Legislature(2003 - 2004)

04/01/2004 03:35 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
        SB 231-DECREASE TIME TO CLAIM UNCLAIMED PROPERTY                                                                    
                                                                                                                              
CHAIR GARY STEVENS announced SB 231 to be up for consideration.                                                                 
                                                                                                                                
SENATOR JOHN  COWDERY motioned to adopt  the committee substitute                                                               
(CS) for  SB 231  for discussion purposes.  It was  identified as                                                               
work draft  dated 12/5/03.  There being no  objection, it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
BETTY MARTIN,  State Comptroller with the  Department of Revenue,                                                               
introduced herself and Rachel Lewis.  She explained that the bill                                                               
was introduced late  in the previous session and  dealt only with                                                               
increasing the  dormancy claims on  unclaimed property.  Over the                                                               
interim,  the Department  of Revenue  and the  Department of  Law                                                               
worked to bring Alaska's unclaimed  property law into conformance                                                               
with the  Unclaimed Property Uniform  Act passed in 1995  and the                                                               
CS is the result of that effort.                                                                                                
                                                                                                                                
SENATOR  JOHN  COWDERY asked  what  kind  of property  they  were                                                               
talking about.                                                                                                                  
                                                                                                                                
RACHEL  LEWIS   with  the  Unclaimed  Property   Section  of  the                                                               
Department of Revenue  explained that it has to do  with any kind                                                               
of intangible money such as  payroll checks, utility deposits, or                                                               
health insurance  reimbursements that  have been sent  to someone                                                               
and  remain un-cashed  for a  certain dormancy  period. The  only                                                               
tangible property they receive are safe deposit boxes.                                                                          
                                                                                                                                
SENATOR  COWDERY asked  if  they wanted  to  reduce the  dormancy                                                               
period from five years to three years.                                                                                          
                                                                                                                                
MS. LEWIS said reducing the  dormancy period would make it easier                                                               
to  find people,  but actually  they're  just requesting  various                                                               
property reductions that  are in line with  the Uniform Unclaimed                                                               
Property Act.                                                                                                                   
                                                                                                                                
SENATOR COWDERY noted  that most checks he's seen have  a 180 day                                                               
limit before  they become  stale dated and  he wondered  how they                                                               
were addressing those.                                                                                                          
                                                                                                                                
MS.  LEWIS explained  that just  because there  is an  expiration                                                               
date  doesn't   cause  them  to  be   eliminated  from  unclaimed                                                               
property. State of  Alaska and government items  are usually good                                                               
for one  year while Alaska warrants  are now good for  six months                                                               
before they are listed as unclaimed property.                                                                                   
                                                                                                                                
SENATOR COWDERY asked whether there  are expenses associated with                                                               
unclaimed property that they try to recover.                                                                                    
                                                                                                                                
MS. LEWIS said  no. Unclaimed property is held  in perpetuity for                                                               
the owner and the information is a matter of public record.                                                                     
                                                                                                                                
CHAIR GARY STEVENS asked about opposition to the bill.                                                                          
                                                                                                                                
MS.  LEWIS  said  they  haven't   heard  any  opposition  because                                                               
everyone benefits.                                                                                                              
                                                                                                                                
CHAIR  GARY STEVENS  noted  that Mary  Ellen  Beardsley from  the                                                               
Attorney General's Office was online to answer questions.                                                                       
                                                                                                                                
SENATOR BERT  STEDMAN asked how  long unclaimed property  is held                                                               
before it's reabsorbed.                                                                                                         
                                                                                                                                
MS. LEWIS  told him  it's never absorbed.  Prior to  1986, Alaska                                                               
had an estate  law that had a seven years  claim period, but that                                                               
is no  longer the case.  The committee substitute makes  it clear                                                               
that the request  is to reduce the reporting period;  there is no                                                               
request  to reduce  the period  for claiming  unclaimed property.                                                               
Property may be  claimed by subsequent generations  if that's how                                                               
long it takes before the owner is identified.                                                                                   
                                                                                                                                
She advised  that most of the  requested changes are all  in line                                                               
with the Uniform Unclaimed Property Act, but three are not.                                                                     
                                                                                                                                
Section  5   is  a   new  type   of  unclaimed   property  called                                                               
demutualization. This  has to do  with mutual  companies deciding                                                               
they  wanted  to  enhance their  financial  security  by  turning                                                               
policyholders  into stockholders.  Because  of  this, they  don't                                                               
have records  on the  policyholders because  the accounts  may be                                                               
several decades old. Section 5  calls for those proceeds and that                                                               
stock  to be  reportable as  unclaimed property  at the  time the                                                               
policyholder is known to be lost.                                                                                               
                                                                                                                                
Alaska  is the  only state  that has  the provision  addressed in                                                               
Section  10,  which  is  that   unclaimed  property  reports  for                                                               
diminutive amounts  are not required.  Businesses may  hold small                                                               
amounts of  unclaimed property until the  aggregate total reaches                                                               
$750  at which  time an  unclaimed property  report is  due. This                                                               
reduces needless paperwork.                                                                                                     
                                                                                                                                
Turning to  Section 13 she  informed members that  the Department                                                               
of Revenue  must publish annually  the name of every  person that                                                               
has  unclaimed  property  of  more   than  $100.  Last  year  the                                                               
publishing cost for  that was $30,000 and they  received just 348                                                               
claims. They  already list all  the names on the  Internet, which                                                               
cost  almost nothing  and that  listing  generated 1,800  claims.                                                               
It's more cost efficient for  the department to reach people over                                                               
the Internet, she said.                                                                                                         
                                                                                                                                
Section 15  streamlines the meaning  of "last known  address" and                                                               
Section 16 deals with gift  certificates. As per the Uniform Act,                                                               
they are changing the reporting  period to three years instead of                                                               
five, but they are expanding  the definition of gift certificates                                                               
to include electronic gift cards as well.                                                                                       
                                                                                                                                
CHAIR GARY  STEVENS announced that  he intended to move  the bill                                                               
from committee,  but there wasn't  a quorum. The bill  would move                                                               
as soon as a quorum was reestablished.                                                                                          
        SB 231-DECREASE TIME TO CLAIM UNCLAIMED PROPERTY                                                                    
                                                                                                                                
CHAIR GARY  STEVENS noted  there was  a new  fiscal note  on CSSB
231(STA) then asked for a motion.                                                                                               
                                                                                                                                
SENATOR  COWDERY  made a  motion  to  report CSSB  231(STA)  from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
notes. There being no objection, it was so ordered.                                                                             

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