Senate Bill 390 would repeal the Michigan Code of Escheats and create the "Uniform Unclaimed Property Act" to specify the conditions under which property would be considered abandoned; create a general presumption of abandonment of unclaimed property after five years; provide for public notice of abandoned property; provide for the disposition, sale, reclaiming, and reimbursement for sale of abandoned property; make the State Treasurer the successor to the State Board of Escheats and specify his or her powers concerning abandoned property; and specify penalties for violations of the bill.

Senate Bill 391 would amend the Executive Organization Act to repeal, effective January 1, 1994, provisions that transferred the State Board of Escheats to the Department of Treasury.

Senate Bill 392 would amend Public Act 90 of 1951, which regulates racing meets, to replace references to the State Board of Escheats, the Michigan Code of Escheats, and Public Act 63 of 1949 (which pertains to unclaimed personal property) with references to the State Treasurer and the Uniform Unclaimed Property Act.

Senate Bill 393 would amend Public Act 238 of 1957, which provides for the sale or disposition of abandoned property in the custody of the State, to replace references to the Code of Escheats with references to the Uniform Unclaimed Property Act.

Senate Bill 394 would amend Public Act 194 of 1947, which provides for the administration of the estates of deceased persons in certain

cases, to replace references to the State Board of Escheats with references to the State Treasurer.

Senate Bill 395 would amend the credit union Act to replace references to Public Act 63 of 1949 with references to the Uniform Unclaimed Property Act.

Senate Bill 396 would amend the Nonprofit Health Care Corporation Reform Act to replace references to the Code of Escheats with references to the Uniform Unclaimed Property Act.

Except for Senate Bill 391, the bills would take effect January 1, 1996.

Senate Bills 391 through 396 are tie-barred to Senate Bill 390, which is described in detail below.

General Abandonment Conditions

The bill provides generally that all property, whether tangible or intangible, including any income or increment derived from the property, less any lawful charges, that was held, issued, or owing in the ordinary course of a holder's business and remained unclaimed by the owner for more than five years after it became payable or distributable would be presumed abandoned. "Holder" would mean a trustee or a person who possessed property belonging to another or was indebted to another on an obligation. The property would be payable or distributable for the purpose of the bill, in spite of the owner's failure to make demand or to present any instrument or document required to receive payment.

Unless otherwise provided, the property would be subject to the custody of the State as unclaimed property if the conditions raising a presumption of

abandonment were satisfied and one or more of the following requirements were met:

-- The last known address of the apparent owner, as shown on the records of the holder, was in this State.

-- The holder's records did not reflect the identity of the person entitled to the property and it was established that the last known address of the person entitled to the property was in Michigan.

-- The holder's records did not reflect the last known address of the apparent owner and either the last known address of the person entitled to the property was in Michigan or it was established that the holder was domiciled in Michigan or was a government or governmental subdivision or agency of Michigan and had not previously paid or delivered the property to the state of the last known address of the apparent owner or the person entitled to the property.

-- The last known address of the apparent owner was in a state that did not provide by law for the escheat or custodial taking of the property, or its escheat or unclaimed property law was not applicable to the property and the holder was domiciled in this State or was a government or governmental subdivision or agency of this State.

-- The last known address of the apparent owner was in a foreign nation and the holder was domiciled in this State or was a government or governmental subdivision or agency of this State.

-- The transaction out of which the property arose occurred in this State, and either the last known address of the apparent owner or person entitled to the property was unknown or was in a state that did not provide by law for the escheat or custodial taking of the property or its escheat or unclaimed property law was inapplicable; or the holder was domiciled in such a state.

The bill would not apply to any property held, due, and owing in a foreign country and arising out of a foreign transaction.

The bill would not apply to unclaimed, lost, or abandoned property, if the loss, abandonment, or failure to claim the property were the subject of another statute of this State specifying to whom ownership of the property would devolve.

The bill would have to be applied and construed as to effectuate its general purpose to make uniform the law with respect to the subject of the bill among states enacting it.

Travelers Checks and Money Orders

The bill specifies that any sum payable on a travelers check that was outstanding for more than 15 years after its issuance and any sum payable on a money order or similar written instrument, other than a third party bank check, that was outstanding for more than seven years after its issuance would be presumed abandoned unless the owner, within that time, communicated in writing with the issuer concerning the check or otherwise indicated an interest as evidenced by a memorandum or other record on file prepared by an employee of the issuer.

A holder could not deduct from the amount of a travelers check or money order any charge imposed by reason of the failure to present the instrument for payment unless there was an enforceable written contract between the issuer and the owner of the instrument under which the issuer could impose a charge and the issuer regularly imposed such charges and did not regularly reverse or otherwise cancel them.

A sum payable on a travelers check, money order, or similar written instrument, other than a third party bank check, could not be subjected to the custody of the State as unclaimed property unless one or more of the following requirement were met:

-- The travelers check, money order, or similar written instrument was purchased in this State.

-- The issuer had its principal place of business in this State and its records did not show the state in which the travelers check, money order, or similar written instrument was purchased.

-- The issuer had its principal place of business in this State, its records showed the state in which the instrument was purchased, and either the laws of the state of purchase did not provide for the escheat or custodial taking of the property or its escheat or unclaimed property law was not applicable to the property.

These provisions would apply to sums payable on travelers checks, moneyorders, and similar written

instruments presumed abandoned on or after February 1, 1965, except to the extent that those sums had been paid over to a state prior to January 1, 1974.

Checks and Drafts

Any sum payable on a check, draft, or similar instrument on which a banking or financial organization was directly liable, including a cashier's check and a certified check, which was outstanding for more than five years after it was payable or after its issuance if payable on demand, would be presumed abandoned, unless the owner, with the five years, had communicated in writing with the organization or otherwise indicated an interest.

The holder could not impose any charge for failure to present the instrument for payment unless there was an enforceable written contract under which the holder could impose a charge, and the holder regularly imposed such charges.

Demand, Savings, Time Deposits

Any demand, savings, or matured time deposit, including interest and dividends with a banking or financial organization, including a deposit that was automatically renewable, and any funds paid toward the purchase of a share, a mutual investment certificate, or any other interest in a banking or financial organization would be presumed abandoned unless the owner, within five years, met one or more of the following requirements:

-- Increased or decreased the deposit or presented the passbook or other similar evidence of the deposit for the crediting of interest.

-- Communicated, in writing, with the banking or financial organization concerning the property that would include interest and dividends.

-- Otherwise indicated an interest in the property.

-- Owned other property to which the previous three requirements applied and unless the banking or financial organization communicated in writing with the owner with regard to the property, that would otherwise be presumed abandoned at the address to which communications regarding the other property regularly were sent.

-- Had another relationship with the banking or financial organization concerning which the owner communicated, in writing, with

the organization or otherwise indicated an interest.

A holder could not impose any charge due to dormancy or inactivity or cease payment of interest unless certain conditions specified in the bill were met.

Any property that was automatically renewable would mature 15 years after the expiration of its initial time period, unless otherwise provided. If, at the time provided for delivery to the State Treasurer, a penalty or forfeiture in the payment of interest would result from the delivery of the property, the time for delivery would be extended until no penalty or forfeiture would result.

An account established pursuant to the Michigan Uniform Gifts To Minors Act, or an "in trust for" account would be presumed abandoned 15 years after the owner or the person entitled to the funds last communicated in writing with the banking or financial organization concerning the funds or otherwise indicated an interest by a memorandum or other record on file.

Life Insurance/Annuities

The bill specifies that any funds held or owing under a life or endowment insurance policy or annuity contract that had matured or terminated would be presumed abandoned if they had not been claimed for five years after they became due and payable according to the records of the insurer holding or owing the funds.

If a person other than the insured or annuitant were entitled to the funds and the person's address were not known to the insurer or it were not definite and certain from the insurer's records who was entitled to the funds, it would be presumed that the last known address of the person entitled to the funds was the same as the last known address of the insured or annuitant according to the records.

A life or endowment insurance policy or annuity contract not matured by actual proof of the death of the insured or annuitant according to the insurer's records would be matured and the proceeds due and payable if certain conditions specified in the bill were met.

The application of an automatic premium loan provision or other nonforfeiture provision contained in an insurance policy would not prevent a policy from being matured or terminated if the insured died or he or she or the beneficiary of the policy otherwise became entitled to the proceeds of the

policy before the depletion of the cash surrender value of the policy by the application of that provision.

If the laws of this State or the terms of the life insurance policy required the insurer to give notice to the insured or owner that an automatic premium loan provision or other nonforfeiture provision had been exercised and the notice was undeliverable, the insurer would have to make a reasonable search to ascertain the policyholder's correct address to which the notice would have to be mailed.

In spite of any other provision of law, if the insurer learned of the death of the insured or annuitant and the beneficiaryhad not communicated with the insurer within four months after the death, the insurer would have to take reasonable steps to pay the proceeds to the beneficiary.

Within two years of the bill's effective date, every change of beneficiary form, issued by an insurer under a life or endowment policy or annuity contract to an insured or owner who was a resident of Michigan, would have to request the relationship of each beneficiary to the insured; the address of each beneficiary; and the name of each beneficiary or, if a class of beneficiaries were named, the name of each current beneficiary.

Prepaid Funeral Contract Funds

Funds held by a provider under the Prepaid Funeral Contract Funding Act that remained unclaimed for five years after the death of the contract beneficiary or, if no contract beneficiary were designated, five years after the death of the owner of the prepaid funeral contract would be presumed abandoned.

Funds held pursuant to Public Act 70 of 1954, which pertains to agreements for the disposition of dead human bodies, would be presumed abandoned after 15 years unless the owner or person entitled to the funds communicated in writing with the banking or financial organization concerning the funds or otherwise indicated an interest by a memorandum or other record.

Utility Deposits

A deposit, including interest, made by a subscriber with a utility to secure payment or any sum paid in advance for utility services to be furnished, less any lawful deductions, that remained unclaimed by the owner for more than one year after termination

of the services for which the deposit or advance payment was made would be presumed abandoned.

Business Associations--Refunds and Stock Ownership

Except to the extent otherwise ordered by the court or administrative agency, any sum that a business association was ordered to refund by the court or agency that remained unclaimed by the owner for more than one year after it became payable in accordance with the final determination or order providing for the refund, whether or not the final determination or order required any person entitled to a refund to claim it, would be presumed abandoned.

In addition, any stock or other intangible ownership interest in a business association, whose existence was evidenced by records available to the association, would be presumed abandoned and, with respect to the interest, the business association would be the holder, if a dividend, distribution, or other sum payable as a result of the interest remained unclaimed by the owner for seven years and the owner within seven years had not communicated in writing with the business association regarding the interest or a dividend, distribution, or other sum payable as a result of the interest.

The interest would not be presumed abandoned unless during the seven-year period there had been at least seven dividends, distributions, or other sums paid during the period, none of which was claimed by the owner.

At the time an interest was presumed abandoned any dividend, distribution, or other sum then held for or owing to the owner as a result of the interest, and not previously presumed abandoned, would be presumed abandoned.

The bill would not apply to any stock or other intangible ownership interest enrolled in a plan that provided for the automatic reinvestment of dividends, distributions, or other sums payable as a result of the interest unless the records available to the administrator of the plan showed, with respect to any intangible ownership interest not enrolled in the reinvestment plan, that the owner had not, within 15 years, communicated in any manner.

Property distributable in the course of a dissolution of a business association that remained unclaimed

by the owner for more than one year after the date specified for final distribution would be presumed abandoned.

IRAs and Fiduciary Trusts

Property and any income or increment derived from the property or income held in a fiduciary capacity for the benefit of another person would be presumed abandoned unless the owner, within five years after it became payable or distributable, increased or decreased the principal, accepted payment of principal or income, communicated concerning the property, or otherwise indicated an interest by a memorandum or other record on file prepared by the fiduciary. Funds in an individual retirement account, however, or a qualified retirement plan for self-employed individuals or similar account or qualified plan established under the Internal Revenue Code would not be payable or distributable unless, under the terms of the account or qualified plan, distribution of all or part of the funds would then be mandatory.

For purposes of these provisions, a person who held property as an agent for a business association would be deemed to hold the property in a fiduciary capacity for that business association alone, unless the agreement between him or her and the business association provided otherwise. For purposes of the bill, a person who was deemed to hold property in a fiduciary capacity for a business association alone would be the holder of the property only to the extent that the interest of the business association in the property was concerned, and the business association would be the holder of the property to the extent that the interest of any other person in the property was concerned.

Property Held by the Court or Government

Property held for the owner by a court, state, or other government, governmental subdivision or agency, public corporation, or public authority that remained unclaimed by the owner for more than one year after becoming payable or distributable would be presumed abandoned.

Gift Certificates

A gift certificate or a credit memo issued in the ordinary course of an issuer's business that remained unclaimed by the owner for more than five years after becoming payable or distributable would be presumed abandoned. The amount presumed abandoned would be the price paid by

the purchaser for the gift certificate or the amount credited to the recipient of the memo.

Unpaid Wages

Unpaid wages, including wages represented by unpresented payroll checks, owing in the ordinary course of the holder's business that remained unclaimed by the owner for more than one year after becoming payable would be presumed abandoned.

Safe Deposit Box Contents

All property held in a safe deposit box or any other safekeeping repository in this State in the ordinary course of the holder's business and proceeds resulting from the sale of the property permitted by law, that remained unclaimed by the owner for more than five years after the lease or rental period on the box or other repository had expired, would be presumed abandoned.

Reporting Requirements

A person holding property presumed abandoned and subject to the State's custody as unclaimed property would have to report annually to the State Treasurer the name, Social Security number, and last known address of each owner of property with a value of $50 or more, excluding travelers checks and money orders, presumed to be abandoned; the name of an insured or annuitant or beneficiary of an abandoned insurance policy or annuity contract if the unclaimed funds equaled $50 or more; in the case of the contents of a safe deposit box or safekeeping repository, or of other tangible property, a description of the property and the place where it was held and could be inspected by the administrator, and any amounts owed to the holder; the nature and identifying number, if any, or description of the property and the amount that appeared due (although items valued under $50 could be reported in the aggregate); the date the property became payable or returnable, and the date of the last transaction with the apparent owner; and other information the State Treasurer required by rule as necessary for the administration of the bill.

In addition, if the person holding property presumed abandoned and subject to the State's custody as unclaimed property were a successor to other persons who previously held the property for the apparent owner, or the holder changed its name while holding the property, the holder would

have to file with the report all known names and addresses of each previous holder of the property.

The report would have to be filed before November 1, each year for the 12-month period ending on the preceding June 30; however, the administrator could postpone the date to file the report upon the written request of a person required to file a report.

Notice of Abandoned Property

Not more than 120 days before filing a report the holder of abandoned property would have to send to the apparent owner written notice that the holder was in possession of abandoned property if the holder had an address for the apparent owner that the holder's records did not disclose to be inaccurate, the claim of the apparent owner were not barred by the statute of limitations, and the property had a value of $50 or more.

Prior to June 2 of the year following receipt of a report, the State Treasurer would have to publish a notice, at least once a week for two consecutive weeks in a newspaper of general circulation in the county in which was located the last known address of a person named in the notice. If no address were listed, or the address were outside the State, the notice would have to be published in the county in which the holder of the property had its principal place of business in Michigan. The notice would not have to list any items of less than

$50 unless the State Treasurer considered their publication to be in the public interest; further, the notice requirement would not apply to travelers checks, moneyorders, or other written instruments presumed to be abandoned. The notice would have to contain the following: the names (in alphabetical order) and last known address, if any, of persons listed in the report and entitled to notice; a statement that information on the property could be obtained by any person possessing an interest in the property, by addressing an inquiry to the State Treasurer; and a statement informing an owner of property held by the State Treasurer on how to file a claim.

The initial report filed under the bill for property that was not required to be reported before the effective date of the bill but that would be subject to the bill would have to include all items of property that would have been presumed abandoned during the 10-year period preceding the effective date of the bill as if the bill had been in effect during that period.

Payment or Delivery of Abandoned Property

A person who was required to file a report would have to pay or deliver to the State Treasurer at the time for filing, all abandoned property required to be reported.

The Treasurer would be allowed to decline to receive property that he or she considered to have a value less than the expense of giving notice and of public sale. If the Treasurer declined to receive the property, he or she would have to authorize the holder to destroy or otherwise dispose of it at any time the holder chose. Further, if the Treasurer determined that any property delivered had insubstantial commercial value, he or she could destroy or otherwise dispose of the property at any time. An action or proceeding could not be maintained against a holder for or on account of any action taken by the holder in destroying or otherwise disposing of the property pursuant to the authorization of the Treasurer, or against the State or any officer or the holder for or on account of any action taken by the Treasurer under these provisions.

A holder could report and deliver property to the State Treasurer before the property was presumed abandoned if the owner failed to exercise dominion or control, assert a right of ownership or possession, make presentment or demand payment, or do any other act in relation to or concerning that property for a period of two years. The property would have to be held by the Treasurer and would be presumed abandoned; the property would have to be sold to the highest bidder three years after receipt.

Custody and Liability

The holder of stock or other intangible interest in a business association would have to deliver a duplicate certificate or other evidence of ownership if he or she did not issue certificates of ownership to the State Treasurer. Upon delivery of a duplicate certificate to the State Treasurer, the holder and any transfer agent, registrar, or other person acting for or on behalf of a holder in executing or delivering the duplicate certificate would be relieved of all liability of every kind to every person, including any person acquiring the original certificate or the duplicate of the certificate issued to the State Treasurer, for any losses or damages resulting to any person by the issuance and delivery of the duplicate certificate.

Upon the payment or delivery of property to the State Treasurer, the State would assume custody and responsibility for the safekeeping of the property. A person who paid or delivered property to the State Treasurer in good faith would be relieved of all liability to the extent of the value of the property paid or delivered for any claim then existing or that could arise or be made in respect to the property after the payment or delivery. Further, if the holder paid or delivered property to the State Treasurer in good faith and another person claimed the property from the holder or another state claimed the money or property under its laws relating to escheat or abandoned or unclaimed property, the Treasurer, upon written notice of the claim, would have to defend the holder against the claim and indemnify the holder against any liability on the claim.

If property other than money were paid or delivered to the State Treasurer, the owner would be entitled to receive any dividends, interest, or other increments realized or accruing on the property at or before liquidation or conversion of the property into money.

The expiration, before or after the effective date of the bill, of any period of time specified by contract, statute, or court order, during which a claim for money or property could be made or during which an action or proceeding could be commenced or enforced to obtain payment of a claim for money or to recover property, would not prevent the money or property from being presumed abandoned or affect any duty to file a report or to pay or deliver abandoned property to the Treasurer as required.

Reimbursement/Reclaim Property

A holder who paid money to the State Treasurer could make payment to any person appearing to the holder to be entitled to payment and, upon the filing of proof of payment and proof that the payee was entitled to the payment, the State Treasurer would have to reimburse promptly the holder for the payment without imposing any fee or other charge. If reimbursement were sought for a payment made on a negotiable instrument, including a travelers check or money order, the holder would have to be reimbursed upon filing proof that the instrument was duly presented and that payment was made to a person who appeared to the holder to be entitled to payment. The holder would have to be reimbursed even if the payment were made to a person whose claim was barred under the bill.

A holder who delivered property, including a certificate of interest in a business association, other than money, to the State Treasurer, could reclaim the property if it were still in the possession of the Treasurer, without paying any fee or other charge, upon filing proof that the owner had claimed the property from the holder.

Property removed from a safe deposit box or other safekeeping repository would be received by the State Treasurer subject to the holder's right to be reimbursed for the actual cost of the opening and to any valid lien or contract providing for the holder to be reimbursed for unpaid rent or storage charges. The Treasurer would have to reimburse or pay the holder out of the proceeds remaining after deducting the Treasurer's selling cost.

Sale of Abandoned Property

Generally, within three years after receiving abandoned property, the State Treasurer would be required to sell it to the highest bidder at public sale in whatever city in the State, in his or her judgment, afforded the most favorable market for the property involved. The Treasurer could decline the highest bid and reoffer the property for sale if he or she judged the bid to be insufficient. If the probable cost of sale exceeded the value of the property, the property would not have to be offered for sale. Notice of the impending sale would have to be published at least three weeks in advance in a newspaper of general circulation in the county in which the property was to be sold.

Securities listed on an established stock exchange would have to be sold at prices prevailing at the time of sale on the exchange. Securities not listed on an established stock exchange could be sold over the counter at prices prevailing at the time of sale or by any other method the Treasurer considered advisable. Unless the Treasurer considered it to be in the best interest of the State to do otherwise, all securities, other than stock and other intangible interests in a business association that were presumed abandoned, that were delivered to the Treasurer would have to be held for at least one year before they could be sold. All stock and other intangible interests in a business association that were presumed abandoned and delivered to the Treasurer would have to be held for at least three years before being sold, unless the Treasurer considered it to be in the best interest of the State to do otherwise. If the Treasurer sold any of the securities before the

three-year period expired, any person making a claim before the end of the period would be entitled to either the proceeds of the sale of the securities or the market value of the securities at the time the claim was made, whichever amount was greater, less any necessary deductions. A person making a claim after the period expired would be entitled to receive either the securities delivered to the Treasurer by the holder, if they were still in the hands of the Treasurer, or the proceeds received from the sale, less any necessary deductions. No person, however, would have any claim against the State, the holder, any transfer agent, registrar, or other person acting for or on behalf of a holder for any appreciation in the value of the property occurring after delivery by the holder to the Treasurer.

The purchaser of property at any sale conducted by the Treasurer would take the property free of all claims of the owner or previous holder of the property and of all persons claiming through or under the owner or previous holder.

Sale Proceeds/General Fund

The bill would require the Treasurer to deposit promptly in the General Fund all funds received under the bill, including the proceeds from the sale of abandoned property. The Treasurer would have to retain in a separate trust fund at least $100,000 from which prompt payment of claims allowed under the bill would have to be made. When making the deposit, the Treasurer would have to record the name and last known address of each person appearing from the holders' reports to be entitled to the property and the name and last known address of each insured person or annuitant and beneficiary and with respect to each policy or contract listed in the report of an insurer the number of the policy or contract, the name of the insurer and the amount due. The owner's or apparent owner's name and a gross description of the property only would have to be available for public inspection at all reasonable business hours.

Before making any deposit to the credit of the General Fund, the Treasurer could deduct administrative costs.

Senior Care Respite Fund

As is currently provided under the Older Michiganians Act, the bill would require the State Treasurer to transfer to the Senior Care Respite Fund funds that escheated to the State pursuant to Section 403a of the Nonprofit Health Care

Corporation Reform Act. Section 403a of that Act provides that payments by a health care corporation to a subscriber or provider by check or other written instrument, that is not cashed within the period before it is considered abandoned, escheat to the State.

Property Claims

A person, excluding another state, claiming an interest in any property paid or delivered to the Treasurer would be allowed to file a claim. The Treasurer would have to consider each claim within 90 days after it was filed and give written notice to the claimant if the claim were denied in whole or in part. No notice of denial would have to be given if the claim failed to state either the last address to which notices were to be sent or the address of the claimant.

If a claim were allowed, the Treasurer would have to pay over or deliver to the claimant the property or the amount the Treasurer actually received, or the net proceeds if it were sold by the Treasurer, plus any additional dividends, interest, or increments required. If the claim were for stocks or business ownership interests presumed abandoned that were sold within three years after the date of delivery, the amount payable for the claim would be the value of the property at the time the claim was made or the net proceeds of sale, whichever was greater. If the property claimed were interest-bearing to the owner on the date of surrender by the holder, the Treasurer also would have to pay 6% annual interest or any lesser rate the property earned while in the possession of the holder. No interest on interest-bearing property would be payable for any period before the effective date of the bill. Any holder who paid the owner for property that had been delivered to the State and that, if claimed from the Treasurer, would be subject to the interest provisions would have to add interest, but the interest would be repaid to the holder by the Treasurer in the same manner as the principal.

Recovery of Property by Another State

At any time after property was paid or delivered to the Treasurer, another state could recover it if certain requirements specified in the bill were met, and under the laws of that state the property had escheated to or become subject to a claim of abandonment by that state.

The State Treasurer would have to decide the claim within 90 days after it was presented and

specifically would have to allow the claim if it were determined that the other state was entitled to the property. Before recovering property, the other state would have to agree to indemnify Michigan and its officers and employees against any liability on a claim for the property.

Grievance Procedures

A person who was aggrieved by a decision of the Treasurer or whose claim was not acted upon within 90 days after its filing could sue to establish the claim in the circuit court, naming the Treasurer as a defendant. The action would have to be brought within 90 days after the decision of the Treasurer or within 180 days after the filing of the claim if the Treasurer failed to act on it. If the aggrieved person established the claim in a suit, the court would have to award the claimant costs and reasonable attorney's fees.

Examinations

The Treasurer could require a person who had not filed a report under the bill to file a verified report stating whether the person was holding any unclaimed property reportable or deliverable under the bill. Further, the Treasurer could examine the records of a person to determine whether he or she had complied with the bill. The examination could be conducted even if the person believed he or she did not possess any property reportable or deliverable.

If an examination resulted in the disclosure of property reportable and deliverable, the Treasurer could assess the cost of the examination against the holder at the rate of $50 a day for each examiner; however, the charges could not exceed the value of the property found to be reportable and deliverable.

If a holder failed to maintain the required records and the available records were insufficient to permit the preparation of a report, the Treasurer could require the holder to report and pay an amount as could reasonably be estimated from any available records. A holder required to file a report would have to maintain a record of the name and last known address of the owner for 10 years after the property became reportable.

A business association that sold in this State its travelers checks, money orders, or other similar written instruments, other than third-party banks checks on which the business association was directly liable, or that provided those instruments to

others for sale in this State, would have to maintain a record of those instruments while they remained outstanding, indicating the state and date of issue for three years after the date the property was reportable.

Powers of the Treasurer The State Treasurer could:

-- Bring an action in a court of competent jurisdiction to enforce the bill.

-- Enter into an agreement with another state to exchange information needed to enable this or another state to audit or otherwise determine unclaimed property that this State or another state could be entitled to subject to a claim of custody.

-- Join with other states to seek enforcement of the bill against a person who was or could be holding property reportable under the bill.

-- Request that the attorney general of another state or any other person bring an action in the name of the Treasurer in the other state.

At the request of another state, the Attorney General of this State could bring an action in the name of the treasurer of the other state in a court of competent jurisdiction to enforce the unclaimed property laws of the other state against a holder in this State of property subject to escheat or a claim of abandonment by the other state, if the other state agreed to pay expenses incurred by the Attorney General in bringing the action.

Penalties

A person who failed to pay or deliver property within the time prescribed by the bill would have to pay to the Treasurer interest at the monthly rate of one percentage point above the adjusted prime rate per annum per month on the property or value of the property from the date the property should have been paid or delivered.

Willful failure to render any report or perform other duties required under the bill would result in a civil penalty of $100 for each day the report was withheld or the duty was not performed, up to

$5,000. Willful failure to pay or deliver property to the Treasurer would result in a civil penalty equal to 25% of the value of the property that should have been paid or delivered. Willful refusal after written demand by the Treasurer to pay or deliver property as required would constitute a

misdemeanor punishable by a fine of at least

$500, but not more than $25,000, imprisonment for up to six months, or both.

The Treasurer, however, could waive interest and civil fines imposed.

An agreement to pay compensation to recover or assist in the recovery of property reported as abandoned made within 24 months after the date payment or delivery was made to the Treasurer would be unenforceable.

The bill would not relieve a holder of a duty that arose before the effective date of the bill to report, pay, or deliver property. A holder who did not comply with the law in effect before the effective date of the bill would be subject to the applicable enforcement and penalty provisions that existed and they would continue in effect for the purpose of this provision. An action or proceeding could not be commenced by the Treasurer with respect to any duty of a holder under the bill more than 10 years after the duty arose.

MCL 16.178 (S.B. 391)

MCL 431.255 and 431.256 (S.B. 392)

MCL 434.152 (S.B. 393)

MCL 720.218 (S.B. 394) MCL 490.5a (S.B. 395) MCL 550.1403a (S.B. 396)

Legislative Analyst: G. Towne

S9596\S390SA

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.

FISCAL IMPACT

These bills would have minimal fiscal impact on State and local governments. By more efficiently handling abandoned or unclaimed property, costs would be reduced. These bills would reduce State payments, by an annual amount of approximately

$900,000, to counties and to probate courts, which would no longer be involved with escheat lawsuits. By eliminating the local unit s responsibilities with abandoned or unclaimed property, the bills would require the Department of Treasury to take on those duties and incur minimal costs.

Minor changes in the amount of time certain categories of property are considered abandoned and escheated to the State would have minimal impact on the escheat revenue. Many entities affected by escheat laws presently follow the smaller time periods these bills would implement.

Fiscal Analyst: R. Ross

SUMMARY OF SENATE BILLS 390 through 396 as introduced 3-15-95:

FISCAL IMPACT