NORTH CAROLINA GENERAL ASSEMBLY

1979 SESSION

 

 

CHAPTER 1311

SENATE BILL 715

 

 

AN ACT TO REVISE THE LAWS RELATING TO ESCHEATS AND ABANDONED PROPERTY.

 

The General Assembly of North Carolina enacts:

 

Section 1.  Chapter 116A of the General Statutes is repealed and the following new Chapter 116B is enacted.

"Chapter 11 6B.

"Escheats and Abandoned Property.

"Article 1.

"Escheats.

"§ 116B-1.  Escheats to Escheat Fund. — All real estate which has accrued to the State since June 30, 1971, or shall hereafter accrue from escheats, shall be vested in the Escheat Fund. Title to any such real property which has escheated to the Escheat Fund shall be conveyed by deed in the manner now provided by G.S. 146-74 through G.S. 146-78, except as is otherwise provided herein: Provided, that in any action in the superior court of North Carolina wherein the State Treasurer is a party, and wherein said court enters a judgment of escheat for any real property, then, upon petition of the State Treasurer in said action, said court shall have the authority to appoint the State Treasurer or his designated agent as a commissioner for the purpose of selling said real property at a public sale, for cash, at the courthouse door in the county in which the property is located, after properly advertising the sale according to law. The said commissioner, when appointed by the court, shall have the right to convey a valid title to the purchaser of the property at public sale. The funds derived from the sale of any such escheated real property by the commissioner so appointed shall thereafter be paid by him into the Escheat Fund.

"§ 116B-2.  Unclaimed real and personal property escheats to the Escheat Fund. — Whenever the owner of any real or personal property situated or located within this State dies intestate, or dies testate but did not dispose of all real or personal property by will, without leaving surviving any heirs, as defined in G.S. 29-2(3), to inherit said property under the laws of this State, such real and personal property shall escheat. The State Treasurer shall have the right to institute a civil action in the superior court of any county in which such real or personal property is situated, against any administrator, executor, and unknown heirs or unknown claimants as party defendants, which unknown heirs or unknown claimants may be served with summons and notice of such action by publication as is now provided by the laws of this State. If an administrator or executor has been appointed, he shall make a determination that there are no known heirs or unknown claimants and shall inform the State Treasurer of that determination. The superior court in which such civil action is instituted shall have the authority to enter a judgment therein declaring the real and personal property unclaimed as having escheated, and the real property may be sold according to the provisions of G.S. 116B-1. A default final judgment may be entered by the clerk of the superior court in such cases when no answer is filed by the administrator, executor, unknown heirs or unknown claimants to the complaint, or if any answer is filed, the allegations of the complaint are either admitted or not denied by such party defendants, and no claim is made in the answer to the property left by said deceased person. The funds derived from such sale shall be paid into the Escheat Fund where said funds, together with all other escheated funds, shall be held without liability for profit or interest, subject to any just claims therefor.

"§ 116B-3.  Unclaimed personality on settlements of decedents' estates to the Escheat Fund. — All sums of money or other personal estate of whatever kind which shall remain in the hands of any administrator, executor, administrator c.t.a., or personal representative when the administration of an estate of a person dying intestate, or partially intestate, without leaving any known heirs to inherit same, is ready to be closed, unrecovered or unclaimed by suit, by creditors, heirs, or others entitled thereto, shall, prior to the closing of the administration of the estate, be paid or delivered by such administrator or executor to the State Treasurer as an escheat and shall be included in the disbursements in the final account of such estate. In such cases as above described, the State Treasurer is authorized to demand, sue for, recover, and collect such unclaimed monies or other personal estate of whatever kind from any administrator or executor after the estate is ready to be closed, or from the clerk of the superior court if the unclaimed assets have been paid over to him, and the State Treasurer shall hold the same without liability for profit or interest, subject to any just claims therefor. The provisions of this section and G.S. 116B-2 shall apply to the estate of a person missing for seven years and the State Treasurer may bring an action to have an administrator appointed in such case.

"§ 116B-4.  Claim for escheated property. — Any escheated property or proceeds from the sale of escheated property held by the Escheat Fund pursuant to G.S. 116B-23 may be claimed by an heir of the decedent or by a creditor of the decedent who is not barred from presenting a claim under the provisions of Article 19 of Chapter 28A. The claim shall be made on a form prescribed by the Treasurer and shall be presented to the Treasurer. If the Treasurer determines that the claimant is entitled to all or a portion of the escheated property or the proceeds from its sale, he shall make payment of the claim or return of the property. The claimant shall agree to indemnify the State, the State Treasurer and the Escheat Fund from any claim arising out of or in connection with refund of the property claimed. The provisions of G.S. 116B-34(b) and (c) shall apply to a claim under this subsection.

"Article 2.

"Abandoned Property.

"§ 116B-10.  Definitions. — For the purposes of Articles 2 and 3 of this Chapter, the following words shall have the following meanings, unless a different meaning is required by the context.

(1)        Business association. 'Business association' shall mean any proprietorship, private corporation, joint stock company, business trust, partnership or association, two or more individuals having joint or common interest, or any other legal or commercial entity engaged in business, including corporations and organizations under the authority of Chapters 53A and 54.

(2)        Commissioner. 'Commissioner' shall mean the duly elected and serving Commissioner of Insurance of North Carolina or his designated agent.

(3)        Financial institution. 'Financial institution' shall mean any trust company, savings bank, industrial bank, savings and loan association, building and loan association, commercial bank, credit union, federal association, investment company, or other business association, which is chartered under federal or State law, solicits, receives or accepts money or its equivalent on deposit and loans money as a regular business.

(4)        Holder. 'Holder' shall mean any person in possession of property subject to this Chapter belonging to another, or who is trustee in case of a trust, or is indebted to another on an obligation subject to this Chapter.

(5)        Insurer. 'Insurer' shall mean any business association doing business in this State, as a life, fire, casualty, motor vehicle liability, accident and health or other insurer referred to and regulated under Chapter 58 of the General Statutes.

(6)        Owner. 'Owner' shall mean a depositor in case of a deposit, a beneficiary in case of a trust, a creditor, claimant or payee in case of other choses in action, or any person having a legal or equitable interest in property subject to this Chapter, or his legal representative.

(7)        Person. 'Person' shall mean any individual, business association, government or political subdivision, public corporation, public authority, estate, trust, two or more persons having a joint or common interest, or any other legal or commercial entity.

(8)        Terminate. 'Terminate' shall mean to end in any manner, including lapse, expire or cease under its terms or otherwise.

(9)        Treasurer. 'Treasurer' shall mean the duly elected and serving Treasurer of the State of North Carolina or his designated agent.

(10)      Utility. 'Utility' shall mean any person who owns or operates, for public use, any plant, equipment, property, franchise or license, for transportation of the public, the transmission of communications or the production, storage, transmission, sale, delivery or furnishing of electricity, water, steam or gas.

(11)      Written instrument. 'Written instrument' shall mean a document in writing that evidences a legal right, obligation or interest.

"§ 116B-11.  Property subject to custody and control of the State. — Personal property that is deemed unclaimed or abandoned under this Chapter is subject to the custody and control of the State if it is:

(1)        Tangible. Tangible and physically located within the State; or

(2)        Intangible. Intangible, and

a.         the last known address of the owner, as shown by the records of the holder, is within the State; or

b.         the last known address of the owner as shown by the records of the holder is within a jurisdiction, the laws of which do not provide for the escheat or custodial taking of the property, and the domicile of the holder is within the State; or

c.         no address of the owner appears on the records of the holder and the domicile of the holder is within the State; or

d.         no address of the owner appears on the records of the holder and the domicile of the holder is not within the State, but it is proved that the last known address of the owner is in the State; or

e.         if the intangible property is a sum payable on a money order, traveler's check or similar written instrument, and

1.         the instrument was purchased within the State, as shown by the records of the holder;

2.         the place of purchase of the instrument is not shown in the records of the holder and the holder's principal place of business is within the State; or

3.         the place of purchase of the instruments, as shown by the records of the holder, is within a jurisdiction, the laws of which do not provide for the escheat or custodial taking of the property, and the holder's principal place of business is within the State.

"§ 116B-12.  Property held by financial institutions. — (a) Deposits and funds. Any demand, savings or matured time deposit in a financial institution, or any funds paid toward the purchase of shares or other interest in a financial institution shall be presumed abandoned if the financial institution receives information that the owner no longer resides at the address listed in the holder's records and is unable to locate the owner and if, within the preceding five years, as to any demand deposit, or a savings or time deposit or interest having a value of one thousand dollars ($1,000) or less, or within the preceding 10 years, as to any such savings or time deposit or interest having a value of more than one thousand dollars ($1,000), the owner has not:

(1)        increased or decreased the amount of the deposit, shares or claim, or presented to the holder the passbook, evidence of deposit or other appropriate record for the crediting of interest or dividends;

(2)        corresponded in writing with the holder concerning the deposit, shares or claim; or

(3)        otherwise indicated an interest in the deposit, shares or claim as evidenced by a writing on file with the holder.

The financial institution shall make reasonable efforts to locate the owner and to determine whether its records disclose a different address for the owner.

(b)        Written instruments. Any sum payable on a check certified in the State or on any written instrument issued in the State on which a financial institution is directly liable shall be presumed abandoned if, within 10 years from the date payable, or from the date of issuance, if payable on demand, the owner has not:

(1)        negotiated the instrument;

(2)        corresponded in writing with the financial institution concerning it; nor

(3)        otherwise indicated an interest by a writing on file with the financial institution.

(c)        Traveler's checks. Any sum payable on a traveler's check, money order or a similar written instrument on which a financial institution or other business association is directly liable shall be presumed abandoned if, within 15 years from the date payable, or from the date of issuance, if payable on demand, the owner has not:

(1)        negotiated the instrument;

(2)        corresponded in writing with the financial institution or other business association concerning it; nor

(3)        otherwise indicated an interest as indicated by a writing on file with the financial institution or other business association.

(d)        Safe deposit box. Any funds or other personal property, tangible or intangible, contained in or removed from a safe deposit box or other safekeeping repository shall be presumed abandoned if the owner has not claimed the property within the period established by G.S. 53-43.7 and shall be delivered to the State Treasurer.

(e)        Charges, interest or dividends on abandoned property.

(1)        Reasonable service charges may be levied against deposits or accounts presumed to be abandoned, provided those charges may not exceed the charges levied against similar active deposits or accounts or the actual cost of administering the account or deposit.

(2)        Interest or dividends due on any deposits, accounts, funds or shares presumed to be abandoned shall not be discontinued or diverted because of the inactivity or during the period prior to abandonment.

"§ 116B-13.  Property held by life insurers. — (a) Funds owed under a policy or contract. Any funds held or owing by a life insurer that are due and payable under any life or endowment insurance policy or annuity contract which has matured or terminated shall be presumed abandoned if they have not been claimed or paid within 10 years after becoming due or payable as established from the insurer's records. Funds payable according to the insurer's records are deemed due and payable although the policy or contract has not been surrendered as required. The insurer shall make reasonable efforts to locate the insured or annuitant and to determine whether its records disclose a different address for the insured or annuitant.

(b)        Presumption of address of beneficiary. If a person other than the insured or annuitant is entitled to the funds and no address of the person is known to the insurer or if it is not definite and certain from the records of the insurer what person is entitled to the funds, it is presumed that the last known address of the person entitled to the funds is the same as the last known address of the insured or annuitant according to the records of the insurer.

(c)        Presumption of maturity. A life insurance policy not matured by actual proof of the death of the insured is deemed to be matured, and the proceeds are deemed to be due and payable if the policy was in force when the insured attained the limiting age under the mortality table on which the reserve is based, unless the person appearing entitled thereto has, within the preceding five years, assigned, readjusted or paid premiums on the policy, negotiated a dividend check, made payments on a loan, or corresponded in writing with the life insurer concerning the policy.

"§ 116B-14.  Property held by other insurers. — (a) Funds owed under a policy or contract. Any funds held or owing by a fire, casualty, or any other insurer or surety as defined in G.S. 58-2(3) that are due and payable, as established from the records of the insurer or surety either to an insured, a principal, or other claimant under any insurance policy or contract shall be presumed abandoned if they have not been claimed or paid within five years after becoming due or payable. Funds payable according to the insurer's or surety's records are deemed due and payable although the policy or contract has not been surrendered as required.

(b)        Presumption of address of beneficiary. If a person other than the insured, the principal or the claimant is entitled to the funds and no address of the person is known to the insurer or surety or if it is not definite and certain from the records of the insurer or surety what person is entitled to the funds, it is presumed that the last known address of the person entitled to the funds is the same as the last known address of the insured, the principal or the claimant according to the records of the insurer or surety.

"§ 116B-15.  Property held by utilities. — (a) Deposits. Any deposit, advance, toll, collateral, security or other property held by a utility to secure payment or as an advance for services to be furnished shall be presumed abandoned if it has not been claimed or returned within five years after:

(1)        it was due to or demandable by the owner under the terms of the agreement; or

(2)        the termination of services to the owner.

(b)        Refunds. Any funds which a utility has been ordered to refund shall be presumed abandoned if they have not been claimed or paid within five years after the date they became payable in accordance with the final determination or order providing for the refund.

(c)        Notice required. Unless other written notice is required by statutory provision or order of a court or other authority having jurisdiction, every utility shall give written notice, mailed or delivered to the last known address of the owner, of each deposit or refund within 30 days after the same shall be due and demandable. Such notice shall be in addition to, and not in lieu of, the notice required by G.S. 116B-24.

"§ 116B-16.  Property held by business associations. — (a) Dividends. Any dividend, profit, distribution, interest, payment on principal or other funds held or owing by a business association for or to its shareholder, certificate holder, member, bond holder or other security holder, or a participating patron of a cooperative shall be presumed abandoned if within five years after the date prescribed for delivery or payment, it has not been claimed or the owner has not corresponded in writing with the holder concerning it.

(b)        Stocks. Any intangible interest in a business association, as evidenced by stock records or membership records of the association, shall be presumed abandoned if, for five years:

(1)        the owner of the interest has not claimed a dividend or other sum referred to in subsection (a); or

(2)        the owner of the interest has not corresponded in writing with the association or otherwise indicated an interest as evidenced by a memorandum or other record on file with the association.

(c)        Dividends on abandoned stocks. Any dividends or other distributions held for or owing to a person and attached to a stock or security deemed abandoned shall also be presumed abandoned and shall not be diverted or discontinued during the period prior to the abandonment.

"§ 116B-17.  Property held in the course of dissolution or following merger. — (a) Dissolution. All property distributable in the course of a voluntary or involuntary dissolution of a business association, financial institution, insurer or utility shall be presumed abandoned if it is unclaimed within six months of the date of final dissolution.

(b)        Merger. All shares of stock that are not delivered following the merger of two or more corporations and are not claimed within two years from the date they became deliverable shall be presumed abandoned.

"§ 116B-18.  Property held by fiduciary. — (a) Property. All property held in a fiduciary capacity for the benefit of another person shall be presumed abandoned if, within five years of its becoming payable or distributable, the owner has not:

(1)        increased or decreased the principal; or

(2)        accepted payment of principal or income; or

(3)        corresponded in writing with the fiduciary concerning the property; or

(4)        otherwise indicated an interest as evidenced by a memorandum or other record on file with the fiduciary.

(b)        Income. Any income or increment due on property deemed abandoned under subsection (a) shall also be presumed abandoned and shall not be discontinued or diverted during the period prior to the abandonment.

"§ 116B-19.  Property held by governmental agents. — All property not otherwise covered by this Chapter, and held for the owner by a court, public corporation or authority, or agent or instrumentality of the United States, this State or any other state, or by a public officer or political subdivision thereof, shall be presumed abandoned if it is not claimed within five years of becoming payable or distributable.

"§ 116B-20.  Salary, wages or other compensation. — Unpaid and unclaimed salary, wages or other compensation held by or owing by any business association which are due to any person or persons shall be presumed abandoned if, within five years after the date that the unpaid and unclaimed salary, wages or other compensation became due and payable, the same have not been claimed by the owner.

"§ 116B-21.  Property held in the ordinary course of business. — (a) Property. All property, not otherwise covered in this Chapter, held in the ordinary course of the holder's business, including accounts payable and other obligations, and whether one or more articles of property, accounts payable or obligations, which has a value or an aggregate value of five hundred dollars ($500.00) or more, shall be presumed abandoned if it has not been claimed within five years after becoming payable or distributable.

(b)        Income and charges. Any income or increment due on property deemed abandoned under subsection (a) shall also be presumed abandoned and shall not be discontinued or diverted during the period prior to abandonment. Lawful charges may be deducted from property that is presumed to be abandoned, provided the lawful charges are specifically authorized by statute or by a valid enforceable contract.

"Article 3.

"Administration of Abandoned Property.

"§ 116B-23.  Escheat Fund. — All property escheated or abandoned under the provisions of this Chapter and all property escheated or abandoned since June 30, 1971, under the provisions of former Chapter 116A, as amended, shall be paid into a fund to be administered by the Treasurer, which fund shall be designated the Escheat Fund. No escheated or abandoned property heretofore paid or delivered to The University of North Carolina pursuant to any constitutional provision or statute of this State shall be subject to the provisions of this Chapter.

"§ 116B-24.  Notice by holders to owners required. — (a) Insurers. Every insurer required to file a report pursuant to G.S. 116B-25 shall determine, prior to May 1st of each year, all owners who, as of the preceding December 31st, appear entitled to property of the value of fifty dollars ($50.00) or more, presumed abandoned under this Chapter, and, on or before May 1st, shall mail, first class postage prepaid, a notice to the last known address of each such owner.

(b)        Other holders. Every holder, other than insurers, required to file a report pursuant to G.S. 116B-25 shall determine, prior to November 1st of each year, all owners who, as of the preceding June 30th, appear entitled to property of the value of fifty dollars ($50.00) or more, presumed abandoned under this Chapter, and, on or before November 1st, shall mail, first class postage prepaid, a notice to the last known address of each such owner.

(c)        Contents. Each notice required by this section shall contain:

(1)        a statement that, according to the records of the holder, property is being held to which the addressee appears entitled and the amount or description of the property;

(2)        the name and address of the person holding the property and any necessary information regarding changes of name and address of the holder;

(3)        a statement that, if satisfactory proof of claim is not presented by the owner to the holder by the following February 1st, or if the holder is an insurer, by the following August 1st, the property will be placed in the custody of the State Treasurer, to whom all further claims shall be directed.

(d)        Charges for notices. The holder shall be entitled to deduct from the property of each owner to whom notice is sent an amount not to exceed fifty cents (50¢) to defray the expense of mailing notice. If the property is other than cash in the possession of the holder, the holder may submit to the Escheat Fund, with the certification hereinafter provided for, a sworn itemized statement of charges for notices mailed, not to exceed fifty cents (50¢) per notice, which shall be paid by the Escheat Fund within 30 days following receipt of the statement. The Escheat Fund shall charge the accounts of the respective owners with any charges so paid to holders.

(e)        Certification of mailing; penalties; right of owners. Every holder filing a report pursuant to G.S. 116B-25 shall certify to the Treasurer therewith that the notices required by subsections (a) and (b) of this section have been mailed to the last known address of every owner named in the report. Failure or refusal to certify after written demand by the Treasurer or filing false certification shall be a misdemeanor, punishable, upon conviction, by a fine of not less than five hundred dollars ($500.00) nor more than five thousand dollars ($5,000) as the court, in its discretion, shall determine. Any owner who has suffered loss or damage by reason of the failure of a holder to mail the notice required by this section may recover actual loss or damage from the holder in an appropriate action at law.

(f)         Other notice. All holders shall make reasonable efforts to locate and communicate with the owner prior to filing the report required by G.S. 116B-26 in order to prevent abandonment from being presumed, including the exercise of due diligence to determine whether he possesses a different address for the owner.

(g)        The Department of Revenue may use the dates prescribed in subsection (a) of this section for insurers in mailing notices of unclaimed property.

"§ 116B-25.  Report of abandoned property by holder to Commissioner of Insurance or Treasurer. — (a) Reports to Commissioner of Insurance and Treasurer. Every insurer holding property presumed abandoned under the provisions of G.S. 116B-13 or G.S. 116B-14, or both, shall report to the Commissioner of Insurance, with respect to that property; however, payment of such property shall be to the Treasurer in accordance with G.S. 116B-27. Every other person holding funds or other property, tangible or intangible, presumed abandoned under this Chapter shall report to the State Treasurer with respect to that property.

(b)        Contents. The report shall be verified and shall include:

(1)        the name, if known, and last known address, if any, of each person appearing from the records of the holder to be the owner of any property of the value of twenty-five dollars ($25.00) or more;

(2)        in the case of unclaimed funds of an insurer, the full name of the insured or annuitant and his last known address according to the insurer's records;

(3)        the nature and identifying number, if any, or description of the property and the amount appearing from the records to be due, except that items of value under twenty-five dollars ($25.00) each may be reported in the aggregate;

(4)        the date when the property became payable, demandable or returnable, and the date of the last transaction with the owner with respect to the property; and

(5)        other information which the Treasurer prescribes by rule.

(c)        Names of prior holders. If the person holding property presumed abandoned is a successor to other persons who previously held the property for the owner, or if the holder has changed his name while holding the property, he shall file with his report all prior known names and addresses of each holder of the property.

(d)        Time of filing. The report shall be filed before March 1st of each year as of the prior June 30th, but the report of insurers shall be filed before September 1st of each year as of the prior December 31st. The Treasurer, in his discretion, may postpone the reporting date for a period not exceeding six months upon written request by any person required to file a report. The Department of Revenue may use the dates prescribed in this subsection for insurers in filing reports of unclaimed property with the State Treasurer.

(e)        Verification. Verification, if made by a partnership, shall be executed by a partner; if made by an unincorporated association or private corporation, by an officer; and if made by a public corporation, by its chief fiscal officer.

"§ 116B-26.  Preparation of list of owners by State Treasurer. — (a) Listing of names. There shall be delivered to each clerk of superior court prior to November 1st a list prepared by the State Treasurer of escheated and abandoned property, which list shall contain:

(1)        the names, if known, in alphabetical order of surname, and last known addresses, if any, of owners of escheated and abandoned property;

(2)        the names and addresses of the holders of the abandoned property; and

(3)        a statement that claim and proof of legal entitlement to escheated or abandoned property shall be presented by the owner to the Treasurer, and setting forth where further information may be obtained.

(b)        Notice. At the time the said lists are distributed to the clerks of superior court, the Treasurer shall cause to be published once each week for two consecutive weeks, in at least two newspapers having general circulation in this State, a notice stating the nature of such lists and that the same are available for inspection at the offices of the respective clerks of superior court, together with such other information as the Treasurer shall deem appropriate to appear in such notice.

(c)        Property not required to be listed. The Treasurer is not required to include in any such list any item of a value, as determined by the Treasurer, in his discretion, of less than fifty dollars ($50.00), unless he deems inclusion of items of lesser amounts to be in the public interest.

(d)        Lists retained by clerks. The clerks of superior court shall retain such lists on permanent file in their offices and shall make them available for public inspection.

(e)        Lists not cumulative. The lists prepared by the Treasurer shall include only escheated and abandoned property reported for the current reporting date and are not required to be cumulative lists of escheated and abandoned property previously reported.

"§ 116B-27.  Payment or delivery of abandoned property. — (a) Insurers. Every insurer shall remit or deliver to the Treasurer with the report required to be filed by G.S. 116B-25 any property deemed abandoned under the provisions of this Chapter.

(b)        Other holders. All other holders shall remit or deliver to the Treasurer with the report required to be filed by G.S. 116B-25 any property deemed abandoned under the provisions of this Chapter.

(c)        Tangible personal property. Prior to the delivery of any tangible personal property to the Treasurer, the holder shall report to the Treasurer the nature, condition and approximate value of each article of such property. The Treasurer may determine that delivery of specific tangible personal property is not in the best interest of the State, either because the sum or value is too small or for other good reason. The Treasurer shall notify the holder of the property of his determination and may refuse to accept delivery and custody of that property.

"§ 116B-28.  Relief from liability by payment or delivery. — Upon the payment or delivery of abandoned property to the Treasurer, the State shall assume custody of the property and shall be responsible for its safekeeping. Any person who pays or delivers abandoned property to the Treasurer under this Chapter is relieved of all liability to the extent of the value of the property so paid or delivered for any claim which then exists or which thereafter may arise or be made in respect to the property.

"§ 116B-29.  Income accruing after payment or delivery. — When property is paid or delivered to the Treasurer under this Chapter, the Treasurer shall hold the property without liability for profit or interest.

"§ 116B-30.  Periods of limitation not a bar. — The expiration of any period of time specified by statutes or court order, during which an action or proceeding may be commenced or enforced to obtain payment of a claim for money or recovery of property, shall not prevent the money or property from being presumed abandoned property, nor affect any duty to file a report under this Chapter or to pay or deliver abandoned property to the Treasurer.

"§ 116B-31.  Sale, retention or disposal of abandoned property. — (a) Sale by auction. All abandoned property, other than money or securities or other property sold under subsection (b) or tangible property retained under subsection (c) delivered to the Treasurer under this Chapter shall, within three years after delivery, be sold by him to the highest bidder at public sale in whatever city in the State affords, in his judgment, the most favorable market for the property involved. The Treasurer may decline the highest bid and reoffer the property for sale if he considers the price bid insufficient. He need not offer any property for sale, if in his opinion, the probable cost of sale exceeds the value of the property. The Treasurer, in his discretion, may cause any abandoned or escheated property to be appraised prior to sale by one or more appraisers, but the Treasurer shall not be required to sell any property at the appraised value.

Each sale shall be preceded by a single publication of notice of the sale at least three weeks in advance in two newspapers of general circulation in the State.

(b)        Securities and other property.

(1)        Securities in which the Treasurer may invest funds of the Escheat Fund may be retained by the Treasurer, in his discretion, as an investment or may be sold by the Treasurer upon receipt or at such time thereafter as he shall deem appropriate. All other securities shall be sold as soon as reasonably possible following receipt. If valid claim is made for any securities in the possession of the Treasurer, he may transfer such securities to the claimant or, in his discretion, pay to the claimant the value thereof as of the date claim is received, determined as hereinafter set out. Securities listed on an established stock exchange may be sold at the prevailing price on such exchange. Other securities may be sold over the counter at prevailing prices or by such other method as the Treasurer may determine to be advisable. United States Government Savings Bonds and United States War Bonds shall be presented to the United States for payment. Notice of sale of securities is not required.

(2)        If the property is of a type customarily sold on a recognized market or of a type which is subject to widely distributed standard price quotations, the Treasurer may sell the property without notice by publication or otherwise.

(c)        Retention of tangible property with historic value. The Treasurer may retain any tangible property delivered to him, if the property has recognized historic significance. The historic significance shall be certified by the Treasurer, with the advice of the Secretary of Cultural Resources; and a statement of the appraised value of the property shall be filed with the certification. Historic property retained under this subsection may be stored and displayed at any suitable location.

(d)        Destruction of valueless property. The Treasurer may destroy or otherwise dispose of any property delivered to him, if the property has no apparent commercial or historic value. The lack of apparent commercial or historic value shall be certified by the State Auditor, and a description of the property shall be filed with the certification.

(e)        Title. The purchaser at any sale conducted by the Treasurer pursuant to this Chapter shall receive title to the property purchased, free from all claims of the owner or prior holder thereof and of all persons claiming through or under them. The Treasurer shall execute all documents necessary to complete the transfer of title.

"§ 116B-32.  Administration of Escheat Fund; Escheat Account. — (a) Escheat Account. All funds received by the Treasurer as escheated or abandoned property and which were transferred prior to January 1, 1980, to the trust fund created under G.S. 116-209 shall remain in that trust fund and shall be placed in a special fund, designated the 'Escheat Account'.

(b)        Investment and transfer of assets; income. The Treasurer shall be the trustee of the Escheat Account and shall have full power to invest and reinvest the assets of the Escheat Account and the Escheat Fund. Subject to the Treasurer's withholding an amount necessary to accomplish his duties as set out in this Chapter, including subsections (e), (f) and (g) of this section, the Treasurer shall transfer, at least annually, to the Escheat Account all monies then in his custody received as, or derived from the disposition of, escheated and abandoned property and shall disburse to the State Education Assistance Authority, as provided in G.S. 116B-33, the income derived from the investment of the Escheat Account and the Escheat Fund. All monies transferred to the Escheat Account under this section shall be accounted for and administered separately from other assets and money in the trust fund created under G.S. 116-209.

(c)        Security interest in Escheat Account. The State Education Assistance Authority, in addition to other powers vested under G.S. 116-201 to G.S. 116-209.23, inclusive, is authorized to pledge and vest a security interest in all or any part of the Escheat Account, by resolution adopted or trust agreement approved by it, as security for or insurance respecting the payment of bonds or other obligations, as defined in G.S. 116-201, including principal, interest and redemption premium, if any; provided, that such pledge and security interest in the Escheat Account shall, in the determination of the Authority, constitute a use of the Escheat Fund to aid worthy and needy students who are residents of this State and are enrolled in public institutions of higher education in this State. The Authority may submit to the Treasurer, from time to time as it deems necessary, requisitions for transfers of money in the Escheat Account to pay such bonds and other obligations to the extent necessary under such pledge of, or security interest in, the Escheat Account, or any part thereof, and the Treasurer is authorized and directed to pay such money so requisitioned to the Authority for such purposes.

(d)        Limitation on amount of obligations secured. The principal amount of bonds and other obligations insured or secured by the Escheat Account shall not exceed 10 times the amount held for the credit of the Escheat Account, as certified from time to time by the Treasurer, and, in no event, shall exceed three hundred fifty million dollars ($350,000,000). If the amount held for the credit of the Escheat Account, as certified by the Treasurer, shall be ten percent(10%) or less of the principal amount of the bonds and other obligations so insured or secured, the Authority shall not issue any additional bonds or cause additional obligations to be insured or secured by the Escheat Account until such time as the amount held for the credit of the Escheat Account exceeds ten percent (10%) of the principal amount of the bonds and other obligations secured or insured by the Escheat Account.

(e)        Use of excess funds. If the amount held for the credit of the Escheat Account at any time shall exceed the sum of thirty-five million dollars($35,000,000), such excess may be used by the State Education Assistance Authority, with the written approval of the Treasurer, for the purpose of either(i) making student loans or (ii) refunding outstanding bonds or other obligations issued by the Authority and secured by a pledge of, or a security interest in, the Escheat Account. Any excess so used shall be repaid by the Authority to the Escheat Account in the manner agreed between the Authority and the Treasurer.

(f)         Refund reserve. The Treasurer shall retain in the Escheat Fund, as a permanent refund reserve, either the sum of five million dollars ($5,000,000) or a sum equal to the total value of escheated or abandoned property received in the preceding fiscal year, whichever is greater, for the purpose of payment of refunds of escheated or abandoned property to persons entitled thereto.

(g)        Additional funds for refunds. If at any time the amount of the refund reserve shall be insufficient to make refunds required to be made, the Treasurer, in addition, may use all current receipts derived from escheated or abandoned property, exclusive of earnings and profits on investments of the Escheat Fund and the Escheat Account, for the purpose of making such refunds; and if all such funds shall be inadequate for such refunds, the Treasurer may apply to the Council of State, pursuant to the Executive Budget Act, to the limit of funds available from the Contingency and Emergency Fund, for a loan, without interest, to supply any deficiencies, in whole or in part. No receipts derived from escheated or abandoned property, other than earnings or profits on investments, shall be paid to the Authority until: (i) all valid claims for refund have been paid; (ii) the reserve for refund shall equal five million dollars($5,000,000); and (iii) the amount loaned from the Contingency and Emergency Fund shall have been repaid by the Escheat Fund.

(h)        Expenditures. The Treasurer may expend the funds in the Escheat Fund, other than funds in the Escheat Account, for the payment of claims for refunds to owners, holders and claimants under G.S. 116B-4; for the payment of costs of maintenance and upkeep of abandoned or escheated property; costs of preparing lists of names of owners of abandoned property to be furnished to clerks of superior court; costs of notice and publication; costs of appraisals; fees of persons employed pursuant to G.S. 116B-43; costs involved in determining whether a decedent died without heirs; costs of a title search of real property that has escheated; and costs of auction or sale under this Chapter. All other costs, including salaries of personnel, necessary to carry out the duties of the Treasurer under this Chapter, shall be appropriated from the funds of the Escheat Fund pursuant to the provisions of Article 1, Chapter 143 of the General Statutes.

(i)         Records. Before making a deposit to the Escheat Fund, or retaining or destroying property, the Treasurer shall record the name and address of the holder, the name and last known address of each person appearing from the holder's reports to be entitled to the abandoned property, the name and last known address of each insured person or annuitant, the amount or description of the property, and, with respect to each policy or contract listed in the report of an insurer, its number and the name of the corporation. The records shall be available for public inspection at all reasonable business hours.

"§ 116B-33.  Distribution of income of fund. — The income derived from the investment or deposit of the Escheat Fund shall be distributed annually on or before July 15th to the State Education Assistance Authority for loans to aid worthy and needy students who are residents of this State and are enrolled in public institutions of higher education in this State. Such loans shall be made upon terms, consistent with the provisions of this Chapter, pursuant to which the State Education Assistance Authority makes loans to other students under G.S. 116‑201 to 116-209.23, Article 23.

"§ 116B-34.  Claim for abandoned property paid or delivered. — (a) Filing. Any person claiming an interest in any property delivered to the Treasurer under this Chapter may file a claim to the property or to the proceeds from its sale. The claim shall be on a form prescribed by the Treasurer. The claim shall be made to the person originally holding the property, or to his successor or successors. If such person is satisfied that the claim is valid and that the claimant is the actual and true owner of the property, he shall so certify to the Treasurer by written statement attested by him under oath, or in case of a corporation, by two principal officers, or one principal officer and an authorized employee thereof. The determination of the holder that the claimant is the actual and true owner shall, in the absence of fraud, be binding upon the Treasurer and upon receipt of the certificate of the holder to this effect, the Treasurer shall forthwith authorize and make payment of the claim or return of the property, or if the property has been sold, the amount received from such sale to the owner, or to the holder in the event the owner has assigned the claim to the holder and the certificate of the holder is accompanied by such assignment. In the event the person originally holding the property rejects the claim made against him, the claimant may appeal to the Treasurer.

If the person originally holding the property, or his successor, is not available, the owner may file a claim with the Treasurer on a form prescribed by the Treasurer. In addition to any other information, the claim shall state the facts surrounding the unavailability of the person originally holding the property and the lack of a successor.

(b)        Determination. The Treasurer shall consider each claim and make a determination on it within 90 days after it is filed. He may hold a hearing, which shall be held in the manner required by Article 3 of the Administrative Procedure Act, Chapter 150A, and the Treasurer may designate any individual as hearing officer. Each determination shall be in writing, shall state the reasons for the decision and shall be given or sent to the claimant. Each determination may be appealed as provided under Article 4 of Chapter 150A.

(c)        Payment. If the claim is allowed, the Treasurer shall make payment forthwith. The claim shall be paid without deduction for costs of notices of sale or for the Treasurer's administrative costs, other than cost of notice provided for in G.S. 116B-25.

(d)        Payment by holder. Any holder who has paid monies to the Treasurer pursuant to this Chapter may make payment to any person appearing to such holder to be entitled thereto, and upon proof of such payment and proof that the payee was entitled thereto, the Treasurer shall forthwith reimburse the holder for the payment.

(e)        Indemnification. The claimant or claimants and the holder, if he certifies the claim under subsection (a) or receives reimbursement under subsection (d), shall agree to indemnify, save harmless and defend the State, the Treasurer and the Escheat Fund from any claim arising out of or in connection with refund of the property claimed. In like manner, the claimant or claimants shall also agree to indemnify, save harmless and defend the holder, if the holder certifies the claim under subsection (a) or pays a claim under subsection (d).

"§ 116B-35.  Examination of records. — (a) Treasurer. The Treasurer and the Commissioner with respect to records of insurers, may at reasonable times and upon reasonable notice cause to be examined the records of any person with respect to holding, reporting, paying, or delivering any property that is required to be reported pursuant to this Chapter.

(b)        Other examiner. When requested by the Treasurer, an examination shall be conducted by any administrative licensing or regulating agency otherwise empowered to examine the records of a holder. For the purpose of this section, the Commissioner of Banks is vested with full authority to examine the records of any financial institution doing business within the State, including those not organized under the laws or created in this State.

The Treasurer may also receive copies of any reports or forms filed by any person with any State agency, including the Department of Revenue, if he deems it necessary or appropriate to the proper administration of this Chapter.

The Treasurer may also receive copies of any such reports or forms when an official of any such State agency is of the opinion that the person has failed to report such property.

(c)        Confidentiality of records. Information derived by any examination of records or otherwise communicated to the Treasurer, the Commissioner or their respective representatives concerning abandoned property shall be confidential and not available for public inspection to the extent the Treasurer or the Commissioner finds necessary to protect the interest of the holder, the owner, the State and the public welfare; and, in any event, any such information or record which is confidential under any law of this State or of the United States when in the possession of a person, firm, corporation, agency or other entity named in such law shall also be confidential when revealed to or delivered into the possession of the Treasurer or the Commissioner and shall not be available for public inspection.

(d)        Order. The Treasurer, and the Commissioner with respect to reports of insurers, for the purpose of ascertaining the correctness of any report, the necessity of making a report where none has been made or the payment or delivery of property required to be paid or delivered under this Chapter, shall have the power to examine, personally or by an agent designated by him, any books, records, papers or other data which may be relevant to or material to such inquiry; and the Treasurer or the Commissioner may order the person required to make such report or pay or deliver such property, or any officer or employee of such person, or any person having possession, custody, care or control of books, records, papers or other data relevant or material to the matters under inquiry, or any other person having knowledge in the premises, to appear before the Treasurer or the Commissioner or their respective agents, at a time and place named in the order, and to produce such books, records, papers or other data, and to give such testimony under oath as may be material or relevant to such inquiry, and the Treasurer or the Commissioner or their respective agents may administer oaths to such person or persons. If any person so ordered refuses to obey such order or to give testimony when ordered, the Treasurer or the Commissioner may apply to the Superior Court of Wake County for a summons and court order requiring such person or persons to comply with the order of the Treasurer or the Commissioner; and failure to comply with such court order shall be punished as for contempt.

"§ 116B-36.  Proceeding to allow examination or compel delivery. — If any person refuses to allow examination of records or to deliver property to the Treasurer as required under this Chapter, the Treasurer, or the Commissioner with respect to records of insurers, may bring an action in a court of appropriate jurisdiction to enforce the examination or delivery.

"§ 116B-37.  Penalties. — (a) Failure or refusal to file; false reports. Any holder who shall willfully fail, neglect or refuse to make and file any required report or files a false report or who shall willfully fail, neglect or refuse to pay or deliver any property to the Escheat Fund shall be liable to the State of North Carolina in the sum of three hundred dollars ($300.00) for each and every such failure, neglect, refusal or false report, and an additional sum of ten dollars ($10.00) for each and every day of the period of default, or a sum equal to one-half of the value of the property, whichever is greater. Such penalty may be recovered by the State in an appropriate legal proceeding instituted by the State upon the relation of the Treasurer. The proceeds of any penalty or judgment recovered in such action shall be paid to the Treasurer to be added to the Escheat Fund.

(b)        Compelling compliance. The recovery of such penalty shall not relieve the defendant-holder from the duty of making and filing said reports. The State of North Carolina, upon relation of the State Treasurer or the Commissioner with respect to records of insurers, may bring injunctive proceedings to compel compliance with the requirements of this Chapter relative to the making and filing of said reports, or the Treasurer may compel compliance by suit and/or bill for discovery.

(c)        Interest penalty. In addition to any other damages, penalties or fines, any person who fails to render reports, files a false report, refuses to pay or deliver abandoned property to the Treasurer or perform any other duties required under this Chapter shall be charged interest at the rate of twelve percent (12%) per annum on the property or its value from the date the property should have been reported, paid, delivered or the day the false report was filed, until a correct report is filed.

"§ 116B-38.  Regulations. — The Treasurer or the Commissioner with respect to insurers, may adopt or amend the regulations necessary to carry out the provisions of this Chapter. These regulations shall be adopted or amended under the procedures of the Administrative Procedures Act, Chapter 150A.

"§ 116B-39.  Restriction on agreement to locate reported property. — (a) Limit on fees. No agreement entered into after a report is filed under G.S. 116B-25 is valid if any person undertakes thereby to locate or reveal the whereabouts of property included in that report for a fee or compensation, unless the agreement is:

(1)        in writing and duly signed and acknowledged by the property owner; and

(2)        clearly states the fee or compensation to be paid, which may not exceed twenty-five percent (25%) of the actual value of the property recovered; and

(3)        discloses the nature and value of the property; and

(4)        discloses the name and address of the holder; or discloses that the property has been paid or delivered to the Escheat Fund.

(b)        Agreements not affected. Subsection (a) shall not apply to any agreement made by any person, including personal representatives, guardians, trustees, and others in a representative capacity, with another to discover property in which such person has an interest for a fixed fee or hourly or daily rate, not contingent upon the discovery of property or the value of property discovered; provided, however, that any agreement entered into under this subsection for the purpose of evading the provisions of subsection (a) shall be invalid and unenforceable.

(c)        Excessive consideration. Nothing in this section shall be construed to prevent an owner from asserting, at any time, that any agreement to locate or reveal the whereabouts of properties is based on an excessive or unjust consideration.

"§ 116B-40.  Effect of laws of other states. — This Chapter shall not apply to any property that has been presumed abandoned or escheated under the laws of another state prior to the effective date of this Chapter.

"§ 116B-41.  Severability. — If any provision of this Chapter or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of the Chapter which can be given effect without the invalid provisions, and to this end the provisions of this Chapter are severable.

"§ 116B-42.  Transition and application. — Any person holding property that was not required to be reported, delivered or paid to any State agency as abandoned property under the laws of this State prior to January 1, 1980, and which, on December 31, 1979, has been held for a period greater than the period for abandonment established by this Chapter, shall not be subject to the reporting provisions of this Chapter. Such property shall be reported and delivered or paid to the Treasurer, however, in such manner and at such time as the Treasurer shall prescribe by rule adopted to promote the identification and delivery or payment of the property and the reasonable convenience of the holders.

Any person holding property that was subject to reporting, delivery or payment to a State agency as abandoned property under the laws of this State prior to January 1, 1980, and that is subject to a shorter period for abandonment under this act, may report and deliver or pay to the Treasurer that property between January 1, 1980, and June 30, 1980.

This act shall not effect any duty to file a report or deliver or pay to any State agency any abandoned property under the laws of this State prior to January 1, 1980.

"§ 116B-43.  Employment of persons with specialized skills or knowledge. — The Treasurer may employ the services of such independent consultants, real estate managers and other persons possessing specialized skills or knowledge as he shall deem necessary or appropriate for the administration of this Chapter, including, but specifically not limited to, valuation, maintenance, upkeep, management, sale and conveyance of property and determination of sources of unreported abandoned property. The Treasurer may also employ the services of an attorney to perform a title search or to provide an accurate legal description of real property which he has reason to believe may have escheated.

"§ 116B-44.  Agreements to coordinate the collection and administration of abandoned property. — (a) Coordination with United States and other states. The Treasurer is hereby authorized, with the approval of the Governor and Council of State, to enter into agreements with the United States government or any department or agency thereof, or with any state or political subdivision thereof, for the purpose of coordinating and improving the collection and administration of property abandoned or escheated under the laws of this State and collected and administered by the Treasurer with the collection and administration of property abandoned or escheated under the laws of the United States or any other state or political subdivision.

(b)        Expenditures to effectuate agreements. The Treasurer, with the approval of the Governor and Council of State, is authorized and empowered to undertake such agreements and make such expenditures from the funds of the Escheat Fund as may be necessary to effectuate such agreements.

"§ 116B-45.  Certification by holders with tax return. — (a) Certification. Every business association, including financial institutions and life insurers, holding property deemed unclaimed and abandoned under this Chapter, shall certify such holding in the income tax return required by Chapter 105 of the North Carolina General Statutes. The certification shall be a part of the tax return with which it is filed. If such business association is not required to file an income tax return under Chapter 105, the certification shall be made in the form and manner required by the Secretary of Revenue.

(b)        Certification not confidential. The information appearing on the certification shall not be privileged or confidential, and such information shall be furnished by the Secretary of Revenue to the Escheat Fund on October 1 of each year, or if such date shall fall on a weekend or holiday, on the next regular business day thereafter.

Sec. 2.  Article 22 of Chapter 28A is hereby amended by adding a new section thereto to read as follows:

"§ 28A-22-8.  Distribution to known but unlocated devisees or heirs. — (a) If there are known but unlocated devisees or heirs, the personal representative may deliver the share of such devisee or heir to the clerk of superior court immediately prior to filing of the final account. If the devisee or heir is located after the final account has been filed, he may present a claim for the share to the clerk. If the clerk determines that the claimant is entitled to the share, he shall deliver the share to the devisee or claimant. If the clerk denies the claim, the claimant may take an appeal as in a special proceeding.

(b)        The clerk shall hold the share without liability for profit or interest. If no claim has been presented within a period of five years after the filing of the final account, the clerk shall deliver the share to the State Treasurer as abandoned property.

(c)        The clerk shall not be required to publish any notice to such devisee or heir and shall not be required to report such share to the State Treasurer. If the devisee or heir is located, the clerk shall inform the devisee or heir that he is entitled to file a claim with the State Treasurer for the share under the provisions of G.S. 116B-34(a)."

Sec. 3.  G.S. 53-18, as the same appears in the 1975 Replacement Volume 2B, is hereby amended on line 30 by deleting the words "this Chapter as hereinafter provided" and inserting in lieu thereof the words "Chapter 116B".

Sec. 4.  G.S. 53-20, as the same appears in the 1975 Replacement Volume 2B, is hereby amended by adding a new subsection at the end thereof, as follows:

"(x)       Unlocated depositor. Any funds due a known but unlocated person shall be disposed in accordance with Chapter 116B of the General Statutes, except where the provisions of this Chapter specifically provide otherwise."

Sec. 5.  G.S. 53-43.7, as the same appears in the 1975 Replacement Volume 2B, is hereby amended as follows:

a.   Subsection (b) is amended by striking the entire subsection and inserting in lieu thereof the following:

"(b)      Any property, including documents or writings of a private nature, which has little or no apparent value, need not be sold but may be destroyed by the Treasurer or by the lessor, if retained by the lessor pursuant to a determination by the Treasurer under G.S. 116B-27(c).";

b.   Subsection (c) thereof is amended on lines 4 through 10 by deleting all of the language after the word "be" on line 4 and inserting in lieu thereof the following: "delivered to the State Treasurer as abandoned property under the provisions of Chapter 116B.";

c.   Subsection (d) thereof is amended by striking the entire subsection and by inserting in lieu thereof the following:

"(d)      The lessor shall submit to the Treasurer a verified inventory of all of the contents of the safe-deposit box upon delivery of the contents of the box or such part thereof as shall be required by the Treasurer under G.S. 116B-27(c); but the lessor may deduct from any cash of the lessee in the safe-deposit box an amount equal to accumulated charges for rental and shall submit to the Treasurer a verified statement of such charges and deduction. If there is no cash, or insufficient cash to pay accumulated charges, in the safe-deposit box, the lessor may submit to the Treasurer a verified statement of accumulated charges or balance of accumulated charges due, and the Treasurer shall remit to the lessor the charges or balance due, up to the value of the property in the safe-deposit box delivered to him, less any costs or expenses of sale; but if the charges or balance due exceeds the value of such property, the Treasurer shall remit only the value of the property, less costs or expenses of sale. Any accumulated charges for safe-deposit box rental paid by the Treasurer to the lessor shall be deducted from the value of the property of the lessee delivered to the Treasurer.";

d.   Subsection (e) thereof is hereby repealed.

Sec. 6.  G.S. 55-130, as the same appears in the 1975 Replacement Volume 2B, is hereby amended on lines 3 through 9 by deleting all of the language after the word "be" on line 3 and inserting in lieu thereof the following: "disposed of in accordance with Chapter 116B".

Sec. 7.  G.S. 58-241.15 as the same appears in the 1977 Cumulative Supplement to Volume 2B of the General Statutes, is hereby rewritten to read as follows:

"§ 58-241.15.  Unclaimed funds of defunct burial associations. — All unclaimed funds of any burial association that is no longer in operation shall be disposed of in accordance with Chapter 116B."

Sec. 8.  This act shall become effective January 1, 1981.

In the General Assembly read three times and ratified, this the 25th day of June, 1980.