Bill Text: MI HB6067 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: State; escheats; period of years after which unclaimed property escheats to the state; modify. Amends secs. 3, 5, 6, 7, 8, 8a, 13, 15, 17 & 18 of 1995 PA 29 (MCL 567.223 et seq.).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2012-12-04 - Printed Bill Filed 11/30/2012 [HB6067 Detail]

Download: Michigan-2011-HB6067-Introduced.html

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HOUSE BILL No. 6067

 

November 29, 2012, Introduced by Rep. McMillin and referred to the Committee on Commerce.

 

     A bill to amend 1995 PA 29, entitled

 

"Uniform unclaimed property act,"

 

by amending sections 3, 5, 6, 7, 8, 8a, 13, 15, 17, and 18 (MCL

 

567.223, 567.225, 567.226, 567.227, 567.228, 567.228a, 567.233,

 

567.235, 567.237, and 567.238), as amended by 2010 PA 197.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. (1) Except as otherwise provided by this act, all

 

property, including any income or increment derived from the

 

property, less any lawful charges, that is held, issued, or owing

 

in the ordinary course of a holder's business and remains unclaimed

 

by the owner for more than 3 5 years after it becomes payable or

 

distributable is presumed abandoned.

 

     (2) Property is payable or distributable for the purpose of

 

this act, notwithstanding the owner's failure to make demand or to

 

present any instrument or document required to receive payment.

 

     Sec. 5. (1) Subject to subsection (4), any sum payable on a

 

travelers check that is outstanding for more than 15 years after

 

its issuance is presumed abandoned unless the owner, within 15

 

years, has communicated in writing with the issuer concerning it or

 

otherwise indicated an interest as evidenced by a memorandum or

 

other record on file prepared by an employee of the issuer.

 

     (2) Subject to subsection (4), any sum payable on a money

 

order or similar written instrument, other than a third party bank

 

check, that is outstanding for more than 3 7 years after its

 

issuance is presumed abandoned unless the owner, within 3 7 years,

 

has communicated in writing with the issuer concerning it or

 

otherwise indicated an interest as evidenced by a memorandum or

 

other record on file prepared by an employee of the issuer.

 

     (3) A holder may 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 is an enforceable

 

written contract between the issuer and the owner of the instrument

 

under which the issuer may impose a charge and the issuer regularly

 

imposes such charges and does not regularly reverse or otherwise

 

cancel them.

 

     (4) A sum payable on a travelers check, money order, or

 

similar written instrument, other than a third party bank check,

 

described in subsections (1) and (2) may not be subjected to the

 

custody of this state as unclaimed property unless 1 or more of the

 

following requirements are met:

 

     (a) The records of the issuer show that the travelers check,

 

money order, or similar written instrument was purchased in this

 

state.

 

     (b) The issuer has its principal place of business in this

 

state and the records of the issuer do not show the state in which

 

the travelers check, money order, or similar written instrument was

 

purchased.

 

     (c) The issuer has its principal place of business in this

 

state, the records of the issuer show the state in which the

 

travelers check, money order, or similar written instrument was

 

purchased and the laws of the state of purchase do not provide for

 

the escheat or custodial taking of the property or its escheat or

 

unclaimed property law is not applicable to the property.

 

     (5) Notwithstanding any other provision of this act,

 

subsection (4) applies to sums payable on travelers checks, money

 

orders, and similar written instruments presumed abandoned on or

 

after February 1, 1965, except to the extent that those sums have

 

been paid over to a state prior to January 1, 1974.

 

     Sec. 6. (1) Any sum payable on a check, draft, or similar

 

instrument, except those subject to section 5, on which a banking

 

or financial organization is directly liable, including a cashier's

 

check and a certified check, which is outstanding for more than 3 5

 

years after it was payable or after its issuance if payable on

 

demand, is presumed abandoned, unless the owner, within 3 5 years,

 

has communicated in writing with the banking or financial

 

organization concerning it or otherwise indicated an interest as

 

evidenced by a memorandum or other record on file prepared by an

 

employee of the banking or financial organization.

 

     (2) A holder may not deduct from the amount of any instrument

 

subject to this section any charge imposed by reason of the failure

 

to present the instrument for payment unless there is an

 

enforceable written contract between the holder and the owner of

 

the instrument under which the holder may impose a charge, and the

 

holder regularly imposes such charges and does not regularly

 

reverse or otherwise cancel them.

 

     Sec. 7. (1) Any demand, savings, or matured time deposit with

 

a banking or financial organization, including a deposit that is

 

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 is presumed abandoned unless

 

the owner, within 3 5 years, has met 1 or more of the following

 

requirements:

 

     (a) In the case of a deposit, increased or decreased its

 

amount or presented the passbook or other similar evidence of the

 

deposit for the crediting of interest.

 

     (b) Communicated, in writing, with the banking or financial

 

organization concerning the property.

 

     (c) Otherwise indicated an interest in the property as

 

evidenced by a memorandum or other record on file prepared by an

 

employee of the banking or financial organization.

 

     (d) Owned other property to which subdivision (a), (b), or (c)

 

applies and unless the banking or financial organization

 

communicates, in writing, with the owner with regard to the

 

property that would otherwise be presumed abandoned under this

 

subsection at the address to which communications regarding the

 

other property regularly are sent.

 

     (e) Had another relationship with the banking or financial

 

organization concerning which the owner has met 1 or more of the

 

following requirements:

 

     (i) Communicated, in writing, with the banking or financial

 

organization.

 

     (ii) Otherwise indicated an interest as evidenced by a

 

memorandum or other record on file prepared by an employee of the

 

banking or financial organization and unless the banking or

 

financial organization communicates in writing with the owner with

 

regard to the property that would otherwise be abandoned under this

 

subsection at the address to which communications regarding the

 

other relationship regularly are sent.

 

     (2) For purposes of subsection (1), property includes interest

 

and dividends.

 

     (3) A holder may not impose with respect to property described

 

in subsection (1) any charge due to dormancy or inactivity or cease

 

payment of interest unless all of the following requirements are

 

met:

 

     (a) There is an enforceable written contract between the

 

holder and the owner of the property providing that the holder may

 

impose a charge or cease payment of interest.

 

     (b) For the property of a value in excess of $2.00, the

 

holder, no more than 3 months before the initial imposition of

 

those charges or cessation of interest, has given written notice to

 

the owner of the amount of those charges at the last known address

 

of the owner stating that those charges will be imposed or that

 

interest will cease. However, the notice required in this

 

subdivision need not be given with respect to charges imposed or

 

interest ceased before March 28, 1996.

 

     (c) The holder regularly imposes such charges or ceases

 

payment of interest and does not regularly reverse or otherwise

 

cancel them or retroactively credit interest with respect to the

 

property.

 

     (4) Any property described in subsection (1) that is

 

automatically renewable is matured for purposes of subsection (1)

 

15 years after the expiration of its initial time period, but in

 

the case of any renewal to which the owner consents at or about the

 

time of renewal by communicating in writing with the banking or

 

financial organization or otherwise indicating consent as evidenced

 

by a memorandum or other record on file prepared by an employee of

 

the organization, the property is matured upon the expiration of

 

the last time period for which consent was given. If, at the time

 

provided for delivery to the administrator under section 20, a

 

penalty or forfeiture in the payment of interest would result from

 

the delivery of the property, the time for delivery is extended

 

until the time when no penalty or forfeiture would result.

 

     (5) The following types of accounts are presumed abandoned 3

 

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 as

 

evidenced by a memorandum or other record on file prepared by an

 

employee of the banking or financial organization:

 

     (a) An in trust for account described in section 2 of 1909 PA

 

248, MCL 487.702.

 

     (b) An account established pursuant to the Michigan uniform

 

gifts to minors act, 1959 PA 172, MCL 554.451 to 554.461.

 

     Sec. 8. (1) Funds held or owing under any life or endowment

 

insurance policy or annuity contract that has matured or terminated

 

are presumed abandoned if unclaimed for more than 3 5 years after

 

the funds became due and payable as established from the records of

 

the insurance company holding or owing the funds. However, property

 

described in subsection (3)(b) is presumed abandoned if unclaimed

 

for more than 2 years.

 

     (2) If a person other than the insured or annuitant is

 

entitled to the funds and an address of the person is not known to

 

the insurance company or it is not definite and certain from the

 

records of the insurance company who is entitled to the funds, it

 

is presumed that the last known address of the person entitled to

 

the funds is the same as the last known address of the insured or

 

annuitant according to the records of the insurance company.

 

     (3) For purposes of this act, 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 records of the

 

insurance company is matured and the proceeds due and payable if 1

 

or more of the following requirements are met:

 

     (a) The insurance company knows that the insured or annuitant

 

has died.

 

     (b) The insured has attained, or would have attained if he or

 

she were living, the limiting age under the mortality table on

 

which the reserve is based; the policy was in force at the time the

 

insured attained, or would have attained, the limiting age; and

 

neither the insured nor any other person appearing to have an

 

interest in the policy within the preceding 2 years, according to

 

the records of the insurance company, has assigned, readjusted, or

 

paid premiums on the policy, subjected the policy to a loan,

 

corresponded in writing with the insurance company concerning the

 

policy, or otherwise indicated an interest as evidenced by a

 

memorandum or other record on file prepared by an employee of the

 

insurance company.

 

     (4) For purposes of this act, the application of an automatic

 

premium loan provision or other nonforfeiture provision contained

 

in an insurance policy does not prevent a policy from being matured

 

or terminated under subsection (1) if the insured has died or the

 

insured or the beneficiary of the policy otherwise has become

 

entitled to the proceeds of the policy before the depletion of the

 

cash surrender value of the policy by the application of those

 

provisions.

 

     (5) If the laws of this state or the terms of the life

 

insurance policy require the insurance company to give notice to

 

the insured or owner that an automatic premium loan provision or

 

other nonforfeiture provision has been exercised and the notice,

 

given to an insured or owner whose last known address according to

 

the records of the insurance company is in this state, is

 

undeliverable, the insurance company shall make a reasonable search

 

to ascertain the policyholder's correct address to which the notice

 

must be mailed.

 

     (6) Notwithstanding any other provision of law, if the

 

insurance company learns of the death of the insured or annuitant

 

and the beneficiary has not communicated with the insurance company

 

within 4 months after the death of the insured or annuitant, the

 

insurance company shall take reasonable steps to pay the proceeds

 

to the beneficiary.

 

     (7) Commencing March 28, 1998, every change of beneficiary

 

form issued by an insurance company under any life or endowment

 

insurance policy or annuity contract to an insured or owner who is

 

a resident of this state must request all of the following

 

information:

 

     (a) The name of each beneficiary, or if a class of

 

beneficiaries is named, the name of each current beneficiary in the

 

class.

 

     (b) The address of each beneficiary.

 

     (c) The relationship of each beneficiary to the insured.

 

     Sec. 8a. (1) Funds held by a provider under the prepaid

 

funeral contract funding act, 1986 PA 255, MCL 328.211 to 328.235,

 

that remain unclaimed for a period of 3 5 years after the death of

 

the contract beneficiary or, if no contract beneficiary has been

 

designated under the prepaid funeral contract, 3 years after the

 

death of the owner of the prepaid funeral contract are presumed

 

abandoned.

 

     (2) Funds held pursuant to 1954 PA 70, MCL 328.201 to 328.204,

 

are presumed abandoned, after a period of 3 15 years, unless the

 

owner or person entitled to the funds has communicated in writing

 

with the banking or financial organization concerning the funds or

 

otherwise indicated in interest as evidenced by a memorandum or

 

other record on file prepared by an employee of the banking or

 

financial organization.

 

     Sec. 13. (1) Property and any income or increment derived

 

therefrom held in a fiduciary capacity for the benefit of another

 

person is presumed abandoned unless the owner, within 3 5 years

 

after it has become payable or distributable, has increased or

 

decreased the principal, accepted payment of principal or income,

 

communicated concerning the property, or otherwise indicated an

 

interest as evidenced by a memorandum or other record on file

 

prepared by the fiduciary.

 

     (2) Funds in an individual retirement account or a qualified

 

retirement plan for self-employed individuals or similar account or

 

qualified plan established under the internal revenue code are not

 

payable or distributable within the meaning of subsection (1)

 

unless, under the terms of the account or qualified plan,

 

distribution of all or part of the funds would then be mandatory.

 

     (3) For the purpose of this section, a person who holds

 

property as an agent for a business association is 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 provides otherwise.

 

     (4) For the purposes of this act, a person who is deemed to

 

hold property in a fiduciary capacity for a business association

 

alone is the holder of the property only insofar as the interest of

 

the business association in the property is concerned, and the

 

business association is the holder of the property insofar as the

 

interest of any other person in the property is concerned.

 

     Sec. 15. (1) Except as provided in subsection (4), a gift

 

certificate, gift card, or credit memo is presumed abandoned if

 

either of the following apply:

 

     (a) The certificate, card, or memo is not claimed or used for

 

a period of 3 5 years after becoming payable or distributable.

 

     (b) The certificate, card, or memo was used or claimed 1 or

 

more times without exhausting its full value, but subsequently was

 

not claimed or used for an uninterrupted period of 3 5 years.

 

     (2) For purposes of subsection (1), a gift certificate or gift

 

card is considered to have been claimed or used if there is any

 

transaction processing activity on the gift certificate or gift

 

card including, but not limited to, redeeming, refunding, or adding

 

value to the certificate or card. Activity initiated by the issuer

 

of the certificate or card, including, but not limited to,

 

assessing inactivity fees or similar service fees, does not

 

constitute transaction processing activity for purposes of this

 

subsection.

 

     (3) In the case of a gift certificate or gift card, the owner

 

is presumed to be a gift recipient of the gift certificate or gift

 

card, and the amount presumed abandoned is the price paid by the

 

purchaser for the gift certificate or gift card, less the total of

 

any purchases or fees assessed against the certificate or card. In

 

the case of a credit memo, the amount presumed abandoned is the

 

amount credited to the recipient of the memo.

 

     (4) This act does not apply to a gift certificate as defined

 

in section 3e of the Michigan consumer protection act, 1976 PA 331,

 

MCL 445.903e, that is issued for retail goods or services by a

 

person engaged in the retail sale of goods or services.

 

     Sec. 17. 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 remain unclaimed by the owner for

 

more than 3 5 years after the lease or rental period on the box or

 

other repository has expired, are presumed abandoned.

 

     Sec. 18. (1) A person holding property presumed abandoned and

 

subject to the state's custody as unclaimed property under this act

 

shall report to the administrator concerning the property as

 

provided in this section.

 

     (2) The report shall be verified and shall include all of the

 

following:

 

     (a) The name, if known, social security number, if known, and

 

last known address, if any, of each person appearing from the

 

records of the holder to be the owner of property of the value of

 

$50.00 or more presumed abandoned under this act. This subdivision

 

does not apply to travelers checks and money orders.

 

     (b) In the case of unclaimed funds of $50.00 or more held or

 

owing under any life or endowment insurance policy or annuity

 

contract, the full name and last known address of the insured or

 

annuitant and of the beneficiary according to the records of the

 

insurance company holding or owing the funds.

 

     (c) In the case of the contents of a safe deposit box or other

 

safekeeping repository or of other tangible property, a description

 

of the property and the place where it is held and may be inspected

 

by the administrator and any amounts owing to the holder.

 

     (d) The nature and identifying number, if any, or description

 

of the property and the amount appearing from the records to be

 

due. However, items of value under $50.00 each may be reported in

 

the aggregate.

 

     (e) The date the property became payable, demandable, or

 

returnable, and the date of the last transaction with the apparent

 

owner with respect to the property.

 

     (f) Other information the administrator requires by rule as

 

necessary for the administration of this act.

 

     (3) If the person holding property presumed abandoned and

 

subject to the state's custody as unclaimed property under this act

 

is a successor to other persons who previously held the property

 

for the apparent owner, or the holder has changed its name while

 

holding the property, the holder shall file with the report all

 

known names and addresses of each previous holder of the property.

 

     (4) Except as otherwise provided in this subsection, the

 

report shall be filed on or before November 1 of each year for the

 

12-month period ending on the immediately preceding June 30.

 

However, in 2011, the report shall be filed on or before July 1,

 

2011 for the 9-month period ending on March 31, 2011, and for years

 

ending after December 31, 2011, the report shall be filed on or

 

before July 1 of each year for the 12-month period ending on the

 

immediately preceding March 31. The administrator may postpone the

 

date to file a report, on written request by any person required to

 

file a report under this section. The administrator may extend the

 

filing date for up to 60 days after the deadline if an estimated

 

payment is paid on or before the deadline for the applicable

 

period. Remittance of an estimated payment without a report on or

 

before the deadline shall be considered a request for extension. A

 

request for extension of time to file the report is not a request

 

for an extension of time to remit payments. Interest and penalties

 

will not accrue during the extension period against a person who

 

remits an estimated payment. The administrator shall determine how

 

estimated payments are to be remitted.

 

     (5) Not less than 60 days or more than 365 days before filing

 

the report required by this section, the holder in possession of

 

property presumed abandoned and subject to the state's custody as

 

unclaimed property under this act shall send written notice to the

 

apparent owner at his or her last known address informing him or

 

her that the holder is in possession of property subject to this

 

act if all of the following requirements are met:

 

     (a) The holder has in its records an address for the apparent

 

owner that the holder's records do not disclose to be inaccurate.

 

     (b) The claim of the apparent owner is not barred by the

 

statute of limitations.

 

     (c) The property has a value of $50.00 or more or, if the

 

holder filing a report under this section is reporting for the

 

current report year at least 25,000 properties over $50.00 each,

 

the property has a value of $100.00 or more.

 

     (6) There is appropriated from funds generated by unclaimed

 

properties deposited under this act the sum of $4,800,000.00 to the

 

department of treasury for administration and public awareness of

 

unclaimed property filing and compliance requirements created by

 

the amendatory act that added this subsection. This appropriation

 

is allotted for expenditure on and after October 1, 2010. The

 

appropriation authorized in this subsection is a work project

 

appropriation, and any unencumbered or unallotted funds are carried

 

forward into the following year. The following is in compliance

 

with section 451a(1) of the management and budget act, 1984 PA 431,

 

MCL 18.1451a:

 

     (a) The purpose of the project is to provide technical and

 

administrative support for the 2011 unclaimed property program in

 

the department of treasury. Costs related to this project will

 

include, but are not limited to:

 

     (i) Information technology system changes.

 

     (ii) Staffing-related costs.

 

     (iii) Costs to promote public awareness.

 

     (iv) Any other costs related to implementation of the program.

 

     (b) The work project will be accomplished through the use of

 

interagency agreements, grants, state employees, and contracts.

 

Contracts, if any, for the work project authorized by this

 

subsection shall be subject to competitive solicitation of bids

 

from the private sector in compliance with section 261 of the

 

management and budget act, 1984 PA 431, MCL 18.1261.

 

     (c) The total estimated completion cost of the project is

 

$4,800,000.00.

 

     (d) The expected completion date is September 30, 2012.

 

     (7) The provisions modifying the dormancy periods of the

 

amendatory act that added this subsection do not apply if the owner

 

of the property is on active duty military service outside the

 

United States.