Article 6 - Compliance and Enforcement

California Code of Civil Procedure — §§ 1570-1577.5

Sections (9)

Added by renumbering Section 1515 by Stats. 1968, Ch. 356.

The expiration of any period of time specified by statute or court order, during which an action or proceeding may be commenced or enforced to obtain payment of a claim for money or recovery of property from the holder, does not prevent the money or property from being escheated, nor affect any duty to file a report required by this chapter or to pay or deliver escheated property to the State Controller.

§ 1571

Amended by Stats. 2022, Ch. 452, Sec. 42. (SB 1498) Effective January 1, 2023.

(a)The Controller may at reasonable times and upon reasonable notice examine the records of any person if the Controller has reason to believe that the person is a holder who has failed to report property that should have been reported pursuant to this chapter.

(b)When requested by the Controller, the examination shall be conducted by any licensing or regulating agency otherwise empowered by the laws of this state to examine the records of the holder. For the purpose of determining compliance with this chapter, the Commissioner of Financial Protection and Innovation is vested with full authority to examine the records of any banking organization and any savings association doing business within this state but not organized under the laws of or created in this

state.

(c)Following a public hearing, the Controller shall adopt guidelines as to the policies and procedures governing the activity of third-party auditors who are hired by the Controller.

(d)Following a public hearing, the Controller shall adopt guidelines, on or before July 1, 1999, establishing forms, policies, and procedures to enable a person to dispute or appeal the results of any record examination conducted pursuant to this section.

§ 1572

Added by Stats. 1968, Ch. 356.

(a)The State Controller may bring an action in a court of appropriate jurisdiction, as specified in this section, for any of the following purposes:

(1)To enforce the duty of any person under this chapter to permit the examination of the records of such person.

(2)For a judicial determination that particular property is subject to escheat by this state pursuant to this chapter.

(3)To enforce the delivery of any property to the State Controller as required

under this chapter.

(b)The State Controller may bring an action under this chapter in any court of this state of appropriate jurisdiction in any of the following cases:

(1)Where the holder is any person domiciled in this state, or is a government or governmental subdivision or agency of this state.

(2)Where the holder is any person engaged in or transacting business in this state, although not domiciled in this state.

(3)Where the property is tangible personal property and is held in this state.

(c)In any case where no court of this state can obtain jurisdiction over the holder, the State Controller may bring an action in any federal or state court with jurisdiction over the

holder.

§ 1573

Added by Stats. 1968, Ch. 356.

The State Controller may enter into an agreement to provide information needed to enable another state to determine unclaimed property it may be entitled to escheat if such other state or an official thereof agrees to provide this state with information needed to enable this state to determine unclaimed property it may be entitled to escheat. The State Controller may, by regulation, require the reporting of information needed to enable him to comply with agreements made pursuant to this section and may, by regulation, prescribe the form, including verification, of the information to be reported and the times for filing the reports.

§ 1574

Added by Stats. 1968, Ch. 356.

At the request of another state, the Attorney General of this state may bring an action in the name of the other state, in any court of appropriate jurisdiction of this state or federal court within this state, to enforce the unclaimed property laws of the other state against a holder in this state of property subject to escheat by the other state, if:

(a)The courts of the other state cannot obtain jurisdiction over the holder;

(b)The other state has agreed to bring actions in the name of this state at the request of the Attorney General of

this state to enforce the provisions of this chapter against any person in the other state believed by the State Controller to hold property subject to escheat under this chapter, where the courts of this state cannot obtain jurisdiction over such person; and

(c)The other state has agreed to pay reasonable costs incurred by the Attorney General in bringing the action.

§ 1575

Added by Stats. 1968, Ch. 356.

(a)If the State Controller believes that a person in another state holds property subject to escheat under this chapter and the courts of this state cannot obtain jurisdiction over that person, the Attorney General of this state may request an officer of the other state to bring an action in the name of this state to enforce the provisions of this chapter against such person.

(b)This state shall pay all reasonable costs incurred by the other state in any action brought under the authority of this section. The State Controller may agree to pay to any state bringing such an action a

reward not to exceed fifteen percent of the value, after deducting reasonable costs, of any property recovered for this state as a direct or indirect result of such action. Any costs or rewards paid pursuant to this section shall be paid from the Abandoned Property Account in the Unclaimed Property Fund and shall not be deducted from the amount that is subject to be claimed by the owner in accordance with this chapter.

§ 1576

Amended by Stats. 1996, Ch. 762, Sec. 10. Effective January 1, 1997.

(a)Any person who willfully fails to render any report or perform other duties, including use of the report format described in Section 1530, required under this chapter shall be punished by a fine of one hundred dollars ($100) for each day such report is withheld or such duty is not performed, but not more than ten thousand dollars ($10,000).

(b)Any person who willfully refuses to pay or deliver escheated property to the Controller as required under this chapter shall be

punished by a fine of not less than five thousand dollars ($5,000) nor more than fifty thousand dollars ($50,000).

(c)No person shall be considered to have willfully failed to report, pay, or deliver escheated property, or perform other duties unless he or she has failed to respond within a reasonable time after notification by certified mail by the Controller’s office of his or her failure to act.

§ 1577

Amended by Stats. 2022, Ch. 282, Sec. 2. (AB 2280) Effective January 1, 2023.

(a)In addition to any damages, penalties, or fines for which a person may be liable under other provisions of law, any person who fails to report, pay, or deliver unclaimed property within the time prescribed by this chapter, unless that failure is due to reasonable cause, shall pay to the Controller interest at the rate of 12 percent per annum on that property or value thereof from the date the property should have been reported, paid, or delivered.

(b)If a holder reports and pays or delivers unclaimed property within the time prescribed by this chapter, but files a report that is not in substantial compliance with the requirements of Section 1530 or 1532, the interest payable on the

unclaimed property that is paid or delivered in the time prescribed by this chapter shall not exceed ten thousand dollars ($10,000).

(c)The Controller may waive the interest payable under this section if the holder’s failure to file a report that is in substantial compliance with the requirements of Section 1530 or 1532 is due to reasonable cause.

(d)The Controller shall waive the interest payable under this section if the holder participates in and completes all of the requirements of the California Voluntary Compliance Program under Section 1577.5, subject to the right to reinstate, as specified.

§ 1577.5

Repealed and added by Stats. 2022, Ch. 282, Sec. 4. (AB 2280) Effective January 1, 2023. Conditionally operative by its own provisions.

(a)This section shall be known, and may be cited, as the “California Voluntary Compliance Program.”

(b)The Controller may establish a program for the voluntary compliance of holders for the purpose of resolving unclaimed property that is due and owing to the state under this chapter.

(c)A holder that has not reported unclaimed property in accordance with Section 1530 may request to enroll in the program using a form prescribed by the Controller.

(d)The Controller, in their discretion, may enroll eligible holders in the program. A holder is

ineligible to participate in the program if any of the following apply:

(1)At the time the holder’s request to enroll is received by the Controller, the holder is the subject of an examination of records or has received notification from the Controller of an impending examination under Section 1571.

(2)At the time the holder’s request to enroll is received by the Controller, the holder is the subject of a civil or criminal prosecution involving compliance with this chapter.

(3)The Controller has notified the holder of an interest assessment under Section 1577 within the previous five years, and the interest assessment remains unpaid at the time of the holder’s request to enroll.

A holder subject to an outstanding interest assessment may file or refile a request to enroll in the program after resolving the outstanding interest assessment.

(4)The Controller has waived interest assessed against the holder under this section within the previous five years. Notwithstanding the foregoing, if a holder acquired or merged with another entity within the five-year period, the holder may request to enroll in the program for the purpose of resolving unclaimed property that may be due and owing to the state as a result of the acquisition or merger.

(e)The Controller shall waive interest

assessed under Section 1577 for a holder enrolled in the program if the holder does all the following within the prescribed timeframes and satisfies the other requirements of this section:

(1)Enrolls and participates in an unclaimed property educational training program provided by the Controller within three months after the date on which the Controller notified the holder of their enrollment in the program, unless the Controller sets a different date.

(2)Reviews their books and records for unclaimed property for at least the previous 10 years, starting from June 30 or the fiscal yearend preceding the date on which the

report required by paragraph (4) is due.

(3)Makes reasonable efforts to notify owners of reportable property by mail or electronically, as applicable, pursuant to Sections 1513.5, 1514, 1516, or 1520, no less than 30 days prior to submitting the report required by paragraph (4).

(4)Reports to the Controller as required by subdivisions (b), (c), and (e) of Section 1530 within six months after the date on which the Controller notified the holder of their enrollment in the program. Upon written request by the enrolled holder, the Controller may

postpone the reporting date for a period not to exceed 18 months after the date on which the Controller notified the holder of their enrollment in the program.

(5)Submits to the Controller an updated report and pays or delivers to the Controller all escheated property specified in the report as required by Section 1532, no sooner than seven months and no later than seven months and 15 days after the Controller received the report submitted pursuant to paragraph (4).

(f)The Controller may reinstate interest waived under subdivision (d) of Section 1577 if the holder does not pay or deliver all escheated property specified in the report submitted pursuant to and within the timeframe prescribed by paragraph (5) of subdivision (e).

(g)The Controller may adopt guidelines and forms that provide specific procedures for the administration of the program.

(h)This section shall become operative only upon an appropriation by the Legislature in the annual Budget Act for this purpose.