State eyes accelerated transfer of unclaimed property

Tuesday, Aug. 22, 2000 | 9:14 a.m.

Reducing the time unclaimed property can be held by private financial institutions from five years to three years would generate the income, he told a panel looking at ways to streamline state government.

"Our top priority is always to locate and return the money to the rightful owner," Krolicki said Monday. "But there is no reason the state can't benefit from the unclaimed property sooner."

Unclaimed property is typically a bank account opened by an individual who passed away without disclosing the account to family, or items in a safe-deposit box forgotten by the owner.

Owners of unclaimed property never lose the rights to claim their property, including the interest it earns. But transferring these assets to the state in three years instead of five would allow the state to earn interest on the unclaimed funds sooner.

The two years of additional interest would generate the estimated $10 million, a one-time windfall that would come in the 2001-03 budget, Krolicki said.

Since 1979, the state has collected more than $90 million worth of property and returned about a third of that to the rightful owners.

Krolicki said the Legislature would have to change the law to accelerate the transfer of unclaimed property to the state for the proposal to take effect.

The proposal will be evaluated by the Governor's Steering Committee to Conduct a Fundamental Review of State Government. The panel, which is looking at increased efficiency for all state agencies, is expected to recommend changes that could save as much as $30 million in the upcoming two-year budget.

Gov. Kenny Guinn has proposed that any savings from the fundamental review be directed toward state employee salary and benefit increases.