126th General Assembly
(As Passed by the General Assembly)
Sens. Niehaus, Schuring, Spada, Mumper, Jacobson, Clancy, Armbruster, Coughlin, Hagan, Harris, Kearney, D. Miller, Roberts, Fedor, Zurz, R. Miller
Reps. Combs, Collier, Widener, J. McGregor, Cassell, Book, Calvert, Chandler, Domenick, C. Evans, Flowers, Gibbs, Gilb, Hoops, Hughes, Luckie, T. Patton, Perry, Reidelbach, G. Smith, D. Stewart, Yuko
Effective date: March 23, 2007; certain provisions effective May 22, 2007
ACT SUMMARY
· Prohibits a person who, for remuneration, is interested in entering into an agreement to locate, deliver, recover, or assist in the recovery of unclaimed funds from initiating any contact with an owner of unclaimed funds during the two-year period immediately after the date a report of unclaimed funds is filed with the Director of Commerce, and makes failure to comply grounds for invalidation of an agreement.
· Specifies additional information that must be disclosed in an agreement for recovering unclaimed funds or contents of a safe deposit box and requires that the agreement be notarized.
· Establishes conditions that must be satisfied when an agreement involves recovery of the contents of a safe deposit box.
· Prohibits an agreement from containing a power of attorney that allows for payment of the unclaimed funds or delivery of the contents of a safe deposit box to any person other than the owner of the unclaimed funds or contents of the safe deposit box.
· Prohibits the Director from recognizing or making any delivery and prohibits the Auditor of State from making any payment pursuant to a power of attorney between an owner and the person with whom the owner entered into an agreement if that power of attorney specifies that payment or delivery must be made to a person other than the owner or the owner's legal representative.
· Prohibits a person, on behalf of any other person, from engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds or contents of a safe deposit box and receiving a fee, compensation, commission, or other remuneration for such activity, without first obtaining a certificate of registration; makes violation of this prohibition a first-degree misdemeanor on a first offense and a fifth-degree felony on subsequent offenses; and delays the effect of these provisions until 60 days after the act's effective date.
· Specifies criteria for obtaining and renewing a certificate of registration and procedures and authority to take disciplinary action against a certificate holder.
· Specifies procedures and authority to investigate allegations that a person is operating without a required certificate or operating under an invalid agreement.
· Requires that claims for unclaimed funds or contents of a safe deposit box submitted pursuant to an agreement anytime after 60 days after the act's effective date, bear a certificate of registration number.
· Statutorily creates the office of the Superintendent of Unclaimed Funds and the Division of Unclaimed Funds.
CONTENT AND OPERATION
Under continuing law, all agreements to pay a fee, compensation, commission, or other remuneration to locate, deliver, recover, or assist in the recovery of unclaimed funds entered into within two years immediately after the date a report is filed with the Director are invalid.[1] Continuing law prohibits a person from receiving remuneration and from engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds under an invalid agreement. A person who does so is guilty of a first-degree misdemeanor for a first offense and a fifth-degree felony for each subsequent offense. (Secs. 169.13 and 169.99.)
The act adds a related prohibition that specifies that a person interested in entering into an agreement to locate, deliver, recover, or assist in the recovery of unclaimed funds for remuneration cannot initiate any contact with an owner during the two-year period immediately after the date a report is filed with the Director. The act specifies that this prohibition applies only to agreements that are entered into on or after the act's effective date. It further specifies that failure to comply with this requirement is grounds for the invalidation of any such agreement between the person and the owner. (Sec. 169.13(A)(2) and Section 3.)
Under continuing law, largely retained by the act an agreement entered into any time after the required two-year delay period is valid only if the remuneration agreed upon, paid directly or indirectly, is not in excess of 10% of the amount paid to the owner by the Auditor of State and the agreement is in writing, signed by the owner, and discloses all of the following items:
(1) The nature and value of the property;
(2) The amount the owner will receive after the fee or compensation has been subtracted;
(3) The name and address of the person or entity in possession of the property.
The act removes the reference to remuneration "paid directly or indirectly" and changes references to "property" in the list above to "unclaimed funds or contents of a safe deposit box."
Under the act, any written agreement entered into on and after the act's effective date also must be notarized and disclose the following additional information:
(1) The name, address, and telephone number of the owner, as shown by the records of the person or entity in possession of the unclaimed funds or contents of a safe deposit box;
(2) The name, address, and telephone number of the owner if the owner's name, address, or telephone number are different from the name, address, or telephone number of the owner as shown by the records of the person or entity in possession of the unclaimed funds or contents of a safe deposit box;
(3) That the person agreeing to locate, deliver, recover, or assist in the recovery of the unclaimed funds or contents of a safe deposit box is not an employee or agent of the Director;
(4) That the Director is not a party to the agreement;
(5) That the Auditor of State will pay the unclaimed funds directly to the owner or the Director will deliver the contents of the safe deposit box directly to the owner;
(6) That the person agreeing to locate, deliver, recover, or assist in the recovery of the unclaimed funds or contents of a safe deposit box holds a valid certificate of registration issued by the Director (see "Obtaining a certificate of registration" below);
(7) The number designated on the certificate of registration and the date the certificate expires. (Sec. 169.13(B) and Section 3.)
The act adds an additional condition that must be satisfied for an agreement to be valid. It specifies that if the agreement involves recovery of the contents of a safe deposit box, the agreement must stipulate that the person receiving any fee, compensation, commission, or other remuneration for engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds or other items stored in a safe deposit box on behalf of any other person must do all of the following:
(1) Make arrangements to have a licensed appraiser and the Director of Commerce view the contents of the safe deposit box together, at a time mutually agreeable to the appraiser and the Director;
(2) State that the value of the property in the safe deposit box is the amount established by the appraiser who viewed the safe deposit box contents;
(3) Base the fee, compensation, commission, or other remuneration for locating, delivering, recovering, or assisting in the recovery of unclaimed funds or other items stored in a safe deposit box on the amount established by the appraiser who viewed the safe deposit box contents. (Sec. 169.13(B)(4).)
The act specifies that a person who receives any fee, compensation, commission, or other remuneration for engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds or other items stored in a safe deposit box on behalf of any other person cannot function as an appraiser of the contents of the safe deposit box. Additionally, the act prohibits a person from receiving remuneration and from engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of contents of a safe deposit box under an invalid agreement. (Sec. 169.13(C) and (D).)
The act also prohibits any agreement from including a power of attorney for the payment of the unclaimed funds or delivery of the contents of a safe deposit box to any person other than the owner of the unclaimed funds or contents of a safe deposit box (sec. 169.13(B)(3)). Under the act, the Director must not recognize or make any delivery and the Auditor of State must not make any payment pursuant to any power of attorney between an owner of the unclaimed funds or contents of a safe deposit box and the person with whom the owner entered into an agreement described above to locate, deliver, recover, or assist in the recovery of the unclaimed funds or contents of a safe deposit box if that power of attorney is entered into on or after the act's effective date and that power of attorney specifically provides for the payment of unclaimed funds or delivery of the contents of a safe deposit box to any person other than the owner of the unclaimed funds or contents of a safe deposit box. The act specifies that nothing in the act can be construed as prohibiting the payment of unclaimed funds or delivery of the contents of a safe deposit box to the legal representative of the owner of the unclaimed funds or contents of the safe deposit box. Notwithstanding the definition of "owner" specified in the Unclaimed Funds Law (R.C. Chapter 169.),[2] for purposes of the payment of unclaimed funds or delivery of the contents of the safe deposit box, a person with whom an owner entered into an agreement described above is not a legal representative. (Sec. 169.13(D) and (E).)
The act prohibits any person, on behalf of any other person, from engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds or contents of a safe deposit box, and receive a fee, compensation, commission, or other remuneration for such activity, without first having obtained a certificate of registration from the Director. (Sec. 169.16(A).) Violation of this prohibition is a first-degree misdemeanor for a first offense and a fifth-degree felony for any subsequent offense. (Sec. 169.99(B).)
Under the act, to obtain a certificate of registration, a person must submit a written application in the form prescribed by the Director. The application must be accompanied by a recent full-face color photograph of the applicant and notarized character reference letters from two reputable character witnesses. The application, at a minimum, must provide all of the following:
(1) The applicant's full name, home address, and work address;
(2) The name, address, and telephone number of the two character witnesses who have provided the character reference letters;
(3) A statement that the applicant has not, during the ten-year period immediately preceding the submission of the application:
· Received remuneration for engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds or contents of a safe deposit box either without having a certificate as required after the act's effective date, or doing so under an invalid agreement, or
· Been convicted of, or pleaded guilty to, any felony or any offense involving moral turpitude, including theft, attempted theft, falsification, tampering with records, securing writings by deception, fraud, forgery, and perjury;
(4) The notarized signature of the applicant immediately following an acknowledgment that any false or perjured statement subjects the applicant to criminal liability under the law that prohibits falsification. (Sec. 169.16(B).)
The act allows the Division to investigate the applicant upon receipt of the application to verify the information provided in the application and to determine the applicant's eligibility for a certificate. False information on an application is grounds for the denial or revocation of the applicant's certificate. (Sec. 169.16(C).)
The Director must issue a certificate of registration to an applicant if the Director finds that the following conditions are met:
(1) The statement described in (3) immediately above is true of the applicant;
(2) The applicant's character and general fitness command the confidence of the public and warrant the belief that the applicant's business will be conducted honestly and fairly. (Sec. 169.16(D).)
Under the act, a certificate may be renewed annually if the Director finds that the following conditions are met:
(1) The applicant meets the conditions described in (1) and (2) directly above;
(2) The applicant submits a renewal application form prescribed by the Director;
(3) The applicant's certificate of registration is not subject to an order of revocation by the Director. (Sec. 169.16(E).)
The act specifies that the provisions described above requiring that certificate of registration numbers be included on agreements and prohibiting specified activity without a certificate apply 60 days after the act's effective date. (Section 4.)
Under the act, after notice and an opportunity for a hearing conducted in accordance with the Administrative Procedure Act (R.C. Chapter 119.), the Director must revoke or refuse to issue or renew a certificate if the Director finds either of the following is true concerning a person:
(1) During the immediately preceding ten-year period, the person received remuneration for engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds or contents of a safe deposit box either without having a certificate as required after the act's effective date or doing so under an invalid agreement, or the person was convicted of, or pleaded guilty to, any felony or any offense involving moral turpitude, including theft, attempted theft, falsification, tampering with records, securing writings by deception, fraud, forgery, and perjury;
(2) The person's character and general fitness do not command the confidence of the public or warrant the belief that the person's business will be conducted honestly and fairly. (Sec. 169.17(A).)
The Director may investigate allegations that a person received remuneration for engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds or contents of a safe deposit box either without having a required certificate or doing so under an invalid agreement, or complaints concerning such alleged activity. The Director may make application to a court of common pleas for an order enjoining such violation and, upon a showing by the Director that a person has committed or is about to commit such a violation, the court must grant an injunction, restraining order, or other appropriate relief. (Sec. 169.17(B).)
In conducting any investigation pursuant to the act, the Director may compel, by subpoena, witnesses to testify in relation to any matter over which the Director has jurisdiction and may require the production of any book, record, or other document pertaining to that matter. If a person fails to file any statement or report, obey any subpoena, give testimony, produce any book, record, or other document as required by a subpoena, or permit photocopying of any book, record, or other document subpoenaed, the court of common pleas of any county in this state, upon application made to it by the Director, must compel obedience by attachment proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from the court or a refusal to testify therein. (Sec. 169.17(C).)
If the Director determines that a person is engaged in or is believed to be engaged in activities that may constitute a violation of the prohibition against receiving remuneration for engaging in any activity for the purpose of locating, delivering, recovering, or assisting in the recovery of unclaimed funds or contents of a safe deposit box either without having a required certificate or doing so under an invalid agreement, the Director, after notice and a hearing conducted in accordance with the Administrative Procedure Act, may issue a cease and desist order. That order is enforceable in the court of common pleas. (Sec. 169.17(D).)
The act requires each person who files a claim for unclaimed funds or contents of a safe deposit box with the Director pursuant to an agreement to include with that claim the number designated on the certificate of registration that is issued to that person. The act prohibits the Division from processing that type of claim if it does not include the required certificate of registration number. (Sec. 169.14.) The act specifies that the requirement that a claim bear a certificate number applies only to agreements that are entered into on or after the act's effective date. (Section 3.)
The act statutorily creates, in the Department of Commerce, the office of the Superintendent of Unclaimed Funds and a Division of Unclaimed Funds. A Division of Unclaimed Funds already existed prior to the enactment of this act, but it was not created in statute. The act further specifies that the Division has all powers and must perform all duties delegated to or vested by law in the Superintendent and that wherever powers are conferred or duties are imposed upon the Superintendent, those powers and duties are construed as vested in the Division. The act expressly states that the Division is under the control and supervision of the Director of Commerce and must be administered by the Superintendent. The act requires the Superintendent to exercise the powers and perform the functions and duties delegated to the Superintendent by the Director under the Unclaimed Funds Law and as may otherwise be provided by law. (Secs. 121.04, 121.08(B) and (J), 1322.03(B)(1), 1322.03(B)(1), and 4763.05(A)(1)(b).)
HISTORY
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ACTION |
DATE |
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Introduced |
11-08-05 |
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Reported, S. Insurance, Commerce & Labor |
03-01-06 |
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Passed Senate (33-0) |
03-07-06 |
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Reported, H. Commerce & Labor |
11-29-06 |
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Passed House (93-1) |
12-05-06 |
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Senate concurred in House amendments (31-0) |
12-06-06 |
06-sb223-126.doc/kl
[1] Under the act, for purposes of the Unclaimed Funds Law (R.C. Chapter 169.), "Director" may be interpreted as "Superintendent of Unclaimed Funds" or "Division of Unclaimed Funds." (See "Creation of the Office of the Superintendent of Unclaimed Funds and of the Division of Unclaimed Funds" at end of analysis.)
[2] "Owner" means any person, or the person's legal representative, entitled to receive or having a legal or equitable interest in or claim against moneys, rights to moneys, or other intangible property, subject to the Unclaimed Funds Law (sec. 169.01(C)).