GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2017

SESSION LAW 2017-134

HOUSE BILL 294

AN ACT to make changes to the notice requirements and penalty for the disposition of abandoned property, to make technical and CLARIFYING changes to the unclaimed property STATUTES, and to modify terms of appointment for various boards.

The General Assembly of North Carolina enacts:

SECTION 1.(a)  Section 2 of S.L. 2015‑68 is repealed.

SECTION 1.(b)  This section is retroactively effective October 1, 2015.

SECTION 2.(a)  G.S. 116B‑59 reads as rewritten:

"§ 116B‑59.  Notice by holders to apparent owners.

(a) A holder of property presumed abandoned shall make a good faith effort to locate an apparent owner.

(a1) A holder of property that is presumed abandoned and that is either (i) a security or other equity interest in a business association, including a security entitlement under Article 8 of Chapter 25 of the General Statutes, that is valued at twenty‑five dollars ($25.00) or more or (ii) property, other than a security or other equity interest in a business association, including a security entitlement under Article 8 of Chapter 25 of the General Statutes, that is valued at fifty dollars ($50.00) or more shall send written notice by first‑class mail to the apparent owner not more than 120 days or less than 60 days before filing the report required by G.S. 116B‑60. The holder shall exercise reasonable care to ascertain that it is sending the written notice to the apparent owner's correct address.

(b) The holder shall send written notice, by first‑class mail, to the apparent owner, not more than 120 days or less than 60 days before filing the report required by G.S. 116B‑60, to the last known address of the apparent owner as reflected in the holder's records, if the value of the property is fifty dollars ($50.00) or more.

(c)        The written notice to apparent owners required under this section must contain:contain all of the following:

(1)        A statement that, according to the records of the holder, property is being held to which the addressee appears entitled and the amount or description of the property;property.

(2)        The name and address name, address, and contact information of the person holding the property and any necessary information regarding changes of name and address of the holder;holder.

(3)        A statement that, if satisfactory proof of claim is not presented by the owner to the holder by the following October 1 or, if the holder is an insurance company, by the following April 1, the property will be placed in the custody of the Treasurer, to whom all further claims shall be directed.

(4) A statement that, once property is placed in the custody of the Treasurer, all interest, dividends, income, and gains earned on the property will remain with the Treasurer, even if the owner subsequently reclaims the property from the Treasurer."

SECTION 2.(b)  G.S. 116B‑77 reads as rewritten:

"§ 116B‑77.  Interest and penalties; waiver.

(a)        A holder who fails to report, pay, or deliver property within the time prescribed by this Chapter shall pay to the Treasurer interest at the rate established pursuant to this subsection on the property or value of the property from the date the property should have been reported, paid, or delivered. On or before June 1 and December 1 of each year, the Treasurer shall establish the interest rate to be in effect during the six‑month period beginning on the next succeeding July 1 and January 1, respectively, after giving due consideration to current market conditions. If no new rate is established, the rate in effect during the preceding six‑month period shall continue in effect. The rate established by the Treasurer may not be less than five percent (5%) per year and may not exceed sixteen percent (16%) per year.

(b)        A holder who willfully fails to report, pay, or deliver property within the time prescribed by this Chapter, or willfully fails to perform other duties imposed by this Chapter, including the duties imposed by G.S. 116B‑59, shall pay to the Treasurer, in addition to interest as provided in subsection (a) of this section, a civil penalty of one thousand dollars ($1,000) for each day the report, payment, or delivery is withheld, or the duty is not performed, up to a maximum of twenty‑five thousand dollars ($25,000), plus twenty‑five percent (25%) of the value of any property that should have been but was not reported.

(c)        A holder who makes a fraudulent report shall pay to the Treasurer, in addition to interest as provided in subsection (a) of this section, a civil penalty of one thousand dollars ($1,000) for each day from the date a report under this Chapter was due, up to a maximum of twenty‑five thousand dollars ($25,000), plus twenty‑five percent (25%) of the value of any property that should have been but was not reported.

(d)       The Treasurer for good cause may waive, in whole or in part, interest under subsection (a) of this section and penalties under subsection (b) of this section."

SECTION 2.(c)  This section becomes effective October 1, 2017, and applies to property presumed abandoned on or after that date.

SECTION 3.  G.S. 116B‑52(11) reads as rewritten:

"(11)    "Property" means (i) money or tangible personal property held by a holder that is physically located in a safe deposit box or other safekeeping depository held by a financial institution within this State or (ii) a fixed and certain interest in intangible property or money that is held, issued, or owed in the course of a holder's business, or by a government, governmental subdivision, agency, or instrumentality, and all income or increments therefrom. The term includes property that is referred to as or evidenced by:

a.         Money, a check, draft, deposit, interest, or dividend;

b.         Credit balance, customer's overpayment, gift certificate, security deposit, refund, credit memorandum, unpaid wage, unused ticket, mineral proceeds, or unidentified remittance;

c.         Stock Security or other evidence of ownership of an interest in a business association;

d.         A bond, debenture, note, or other evidence of indebtedness;

e.         Money deposited to redeem stocks, bonds, coupons, or other securities, or to make distributions;

f.          An amount due and payable under the terms of an annuity or insurance policy, including policies providing life insurance, property and casualty insurance, workers' compensation insurance, or health and disability insurance; and

g.         An amount distributable from a trust or custodial fund established under a plan to provide health, welfare, pension, vacation, severance, retirement, death, stock purchase, profit sharing, employee savings, supplemental unemployment insurance, or similar benefits."

SECTION 4.  G.S. 116B‑53 reads as rewritten:

"§ 116B‑53.  Presumptions of abandonment.

(a)        Property is unclaimed if the apparent owner has not communicated in writing or by other means reflected in a contemporaneous record prepared by or on behalf of the holder, with the holder concerning the property or the account in which the property is held, and has not otherwise indicated an interest in the property. A communication with an owner by a person (other than the holder or its representative) who has not, in writing, identified the property to the owner is not an indication of interest in the property by the owner.

(b)        An indication of an interest in property includes:

(1)        The presentment of a check or other instrument of payment of a dividend or other distribution made with respect to an account or underlying stock security or other interest in a business association or, in the case of a distribution made by electronic or similar means, evidence that the distribution has been received;

(2)        The presentment of a check or other instrument of payment of interest made with respect to debt of a business association or, in the case of an interest payment made by electronic or similar means, evidence that the interest payment has been received;

(3)        Owner‑directed activity in the account in which the property is held, including a direction by the owner to increase, decrease, or change the amount or type of property held in the account;

(4)        The making of a deposit to or withdrawal from an account in a financial organization;

(5)        Owner activity in another account with the holder of a deposit described in subdivisions (c)(2) and (c)(6) of this section; and

(6)        The payment of a premium with respect to a property interest in an insurance policy; but the application of an automatic premium loan provision or other nonforfeiture provision contained in an insurance policy does not prevent a policy from maturing or terminating if the insured has died or the insured or the beneficiary of the policy has otherwise become entitled to the proceeds before the depletion of the cash surrender value of a policy by the application of those provisions.

(c)        Property is presumed abandoned if it is unclaimed by the apparent owner during the time set forth below for the particular property:

(1)        Traveler's check, 15 years after issuance.

(2)        Time deposit, including a deposit that is automatically renewable, 10 years after the later of initial maturity or the date of the last indication by the owner of interest in the property.

(3)        Money order, cashier's check, teller's check, and certified check, seven years after issuance.

(4)        Stock A security or other equity interest in a business association, including a security entitlement under Article 8 of the Uniform Commercial Code, Chapter 25 of the General Statutes, three years after the earlier of:

a.         The date of a cash dividend or other distribution unclaimed by the apparent owner.

b.         The date a second consecutive mailing, notification, or communication from the holder to the apparent owner by first‑class mail is returned to the holder as unclaimed by or undeliverable to the apparent owner.

c.         The date the holder discontinued mailings, notifications, or communications to the apparent owner.

This subdivision applies to both the underlying stock,security, share, or other intangible ownership interest of an owner, and any stock,security, share, or other intangible interest of which the business association is in possession of the certificate or other evidence or indicia of ownership, and to the stock,security, share, or other ownership interest of dividend and nondividend paying business associations whether or not the interest is represented by a certificate.

(5)        Debt of a business association, including debt evidenced by a matured or called bearer bond or an original issue discount bond, three years after the date of an interest or principal payment unclaimed by the apparent owner.

(5a)      Any dividend, profit, distribution, interest, redemption, payment on principal, cash compensation (including amounts from a demutualized insurance company), or other sum held or owing by a business association for or to its shareholder, certificate holder, policyholder, member, bondholder, or other security holder, who has not claimed it, or corresponded in writing with the business association concerning it, within three years after the date prescribed for payment or delivery.

(6)        Demand or savings deposit, five years after the date of the last indication by the owner of interest in the property.

(7)        Money or credits owed to a customer as a result of a retail business transaction, three years after the obligation accrued.

(8)        Any gift certificate or electronic gift card bearing an expiration date and remaining unredeemed or dormant for more than three years after the gift certificate or electronic gift card was sold is deemed abandoned. The amount abandoned is deemed to be sixty percent (60%) of the unredeemed portion of the face value of the gift certificate or the electronic gift card.

(9)        Amount owed by an insurer on a life or endowment insurance policy or an annuity that has matured or terminated, three years after the obligation to pay arose or, in the case of a policy or annuity payable upon proof of death, three 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.

(10)      Property distributable by a business association in a course of dissolution, one year after the property becomes distributable.

(11)      Property received by a court as proceeds of a class action, and not distributed pursuant to the judgment, one year after the distribution date.

(12)      Property held by a court, government, governmental subdivision, agency, or instrumentality, one year after the property becomes distributable.

(13)      Wages or other compensation for personal services, one year after the compensation becomes payable.

(14)      Deposit or refund owed to a subscriber by a utility, one year after the deposit or refund becomes payable.

(15)      Property in an individual retirement account, defined benefit plan, or other account or plan that is qualified for tax deferral under the income tax laws of the United States, three years after the earliest of the date of the distribution or attempted distribution of the property, the date of the required distribution as stated in the plan or trust agreement governing the plan, or the date, if determinable by the holder, specified in the income tax laws of the United States by which distribution of the property must begin in order to avoid a tax penalty.

(16)      All other property, five years after the owner's right to demand the property or after the obligation to pay or distribute the property arises, whichever first occurs.

(d)       At the time that an interest in property is presumed abandoned under subsection (c) of this section, any other property right accrued or accruing to the owner as a result of the interest, and not previously presumed abandoned, is also presumed abandoned.

(e)        Property is payable or distributable for purposes of this Chapter notwithstanding the owner's failure to make demand or present an instrument or document otherwise required to obtain payment or distribution, except as otherwise provided by the Uniform Commercial Code."

SECTION 5.(a) G.S. 143‑548 reads as rewritten:

"§ 143‑548.  Vocational Rehabilitation Council.

…

(d1)     Terms of Appointment. –

(1)        Length of Term. – Each member of the Council shall serve for a term of not more than three years, except that:

a.         A member appointed to fill a vacancy occurring prior to the expiration of the term for which a predecessor was appointed shall be appointed for the remainder of that term;

b.         The terms of service of the members initially appointed are as specified by the appointing authority for a fewer number of years as will provide for the expiration of terms on a staggered basis and shall include the members of the existing Council to the extent possible with appropriate adjustments to their terms;

c.         The appointing authority shall have the power to remove any member of the Council from office in accordance with the provisions of G.S. 143B‑16; and

d.         A member may continue to serve until a successor for the position is appointed;

(2)        Number of Terms. – No member of the Council other than the representative of the Client Assistance Program Program, the representative of a parent training and information center, and the representative of the directors of projects carried out under section 121 of the Rehabilitation Act of 1973, 29 U.S.C. § 741, as amended, may serve more than two consecutive full terms.

…."

SECTION 5.(b)  G.S. 140‑5.13 reads as rewritten:

"§ 140‑5.13.  Board of Trustees. – establishment; members; selection; quorum; compensation; officers; meetings.

…

(b)        The Board of Trustees of the North Carolina Museum of Art shall consist of 25 members, chosen as follows:

…

All regular appointments or elections except those by the General Assembly shall be for terms of six years, except that each member shall serve until the member's successor is chosen and qualifies. No person may be appointed or elected to more than two consecutive terms of six years. All regular appointments by the General Assembly shall be for the then current legislative term, and no appointee of the General Assembly may be appointed to more than two consecutive terms of two years.four years, with no person being appointed to more than three consecutive terms.

…."

SECTION 6.  Except as otherwise provided, this act is effective when it becomes law.

In the General Assembly read three times and ratified this the 28^th day of June, 2017.

                                                                    s/  Daniel J. Forest

                                                                         President of the Senate

                                                                    s/  David R. Lewis

                                                                         Presiding Officer of the House of Representatives

                                                                    s/  Roy Cooper

                                                                         Governor

Approved 4:10 p.m. this 20^th day of July, 2017