Breaking Down the California Unclaimed Property Reporting Process

The chorus to “California, Here I come,” a popular showtune from the Great American Songbook, starts with the lyrics, “California Here I come, right back where I started from.” For holders trying to stay on top of their California unclaimed property reports, it sometimes feels like a piece of musical déjà vu. Wait, didn’t we file a California report in the fall reporting cycle? Why are we filing again in June? It’s not your imagination, for when it comes to reporting abandoned property to the state, California wants you to come back again and again throughout the year.

Unlike most reporting jurisdictions, which require due diligence mailings and remittance of unclaimed property within the same cycle, California has a five-step unclaimed property reporting process that spans both the fall and spring cycles. Cue the music and let’s walk through this complicated dance.

• Step 1: Identifying the reportable property held by your company.
• Step 2: Sending and responding to due diligence letters to those owners six to 12 months in advance of the Notice Report deadline (November 1 for most business types, the exception is the May 1 deadline for life insurance).
• Step 3: Submit a Notice Report to California containing the reportable property by November 1. California will confirm the receipt of this report by sending you a 14F, a form which assigns an ID number as well as confirms the amount and timeframe for remittance in Step 5.

Let’s pause this pas de deux to mention that funds (cash and/or securities) are NOT sent to the Golden State with the Notice Report (again, that will be in Step 5). In Step 4, California sends pre-escheat notices in the mail to all state residents on your company’s notice report if property is valued at $50 or greater, and it is your responsibility to respond to those letter recipients as well. For Step 5– we’re almost there–submit a remit report AND remittance funds to California June 1 through June 15 to complete the reporting cycle. Phew, my feet are tired.

So, where are we now and what do you need to successfully complete your filing? If you are a holder (again, not life insurance) of California reportable UP, we are currently in Step 5: Remitting report and funds. You will need the following to submit a complete California report via the state’s website:

1. An encrypted .hde file listing all reportable properties and property owner details in National Association of Unclaimed Property Administrators (NAUPA II) format. While it is acceptable to remove properties and owners who initiated contact since the notice, new properties should not be added to this remit report.
2. A completed and signed Universal Holder Face Sheet, or UFS-1 cover sheet. Holders had to complete a USF-1 when submitting the Notice Report, so you should be somewhat familiar with this form. The key piece of information on this UFS-1 is the Report ID, or RID number, found on the 14F.
3. Money sent. Use Electronic Fund Transfer (EFT) to remit $2,000 or more. For amounts less than $2,000, a check made payable to the California State Controller can be sent to the state (include a copy of the 14F and USF-1).
4. The Remittance Report and related reporting materials sent to the state. The .hde file of property owner details, 14F, USF-1 and any additional supporting documents (e.g., deduction and fees schedule for financial institutions, Security Summary for securities holders) can be submitted through the California State Controller’s Office (SCO) online reporting portal.

Sounds simple, right? It’s perfectly understandable to feel like you have two left feet following all of these steps, but there are many helpful tips and tutorials on all of this information on the SCO’s website.

This has only been an overview of the California unclaimed property reporting process–we didn’t even cover some areas like Safe Deposit Box reporting, or possible penalty and interest assessments. However, I hope it provides a roadmap on how to successfully navigate your way to successful unclaimed property reporting in our largest state by area. With some preparation, and the right guidance, the California reporting process will be as easy (and satisfying) as ordering an In-N-Out burger.