California Begins Voluntary Compliance Program Rollout

Freda Pepper
March 16, 2023

The California Voluntary Compliance Program (VCP) is now available, according to an announcement from the California State Controller.

For the first time, we are hearing from the State Controller’s Office (SCO) regarding the VCP authorized by the California legislature in September 2022. The announcement on the SCO’s website provides guidance concerning the upcoming program and includes a link to a survey that must be filled out by holders interested in taking part in the program. According to the website, the survey must be completed before receiving the VCP application form “when it becomes available.” Holders filling out the survey must provide name and address information along with reporting history.

Subsequently, holders receiving the application will be required to identify those employees who will attend a mandated training program and who will be responsible for submitting reports to the state. An estimated value of liability to the state will also need to be submitted.

After reviewing applications and approving enrollment, SCO will provide due dates for required deliverables that coincide with the standard unclaimed property reporting cycle, the statement reads. To complete the program, holders will be required to complete a training program and meet reporting deadlines.

Holders are reminded that the state will not accept any applications from holders that are currently subject to an unclaimed property examination or civil or criminal investigation. Additionally, a holder cannot participate if they have an outstanding interest assessment from the last five years.

The following are tentative dates that will be assigned to those who enroll for the upcoming reporting cycle:

  • July 31, 2023 – Required training completed
  • September 30, 2023 – Due diligence completed
  • Before November 1, 2023 – Notice report submitted
  • June 1-15, 2024 – Remit report and remittance submitted

According to the SCO, this is an ongoing program. Therefore, holders that are unable to meet the 2023 due dates will still have an opportunity to submit applications. Indeed, the SCO will continue to accept applications and provide due dates to subsequent enrollees that are consistent with future report years.

As outlined in previous Sovos blogs, the VCP first required the state legislature to approve funding by way of an appropriation in the Annual Budget Act. Given the 2023 dates, it appears that the necessary funding is in the works despite the lack of acknowledgment of such in the current budget appropriations.

Furthermore, from the announcement, it appears that holders accepted into the program will not be subject to an onerous VDA process similar to those administered by other states. Instead, after ongoing training, to receive an interest waiver, holders will be required to simply report all outstanding property in the fall 2023 annual report.

It’s important to remember that conducting an annual review of potentially escheatable properties is a key step toward businesses maintaining unclaimed property compliance. Paired with strong policies and procedures, organizations are not immune from issues arising, but they will be in a much better place should anything occur. The Sovos Unclaimed Property Consulting practice is always available to assist with conducting your initial review and drafting applicable unclaimed property policies and procedures.

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What other trends and recent regulations are happening in unclaimed property? Read our annual report, The State of Unclaimed Property, to learn more.

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Freda Pepper

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