H.B. 219 Enrolled

1

UNCLAIMED PROPERTY ACT PROVISIONS
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Fred R. Hunsaker
5 Senate Sponsor: Peter C. Knudson
6
7 LONG TITLE
8 General Description:
9 This bill modifies provisions of the Unclaimed Property Act.
10 Highlighted Provisions:
11 This bill:
12 . reduces the time after which the following unclaimed property is considered to be
13 abandoned from five years to three years:
14 . net intangible property;
15 . a bank draft;
16 . a deposit in a financial institution;
17 . a stock, shareholding, or other intangible ownership in a business;
18 . intangible property or income held in an agent or fiduciary capacity; or
19 . mineral proceeds;
20 . provides that all unclaimed funds held or owing under a life or endowment
21 insurance policy are considered to be abandoned after three years;
22 . changes the month in which reports of unclaimed property are to be filed from June
23 to November;
24 . raises the dollar amount at which unclaimed property must be accompanied by
25 specific information and be reported individually from $25 to $50;
26 . permits an electronic book entry to be used as proof of ownership of stock or other
27 intangible interests;
28 . requires that the administrator publish notice of unclaimed property within 12
29 months of the date the property was received;

30 . removes certain content requirements for publication of unclaimed property via
31 newspaper;
32 . permits sale of abandoned property via the Internet;
33 . provides procedures for delivery of property and deductions of reasonable fees and
34 expenses at the time of sale;
35 . modifies procedures and requirements for the sale of securities;
36 . permits the administrator to examine records pertaining to abandoned or unclaimed
37 property that are in the possession of an agent of a business association or a
38 financial association;
39 . permits the administrator to require a person to file a verified report stating whether
40 or not the person is holding any unclaimed property subject to the act;
41 . provides that a person who fails to pay or deliver property when required by the act
42 shall pay interest on the value of the property at the rate of 12% per annum; and
43 . makes technical changes.
44 Monies Appropriated in this Bill:
45 None
46 Other Special Clauses:
47 None
48 Utah Code Sections Affected:
49 AMENDS:
50 67-4a-201, as enacted by Chapter 198, Laws of Utah 1995
51 67-4a-203, as enacted by Chapter 198, Laws of Utah 1995
52 67-4a-204, as enacted by Chapter 198, Laws of Utah 1995
53 67-4a-205, as enacted by Chapter 198, Laws of Utah 1995
54 67-4a-208, as enacted by Chapter 198, Laws of Utah 1995
55 67-4a-209, as enacted by Chapter 198, Laws of Utah 1995
56 67-4a-214, as enacted by Chapter 198, Laws of Utah 1995
57 67-4a-301, as enacted by Chapter 198, Laws of Utah 1995

58 67-4a-302, as enacted by Chapter 198, Laws of Utah 1995
59 67-4a-402, as enacted by Chapter 198, Laws of Utah 1995
60 67-4a-403, as enacted by Chapter 198, Laws of Utah 1995
61 67-4a-601, as enacted by Chapter 198, Laws of Utah 1995
62 67-4a-701, as enacted by Chapter 198, Laws of Utah 1995
63 67-4a-703, as enacted by Chapter 198, Laws of Utah 1995
64
65 Be it enacted by the Legislature of the state of Utah:
66 Section 1. Section 67-4a-201 is amended to read:
67 67-4a-201. Abandoned and unclaimed property -- General rules.
68 (1) (a) Property is considered to be "abandoned" or "unclaimed" when:
69 (i) the property is held, issued, or owing by a holder;
70 (ii) the identity, status, or present location of the apparent owner is unknown; and
71 (iii) the property cannot be paid, distributed, or given to the apparent owner after the
72 stated dormancy period for that type of unclaimed property established in this chapter.
73 (b) Property may not be considered to be "abandoned" or "unclaimed" when:
74 (i) the character or degree of ownership interest of the apparent owner in the property is
75 unsettled or in dispute; and
76 (ii) the holder is notified of this fact.
77 (2) (a) For purposes of this [subsection] section, property is payable or distributable
78 even if the owner has failed to demand the property or to present any instrument or document
79 required to receive payment.
80 (b) Except as otherwise provided by this chapter, net intangible property is considered
81 abandoned if it is not claimed by the owner within [five] three years after it became payable or
82 distributable.
83 Section 2. Section 67-4a-203 is amended to read:
84 67-4a-203. Checks, drafts, and similar instruments issued or certified by banking
85 and financial organizations.

86 (1) Any sum payable on a bank draft that has been outstanding for more [that five] than
87 three years after it was payable or after its issuance, if payable on demand, is considered
88 abandoned unless the owner, within [five] three years, has communicated in writing with the
89 banking or financial organization concerning it or otherwise indicated an interest as evidenced
90 by a memorandum or other record on file prepared by an employee of the banking or financial
91 organization.
92 (2) A holder may not deduct from the amount of a bank draft any charge imposed
93 because of the failure to present the instrument for payment unless:
94 (a) there is a valid and enforceable written contract between the issuer and the owner of
95 the instrument that authorizes the issuer to impose a charge; and
96 (b) the issuer regularly imposes those charges and does not regularly reverse or
97 otherwise cancel them.
98 Section 3. Section 67-4a-204 is amended to read:
99 67-4a-204. Deposits in a financial institution and funds in financial organizations.
100 (1) Each deposit in a financial institution and any ownership purchase funds held by a
101 banking or financial organization are considered abandoned after [five] three years if the
102 location of the owner is unknown, unless:
103 (a) the owner, within the [five] three years, has:
104 (i) in the case of a deposit in a financial institution, increased or decreased its amount
105 or presented the passbook or other similar evidence of the deposit for the crediting of interest;
106 (ii) communicated in writing with the banking or financial organization concerning the
107 property; and
108 (iii) otherwise indicated an interest in the property as evidenced by a memorandum or
109 other record on file prepared by an employee of the banking or financial organization;
110 (b) (i) the owner, within [five] three years, has owned other property to which
111 Subsection (1)(a)(i), (ii), or (iii) apply; and
112 (ii) the banking or financial organization communicates in writing with the owner with
113 regard to the property that would otherwise be considered abandoned at the address to which

114 communications regarding the other property regularly are sent; or
115 (c) (i) the owner, within [five] three years, has had another relationship with the
116 banking or financial organization concerning which the owner has communicated in writing
117 with the banking or financial organization; and
118 (ii) the banking or financial organization communicates in writing with the owner with
119 regard to the property that would otherwise be considered abandoned at the address to which
120 communications regarding the other relationship regularly are sent.
121 (2) A holder may not impose any charge due to dormancy or inactivity or cease
122 payment of interest on any property described in Subsection (1) unless:
123 (a) the holder is specifically exempted by federal law; or
124 (b) (i) there is a valid and enforceable written contract between the issuer and the
125 owner of the instrument that authorizes the issuer to impose a charge; and
126 (ii) the issuer regularly imposes those charges and does not regularly reverse or
127 otherwise cancel them.
128 (3) (a) Except as provided in Subsection (3)(b), any property described in Subsection
129 (1) that is automatically renewable is considered matured for purposes of Subsection (1) when
130 its initial time period expires.
131 (b) If the owner consents to any renewal at or about the time of renewal by
132 communicating in writing with the banking or financial organization or otherwise indicating
133 consent as evidenced by a memorandum or other record on file prepared by an employee of the
134 organization, the property is considered matured for purposes of Subsection (1) when the last
135 time period for which consent was given expires.
136 (c) If, at the time provided for delivery in Section 67-4a-302 , a penalty or forfeiture in
137 the payment of interest would result from the delivery of the property, the time for delivery is
138 extended until the time when no penalty or forfeiture would result.
139 Section 4. Section 67-4a-205 is amended to read:
140 67-4a-205. Funds owing under life insurance policies.
141 (1) [(a) Except as provided in Subsection (b), funds] Funds held or owing under any

142 life or endowment insurance policy or annuity contract that has terminated or matured as
143 defined in Subsection (3)(a) or (3)(b) are considered [abandoned if unclaimed for more than
144 five years after the funds became due and payable as established from the records of the
145 insurance company holding or owing the funds. (b) Funds held or owing under any life or
146 endowment insurance policy or annuity contract that has matured as defined in Subsection
147 (3)(b) are considered] abandoned if unclaimed for more than [two] three years.
148 (2) The insurance company shall presume that the last-known address of the person
149 entitled to the funds is the same as the last-known address of the insured or annuitant according
150 to the records of the company if:
151 (a) a person other than the insured or annuitant is entitled to the funds and an address
152 of the person is not known to the company; or
153 (b) it is not definite and certain from the records of the company who is entitled to the
154 funds.
155 (3) For purposes of this section, a life or endowment insurance policy or annuity
156 contract not matured by actual proof of the death of the insured or annuitant according to the
157 records of the company is matured and the proceeds are due and payable if the company:
158 (a) knows that the insured or annuitant has died; or
159 (b) determines that:
160 (i) the insured has attained, or would have attained if living, the limiting age under the
161 mortality table on which the reserve is based;
162 (ii) the policy was in force at the time the insured attained, or would have attained, the
163 limiting age specified [in] under Subsection (3)(b)(i); and
164 (iii) according to the records of the company, neither the insured nor any other person
165 appearing to have an interest in the policy has, within the last two years:
166 (A) assigned, readjusted, or paid premiums on the policy;
167 (B) subjected the policy to a loan;
168 (C) corresponded in writing with the company concerning the policy; or
169 (D) otherwise indicated an interest in the policy as evidenced by a memorandum or

170 other record on file prepared by an employee of the company.
171 (4) For purposes of this section, the application of an automatic premium loan
172 provision or other nonforfeiture provision contained in an insurance policy does not prevent a
173 policy from being matured or terminated under Subsection (1) if the insured has died or the
174 insured or the beneficiary of the policy otherwise has become entitled to the proceeds of the
175 policy before the depletion of the cash surrender value of the policy by the application of those
176 provisions.
177 Section 5. Section 67-4a-208 is amended to read:
178 67-4a-208. Stock and other intangible interests in business associations.
179 (1) Any stock, shareholding, or other intangible ownership interest in a business
180 association that is evidenced by records available to the association is considered abandoned if:
181 (a) the interest in the association is owned by a person who for more than [five] three
182 years has failed to:
183 (i) claim a dividend, distribution, or other sum payable as a result of the interest; or
184 (ii) communicate with the association regarding the interest or a dividend, distribution,
185 or other sum payable as the result of the interest, as evidenced by a memorandum or other
186 record on file with the association prepared by an employee of the association; and
187 (b) the association does not know the location of the owner at the end of the [five-year]
188 three-year period.
189 (2) The return of official shareholder notifications or communications by the postal
190 service as undeliverable is evidence that the association does not know the location of the
191 owner.
192 (3) This section applies to:
193 (a) the underlying stock, shareholdings, or other intangible ownership interests of an
194 owner;
195 (b) any stock, shareholdings, or other intangible ownership interest of an owner when
196 the business association is in possession of the certificate or other evidence of ownership; and
197 (c) the stock, shareholdings, or other intangible ownership interests of dividend and

198 nondividend paying business associations whether or not the interest is represented by a
199 certificate.
200 (4) At the time an interest is considered abandoned under this section, any dividend,
201 distribution, or other sum then held for or owing to the owner as a result of the interest, and not
202 previously considered abandoned, is considered abandoned.
203 (5) (a) This section does not apply to any stock or other intangible ownership interest
204 enrolled in a plan that provides for the automatic reinvestment of dividends, distributions, or
205 other sums payable as a result of the interest unless:
206 (i) the records available to the administrator of the plan show, with respect to any
207 intangible ownership interest not enrolled in the reinvestment plan, that the owner has not
208 communicated in any manner described in this section within [five] three years; or
209 (ii) [five] three years have elapsed since the location of the owner became unknown to
210 the association, as evidenced by the return of official shareholder notifications or
211 communications by the postal service as undeliverable, and the owner has not within those
212 [five] three years communicated in any manner described in this section.
213 (b) The [five-year] three-year period from the return of official shareholder
214 notifications or communications begins at the earlier of the return of the second of those
215 notifications or communications or the time the holder discontinues mailings to the
216 shareholder.
217 Section 6. Section 67-4a-209 is amended to read:
218 67-4a-209. Property held by agents and fiduciaries.
219 (1) All intangible property, and any income or increment derived from it, that is held in
220 a fiduciary capacity for the benefit of another person is considered abandoned unless the owner
221 has, within [five] three years after it has become payable or distributable:
222 (a) increased or decreased the principal;
223 (b) accepted payment of principal or income;
224 (c) communicated concerning the property; or
225 (d) otherwise indicated an interest as evidenced by a memorandum or other record on

226 file with the fiduciary.
227 (2) (a) As used in this [subsection] section, "distribution date" means the earliest of:
228 (i) the actual date of distribution or attempted distribution;
229 (ii) the date contracted for distribution in the plan or trust agreement governing the
230 account or plan; or
231 (iii) the date specified in the internal revenue law of the United States by which
232 distribution must begin in order to avoid a tax penalty.
233 (b) All intangible property and any income or increment derived from it that is held in
234 an individual retirement account, a retirement plan for self-employed individuals, or similar
235 account or plan established under the internal revenue laws of the United States that has not
236 been paid or distributed for more than 90 days after the distribution date is considered
237 abandoned unless the owner or beneficiary has, within [five] three preceding years:
238 (i) made additional payments or transfers of property to the account or plan;
239 (ii) been paid or received a distribution;
240 (iii) communicated concerning the property; or
241 (iv) otherwise indicated an interest as evidenced by a memorandum or
242 other record on file with the account or plan fiduciary.
243 (3) For the purpose of this section, a person who holds property as an agent for a
244 business association is considered to hold the property in a fiduciary capacity for that business
245 association alone, unless the agreement between him and the business association provides
246 otherwise.
247 (4) For the purposes of this section, a person who is considered to hold property in a
248 fiduciary capacity for a business association alone is the holder of the property only for the
249 interest of the business association in the property, and the business association is the holder of
250 the property for the interest of any other person in the property.
251 Section 7. Section 67-4a-214 is amended to read:
252 67-4a-214. Mineral proceeds.
253 (1) (a) Any sum payable as mineral proceeds that has remained unclaimed by the

254 owner for more than [five] three years after it became payable or distributable is considered
255 abandoned.
256 (b) The owner's underlying right to receive those mineral proceeds is considered
257 abandoned when any sum payable as mineral proceeds has remained unclaimed by the owner
258 for more than [five] three years.
259 (2) At the time an owner's underlying right to receive mineral proceeds is considered
260 abandoned, any mineral proceeds then owing to the owner and any proceeds accruing after that
261 time are considered abandoned.
262 (3) The sum considered abandoned is subject to the custody of this state as unclaimed
263 property if:
264 (a) the last-known address of the apparent owner, as shown on the records of the
265 holder, is in Utah;
266 (b) the records of the holder do not identify the last-known address and it is established
267 that the last-known address of the apparent owner is in Utah;
268 (c) the records of the holder do not reflect the last-known address, and the holder is
269 domiciled in or is a government or governmental subdivision or agency of Utah; or
270 (d) the mineral interest is located in Utah and:
271 (i) the last-known address of the apparent owner, as shown on the records of the
272 holder, is in a state that does not provide by law for the escheat or custodial taking of the
273 property or is in a state in which the state's escheat or unclaimed property law is not applicable
274 to the property; or
275 (ii) the last-known address of the apparent owner is unknown and the holder is
276 domiciled in a state that does not provide by law for the escheat or custodial taking of the
277 property or a state in which the state escheat or unclaimed property law is not applicable to the
278 property.
279 (4) A holder may not deduct from mineral proceeds any charge due to dormancy unless
280 there is an enforceable written contract between the holder and the owner of the mineral
281 proceeds under which the holder may impose a charge.

282 Section 8. Section 67-4a-301 is amended to read:
283 67-4a-301. Report of abandoned property -- Notice.
284 (1) (a) A person holding tangible or intangible property that is considered abandoned
285 and subject to the state's custody as abandoned or unclaimed property under this chapter shall:
286 (i) file a report concerning the property with the administrator before [May] November
287 1 of each year as of the preceding [December 31] June 30 containing the information required
288 by this section; and
289 (ii) transfer the property identified in the report, including all interest, dividends,
290 increments, and accretions due, payable, or distributable on the property as of [May] November
291 1 of the year in which the report is required to the administrator as required by Section
292 67-4a-302 .
293 (b) The administrator may postpone the reporting date if he receives a written request
294 to extend the time of the report from any person required to file a report.
295 (2) (a) The report shall include:
296 (i) except with respect to traveler's checks and money orders, the name, if known, and
297 last-known address, if any, of each person appearing from the records of the holder to be the
298 owner of property with a value of [$25] $50 or more that is considered abandoned under
299 requirements of this chapter;
300 (ii) for unclaimed funds of [$25] $50 or more held or owing under any insurance policy
301 or annuity contract, the full name and last-known address of the insured policy owner or
302 annuitant and of the beneficiary according to the records of the insurance company holding or
303 owing the funds;
304 (iii) for the contents of a safe deposit box or other safekeeping repository or of other
305 tangible property, a description of the property and any amounts owing to the holder;
306 (iv) the nature and identifying number, if any, or description of the property and the
307 amount appearing from the records to be due;
308 (v) the date the property became payable, demandable, or returnable and the date of the
309 last transaction with the apparent owner with respect to the property;

310 (vi) a verification by the person completing the report that the information contained in
311 it is true and accurate; [and]
312 (vii) all known names and addresses of each previous holder of the property if:
313 (A) the person holding property considered abandoned and subject to custody as
314 unclaimed property is a successor to other persons who previously held the property for the
315 apparent owner; or
316 (B) the holder has changed a name while holding the property; and
317 (viii) other information required by the administrator.
318 (b) When reporting the nature and identifying number, if any, or description of the
319 property and the amount appearing from the records to be due, items of value under [$25] $50
320 each may be reported in the aggregate.
321 (3) Not more than 120 days before filing the report required by this section, the holder
322 in possession of property considered abandoned and subject to the state's custody as unclaimed
323 property under this chapter shall send written notice to the apparent owner at that owner's
324 last-known address informing the owner that the holder is in possession of property subject to
325 this chapter if:
326 (a) the holder has in its records an address for the apparent owner which the holder's
327 records do not disclose to be inaccurate; or
328 (b) the property has a value of $50 or more.
329 Section 9. Section 67-4a-302 is amended to read:
330 67-4a-302. Payment or delivery of abandoned property.
331 (1) (a) Each person holding property considered abandoned and subject to the state's
332 custody as unclaimed property shall pay or deliver to the administrator all of the property
333 shown on the report required by this part.
334 (b) The administrator may:
335 (i) postpone the payment or delivery of the property if requested by the person holding
336 the property; and
337 (ii) impose terms and for payment and delivery upon the person holding the property.

338 (c) If the administrator authorizes postponement of payment or delivery of the property,
339 the property paid or delivered to the administrator shall include all interest, dividends,
340 increments and accretions due, payable, or distributable on the day that the property is paid or
341 delivered to the administrator.
342 (2) (a) The holder of stocks and other intangible interests under Section 67-4a-208
343 shall issue and deliver or transmit to the administrator a duplicate certificate, or other evidence
344 of ownership if the holder does not issue certificates of ownership, [that is] including an
345 electronic book entry registered in the name prescribed by the state treasurer.
346 (b) Upon delivery of a duplicate certificate or transmittance of a book entry to the
347 administrator, the holder and any transfer agent, registrar, or other person acting for or on
348 behalf of a holder in executing or delivering the duplicate certificate or other evidence of
349 ownership is relieved of all liability in accordance with Section 67-4a-303 to every person,
350 including any person acquiring the original certificate or the duplicate certificate issued to the
351 administrator, for any losses or damages resulting to any person by the issuance and delivery of
352 the duplicate certificate or other evidence of ownership to the administrator.
353 (3) (a) When a certificate or other evidence of ownership, or a bond or other debt
354 security, registered in the name of a person is delivered to the administrator according to the
355 procedures and requirements of this chapter and is presented by the administrator to the issuer
356 or the issuer's agent, the issuer shall:
357 (i) transfer and register it in the name as prescribed by the state treasurer; and
358 (ii) deliver a new certificate or security registered in that name to the administrator.
359 (b) The issuer and its transfer agent, registrar, or other person acting on behalf of the
360 issuer in executing and delivering the certificate or security is relieved from any liability to any
361 person in accordance with Section 67-4a-303 for any loss or damage caused by the transfer,
362 issuance, and delivery of the certificate or security to the administrator.
363 (4) (a) A holder, with the written consent of the administrator and upon conditions and
364 terms prescribed by the administrator, may report and deliver property before the property is
365 considered abandoned under this chapter.

366 (b) Property delivered under this Subsection (4) is presumed abandoned.
367 (c) The administrator shall advertise and dispose of the property according to the
368 requirements of this chapter.
369 Section 10. Section 67-4a-402 is amended to read:
370 67-4a-402. Publication of notice.
371 [(1) In the calendar year in which] Within 12 months of the date the unclaimed
372 property was paid or delivered to the administrator, the administrator shall:
373 [(a)] (1) cause a notice to be published once in a newspaper having general circulation
374 in Utah; and
375 [(b)] (2) ensure that the notice is in a form that is likely to attract the attention of the
376 apparent owner of the unclaimed property[;].
377 [(c) unless exempted by Subsection (2), ensure that the notice contains:]
378 [(i) the name of each person appearing to be the owner of property considered
379 abandoned, as set forth in the report filed by the holder;]
380 [(ii) the last-known address or location of each person appearing to be the owner of
381 property considered abandoned, if an address or location is set forth in the report filed by the
382 holder;]
383 [(iii) a statement explaining that property of the owner is considered to be abandoned
384 and has been taken into the protective custody of the administrator; and]