Uniform Unclaimed Property Act
July 9, 1997, Richmond
Representatives from the House Corporations, Insurance, and Banking committee and the Senate Commerce and Labor committee met jointly to consider the 1995 Uniform Unclaimed Property Act, which was approved by the National Conference of Commissioners on Uniform State Laws. This organization studies and reviews the laws of the states, drafting and proposing specific statutes in areas of the law where uniformity between the states is desirable. The conference drafts and proposes uniform laws, which become effective when adopted by a state legislature. Maine, New Mexico, West Virginia, and Montana have all enacted the Uniform Act.
Current Virginia Law
The director of the Division of Unclaimed Property presented an overview of how Virginia's present laws address unclaimed property. Virginia's Uniform Disposition of Unclaimed Property Act sets up a system for transferring intangible personal property and personal property in safe deposit accounts held by an entity or person other than the rightful owner to the Commonwealth upon abandonment. The types of property covered under the act include savings accounts, checking accounts, payroll checks, utility deposits, life insurance policy proceeds, refunds, unredeemed gift certificates, credit memos, credit balances, vendor payments, stocks, dividends, bonds, outstanding state warrants and safe deposit box contents.
The act protects the property rights of the absentee owner until he is reunited with his property. However, the Department of Treasury does convert tangible property to cash and liquidate stocks, bonds, and mutual funds. The Commonwealth holds the cash proceeds from such sales for the rightful owner in perpetuity. The Literary Fund receives use of the cash proceeds until the return of the proceeds to the owner.
A holder (the person who is in possession of the property belonging to another) is relieved of potential liability once the division receives the property. The act requires holders to report unclaimed property to the division. The act specifies various holding periods for property, and the holder is responsible for making one final attempt to contact the owner before turning the property over to the division.
After the division receives the property, it makes further attempts to locate the rightful owner and return the property. The division arranges for publication of an advertisement in a newspaper circulated at the owner's last known address. The division places all owners of property valued at more than $50 on a database and arranges for annual publication of this database in a newspaper circulated at the owner's last known address. The division also provides lists to members of the General Assembly and has displays at local county fairs, festivals, and inside shopping malls. Virginia, through reciprocity agreements, shares information about unclaimed property with other states.
The dollar value of the unclaimed property managed by the division is significant. In fiscal year 1997, the division returned over $8.4 million to over 11,100 rightful owners. Additionally, the Literary Fund received, after deductions for operating expenses of the division, over $43.2 million.
In addition to the presentation from the director, a representative from the Attorney General's office provided analysis of the Uniform Act. The main difference between Virginia's current law and the Uniform Act is the organization and numbering scheme. However, the director explained that the large number of holders who must report to multiple states justifies adopting the Uniform Act.
The Uniform Act does contain, unlike Virginia's act, provisions dealing with mineral rights and allows for the use of other forms of technology when attempting to contact owners of unclaimed property, including the use of electronic mail.
In preparation for a second meeting in September, the subcommittee directed staff to draft the Uniform Act in a bill format, along with any recommended or necessary changes. Interested parties will receive copies of the draft prior to the next meeting and be given the opportunity to comment on the Uniform Act in detail at the next meeting.
The Honorable Gladys B. Keating, Chair
Legislative Services contact: Rob Omberg