CA Assembly Bill 2773, introduced in February 2018 and amended a month later, includes a proposal to establish an Unclaimed Property Voluntary Disclosure Agreement (“VDA”) Program. California has not had a program of this type since 2002 when a previous amnesty program ended. Since the previous amnesty program expired, holders who report late property are routinely assessed interest at a rate of 12% per year. As a result, it’s not uncommon for an interest assessment to exceed the value of the past due unclaimed property. Below are a few of the details for the proposed VDA Program:
- Participants must execute a formal agreement with the State’s Controller;
- The VDA look-back period is 10 years, beginning with the date the holder is enrolled in the program;
- Participants must report and remit past due property within 12 months from the date they are enrolled in the program;
- Holders who have previously filed in California but believe they may have past due property would be eligible to participate;
- All penalties and interest on unreported property are waived.
It’s important to note that holders currently under audit by California would not be eligible to participate in the VDA Program. Under the current proposal, the VDA Program would be scheduled to commence effective on January 1, 2019 and expire on January 1, 2024.
This is a major development within the unclaimed property community as countless businesses have vendors, customer and employees in California and could be holding significant unclaimed funds that are potentially due to the State. Holders are strongly encouraged to take advantage of this opportunity if the bill becomes law.
We will continue to monitor developments in California and provide updates as they become available. If you have any follow-up questions, please do not hesitate to contact Eric Mauldin at (410) 415-9751 or firstname.lastname@example.org.