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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2443 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2443

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 HOUSE OF REPRESENTATIVES

                             June 17, 1993

Mr. Gonzalez (for himself and Mr. Leach) introduced the following bill; 
   which was referred to the Committee on Banking, Finance and Urban 
                                Affairs

                            October 28, 1993

    Additional sponsors: Mr. Neal of North Carolina, Mr. Bacchus of 
    Florida, Mr. McCollum, Mr. LaRocco, Mr. Orton, Mr. Deutsch, Mr. 
  Johnston of Florida, Mrs. Meek, Mrs. Fowler, Mr. Gibbons, Mr. Shaw, 
  Mrs. Thurman, Mr. Hastings, Mr. Sanders, Mr. Rahall, Mr. Thomas of 
  Wyoming, Mr. Watt, Ms. Shepherd, Mr. Klein, Mr. Smith of Iowa, Mr. 
    Oxley, Mr. Pastor, Mr. Jefferson, Mr. Peterson of Florida, Mr. 
 Bereuter, Mr. Valentine, Mr. Barrett of Wisconsin, Mr. Lancaster, Mr. 
  Cramer, Mr. Gallegly, Mr. Applegate, Mr. Glickman, Mr. Lantos, Mr. 
 Moran, Mr. Pickett, Mr. Boehner, Mr. McCandless, Mr. Fields of Texas, 
 Mr. Jacobs, Mr. Hamilton, Mr. Machtley, Mr. Swett, Ms. Roybal-Allard, 
Mr. Gillmor, Mr. Hobson, Mr. Rush, Mr. Williams, Mr. Mann, Mr. Price of 
 North Carolina, Mr. Montgomery, Mr. Bateman, Mr. Hansen, Mr. Dooley, 
Mr. Frost, Ms. Danner, Mr. Inslee, Ms. Snowe, Mr. Hayes, Mrs. Unsoeld, 
 Mr. Kreidler, Mr. Durbin, Mr. Berman, Mr. Andrews of Texas, Mr. Rose, 
Mr. Lightfoot, Mr. McDermott, Mr. Santorum, Mr. Payne of Virginia, Mr. 
Andrews of New Jersey, Mr. Packard, Ms. Pryce of Ohio, Mr. Clinger, Mr. 
   Bachus of Alabama, Mr. Kanjorski, Mr. Evans, Mr. Livingston, Mr. 
 Talent, Mr. Bryant, Mr. Dicks, Mr. Borski, Mr. Miller of California, 
  Mr. Brewster, Mrs. Collins of Illinois, Mr. Wheat, Mr. Nussle, Mr. 
Brown of Ohio, Mr. Sam Johnson of Texas, Mrs. Roukema, Mr. Calvert, Mr. 
 Rohrabacher, Mr. Hall of Texas, Ms. Furse, Mr. Ridge, Mr. Fingerhut, 
   Mr. DeFazio, Mr. Royce, Ms. Pelosi, Mr. Lewis of California, Mr. 
   Sangmeister, Mr. Fields of Louisiana, Mr. Emerson, Mr. Klink, Mr. 
Chapman, Ms. Waters, Mr. Stenholm, Mr. Andrews of Maine, Mr. Gutierrez, 
Mr. Reed, Mr. Filner, Mr. Martinez, Mr. Stark, Mr. Baker of Louisiana, 
   Mr. McDade, Mr. Dickey, Mr. Pete Geren of Texas, Mr. Linder, Mr. 
                  Tejeda, Ms. Woolsey, and Mr. Mazzoli

_______________________________________________________________________

                                 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.

    (a) In General.--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 is amended by adding at the end of title VI 
(12 U.S.C. 2501 et seq.) the following new subtitle:

       ``Subtitle B--Disposition of Other Unclaimed Distributions

``SEC. 611. CONGRESSIONAL FINDINGS AND DECLARATION OF PURPOSE.

    ``The Congress hereby finds the following:
            ``(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 substantial sums of money annually.
            ``(4) As a matter of equity among the several States, the 
        States entitled to such unclaimed distributions should be the 
        State in which the principal executive office of the issuer of 
        such distribution is maintained.

``SEC. 612. DEFINITIONS.

    ``As used in this Act--
            ``(1) Address.--The term `address' does not include an 
        address which is not within any State.
            ``(2) 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.
            ``(3) 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 publicly 
        traded security, including a transfer of any ownership interest 
        in such security and any payment of principal with respect to 
        such security.
            ``(4) Holder.--The term `holder'--
                    ``(A) 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; and
                    ``(B) includes any State that has taken possession 
                of a distribution under the laws of such State relating 
                to unclaimed property.
            ``(5) Issuer.--The term `issuer' means a corporate or 
        governmental entity, including a federally-chartered or foreign 
        entity, that issues publicly traded equity or debt securities.
            ``(6) Principal executive office.--For purposes of applying 
        section 613 and 614 with respect to a distribution by an issuer 
        of a publicly traded security--
                    ``(A) In general.--The term `principal executive 
                office' means--
                            ``(i) the office identified as the issuer's 
                        principal executive office in the issuer's most 
                        recent required filing with the appropriate 
                        Federal regulatory agency during the 12-month 
                        period ending on the date immediately prior to 
                        the date of payment by the issuer of such 
                        distribution; and
                            ``(ii) in the case of an issuer who did not 
                        identify a principal executive office in the 
                        filing described in clause (i), the office 
                        identified as the issuer's principal executive 
                        office in--
                                    ``(I) the issuer's most recent 
                                required filing with the appropriate 
                                Federal regulatory agency; or
                                    ``(II) if no filing was required, 
                                any other approved filing with the 
                                appropriate Federal regulatory agency.
                    ``(B) State and municipal issuers.--In the case of 
                any issuer which is a State or a political subdivision 
                of the State, the principal executive offices of the 
                State or political subdivision shall be deemed to be 
                located within such State.
            ``(7) Security.--The term `security' means any note, stock, 
        treasury stock, bond, debenture, evidence of indebtedness, 
        certificate of interest or participation in any profit-sharing 
        agreement, collateral trust certificate, preorganization 
        certificate or subscription, transferable share, investment 
        contract, voting-trust certificate, certificate of deposit for 
        a security, fractional undivided interest in oil, gas, or other 
        mineral rights, any put, call, straddle, option, or privilege 
        on any security, certificate of deposit, or group or index of 
        securities (including any interest therein or based on the 
        value thereof), or any put, call, straddle, option, or 
        privilege entered into on a national securities exchange 
        relating to foreign currency, or, in general, any interest or 
        instrument commonly known as a `security', or any certificate 
        of interest or participation in, temporary or interim 
        certificate for, receipt for, guarantee of, or warrant or right 
        to subscribe to or purchase, any of the foregoing.
            ``(8) State.--The term `State' has the meaning given to 
        such term in section 3(a)(3) of the Federal Deposit Insurance 
        Act.

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

    ``(a) Escheat to State in Which the Principal Executive Offices of 
the Issuer Are Located.--
            ``(1) In general.--Subject to paragraphs (2) and (3), if--
                    ``(A) the books and records of the holder of a 
                distribution paid on a security do not contain the 
                last-known address of a beneficial owner of such 
                distribution; or
                    ``(B) the last-known address of a beneficial owner 
                of a security, as contained on the books and records of 
                the holder of such security, is in a State which does 
                not provide for the escheat or custodial taking of any 
                distribution with respect to such security,
        any distribution for the beneficial owner of the security 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 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 which provides for the escheat or custodial taking of any 
        distribution by any State referred to in paragraph (1)(B) is 
        enacted by or otherwise takes effect in such State at any time 
        after any amount of a distribution for the beneficial owner of 
        a security 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 amount 
        (other than amounts paid by the other State to the beneficial 
        owner) from the other State for disposition in accordance with 
        such law.
            ``(3) Recovery by state for paragraph (1)(a) dispositions 
        before the effective date of this section.--With respect to the 
        amount of any distribution which--
                    ``(A) but for this paragraph, would be subject to 
                paragraph (1)(A); and
                    ``(B) escheated to or was taken into the custody of 
                any State before the date of the enactment of the 
                Equitable Escheatment Act of 1993 pursuant to the laws 
                of such State relating to the escheat or custodial 
                taking of unclaimed property,
        the amount of such distribution (other than amounts paid to a 
        beneficial owner of the security with respect to which such 
        distribution was made) shall be subject to escheat or custodial 
        taking by each other State in the manner provided in paragraph 
        (1).
    ``(b) Escheat to State in Which the Principal Offices of the Holder 
Are Located.--
            ``(1) In general.--Except as provided in subsection (c) and 
        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 
                security do not contain the identity of the issuer of 
                such security; or
                    ``(B) the principal executive offices of the issuer 
                of a security is in a State which does not provide for 
                the escheat or custodial taking of any distribution 
                with respect to such security,
        any distribution for the beneficial owner of the security shall 
        be subject to escheat or custodial taking only by the State in 
        which the principal executive offices of the holder of the 
        security are located to the extent 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 which provides for the escheat or custodial taking of any 
        distribution by a State referred to in paragraph (1)(B) is 
        enacted by or otherwise takes effect in such State at any time 
        after any amount of a distribution for the beneficial owner of 
        a security 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 amount 
        (other than amounts paid by the other State to the beneficial 
        owner) from the other State for disposition in accordance with 
        such law.
    ``(c) Recoveries for Dispositions Described in Subsection (b) 
Before the Effective Date of This Section.--
            ``(1) In general.--With respect to the amount of any 
        distribution which--
                    ``(A) but for this subsection, would be subject to 
                subsection (b); and
                    ``(B) escheated to or was taken into the custody of 
                any State before the date of the enactment of the 
                Equitable Escheatment Act of 1993 pursuant to the laws 
                of such State relating to the escheat or custodial 
                taking of unclaimed property,
        the amount of such distribution (other than amounts paid to a 
        beneficial owner of the security with respect to which such 
        distribution was made) shall be subject to escheat or custodial 
        taking by each other State in the manner provided in paragraph 
        (2).
            ``(2) Apportionment of recovery.--For purposes of paragraph 
        (1), the amount of any distribution which is subject to escheat 
        or custodial taking by any State pursuant to paragraph (1) 
        shall bear the same proportion to the total amount of the 
        distribution which is available to all States under such 
        paragraph as the amount which such State is entitled to receive 
        under subsection (a) from the State referred to in paragraph 
        (1)(B) with respect to distributions which are subject to 
        subsection (a) and escheated to or were taken into the custody 
        of such State before the date of the enactment of the Equitable 
        Escheatment Act of 1993 bears to the total amount which all 
        States are entitled to receive under subsection (a) from the 
        State referred to in paragraph (1)(B) with respect to such 
        distributions.
    ``(d) Determination of Identification and Addresses of Issuers and 
Beneficial Owners.--
            ``(1) In general.--With respect to any unclaimed 
        distribution in the possession of a holder, the holder's 
        determination, after making reasonable efforts (on the basis of 
        prevailing commercial practices) to review the holder's books 
        and records, of the identity and address of the beneficial 
        owner of the security for which such distribution was made and 
        of the issuer of such security, shall be prima facie evidence 
        of the information relating to such beneficial owner and issuer 
        for purposes of this subtitle.
            ``(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, or other 
        readily available public information sources, identify a 
        different State with a superior right to the distribution.
    ``(e) 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 take 
custodially on a pro rata basis to the extent 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 OFFICE DESIGNATION.

    ``No issuer may change the issuer's designation of a principal 
executive office for the sole purpose of altering the entitlement of 
any State to take custody of property subject to this subtitle.

``SEC. 615. SCOPE OF APPLICATION.

    ``Section 613 shall apply to all distributions subject to this 
subtitle 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) Technical and Conforming 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 nt., 2502) are each amended by 
striking ``title'' and inserting ``subtitle''.
    (c) Clerical Amendment.--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, is amended by striking the 
heading for title VI and inserting the following new headings:

           ``TITLE VI--DISPOSITION OF UNCLAIMED DISTRIBUTIONS

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

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