS-1
Original Signature Required

39. Update Property Owner Information
Reunited properties may be excluded or indicated as reunited.
Do not add new properties.
Submit on a Supplemental Report.

40. Remit Property
Remit all unclaimed cash as one payment to the California State Controller.
$20,000 or greater must be remitted via electronic funds transfer (EFT). Send funds at the same time as the report.
Maintain reported safe deposit box and safekeeping items until contacted by the State Controller with delivery instructions.

41. EFT Options Register at any time EFT Desk (916) 464-6220
Method
Fees Assumed By
Registration Form
ACH Debit
Controller’s Office
SCO EFT-1
ACH Credit
Holder
International Funds Transfer
Fedwire
SCO EFT-3
Register at any time
EFT Desk
(916)

42. 2017 Report Cycle 1-Year Dormancy Fiscal Year-End (As of Date)
Last Transaction Date
Due Diligence Must Be Performed
Notice Report Due Before
Remit Report & Remittance Due
6/30/2017
7/1/2015 to 6/30/2016
10/31/2016 to 4/30/2017
11/1/2017
6/1/2018 to 6/15/2018
12/31/2016
1/1/2015 to 12/31/2015

43. “Off-Cycle” Reports
May occur when the Holder Notice Report is received after the report due date.
Holder Remit Report and remittance due date is then subject to change.
Holder Remit Report due date will appear on the Remittance Reminder Letter (14F).

44. Supplemental Reports
If the holder identifies additional property owner accounts that were not included on the original Holder Notice Report, they must be reported on a separate “Supplemental Holder Notice Report.”
You will receive a separate Holder Remit Reminder Letter (14F).
You will file a separate Holder Remit Report for the Supplemental Report.

45. Supplemental UFS-1 Tax ID number Fiscal Year-End Company Name
Company Address
Your Name
Claims Contact Name
Claims Contact

46. Potential Interest, Fines, and Penalties
California may assess a 12% per annum interest charge on late reports or remittances (CCP §1577).
A fine can be assessed by the courts for willful failure to report, remit, deliver property, or for filing a fraudulent report.
$100 per day ($10,000 maximum) for failure to report (CCP§1576(a))
$5,000 - $50,000 for refusing to deliver property (CCP §1576(b))
Remittances $20,000 or greater in any form other than electronic funds transfer (EFT).
A Civil Penalty of 2% of the payment amount shall be assessed (CCP § ).

47. Common Reporting Errors
Reporting property too early
Remitting property with the Holder Notice Report
Incorrect file format
Not in Standard NAUPA II Electronic Format
Paper report exceeds limit of more than nine properties
Invalid Property Starting Transaction Date or Date of Last Contact.

48. Common Reporting Errors
Invalid codes
Sending in a report via
Adding new names to the Holder Remit Report
Property owner accounts not included on the original Holder Notice Report must be reported on a separate Supplemental Holder Notice Report.

49. Common Reporting Errors
Lack of Social Security Number (SSN)
Required for the following property types:
Wages/Salaries
Commissions
Workers Compensation Benefits
Pension and Profit Sharing
IRAs
Bank Accounts
Expense Checks
Pension Checks
Securities Accounts
If any SSNs are not reported, attach a cover letter on company letterhead explaining why this information is not available. Have an officer of the company sign the cover letter.
Lack of SSN may delay the processing of your report.

50. Common Remittance Errors
More than one check included.
Remitting a check for unclaimed property amounts $20,000 or greater.
Proof of securities remittance
(SS-1) form not included, if applicable.

51. Putting Together a Plan
Prepare a timeline and calendar for important steps in the reporting process.
Establish written procedures.
Identify responsible personnel.
Conduct internal training.
Monitor changes in unclaimed property laws.
Include escheatment information in company newsletter.
Make address change forms available.
Be prompt in updating contact information.

52. Frequently Asked Questions

53. Frequently Asked Question
What is the report “As of” date?
The “As of” date defines a period of time in which property is reportable and determines which properties will be reported. This date should be the holder’s fiscal year-end (or June 30 if using the State’s fiscal year-end). This is not the date the report is due, created, or submitted.

54. Frequently Asked Question
After submitting the Holder Notice Report, all properties were returned to the rightful owner. Do we still need to submit a Holder Remit Report?
Yes, submit a negative report.

55. Frequently Asked Question
Our company just submitted our Holder Notice Report and left off five properties. Is it okay to add these properties to the Holder Remit Report when we file in June?
No. Any new property that was not included on the original Holder Notice Report must be reported on a Supplemental Holder Notice Report.

56. Frequently Asked Question
Does California offer a voluntary disclosure agreement or amnesty?
No, there is no statutory authority in California for this kind of program.

57. Frequently Asked Question
Can I request a report extension?
You may file a Holder Request for Extension of Due Date (form available online). It must be submitted at least 30 days prior to the report due date.

58. Resources Unclaimed Property Holder Handbook Holder Notices
A compilation of reporting instructions, laws, codes and regulations.
Holder Notices
Sent by and alert holder community to important changes or new information. Sign up on our website to receive all notices sent to holders.
Holder Newsletter
Quarterly newsletter for holders identifying important upcoming dates, summarizes changes in the law, and provides reporting tips.
Holder Outreach Events Page
A list of upcoming events.
Outreach and Compliance Unit
Site visits and speaking engagements
Webinars
One-on-one assistance

59. Reporting Resources Controller’s Reporting Resources Webpage
sco.ca.gov/upd_rptg.html
Holder Handbook
sco.ca.gov/Files-UPD/guide_rptg_holderhandbook.pdf
California’s Unclaimed Property Law and Regulations
sco.ca.gov/upd_lawregs.html
Dormancy Period Tables
sco.ca.gov/Files-UPD/outreach_rptg_hol_dormancy.pdf
Property Reporting Cycle Tables
Holder Notices
sco.ca.gov/ucp_holder_notification_ .html
Holder Newsletter
sco.ca.gov/upd_rptg_outreach.html
Unclaimed Property Division Events Page
sco.ca.gov/upd_events.html
National Association of Unclaimed Property Administrators (NAUPA)
unclaimed.org/reporting/free-holder-reporting-software/

60. Holder Outreach & Compliance
Any Questions?
Holder Outreach & Compliance
(916)

61. Contact Information
Reporting
(916)
EFT Desk
(916)
Claims Assistance
(800)
California State Controller’s Office
Unclaimed Property Division
10600 White Rock Road, Suite 141
Rancho Cordova, CA
Holder Outreach & Compliance
(916)
Visit our Website:

62. Thank You!