A bill has been introduced in the California Assembly that would create a voluntary disclosure agreement (VDA) program whereby holders can report and remit past due unclaimed property to the state without being assessed interest and penalty charges. If enacted, companies not currently in full compliance with the state’s unclaimed property laws will have an opportunity to come into compliance with a limited look-back period free from interest and penalty charges.
Type: Client Alerts
Many states offer VDA programs as an incentive for companies, as “holders” of unclaimed property, to come into compliance by voluntarily reporting unclaimed property assets to the state. Nearly 20 years ago, California statutorily established an unclaimed property amnesty program.1 That program, which ended in December of 2002, provided an opportunity for holders to come forward and report property without having to pay interest and penalties. California’s unclaimed property statute requires the Controller, absent reasonable cause, to assess 12 percent interest on property from the date that the property should have been reported. The interest is automatically assessed, and requests for abatement must be submitted individually after the assessment. The law provides that the California legislature must act to authorize any general abatement of interest and penalties through a voluntary disclosure program. AB 2773 would do just that.