HOUSE BILL REPORT

HB 2794

BYRepresentatives Horn, Haugen, Ferguson, Nelson, Holland, Van Luven, Betrozoff, Fuhrman, Phillips, Kirby, Cooper, Nealey, Wood, Wolfe, Zellinsky, Rayburn, Nutley, Raiter, May, Winsley, Smith and Silver

Changing provisions relating to abandoned property held by local governments.

House Committe on Local Government

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (13)

      Signed by Representatives Haugen, Chair; Cooper, Vice Chair; Ferguson, Ranking Republican Member; Horn, Kirby, Nealey, Nelson, Nutley, Phillips, Raiter, Rayburn, Wolfe and Zellinsky.

House Staff:Steve Lundin (786-7127)

AS REPORTED BY COMMITTEE ON LOCAL GOVERNMENT

FEBRUARY 1, 1990

BACKGROUND:

The Uniform Unclaimed Property Act requires each person or entity holding intangible property that is presumed to be abandoned, and is subject to the provisions of the act, to make annual reports to the Department of Revenue concerning the property. Such a person or entity must deliver or pay this property to the Department of Revenue within six months of filing the report.

Various statutes for local governments provide that warrants are to be canceled one year after they are issued, if they are not presented for payment.  The funds are to be retained as if the warrant had not been issued.

SUMMARY:

SUBSTITUTE BILL:  A local government that holds abandoned intangible property that is not forwarded to the Department of Revenue shall not be required to maintain current records of this property for longer than five years, and at that time may archive such records and transfer the money to its current expense fund.  However, the local government remains liable to pay the intangible property to a person or entity that subsequently establishes its ownership of this intangible property.

Counties, cities, towns municipal corporations, and quasi-municipal corporations may retain the following funds, instead of transferring the funds to the Department of Revenue under the Uniform Unclaimed Property Act:  (1) warrants that have been canceled because they were not presented for payment; (2) uncashed checks; (3) unredeemed bonds and coupons; (4) excess proceeds from property tax and irrigation district foreclosures; and (5) property tax over-payments.  Local governments are required to report such property to the Department of Revenue.

Any funds received by the Department of Revenue under the Uniform Unclaimed Property Act prior to the effective date of this act shall be retained by the state, and any funds not remitted to the department may be retained as authorized in this act.

The bill contains an emergency clause and takes effect immediately.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Local governments are required to report to the Department of Revenue on unclaimed property that is retained.

Fiscal Note:      Requested February 1, 1990.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    Fred Saeger, Washington Association of County Officials; Greg Vigdor, Washington State Hospital Association; Mike Murphy, Thurston County Treasurer; Cynthia Walker and Phil Sanders, King County; Jack Rusler, Pierce County; and Ron Strabbing, Grays Harbor County Treasurer.

House Committee - Testified Against:      Russ Brubaker and Gary O'Neil, Department of Revenue.

House Committee - Testimony For:    This only makes sense.  This clarifies the law.  The Department of Revenue is picking on local governments.

House Committee - Testimony Against:      We should have a Uniform Unclaimed Property Act that is uniform.