Citations Affected: IC 32-34.
Synopsis: Unclaimed property. Allows the attorney general to sell
unclaimed property at a commercially reasonable public sale. Makes
the time period for which unclaimed property related to child support
is held the same as for other property. Makes other changes to the
unclaimed property law.
Effective: July 1, 2003.
January 7, 2003, read first time and referred to Committee on Rules and Legislative
Procedure.
January 23, 2003, amended; reassigned to Committee on Judiciary.
February 20, 2003, amended, reported favorably _ Do Pass.
February 25, 2003, read second time, amended, ordered engrossed.
A BILL FOR AN ACT to amend the Indiana Code concerning
property.
SECTION 1. IC 32-34-1-1, AS ADDED BY P.L.2-2002, SECTION
19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2003]: Sec. 1. (a) This chapter does not apply to any property held, due,
and owing in a foreign country and arising out of a foreign transaction.
(b) This chapter does not apply to:
(1) stocks;
(2) dividends;
(3) capital credits;
(4) patronage refunds;
(5) utility deposits;
(6) membership fees;
(7) account balances; or
(8) book equities;
for which the owner cannot be found and that are the result of
distributable savings of a rural electric membership corporation formed
under IC 8-1-13, a rural telephone cooperative corporation formed
under IC 8-1-17, or an agricultural cooperative association formed
under IC 15-7-1.
(c) This chapter does not apply to unclaimed overpayments of utility
bills that become the property of a municipality under IC 36-9-23-28.5.
(d) This chapter does not apply to deposits required by a
municipally owned utility (as defined in IC 8-1-2-1).
(e) This chapter does not apply to a business to business credit
memorandum or a credit balance resulting from a business to business
credit memorandum.
(f) This chapter does not apply to gift certificates or gift cards.
SECTION 2. IC 32-34-1-20, AS ADDED BY P.L.2-2002,
SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 20. (a) For purposes of this section, an indication
of interest in the property by the owner:
(1) does not include a communication with an owner by an agent
of the holder who has not identified in writing the property to the
owner; and
(2) includes the following:
(A) With respect to an account or underlying shares of stock
or other interest in a business association or financial
organization:
(i) the cashing of a dividend check or other instrument of
payment received; or
(ii) evidence that the distribution has been received if the
distribution was made by electronic or similar means.
(B) A deposit to or withdrawal from a bank account.
(C) The payment of a premium with respect to a property
interest in an insurance policy.
(D) The mailing of any correspondence in writing from a
financial institution to the owner, including:
(i) a statement;
(ii) a report of interest paid or credited; or
(iii) any other written advice;
relating to a demand, savings, or matured time deposit
account, including a deposit account that is automatically
renewable, or any other account or other property the owner
has with the financial institution if the correspondence is not
returned to the financial institution for nondelivery.
(E) Any activity by the owner that concerns:
(i) another demand, savings, or matured time deposit
account or other account that the owner has with a financial
institution, including any activity by the owner that results
in an increase or decrease in the amount of any other
account; or
(ii) any other relationship with the financial institution,
including the payment of any amounts due on a loan;
if the mailing address for the owner contained in the financial
institution's books and records is the same for both an inactive
account and for a related account.
(b) The application of an automatic premium loan provision or other
nonforfeiture provision contained in an insurance policy does not
prevent the policy from maturing or terminating if the insured has died
or the insured or the beneficiary of the policy otherwise has become
entitled to the proceeds before the depletion of the cash surrender value
of the policy by the application of those provisions.
(c) Property that is held, issued, or owed in the ordinary course of
a holder's business is presumed abandoned if the owner or apparent
owner has not communicated in writing with the holder concerning the
property or has not otherwise given an indication of interest in the
property during the following times:
(1) For traveler's checks, fifteen (15) years after issuance.
(2) For money orders, seven (7) years after issuance.
(3) For consumer credits, three (3) years after the credit becomes
payable.
(4) For gift certificates, three (3) years after December 31 of the
year in which the gift certificate was sold. If the gift certificate is
redeemable in merchandise only, the amount abandoned is
considered to be sixty percent (60%) of the certificate's face
value.
(5) (4) For amounts owed by an insurer on a life or an endowment
insurance policy or an annuity contract:
(A) if the policy or contract has matured or terminated, three
(3) years after the obligation to pay arose; or
(B) if the policy or contract is payable upon proof of death,
three (3) years after the insured has attained, or would have
attained if living, the limiting age under the mortality table on
which the reserve is based.
(6) (5) For property distributable by a business association in a
course of dissolution, one (1) year after the property becomes
distributable.
(7) (6) For property or proceeds held by a court or a court clerk,
other than property or proceeds related to child support, five (5)
years after the property or proceeds become distributable. The
property or proceeds must be treated as unclaimed property under
IC 32-34-3. For property or proceeds related to child support held
by a court or a court clerk, ten (10) years after the property or
proceeds become distributable.
(8) (7) For property held by a state or other government,
governmental subdivision or agency, or public corporation or
other public authority, one (1) year after the property becomes
distributable.
(9) (8) For compensation for personal services, one (1) year after
the compensation becomes payable.
(10) (9) For deposits and refunds held for subscribers by utilities,
one (1) year after the deposits or refunds became payable.
(11) (10) For stock or other interest in a business association, five
(5) years after the earlier of:
(A) the date of the last dividend, stock split, or other
distribution unclaimed by the apparent owner; or
(B) the date of the second mailing of a statement of account or
other notification or communication that was:
(i) returned as undeliverable; or
(ii) made after the holder discontinued mailings to the
apparent owner.
(12) (11) For property in an individual retirement account or
another account or plan that is qualified for tax deferral under the
Internal Revenue Code, three (3) years after the earliest of:
(A) the actual date of the distribution or attempted
distribution;
(B) the distribution date as stated in the plan or trust
agreement governing the plan; or
(C) the date specified in the Internal Revenue Code by which
distribution must begin in order to avoid a tax penalty.
(13) (12) For a demand, savings, or matured time deposit,
including a deposit that is automatically renewable, five (5) years
after maturity or five (5) years after the date of the last indication
by the owner of interest in the property, whichever is earlier.
Property that is automatically renewable is considered matured
for purposes of this section upon the expiration of its initial
period, unless the owner has consented to a renewal at or about
the time of the renewal and the consent is in writing or is
evidenced by a memorandum or other record on file with the
holder.
(14) (13) For all other property, the earlier of five (5) years after:
(A) the owner's right to demand the property; or
(B) the obligation to pay or distribute the property;
arose.
be sold.
(b) If the property is of a type that is customarily sold on a
recognized market or that is subject to widely distributed standard price
quotations, and if, in the opinion of the attorney general, the probable
cost of a public sale to the highest bidder would:
(1) exceed the value of the property; or
(2) result in a net loss;
the attorney general may sell the property privately, without notice by
publication, at or above the prevailing price for the property at the time
of the sale.
(c) Securities shall be sold as soon as reasonably possible following
receipt. If a valid claim is made for any securities in the possession of
the attorney general, the attorney general may:
(1) transfer the securities to the claimant; or
(2) pay the claimant the value of the securities as of the date the
securities were delivered to the attorney general.
Notice of the sale of securities is not required. Securities listed on an
established stock exchange must be sold at prices prevailing at the time
of the sale on the stock exchange. Other securities may be sold over the
counter at prices prevailing at the time of sale or by any other method
the attorney general considers reasonable.
(d) A purchaser of property at a sale conducted by the attorney
general under this chapter takes the property free of all claims of the
owner or previous holder and of all persons claiming through or under
them. The attorney general shall execute all documents necessary to
complete the transfer of ownership.
(e) A person does not have a claim against the attorney general for
any appreciation of property after the property is delivered to the
attorney general, except in a case of intentional misconduct or
malfeasance by the attorney general.
(f) If property is forwarded to the attorney general and the
property does not have any of the information required under
section 26(b)(1) of this chapter or the total value of the property is
ten dollars ($10) or less, the attorney general may immediately:
(1) sell the property and transmit the proceeds; or
(2) transfer the property;
to the common school fund.
SECTION 6. IC 32-34-1-32, AS ADDED BY P.L.2-2002,
SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 32. (a) The property custody fund is established.
Except as provided in section 31(f) of this chapter, any money
received by the attorney general under section 39(b) of this chapter
shall be delivered to the treasurer of state for deposit in the property
custody fund. Subject to any claim of the owner allowed by the attorney
general under this chapter, the money shall be held in the property
custody fund for safekeeping until the date the money is presumed
abandoned under sections 20 and 24 of this chapter and transferred to
the abandoned property fund established by section 33 of this chapter
in accordance with this section.
(b) The attorney general shall specify in the notice required by
section 28 of this chapter the latest date the apparent owner may claim
the property from the property custody fund. Notice must also be
mailed to each person having a last known address listed in the report
to the attorney general filed under section 26 of this chapter.
(c) Except as provided in subsection (d), not later than twenty-five
(25) days after the date specified in the notice published under
subsection (b), the treasurer of state, upon order of the attorney general,
shall transfer the principal of the property to which the notice relates
from property custody fund to the abandoned property fund.
(d) The attorney general may allow a claim of the apparent owner
before the principal of the property in the property custody fund is
transferred to the abandoned property fund under subsection (c). After
the elapse of the twenty-five (25) days referred to in subsection (c), the
funds are considered abandoned property instead of property received
under section 39(b) of this chapter for purposes of this chapter.
SECTION 7. IC 32-34-1-33, AS ADDED BY P.L.2-2002,
SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 33. (a) The abandoned property fund is
established. Except as provided in subsection (b) and section sections
31 and 32 of this chapter, money received by the attorney general
under this chapter, including the proceeds from the sale of abandoned
property under section 31 of this chapter, shall be transferred by the
attorney general to the treasurer of state for deposit in the abandoned
property fund.
(b) Money received under this chapter that was originally drawn
from a fund under the control of a local unit of government shall be
transferred to the fund from which the money was originally drawn.
SECTION 8. IC 32-34-1-36, AS ADDED BY P.L.2-2002,
SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 36. (a) Except as provided in subsection (f), a
person, except another state, claiming an interest in property paid or
delivered to the attorney general may file a claim on a form prescribed
by the attorney general and verified by the claimant. To be considered
by the attorney general, the claim must meet the requirements
established by the attorney general.
(b) Not later than ninety (90) days after a claim that meets the
requirements established by the attorney general is filed under
subsection (a), the attorney general shall:
(1) consider the claim; and
(2) give written notice to the claimant that the claim is granted or
that the claim is denied in whole or in part.
(c) Not later than thirty (30) days after a claim is allowed granted,
the attorney general shall pay over or deliver to the claimant the
property, or the net proceeds of the sale of property if the property has
been sold by the attorney general, together with any additional amount
to which the claimant may be entitled under section 30 of this chapter.
(d) A holder who pays the owner for property that has been
delivered to the state and that, if claimed from the attorney general by
the owner, would be subject to an increment under section 30 of this
chapter shall recover the amount of the increment from the attorney
general.
(e) A person may file a claim under subsection (a) at any time
within twenty-five (25) years after the date on which the property was
first presumed abandoned under this chapter, notwithstanding the
expiration of any other time specified by statute, contract, or court
order during which an action or a proceeding may be commenced or
enforced to obtain payment of a claim for money or recovery of
property.
(f) The attorney general may pay over or deliver to the owner
the property, or the net proceeds of the sale of property if the
property has been sold by the attorney general, together with any
additional amount to which the claimant may be entitled under
section 30 of this chapter, without the owner filing a claim under
subsection (a) if the attorney general identifies the owner.
SECTION 9. IC 32-34-1-36.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 36.5. (a) An owner of property
that is delivered to the attorney general may disclaim the property
by filing a disclaimer of property with the attorney general in the
form and manner required by the attorney general.
(b) If the property is disclaimed under subsection (a), the
attorney general may immediately:
(1) sell the property and transmit the proceeds; or
(2) transfer the property;
to the common school fund.