I
106TH CONGRESS
2D SESSION
H. R. 3997
To improve systems for the delivery of dividends, interest, and other valuable
property rights to lost security holders.
IN THE HOUSE OF REPRESENTATIVES
MARCH 15, 2000
Mrs. WILSON (for herself, Mr. KASICH, and Mr. OXLEY) introduced the fol-
lowing bill; which was referred to the Committee on Commerce, and in
addition to the Committee on the Judiciary, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To improve systems for the delivery of dividends, interest,
and other valuable property rights to lost security holders.
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 ‘‘Money Return Act of
2000’’.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The intent and purpose of Federal securi-
ties law is to protect the general investing public and
to make the regulation and control required by na-
tional public interest reasonably complete and effec-
tive.
(2) The United States Securities and Exchange
Commission has acknowledged that there are mil-
lions of lost security holders in the United States,
who are, thereby, deprived of the benefit of their in-
vestments valued by the Commission in the hun-
dreds of millions of dollars.
(3) The Commission’s current regulations relat-
ing to lost security holders apply only to record-
keeping transfer agents who handle approximately
half of all security holders, thereby denying the same
benefits to the other half.
(4) Available technologies can locate 80 percent
or more of corrected addresses for security holders,
who have not received the benefit of the dividends
and interest earned by their securities and other val-
uable property rights.
(5) The Federal Government, through its agen-
cies, holds large sums of money owed to others, who
cannot reasonably obtain their money, because of a
lack of information about these sums and how to
claim them.
TITLE I—RESPONSIBILITIES OF
THE 
SECURITIES 
AND 
EX-
CHANGE COMMISSION
SEC. 101. ADDITIONAL RESPONSIBILITIES TO SECURE DE-
LIVERY 
OF 
DIVIDENDS, 
INTEREST, 
AND
OTHER VALUABLE PROPERTY RIGHTS.
Section 17A of the Securities Exchange Act of 1934
(15 U.S.C. 78q–1) is amended by adding at the end the
following new subsection:
‘‘(g) DUE DILIGENCE FOR THE DELIVERY OF DIVI-
DENDS, INTEREST, AND OTHER VALUABLE PROPERTY
RIGHTS.—
‘‘(1) 
DUE
DILIGENCE
OBLIGATION.—Each
issuer of any security registered pursuant to section
12 of this title shall exercise due diligence in deliv-
ering dividends, interest, and other valuable property
rights to their owners, whether such dividends, inter-
est, or other valuable property rights are delivered
by any issuer or on behalf of any issuer by any pay-
ing agent.
‘‘(2) REVISION OF REGULATIONS REQUIRED.—
The Commission shall amend the provisions of sec-
tion 240.17Ad–17 of the Commission’s regulations
(17 C.F.R. 240.17Ad–17) as in effect on December
8, 1997—
‘‘(A) to extend the application of such sec-
tion to all such paying agents, including the ob-
ligation to use database searches as required of
transfer agents; and
‘‘(B) to extend the application of such sec-
tion to security holders who became lost secu-
rity holders before such date.
‘‘(3) NOTICES.—
‘‘(A) NOTICE ON CHECKS OR OTHER VALU-
ABLE PROPERTY RIGHTS TO SECURITY HOLD-
ERS.—Any check or notice to any security hold-
er who has failed to cash or deposit a previous
check for any dividend or interest payment or
has failed to process a valuable property right
as instructed shall bear a printed notice to the
effect—
‘‘(i) if a check or other valuable prop-
erty right has been sent to a security hold-
er, and the check or other valuable prop-
erty right has been returned to the sender,
the security holder is considered a ‘lost se-
curity holder’ whenever that expression is
used by the Unites States Securities and
Exchange Commission; and
‘‘(ii) if a check or other valuable prop-
erty right is sent to a security holder, and
the check is not negotiated within 7
months or the other valuable property
right is not processed as instructed within
7 months, then that security holder shall
be considered a ‘lost security holder’ and
shall be treated in the same way as lost se-
curity holders are treated under subpara-
graph (A).
‘‘(B) NOTICES ON SUBSEQUENT COMMU-
NICATIONS.—If the lost security holder (as de-
fined in subparagraphs (A)(i) and (A)(ii)) is to
be sent another regularly scheduled communica-
tion, including a dividend or interest check,
then that next communication shall notify the
security holder—
‘‘(i) that a previous check or valuable
property right has been returned to the
sender or has not been negotiated or proc-
essed as instructed, and such notice shall
request the security holder promptly to ne-
gotiate the received check or process the
received valuable property right as in-
structed; and
‘‘(ii) that if such check or other valu-
able property right has not been received
by the security holder, then the security
holder should call the sender at the toll
free number in the notice or should write
or otherwise contact the sender at the ad-
dress or addresses in the notice.
In no event shall the next regularly scheduled
communication occur longer than 7 months
after the original sending.
‘‘(C) EXCEPTIONS.—Paying agents may
exclude from the search requirements any lost
security holder when the value of all dividend,
interest, or other valuable property rights due
to the security holder plus the value of all as-
sets listed in the lost security holder’s account
is less than $25.
‘‘(4) LISTING OF LOST SECURITY HOLDERS.—
The Commission shall establish, or provide for the
establishment by others, of a database that is acces-
sible from the Internet and that contains a list of
the names of persons who are lost security holders,
the names of those issuers or paying agents who are
obligated to deliver to them their dividends, interest,
and other valuable property rights, and, in the case
of paying agents, the identity of the issuer. The
database and Internet site shall be created or caused
to be created by the Commission in accordance with
such procedures as the Commission shall prescribe
by rule, regulation, or order.
‘‘(5) INTEREST ON UNPAID AMOUNTS; TRUST
FOR SECURITY HOLDERS.—Any amounts to which
security holders are entitled shall be held in trust by
any issuers or any paying agents for the benefit of
the security holders. Interest on the amounts held in
trust shall—
‘‘(A) accrue for the benefit of an issuer or
its paying agent as provided for by agreement
between them for the first 6 months after the
return of any undelivered dividend or interest
payment or 7 months after a payment has been
sent but remains uncashed;
‘‘(B) accrue for the benefit of the security
holders beginning 6 months after the return of
any undelivered dividend or interest payment or
7 months after a payment has been sent but re-
mains uncashed; and
‘‘(C) end upon the delivery as escheated or
unclaimed property to a State pursuant to
State law.
‘‘(6) USE OF PROFESSIONAL SEARCH FIRMS.—
‘‘(A) No lost security holder shall be
turned over to a professional search firm for lo-
cating until after two database searches have
been conducted, regardless of whether the secu-
rity holder was deemed ‘lost’ before, on, or after
December 8, 1997.
‘‘(B) The issuer or its paying agent shall
solicit competing bids for locating lost security
holders in accordance with such procedures as
the Commission shall prescribe by rule, regula-
tion, or order. Any successful bidder shall re-
port to the issuer, its paying agent, and the
Commission the number of accounts pursued,
the percentage of accounts recovered, the
amount and percentage of funds recovered, the
names of those who recovered, and the gross
and net amounts each received.
‘‘(7) LIABILITY.—Any issuer or paying agent
that fails to exercise due diligence in accordance
with the requirements of this subsection shall be lia-
ble to any lost security holders or class of lost secu-
rity holders for damages. If the court determines
that such failure constitutes gross negligence or
wanton misconduct, the court may award punitive
damages in an amount equal to triple the amount of
such damages. An action under this paragraph may
be brought in any Federal court of competent juris-
diction.
‘‘(8) REGULATIONS; REPORT.—The Commission
shall—
‘‘(A) adopt such rules, regulations, and or-
ders necessary to implement this subsection no
later than 3 months after the date of enactment
of this subsection;
‘‘(B) provide a report to Congress con-
cerning its progress toward implementation of
this subsection no later than 6 months after
such date of enactment; and
‘‘(C) thereafter include in its annual report
similar information.
‘‘(9) DEFINITION OF PAYING AGENT.—For pur-
poses of this subsection, the term ‘paying agent’ in-
cludes any issuer, transfer agent, broker, dealer, in-
vestment company, mutual fund, investment adviser,
indenture trustee, custodian, or any other person ob-
ligated to deliver dividends, interest, or valuable
property rights.’’.
TITLE II—UNITED STATES
MONEY RETURN COMMISSION
SEC. 201. ESTABLISHMENT.
(a) IN GENERAL.—There is established the United
States Money Return Commission. The Commission shall
be composed of 5 members appointed by the President.
(b) CHAIRMAN.—The President shall designate a
Chairman from among the members of the Commission.
(c) TERMS.—Each member shall serve for a term of
5 years, except that from the first 5 appointees, one shall
serve for 1 year, one shall serve for 2 years, one shall serve
for 3 years, one shall serve for 4 years, and one, the chair-
man, shall serve for 5 years.
(d) LIMITATION.—No more than 2 members shall be
appointed who are employees of the United States of
America or any of its agencies.
SEC. 202. FUNCTIONS.
(a) IN GENERAL.—The Commission shall—
(1) collect and publish on the Internet and
other appropriate media information on all money
held by the United States that is owed to any person
or entity; and
(2) establish procedures for the use of state-of-
the-art technology to restore such moneys to their
rightful owners without charge.
(b) REPORT.—The Commission shall report on its ac-
tivities to the President not later than 1 year after the
date of the enactment of this Act, and annually thereafter.
SEC. 203. ADMINISTRATION.
(a) INFORMATION FROM EXECUTIVE AGENCIES.—
The heads of executive agencies shall, to the extent per-
mitted by law, provide the Commission such information
as it may require for the purpose of carrying out is func-
tions.
(b) PAY.—Members of the Commission shall serve
without any additional Federal compensation for their
work on the Commission. However, members appointed
from among private citizens of the United States may be
allowed travel expenses, including per diem in lieu of sub-
sistence, as authorized by law for persons serving intermit-
tently in the government service (5 U.S.C. 5701–5707),
to the extent funds are available therefor.
(c) STAFF.—The Commission shall have a staff head-
ed by an Executive Director. Any expenses of the Commis-
sion shall be paid from such funds as may be available
to the Secretary of the Treasury.
Æ