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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1715 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                S. 1715

To provide for the equitable disposition of distributions that are held 
 by a bank or other intermediary as to which the beneficial owners are 
    unknown or whose addresses are unknown, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

            November 19 (legislative day, November 2), 1993

Mrs. Hutchison (for herself, Mrs. Boxer, Mr. Riegle, Mr. Faircloth, Mr. 
 Pryor, Mr. Campbell, Mr. Pressler, Mr. Harkin, Mr. Pell, Mr. Baucus, 
 Mr. Graham, Mr. Breaux, Mr. Grassley, Mr. Reid, Mr. Burns, Mr. Helms, 
Mr. Akaka, Mr. Simon, Mr. Cochran, Mr. Lott, Mr. Bond, Mr. Bradley, Mr. 
Shelby, Ms. Moseley-Braun, Mr. Ford, Mr. Smith, Mr. Coats, Mr. Chafee, 
    Mr. Wofford, Mr. Simpson, Mr. Lautenberg, Mr. Bennett, and Mrs. 
  Feinstein) introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
To provide for the equitable disposition of distributions that are held 
 by a bank or other intermediary as to which the beneficial owners are 
    unknown or whose addresses are unknown, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Equitable Escheatment Act of 1993''.

SEC. 2. DISPOSITION OF UNCLAIMED DISTRIBUTIONS.

    Title VI of the Act entitled ``An Act to increase deposit insurance 
from $20,000 to $40,000, to provide full insurance for public unit 
deposits of $100,000 per account, to establish a National Commission on 
Electronic Fund Transfers, and for other purposes.'' and approved 
October 28, 1974 (12 U.S.C. 2501 et seq.) is amended--
            (1) by striking the title heading and inserting the 
        following:

``TITLE VI--DISPOSITION OF ABANDONED MONEY ORDERS AND TRAVELER'S CHECKS 
                   AND OTHER UNCLAIMED DISTRIBUTIONS

  ``Subtitle A--Disposition of Abandoned Money Orders and Traveler's 
                             Checks''; and

            (2) by adding at the end the following new subtitle:

       ``Subtitle B--Disposition of Other Unclaimed Distributions

``SEC. 611. CONGRESSIONAL FINDINGS.

    ``The Congress finds that--
            ``(1) banks and other intermediaries hold securities which 
        are registered in the street name or nominee name of banks or 
        other intermediaries;
            ``(2) a very small percentage of the dividends, interest, 
        and other distributions made by issuers of securities is unable 
        to be transmitted by the banks and other intermediaries because 
        the intermediaries do not know the identities or addresses of 
        the beneficial owners;
            ``(3) this small percentage of unclaimed distributions 
        nonetheless amounts to a substantial sum of money annually; and
            ``(4) as a matter of equity among the several States, the 
        State entitled to such unclaimed distributions should be the 
        State in which the principal executive offices of the issuer of 
        such distribution are maintained.

``SEC. 612. DEFINITIONS.

    ``For purposes of this subtitle, the following definitions shall 
apply:
            ``(1) Beneficial owner.--The term `beneficial owner' means 
        any person who holds an ownership interest in a security and is 
        entitled to receive the economic benefits of ownership.
            ``(2) Distribution.--The term `distribution' means the 
        payment of a dividend or interest or any other transfer of 
        money, securities, or value made with respect to a security, 
        including a transfer of any ownership interest in such security 
        and any payment of principal with respect to such security.
            ``(3) Holder.--The term `holder' means a person in 
        possession of all or part of a distribution who is not the 
        beneficial owner of the security with respect to which a 
        distribution is made, including banks, depositories, brokerage 
        firms, and other financial intermediaries.
            ``(4) Issuer.--The term `issuer' means a corporation, 
        partnership, trust, or governmental entity, including a 
        federally chartered or foreign entity, that issues equity or 
        debt securities.
            ``(5) Principal executive offices.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `principal executive 
                offices' means--
                            ``(i) the offices identified as the 
                        principal executive offices in the most recent 
                        filing, as required under section 13 of the 
                        Securities Exchange Act of 1934, during the 12-
                        month period ending on the date immediately 
                        prior to the date of payment of such 
                        distribution;
                            ``(ii) in any case in which principal 
                        executive offices were not identified or 
                        required to be identified in a filing described 
                        in clause (i), or where no filing was required, 
                        the offices identified as the principal 
                        executive offices in--
                                    ``(I) the most recent required 
                                filing with a Federal regulatory 
                                agency; or
                                    ``(II) if no filing described in 
                                subclause (I) was required, any other 
                                filing with a self-regulatory agency 
                                (as defined in section 3(26) of the 
                                Securities Exchange Act of 1934); and
                            ``(iii) in any case in which no filing 
                        described in clause (i) or (ii) was made, the 
                        offices identified by the holder.
                    ``(B) State and municipal issuers.--In the case of 
                any issuer that is a State or States, or a political 
                subdivision thereof, the principal executive offices 
                shall be deemed to be located within such State or 
                States.
            ``(6) Security.--The term `security' has the same meaning 
        as in section 2 of the Securities Act of 1933.
            ``(7) State.--The term `State' has the same meaning as in 
        section 3(a)(3) of the Federal Deposit Insurance Act.

``SEC. 613. STATE ENTITLEMENT TO ESCHEAT OR CUSTODY.

    ``(a) Escheat or Custody to State in Which the Principal Executive 
Offices of the Issuer Are Located.--
            ``(1) In general.--Subject to paragraph (2), if--
                    ``(A) the books and records of the holder of a 
                distribution paid on a security do not contain the 
                last-known address of the beneficial owner of such 
                security; or
                    ``(B) the last-known address of the beneficial 
                owner of a security, as contained on the books and 
                records of the holder of a distribution paid with 
                respect to such security, is in a State that does not 
                provide for the escheat or custodial taking of any 
                distribution with respect to such security or is in a 
                foreign country;
        such distribution shall be subject to escheat or custodial 
        taking only by the State in which the principal executive 
        offices of the issuer of the security are located, to the 
        extent that the laws of such State relating to the escheat or 
        custodial taking of unclaimed property authorize the State to 
        take possession of such distribution.
            ``(2) Recovery by state described in paragraph (1)(b).--If 
        a law that provides for the escheat or custodial taking of any 
        distribution by any State described in paragraph (1)(B) is 
        enacted by or otherwise takes effect in such State at any time 
        after a distribution has escheated to or has been taken into 
        the custody of another State pursuant to paragraph (1), the 
        State described in paragraph (1)(B) shall have the right to 
        recover such distribution (other than amounts paid by the other 
        State to the beneficial owner) from the other State for 
        disposition in accordance with such law.
    ``(b) Escheat or Custody to State in Which the Principal Executive 
Offices of the Holder Are Located.--
            ``(1) In general.--Subject to paragraph (2), if, in any 
        case described in subparagraph (A) or (B) of subsection 
        (a)(1)--
                    ``(A) the books and records of the holder of a 
                distribution do not contain the identity of the issuer 
                of the security with respect to which the distribution 
                was made; or
                    ``(B) the principal executive offices of the issuer 
                of the security with respect to which the distribution 
                was made are in a State which does not provide for the 
                escheat or custodial taking of any distribution with 
                respect to such security or are in a foreign country;
        such distribution shall be subject to escheat or custodial 
        taking only by the State in which the principal executive 
        offices of the holder of the distribution are located, to the 
        extent that the laws of such State relating to the escheat or 
        custodial taking of unclaimed property authorize the State to 
        take possession of such distribution.
            ``(2) Recovery by state described in paragraph (1)(b).--If 
        a law that provides for the escheat or custodial taking of any 
        distribution by a State described in paragraph (1)(B) is 
        enacted by or otherwise takes effect in such State at any time 
        after a distribution has escheated to or has been taken into 
        the custody of another State pursuant to paragraph (1), the 
        State described in paragraph (1)(B) shall have the right to 
        recover such distribution (other than amounts paid by the other 
        State to the beneficial owner) from the other State for 
        disposition in accordance with such law.
    ``(c) Determination of Identification and Addresses of Beneficial 
Owners, Issuers, and Holders.--
            ``(1) In general.--With respect to any unclaimed 
        distribution in the possession of a holder, the holder's 
        determination of--
                    ``(A) the identity and address of the beneficial 
                owner of the security with respect to which such 
                distribution was made;
                    ``(B) the issuer of such security; and
                    ``(C) the location of the principal executive 
                offices;
        shall be prima facie evidence for purposes of this subtitle. In 
        making such determinations, the holder shall make reasonable 
        efforts to review its books and records, publicly available 
        information, and databases containing such information.
            ``(2) Burden of showing otherwise.--The burden shall rest 
        upon any State seeking to contest a holder's determination in 
        accordance with paragraph (1) to demonstrate, at the cost of 
        such State, that the books and records of the holder, other 
        publicly available information, or databases identify a 
        different State.
            ``(3) Beneficial owner unknown.--For purposes of this 
        subsection, a holder's determination, after reasonable inquiry, 
        that its books and records do not contain the identity or last-
        known address of the beneficial owner of the security with 
        respect to which a distribution was made shall be conclusive 
        evidence that its books and records do not contain such 
        identity or address.
    ``(d) Distributions in Event of Principal Executive Offices in More 
Than 1 State.--If an issuer or holder identifies principal executive 
offices in more than 1 State, each State identified as the location of 
a principal executive office shall be entitled to escheat or to take 
custodially on a pro rata basis to the extent that the laws of such 
State relating to the escheat or custodial taking of unclaimed property 
authorize the State to take possession of a distribution.

``SEC. 614. CHANGES IN PRINCIPAL EXECUTIVE OFFICES DESIGNATION.

    ``No issuer may change the issuer's designation of principal 
executive offices in any filing described in section 612(5)(A) for the 
sole purpose of altering the entitlement of any State to escheatment or 
custodial possession of property subject to this subtitle.

``SEC. 615. SCOPE OF APPLICATION.

    ``(a) In General.--Section 613 shall apply to all unclaimed 
distributions (other than amounts paid to the beneficial owner) without 
regard to the date on which any such distribution was made by the 
issuer or whether any distribution was paid over by a holder to 1 or 
more States.
    ``(b) Other Application.--With respect to distributions that 
escheated to or were taken into custody by a State before the date of 
enactment of the Equitable Escheatment Act of 1993--
            ``(1) those distributions described in section 613(a)(1) 
        (other than amounts paid by such State to a beneficial owner) 
        shall be subject to escheat or custodial taking by any other 
        State in the manner provided in section 613(a); and
            ``(2) those distributions described in section 613(b)(1) 
        (other than amounts paid by such State to a beneficial owner) 
        shall be subject to escheat or custodial taking by any other 
        State in the same proportion as the proportion which that other 
        State is entitled to receive of the total distributions payable 
        by such State under paragraph (1).''.

SEC. 3. TECHNICAL AMENDMENTS.

    Sections 602 and 604 of title VI of the Act entitled ``An Act to 
increase deposit insurance from $20,000 to $40,000, to provide full 
insurance for public unit deposits of $100,000 per account, to 
establish a National Commission on Electronic Fund Transfers, and for 
other purposes.'' and approved October 28, 1974 (12 U.S.C. 2501 note, 
2502) are amended by striking ``title'' and inserting ``subtitle'' each 
place such term appears.

                                 <all>
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