I
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. JOHN-
STON of Florida, Mrs. MEEK, Mrs. FOWLER, Mr. GIBBONS, Mr. SHAW,
Mrs. THURMAN, Mr. HASTINGS, Mr. SANDERS, Mr. RAHALL, Mr. THOM-
AS of Wyoming, Mr. WATT, Ms. SHEPHERD, Mr. KLEIN, Mr. SMITH of
Iowa, Mr. OXLEY, Mr. PASTOR, Mr. JEFFERSON, Mr. PETERSON of Flor-
ida, Mr. BEREUTER, Mr. VALENTINE, Mr. BARRETT of Wisconsin, Mr.
LANCASTER, Mr. CRAMER, Mr. GALLEGLY, Mr. APPLEGATE, Mr. GLICK-
MAN, 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. HOB-
SON, Mr. RUSH, Mr. WILLIAMS, Mr. MANN, Mr. PRICE of North Caro-
lina, 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 Representa-
tives 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 in-
crease deposit insurance from $20,000 to $40,000, to pro-
vide full insurance for public unit deposits of $100,000
per account, to establish a National Commission on Elec-
tronic Fund Transfers, and for other purposes.’’ and ap-
proved October 28, 1974 is amended by adding at the end
of title VI (12 U.S.C. 2501 et seq.) the following new sub-
title:
‘‘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 secu-
rities 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 bene-
ficial owners.
‘‘(3) This small percentage of unclaimed dis-
tributions nonetheless amounts to substantial sums
of money annually.
‘‘(4) As a matter of equity among the several
States, the States entitled to such unclaimed dis-
tributions 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 ‘bene-
ficial owner’ means any person who holds an owner-
ship 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, deposi-
tories, 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 cor-
porate or governmental entity, including a federally-
chartered or foreign entity, that issues publicly
traded equity or debt securities.
‘‘(6) PRINCIPAL EXECUTIVE OFFICE.—For pur-
poses of applying section 613 and 614 with respect
to a distribution by an issuer of a publicly traded se-
curity—
‘‘(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 appro-
priate 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 re-
quired filing with the appropriate
Federal regulatory agency; or
‘‘(II) if no filing was required,
any other approved filing with the ap-
propriate Federal regulatory agency.
‘‘(B) STATE AND MUNICIPAL ISSUERS.—In
the case of any issuer which is a State or a po-
litical subdivision of the State, the principal ex-
ecutive offices of the State or political subdivi-
sion shall be deemed to be located within such
State.
‘‘(7) SECURITY.—The term ‘security’ means
any note, stock, treasury stock, bond, debenture, evi-
dence of indebtedness, certificate of interest or par-
ticipation in any profit-sharing agreement, collateral
trust certificate, preorganization certificate or sub-
scription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a se-
curity, 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 cur-
rency, 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 fore-
going.
‘‘(8) STATE.—The term ‘State’ has the mean-
ing 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 con-
tain 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 re-
spect to such security,
any distribution for the beneficial owner of the secu-
rity shall be subject to escheat or custodial taking
only by the State in which the principal executive of-
actment of the Equitable Escheatment Act of
1993 pursuant to the laws of such State relat-
ing to the escheat or custodial taking of un-
claimed property,
the amount of such distribution (other than amounts
paid to a beneficial owner of the security with re-
spect 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 sub-
section (c) and subject to paragraph (2), if, in any
case described in subparagraph (A) or (B) of sub-
section (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 secu-
rity shall be subject to escheat or custodial taking
only by the State in which the principal executive of-
fices 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 PARA-
GRAPH (1)(B).—If a law which provides for the es-
cheat 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 disposi-
tion 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 sub-
ject to subsection (b); and
‘‘(B) escheated to or was taken into the
custody of any State before the date of the en-
actment of the Equitable Escheatment Act of
1993 pursuant to the laws of such State relat-
ing to the escheat or custodial taking of un-
claimed property,
the amount of such distribution (other than amounts
paid to a beneficial owner of the security with re-
spect 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 dis-
tribution 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 AD-
DRESSES OF ISSUERS AND BENEFICIAL OWNERS.—
‘‘(1) IN GENERAL.—With respect to any un-
claimed distribution in the possession of a holder,
the holder’s determination, after making reasonable
efforts (on the basis of prevailing commercial prac-
tices) 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 para-
graph (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 dis-
tribution.
‘‘(e) DISTRIBUTIONS IN EVENT OF PRINCIPAL EXEC-
UTIVE 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 Commis-
sion on Electronic Fund Transfers, and for other pur-
poses.’’ and approved October 28, 1974 (12 U.S.C. 2501
nt., 2502) are each amended by striking ‘‘title’’ and insert-
ing ‘‘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 Commis-
sion on Electronic Fund Transfers, and for other pur-
poses.’’ and approved October 28, 1974, is amended by
striking the heading for title VI and inserting the follow-
ing new headings:
‘‘TITLE VI—DISPOSITION OF
UNCLAIMED DISTRIBUTIONS
‘‘Subtitle A—Disposition of Aban-
doned Money Orders and Trav-
eler’s Checks’’.
Æ