A $10,000 interest cap is provided if a holder timely delivers the unclaimed property but the report is not in substantial compliance (this would not apply to most reports containing past-due property). Under the current California Unclaimed Property Law (UPL), holders are subject to 12% interest on late reported and delivered property, unless the failure to timely report and deliver is due to “reasonable cause.” The State Controller’s Office (SCO) automatically generates interest assessments on past-due property, and holders must plead their cases for a waiver, citing “reasonable cause” grounds for the SCO’s withdrawal of an interest assessment (e.g., the failure to report was due to circumstances beyond the holder’s control).
#Another word for clarify code#
Under AB 2280, current Section 1577.5 of the California Code of Civil Procedure would be repealed, and provisions creating the VCP would be added as a new Section 1577.5 with the significant benefit that the controller would be required to waive interest if the holder complies with the program’s provisions. Notably (or infamously), California is one of the only states where there is no voluntary compliance or similar program for holders to report past-due unclaimed property.
On August 17, 2022, the California legislature passed Assembly Bill 2280 (AB 2280) that, if signed into law by Governor Gavin Newsom as expected, would establish the California Voluntary Compliance Program (VCP) for unclaimed property holders.