I 

111TH CONGRESS 

1ST SESSION H. R. 4198 

To establish a program to reunite bondholders with matured unredeemed 

United States savings bonds. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 3, 2009 

Ms. BERKLEY (for herself, Mr. BRADY of Texas, Ms. JENKINS, Mr. WALDEN, 

and Ms. TITUS) introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To establish a program to reunite bondholders with matured 

unredeemed United States savings bonds. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Unclaimed Savings 

5 Bond Act of 2009’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) To maintain public confidence in the United 

9 States savings bond program, sound public policy fa10 vors diligent and productive efforts to locate the 


tjames on DSKG8SOYB1PROD with BILLS
2 

•HR 4198 IH

1 owners of matured unredeemed savings bonds and 

2 return to such owners the more than 

3 $16,500,000,000 in associated bond proceeds. 

4 (2) The Government does not have an orga5 nized program to identify the owners of all matured 

6 unredeemed savings bonds and return to such own7 ers their bond proceeds. 

8 (3) All 50 States, the District of Columbia, the 

9 Commonwealth of Puerto Rico, and the United 

10 States Virgin Islands operate unclaimed property 

11 programs that return to rightful owners over 

12 $1,500,000,000 of property annually, and but for 

13 the efforts of State unclaimed property programs, 

14 this property would almost certainly remain lost. 

15 (4) Providing assistance to State unclaimed 

16 property programs to help return the proceeds of 

17 matured savings bonds to their rightful owners 

18 would benefit owners of savings bonds, stimulate the 

19 economy, and recognize the important, longstanding 

20 role of these programs in consumer protection. 

21 (5) For the Government to develop and admin22 ister an unclaimed property program like the suc23 cessful ones that States already have would be cost24 ly, duplicative, and administratively burdensome, 


tjames on DSKG8SOYB1PROD with BILLS
3 

•HR 4198 IH

1 and would involve the Government in an area that 

2 historically has been the province of the States. 

3 (6) Although the proceeds of matured 

4 unredeemed savings bonds are held in the United 

5 States Treasury, these proceeds are not Federal 

6 funds and belong to bond owners, not the Federal 

7 Government. 

8 (7) Income taxes on matured savings bonds are 

9 due at final maturity. To promote equity among all 

10 taxpayers, estimated taxes due should be withheld 

11 from savings bond proceeds in Federal Government 

12 possession. 

13 SEC. 3. DEMONSTRATION PROGRAM TO RETURN THE PRO14 CEEDS OF MATURED UNREDEEMED U.S. SAV15 INGS BONDS TO THEIR RIGHTFUL OWNERS. 

16 (a) ESTABLISHMENT OF DEMONSTRATION PRO17 GRAM.— 

18 (1) IN GENERAL.—Subject to the succeeding 

19 provisions of this section, beginning in the first fiscal 

20 year beginning after the date of the enactment of 

21 this Act, the Secretary shall conduct a demonstra22 tion program (referred to in this section as the 

23 ‘‘demonstration program’’) under which the Sec24 retary— 


tjames on DSKG8SOYB1PROD with BILLS
4 

•HR 4198 IH

1 (A) attempts to identify and locate the 

2 owners of specified unredeemed savings bonds, 

3 and 

4 (B) provides assistance to States in the 

5 form of bondholder location and assistance 

6 grants (as defined in subsection (b)) for the 

7 purpose of owner location and notification ac8 tivities with respect to such bonds. 

9 (2) PARTICIPATION IN DEMONSTRATION PRO10 GRAM.—A State electing to participate in the dem11 onstration program for any fiscal year by receiving 

12 a bondholder location and assistance grant shall no13 tify the Secretary of such election on or before Sep14 tember 1 of the fiscal year preceding such fiscal year 

15 by filing a grant application with the Secretary, in 

16 such manner and accompanied by such information 

17 as the Secretary may reasonably require. 

18 (3) DIRECT OUTREACH.—Under the demonstra19 tion program, the Secretary shall attempt to locate 

20 the owners of specified unredeemed savings bonds 

21 for which the registered address (as determined 

22 under subsection (c)(2)(C)(i)(II)) is located in a 

23 State not participating in the demonstration pro24 gram in the fiscal year in which such bond would 

25 otherwise have been referred to such State under 


tjames on DSKG8SOYB1PROD with BILLS
5 

•HR 4198 IH

1 subsection (c)(2)(C)(iii), or is not located in any 

2 State. 

3 (4) AUTHORIZATION OF APPROPRIATIONS.— 

4 There is authorized and appropriated from the gen5 eral fund of the Treasury such sums as are nec6 essary to carry out the purposes of this section. 

7 Such sums shall be available until expended. 

8 (5) REPORT TO CONGRESS.—The Secretary 

9 shall report to Congress not later than October 31 

10 of each fiscal year regarding the program established 

11 under this subsection. Such report, which may be 

12 combined with other reports of the Secretary to Con13 gress, shall include— 

14 (A) a description of the actions taken 

15 under this subsection in the preceding fiscal 

16 year, 

17 (B) for each State, the number of specified 

18 unredeemed savings bonds referred to such 

19 State during the preceding fiscal year, 

20 (C) for each State, the amount and num21 ber of such bonds referred to such State in all 

22 fiscal years, by year of referral, that were re23 deemed in the preceding fiscal year, 

24 (D) the average amount of time between 

25 the receipt of valid claims for such bonds and 


tjames on DSKG8SOYB1PROD with BILLS
6 

•HR 4198 IH

1 the issuance of payment to redeem such bonds, 

2 and 

3 (E) the States receiving a bondholder loca4 tion and assistance grant under the demonstra5 tion program during the preceding fiscal years 

6 of such program, the total number of such 

7 grants awarded during such fiscal years, and 

8 the total amount of grant funds distributed 

9 under subsection (b)(2) during such fiscal 

10 years. 

11 (b) BONDHOLDER LOCATION AND ASSISTANCE

12 GRANTS.— 

13 (1) IN GENERAL.—For purposes of the dem14 onstration program established under subsection (a), 

15 a bondholder location and assistance grant is a 

16 grant issued by the Secretary to a State for the pur17 pose of locating the owners of specified unredeemed 

18 savings bonds referred to the State as provided in 

19 subsection (c)(2)(C)(iii) and providing the owners of 

20 such bonds with assistance in claiming the proceeds 

21 of such bonds. 

22 (2) AWARDING OF GRANTS.—Subject to the 

23 availability of funds, the Secretary shall make an 

24 award in each fiscal year of a bondholder location 

25 and assistance grant under the demonstration proVerDate Nov 24 2008 00:45 Dec 04, 2009 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4198.IH H4198

tjames on DSKG8SOYB1PROD with BILLS
7 

•HR 4198 IH

1 gram established under subsection (a) to any State 

2 that has submitted for such fiscal year a grant ap3 plication under paragraph (2) of such subsection 

4 that satisfies all requirements stipulated by the Sec5 retary for such applications. The funds under such 

6 grant shall be made available to the State within 30 

7 days of the later of the start of such fiscal year or 

8 the appropriation of funds for the demonstration 

9 program for such fiscal year. 

10 (3) GRANT AMOUNT.—The amount of each 

11 bondholder location and assistance grant awarded to 

12 a State for any fiscal year shall be an amount equal 

13 to the product of— 

14 (A) the number of bonds that will be re15 ferred to such State in such fiscal year, as esti16 mated by the Secretary based on the rec17 ommendation of the State coordinator under 

18 subsection (c)(2)(C)(i), and 

19 (B) $30. 

20 Such amount to be made available to the State until 

21 expended. 

22 (4) GRANT ACTIVITIES.— 

23 (A) MANDATORY ACTIVITIES.—A State re24 ceiving a bondholder location and assistance 


tjames on DSKG8SOYB1PROD with BILLS
8 

•HR 4198 IH

1 grant in any fiscal year shall conduct the fol2 lowing activities under such grant in such year: 

3 (i) WRITTEN NOTIFICATION EF4 FORTS.—Written notification, mailed to 

5 each owner of record of each specified 

6 unredeemed savings bond referred to the 

7 State with respect to whom an address 

8 suitable for the delivery of mail can be de9 termined, of— 

10 (I) the existence of such bond, 

11 (II) the fact that such bond is no 

12 longer earning interest, and 

13 (III) the fact that the bond may 

14 be redeemed through agents of the 

15 Department of the Treasury. 

16 (ii) INCLUSION IN STATE DATA17 BASES.—In the case of any State that op18 erates a searchable database of unclaimed 

19 property, inclusion in such database of in20 formation about each specified unredeemed 

21 savings bond referred to the State and the 

22 owner of such bond. 

23 (B) OPTIONAL ACTIVITIES.—In addition to 

24 the activities required under subparagraph (A), 

25 funds received by a State under a bondholder 


tjames on DSKG8SOYB1PROD with BILLS
9 

•HR 4198 IH

1 location and assistance grant may be used for 

2 the following activities: 

3 (i) OWNER LOCATION AND NOTIFICA4 TION EFFORTS.—In addition to the activi5 ties required under subparagraph (A)(i), 

6 activities to locate the owners of specified 

7 unredeemed savings bonds referred to the 

8 State and to notify such owners of such 

9 bonds, including matching bond records 

10 against State databases or constituent lists 

11 maintained by State legislators, research12 ing the location of such owners, and pub13 lishing notices in newspapers and maga14 zines of general circulation. 

15 (ii) ASSISTANCE TO BONDHOLDERS.— 

16 Actual and attempted communications with 

17 owners of specified unredeemed savings 

18 bonds about methods of bond redemption, 

19 requirements for filing claims for missing 

20 bonds or other similar claims, the status of 

21 claims for bonds, and similar matters. 

22 (C) RESTRICTIONS ON LOCATION AND NO23 TIFICATION EFFORTS.—The Secretary may pro24 vide for such restrictions on methods used to lo25 cate and notify owners of specified unredeemed 


tjames on DSKG8SOYB1PROD with BILLS
10 

•HR 4198 IH

1 savings bonds as the Secretary deems appro2 priate, including any restrictions on the use of 

3 commercial locator services. 

4 (5) PROVISION OF BOND RECORDS.—Subject to 

5 any other requirements and limitations provided in 

6 this section, the State coordinator shall provide to a 

7 State receiving a bondholder location and assistance 

8 grant such records with respect to the bonds re9 ferred to such State under subsection (c)(2)(C)(iii) 

10 as are necessary and appropriate to carry out the 

11 purposes of such grant. 

12 (c) EXAMINATION AND REFERRAL OF BONDS.— 

13 (1) IN GENERAL.—Not later than 90 days after 

14 the date of the enactment of this Act, the Secretary 

15 shall enter into a cooperative agreement (within the 

16 meaning of section 6305 of title 31, United States 

17 Code) with the State coordinator for the purpose 

18 of— 

19 (A) identifying the owners of specified 

20 unredeemed savings bonds, and 

21 (B) referring specified unredeemed savings 

22 bonds to the State of residence of the owner, in 

23 the case of a State that is participating in the 

24 demonstration program by receiving a bond25 holder location and assistance grant under subVerDate Nov 24 2008 00:45 Dec 04, 2009 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4198.IH H4198

tjames on DSKG8SOYB1PROD with BILLS
11 

•HR 4198 IH

1 section (b) for the fiscal year in which the refer2 ral is made. 

3 (2) AGREEMENT REQUIREMENTS.—The cooper4 ative agreement entered into under paragraph (1) 

5 shall provide for the following with respect to speci6 fied unredeemed savings bonds: 

7 (A) ACCESS TO BOND RECORDS.—The Sec8 retary shall provide the State coordinator with 

9 full access to records related to such bonds. 

10 (B) COMPILATION OF INFORMATION.—The 

11 State coordinator shall compile relevant infor12 mation with respect to such bonds and make 

13 the results of such compilation available to the 

14 Secretary for the Secretary’s review and concur15 rence. 

16 (C) REFERRAL OF BONDS TO STATES FOR

17 PROCESSING.— 

18 (i) RECOMMENDATION OF STATE OF

19 REFERRAL.— 

20 (I) The State coordinator shall 

21 make a recommendation to the Sec22 retary regarding to which State each 

23 bond should be referred for owner lo24 cation and notification activities. 


tjames on DSKG8SOYB1PROD with BILLS
12 

•HR 4198 IH

1 (II) Such recommendation shall 

2 be based on the registered owner’s ad3 dress of record being in the State to 

4 which the bond will be recommended 

5 to be referred as determined in ac6 cordance with Government Auditing 

7 Standards for appropriateness and 

8 sufficiency. 

9 (ii) FINALITY OF DETERMINATION.— 

10 The Secretary shall make the final deter11 mination regarding the State, if any, to 

12 which each bond should be referred for 

13 processing after taking into account the 

14 recommendation of the State coordinator. 

15 Such determination by the Secretary shall 

16 be conclusive and shall not be subject to 

17 judicial review. 

18 (iii) REFERRAL.—Subject to clauses 

19 (iv) and (v), in the case of a State that is 

20 participating in the demonstration pro21 gram by receiving a bondholder location 

22 and assistance grant under subsection (b) 

23 for the fiscal year in which the referral will 

24 be made, the Secretary shall refer to such 

25 State each bond that the Secretary has deVerDate Nov 24 2008 00:45 Dec 04, 2009 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H4198.IH H4198

tjames on DSKG8SOYB1PROD with BILLS
13 

•HR 4198 IH

1 termined should be referred to such State, 

2 for activities under such grant. 

3 (iv) LIMITATION BASED ON AVAIL4 ABILITY OF FUNDS.—The Secretary shall 

5 not refer a bond to a State described in 

6 clause (iii) unless sufficient funds are 

7 available to provide to such State the full 

8 grant amount described in subsection 

9 (b)(3) for the fiscal year in which the re10 ferral will be made. 

11 (v) LIMITATION BASED ON MAXIMUM

12 ALLOWABLE NUMBER OF BONDS.— 

13 (I) IN GENERAL.—The State co14 ordinator shall not examine under the 

15 agreement described in this subsection 

16 more than the number of bond 

17 records that is reasonably expected to 

18 result in the referral to the States of 

19 a number of such bonds that is not 

20 greater than such maximum allowable 

21 number. 

22 (II) MAXIMUM ALLOWABLE NUM23 BER OF SPECIFIED UNREDEEMED

24 SAVINGS BONDS.—For purposes of 

25 this clause, the maximum allowable 


tjames on DSKG8SOYB1PROD with BILLS
14 

•HR 4198 IH

1 number of specified unredeemed sav2 ings bonds is a number of such bonds 

3 such that the sum of— 

4 (aa) the product of— 

5 (AA) the number of 

6 bonds, and 

7 (BB) $30, and 

8 (bb) the estimated amounts 

9 to be paid by the Secretary to the 

10 State coordinator under para11 graph (3), 

12 equals $300,000,000. 

13 (D) SEARCHABLE DATABASE.—After the 

14 Secretary concurs with the information com15 piled under subparagraph (B), the State coordi16 nator shall establish a searchable database 

17 which includes such information specified by 

18 the Secretary with respect to each bond and the 

19 State to which each bond is recommended to be 

20 referred for processing. The State coordinator 

21 shall update the information contained in such 

22 database (including information indicating 

23 which bonds have been redeemed) in such man24 ner as the Secretary may provide. 


tjames on DSKG8SOYB1PROD with BILLS
15 

•HR 4198 IH

1 (3) PAYMENT OF FUNDS.—The cooperative 

2 agreement entered into under this subsection shall 

3 specify that the Secretary shall pay to the State co4 ordinator, from the funds appropriated for the dem5 onstration program, an amount equal to the reason6 able costs of carrying out the State coordinator’s du7 ties under the agreement. 

8 (d) CONFIDENTIALITY.— 

9 (1) RETURN INFORMATION.—Except as pro10 vided in paragraph (2), for purposes of section 6103 

11 of the Internal Revenue Code of 1986, records pro12 vided to the State coordinator or to a State by the 

13 Secretary under this section shall be treated as re14 turn information as defined in section 6103(b)(2) of 

15 such Code. 

16 (2) EXCEPTION.—Notwithstanding section 

17 6103(b)(2)(A) of the Internal Revenue Code of 

18 1986, for purposes of this paragraph, the name and 

19 address of the holder of a bond and such other infor20 mation as may be specified by the Secretary shall 

21 not be treated as return information when provided 

22 to the State coordinator or to a State by the Sec23 retary. 

24 (e) DEFINITIONS.—For purposes of this section— 


tjames on DSKG8SOYB1PROD with BILLS
16 

•HR 4198 IH

1 (1) REGISTERED ADDRESS.—The term ‘‘reg2 istered address’’ means the address of the bond 

3 owner inscribed on the face of the bond or main4 tained by the Secretary at the time of final maturity 

5 of such bond. 

6 (2) SECRETARY.—The term ‘‘Secretary’’ means 

7 the Secretary of the Treasury or the Secretary’s del8 egate. 

9 (3) SPECIFIED UNREDEEMED SAVINGS BOND.— 

10 The term ‘‘specified unredeemed savings bond’’ 

11 means each outstanding United States savings bond, 

12 except that such bond shall not be treated as a spec13 ified unredeemed savings bond until the later of— 

14 (A) the date that is 5 years after the date 

15 of the maturity of such bond; or 

16 (B) the date of the enactment of this Act. 

17 (4) STATE.—The term ‘‘State’’ includes the 

18 District of Columbia and any territory or possession 

19 of the United States that maintains a program for 

20 the administration of unclaimed property. 

21 (5) STATE COORDINATOR.—The term ‘‘State 

22 coordinator’’ means the eligible entity which is deter23 mined by the Secretary, after consultation with the 

24 States, to be best suited to carry out the activities 

25 described in subsection (c). For purposes of the preVerDate Nov 24 2008 00:45 Dec 04, 2009 Jkt 089200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H4198.IH H4198

tjames on DSKG8SOYB1PROD with BILLS
17 

•HR 4198 IH

1 ceding sentence, the term ‘‘eligible entity’’ means 

2 any State or the National Association of Unclaimed 

3 Property Administrators. 

4 SEC. 4. WITHHOLDING OF TAX ON UNCLAIMED INTEREST. 

5 (a) IN GENERAL.—The Secretary of the Treasury 

6 shall deduct and withhold from the proceeds of any ma7 tured outstanding United States savings bond, on the later 

8 of the date of maturity of such bond or the date of the 

9 enactment of this Act, a tax in an amount equal to the 

10 applicable percentage of the amount which, if such bond 

11 were redeemed, would constitute interest. 

12 (b) APPLICABLE PERCENTAGE.—For purposes of 

13 this section, the applicable percentage is the 2nd highest 

14 rate of individual income tax under section 1(c) of the In15 ternal Revenue Code of 1986. 

16 (c) TREATMENT IN SAME MANNER AS WAGE WITH17 HOLDING.—Except as otherwise provided by the Secretary 

18 of the Treasury, for purposes of sections 3403 and 3404 

19 of the Internal Revenue Code of 1986 and so much of 

20 subtitle F of such Code (except section 7205) as relates 

21 to chapter 24 of such Code, payments to any person as 

22 a result of the redemption of any bond subject to with23 holding under this subsection shall be treated, at the time 

24 of maturation of such bond, as if such payments were 

25 wages paid by an employer to an employee. 


tjames on DSKG8SOYB1PROD with BILLS
18 

•HR 4198 IH

1 (d) INCLUSION IN INCOME OF BONDHOLDER.—Ef2 fective on the date of maturity of any matured outstanding 

3 United States savings bond, the amount which, if such 

4 bond were redeemed, would constitute interest shall be 

5 treated as gross income of the holder of such bond for 

6 purposes of section 61 of the Internal Revenue Code of 

7 1986. 

8 (e) FILING OF AMENDED RETURNS.— 

9 (1) IN GENERAL.—Upon redemption of any ma10 tured outstanding United States savings bond, the 

11 bondholder may file an amended Federal income tax 

12 return for the taxable year of the maturity of such 

13 bond in order to claim a credit for the amount with14 held in such year under subsection (a), provided that 

15 such amended return includes the inclusion in the 

16 income of the bondholder of the amounts specified in 

17 subsection (d). 

18 (2) EXCEPTION TO STATUTE OF LIMITA19 TIONS.—An amended return filed by reason of para20 graph (1) shall be considered a return for purposes 

21 of sections 6501(a) and 6511(a) of the Internal Rev22 enue Code of 1986. 

23 (f) CONFORMING AMENDMENT.—Subsection (b) of 

24 section 1324 of title 31, United States Code, is amended— 


tjames on DSKG8SOYB1PROD with BILLS
19 

•HR 4198 IH

1 (1) by striking ‘‘and’’ at the end of paragraph 

2 (1); 

3 (2) by striking the period at the end of para4 graph (2) and inserting ‘‘; and’’; and 

5 (3) by adding at the end the following new 

6 paragraph: 

7 ‘‘(3) refunds due from the credit provision of 

8 section 4(e)(1) of the Unclaimed Savings Bond Act 

9 of 2009.’’. 

Æ 


tjames on DSKG8SOYB1PROD with BILLS