Senate Study Bill 1019
SENATE/HOUSE FILE
BY (PROPOSED TREASURER OF
STATE BILL)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the procedures for handling abandoned property
2 and property presumed to be abandoned.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 556.11, subsection 2, paragraphs a and
1 2 c, Code 2003, are amended to read as follows:
1 3 a. Except with respect to traveler's checks and, money
1 4 orders, cashier's checks, official checks, or similar
1 5 instruments, the name, if known, and last known address, if
1 6 any, of each person appearing from the records of the holder
1 7 to be the owner of any property of the value of twenty=five
1 8 fifty dollars or more presumed abandoned under this chapter.
1 9 c. The nature and identifying number, if any, or
1 10 description of the property and the amount appearing from the
1 11 records to be due, except that items of value under twenty=
1 12 five fifty dollars each may be reported in aggregate.
1 13 Sec. 2. Section 556.11, subsection 5, Code 2003, is
1 14 amended to read as follows:
1 15 5. If the holder of property presumed abandoned under this
1 16 chapter knows the whereabouts of the owner and if the owner's
1 17 claim has not been barred by the statute of limitations, the
1 18 holder shall, before filing the annual report, communicate
1 19 with the owner and take necessary steps to prevent abandonment
1 20 from being presumed. The holder shall exercise due diligence
1 21 to ascertain the whereabouts of the owner. A holder is not
1 22 required to make a due diligence mailing to owners whose
1 23 property has an aggregate value of less than fifty dollars.
1 24 The treasurer of state may charge a holder that fails to
1 25 timely exercise due diligence, as required in this subsection,
1 26 five dollars for each name and address account reported if
1 27 thirty=five percent of more of the accounts are claimed within
1 28 the twenty=four months immediately following the filing of the
1 29 holder report.
1 30 Sec. 3. Section 556.11, Code 2003, is amended by adding
1 31 the following new subsection after subsection 8:
1 32 NEW SUBSECTION. 9. Other than the notice to owners
1 33 required by subsection 5, published notice required by section
1 34 556.12, subsection 1, and other discretionary means employed
1 35 by the treasurer of state for notifying owners of the
2 1 existence of abandoned property, all information provided in
2 2 reports shall be confidential, unless written consent from the
2 3 person entitled to the property is obtained by the treasurer
2 4 of state, and may be disclosed only to governmental agencies
2 5 for the purposes of returning abandoned property to its owners
2 6 or to those individuals who appear to be the owner of the
2 7 property or otherwise have a valid claim to the property.
2 8 Sec. 4. Section 556.11, unnumbered paragraph 1, Code 2003,
2 9 is amended to read as follows:
2 10 10. All agreements to pay compensation to recover or
2 11 assist in the recovery of property reported under this
2 12 section, made within twenty=four months after the date payment
2 13 or delivery is made under section 556.13 are unenforceable.
2 14 However, such agreements made after twenty=four months from
2 15 the date of payment or delivery are valid if the fee or
2 16 compensation agreed upon is not more than fifteen percent of
2 17 the recoverable property, the agreement is in writing and
2 18 signed by the owner, and the writing discloses the nature and
2 19 value of the property and the name and address of the person
2 20 in possession. A person shall not attempt to collect or
2 21 collect a fee or compensation for discovering property
2 22 presumed abandoned under this chapter unless the person is
2 23 licensed as a private investigation business pursuant to
2 24 chapter 80A. This section does not prevent an owner from
2 25 asserting, at any time, that an agreement to locate property
2 26 is based upon excessive or unjust consideration. This section
2 27 does not apply to an owner who has a bona fide fee contract
2 28 with a practicing attorney and counselor as described in
2 29 chapter 602, article 10.
2 30 Sec. 5. Section 556.12, subsection 2, paragraph c, Code
2 31 2003, is amended by striking the paragraph.
2 32 Sec. 6. Section 556.12, subsections 3, 4, 5, and 6, Code
2 33 2003, are amended to read as follows:
2 34 3. The state treasurer of state is not required to publish
2 35 in such notice any item of less than twenty=five fifty dollars
3 1 unless the treasurer deems such the publication to be in the
3 2 public interest.
3 3 4. Within one hundred twenty days from the receipt of the
3 4 report required by section 556.11, the state treasurer of
3 5 state shall mail a notice to each person having an address
3 6 listed therein who appears to be entitled to property of the
3 7 value of twenty=five fifty dollars or more presumed abandoned
3 8 under this chapter.
3 9 5. The mailed notice shall contain:
3 10 a. A a statement that, according to a report filed with
3 11 the state treasurer of state, property is being held to which
3 12 the addressee appears entitled.
3 13 b. The name and address of the person holding the property
3 14 and any necessary information regarding changes of name and
3 15 address of the holder.
3 16 c. A statement that, if satisfactory proof of claim is not
3 17 presented by the owner to the holder by the date specified in
3 18 the published notice, the property will be placed in the
3 19 custody of the state treasurer to whom all further claims must
3 20 be directed.
3 21 6. This section is not applicable to sums payable on
3 22 traveler's checks, or money orders, cashier's checks, official
3 23 checks, or similar instruments presumed abandoned under
3 24 section 556.2.
3 25 Sec. 7. Section 556.17, subsections 1 and 5, Code 2003,
3 26 are amended to read as follows:
3 27 1. All abandoned property other than money delivered to
3 28 the state treasurer of state under this chapter which remains
3 29 unclaimed one year after the delivery to the treasurer may be
3 30 sold to the highest bidder at public sale in any city in the
3 31 state that affords in the treasurer's judgment the most
3 32 favorable market for the property involved. The state
3 33 treasurer of state may decline the highest bid and reoffer the
3 34 property for sale if the treasurer considers the price bid
3 35 insufficient. The treasurer need not offer any property for
4 1 sale if, in the treasurer's opinion, the probable cost of sale
4 2 exceeds the value of the property. The treasurer may order
4 3 destruction of the property when the treasurer has determined
4 4 that the probable cost of offering the property for sale
4 5 exceeds the value of the property. If the treasurer
4 6 determines that the property delivered does not have any
4 7 substantial commercial value, the treasurer may destroy or
4 8 otherwise dispose of the property at any time. An action or
4 9 proceeding may not be maintained against the treasurer or any
4 10 officer or against the holder for or on account of an act the
4 11 treasurer made under this section, except for intentional
4 12 misconduct or malfeasance.
4 13 5. Unless the treasurer of state considers it to be in the
4 14 best interest of the state to do otherwise, all securities
4 15 presumed abandoned under section 556.5 and delivered to the
4 16 treasurer of state must be held for at least three years one
4 17 year before the treasurer of state may sell them. If the
4 18 treasurer of state sells any securities delivered pursuant to
4 19 section 556.5 before the expiration of the three=year one=year
4 20 period, any person making a claim pursuant to this chapter
4 21 before the end of the three=year one=year period is entitled
4 22 to either the proceeds of the sale of the securities or the
4 23 market value of the securities at the time the claim is made,
4 24 whichever amount is greater, less any deduction for fees
4 25 pursuant to section 556.18, subsection 2. A person making a
4 26 claim under this chapter after the expiration of this period
4 27 is entitled to receive either the securities delivered to the
4 28 treasurer of state by the holder, if they still remain in the
4 29 hands of the treasurer of state, or the proceeds received from
4 30 the sale, less any amounts deducted pursuant to section
4 31 556.18, subsection 2, but no person has any claim under this
4 32 chapter against the state, the holder, any transfer agent,
4 33 registrar, or other person acting for or on behalf of a holder
4 34 for any appreciation in the value of the property occurring
4 35 after delivery by the holder to the treasurer of state.
5 1 EXPLANATION
5 2 This bill makes changes in the procedures for handling
5 3 property that is presumed abandoned.
5 4 Code sections 556.11(2) and 556.12(3) and (4) are amended
5 5 to increase from $25 to $50 the value of presumed abandoned
5 6 property for which a report must be submitted to the treasurer
5 7 of state and for which the treasurer must publish notice.
5 8 Code sections 556.11(2) and 556.12(6) are amended to
5 9 provide that the reporting requirements of Code section 556.11
5 10 and the notice requirements of Code section 556.12 do not
5 11 apply to cashier's checks, official checks, and similar
5 12 instruments.
5 13 Code section 556.11(5) is amended to specify that a holder
5 14 of presumed abandoned property is not required to use due
5 15 diligence to notify owners of such property if the aggregate
5 16 value is less than $50. The treasurer of state is authorized
5 17 to charge the holder a fee for failure to exercise due
5 18 diligence in notifying the owners if 35 percent or more of the
5 19 owner accounts are claimed within 24 months following the
5 20 filing of the holder report.
5 21 Code section 556.11, unnumbered paragraph 1, is amended to
5 22 require that a person attempting to collect or to collect a
5 23 fee or compensation for discovering presumed abandoned
5 24 property be licensed as a private investigator.
5 25 New Code subsection 556.11(9) is added and provides that
5 26 information provided in reports is confidential except for
5 27 that used pursuant to the notice requirements or if consent is
5 28 obtained from the owner of the property.
5 29 Code sections 556.12(2) and 556.12(5) are amended by
5 30 striking obsolete language.
5 31 Code section 556.17(1) is amended to authorize the
5 32 treasurer of state to destroy or otherwise dispose of presumed
5 33 abandoned property at any time if the property has no
5 34 commercial value.
5 35 Code section 556.17(5) is amended to reduce from three
6 1 years to one year the time period that the treasurer of state
6 2 has to wait before selling stocks and other intangible
6 3 interests in business associations that are presumed
6 4 abandoned.
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