Commonwealth
of Puerto Rico
Eleventh Legislative
Assembly
First Regular
Session
Abandoned
or Unclaimed Money and Other Liquid Assets Act
Puerto
Rico Act No. 36 of July 28, 1989
As
amended by
Puerto
Rico Act No. 346 of September 2, 2000
Unofficial
translation
AN ACT
[Synopsis: 1989] To provide that all sums of money
and other liquid assets abandoned or unclaimed by their legitimate owners,
belong to the Commonwealth of Puerto Rico; to establish procedures for the
handling, delivery, inspection and disposition of unclaimed liquid assets
and money, and to fix penalties.
[Synopsis: 2000] To add section (e) to Article 4;
amend section (a) of Article 6 and [to] amend Article 7 of Act No. 36 of
July 28, 1989, as amended, known as the “Abandoned or Unclaimed Money and
Other Liquid Assets Act” in order to make the provisions of the statute
applicable to financial institutions or holders that are not residents of
Puerto Rico that possess money or other abandoned or unclaimed liquid
assets that must be reported to Puerto Rico; [to] authorize the engagement
of independent consultants to identify said financial institutions or
holders; and to increase to one hundred dollars ($100.00) the aggregate
value of the money and other unclaimed liquid assets for the purposes of
the publication of the public notice and for other purposes.
STATEMENT OF MOTIVES of
1989 Act
The principle that the state is the owner of the
properties that have been abandoned or unclaimed by their legitimate
owners has been accepted throughout history and in all organized
communities. This principle
has been recognized in Puerto Rico through several legal provisions such
as the following:
“The original and ultimate
right to all real property, within the limits of Puerto Rico, and not
belonging to the United States, is in the Commonwealth of Puerto
Rico”. Political Code, 1902,
Article 5 (1 L.P.R.A. Sec. 2).
“Whenever the title to any
property fails for want of heirs, or next of kin, it reverts to the
Commonwealth of Puerto Rico.
All property within the limits of Puerto Rico, which does not
belong to any person belongs to the Commonwealth of Puerto Rico”. Political Code, 1902, Article 6 (1
L.P.R.A. Sec. 3)
“In default of persons who
have the right to inherit in accordance with the law, the Commonwealth of
Puerto Rico shall take the inheritance and devote the property to the
benefit of the ‘University Fund’”.
Civil Code, 1930, Article 912 (31 L.P.R.A. Sec. 2691).
Act No. 55 of May 12,
1933, as amended, known as the “Banking Law”, Act No. 93 of June 26, 1964,
as amended, known as the “Savings Bank Law”, Act No. 40 of April 23, 1928,
as amended, known as the “Trust Companies Act” and Act No. 77 of June 19,
1957, as amended, known as the “Insurance Code”, provide procedures so
that the sums of money not claimed from the institutions covered by said
laws shall be transferred to the General Fund of the Commonwealth of
Puerto Rico.
Notwithstanding the
abovementioned provisions, in Puerto Rico there are no adequate procedures
for the Commonwealth to claim those sums of money and other liquid assets
abandoned or unclaimed by the persons entitled to them, that are in the
custody of other natural or juridical persons not covered by the laws
listed in the preceding paragraph.
A great many of the
states of the United States, if not all of them, have laws that provide
adequate procedures to claim abandoned or unclaimed property and assets,
belonging to their respective residents.
It is the purpose of this
Act to provide that all abandoned or unclaimed sums of money and other
liquid assets belonging to residents of Puerto Rico shall be transferred
to the Commonwealth of Puerto Rico and to establish the procedures for the
handling, delivery, inspection and disposition of said money and other
liquid assets, and to fix penalties for any violation of this Act.
STATEMENT OF MOTIVES of
2000 Act
The provisions of the “Abandoned or Unclaimed Money
and Other Liquid Assets Act”, as amended, Act No. 36 of July 28, 1989
(hereinafter, “Act 36”) are not specifically clear in that they are
applicable to every financial institution or holder, even when these
[entities] do not carry out business in Puerto Rico. The previous situation is contrary
to the situation of the majority of the states where the provisions of the
statutes on unclaimed or abandoned chattels are specifically clear in that
they are applicable to al institutions or holders, even when they are
engaged in business or are incorporated in other states.
The doctrine established by the Supreme Court of the
United States in the case of Texas v. New Jersey et al., 379 US 674
(1965), provides that the abandoned or unclaimed chattels shall be
reported to the state of the last known address of the owner; if the last
known address is not available, [the chattels] shall be reported to the
state where the holder is incorporated; in the event that the laws of the
state of the last known address does not require that the chattels be
reported to the state, then [the chattels] shall be reported to the state
of incorporation of the holder.
In this last case, if the state of the last known address enacts
legislation requiring that said chattels be reported, then [that state]
may claim all those chattels that have been reported to other states.
This [legislative] bill intends to clarify the law in
order to facilitate the retrieval of money or other liquid assets in the
hands of holders outside Puerto Rico belonging to persons whose last known
address is in Puerto Rico.
To facilitate compliance with the statutes on
abandoned or unclaimed chattels, the states, as a generalized practice,
engage independent consultants who work to identify possible holders of
abandoned or unclaimed chattels that must be reported to the state and to
audit these holders. This
practice may be of great help in order for Puerto Rico to have access to
those chattels that would otherwise be very difficult to identify. This legislative measure amends
Act 36 for those purposes.
Every financial institution or holder, as these terms
are defined in Act 36, is bound to annually file a report with the
Commissioner of Financial Institutions indicating the amounts of money or
other liquid assets in its possession with an aggregate value of one
dollar ($1.00) or more that are presumed abandoned or unclaimed pursuant
to Act 36. In addition, it is
bound, in turn, to annually publish, once during each of the months of
August and September, in a newspaper of general circulation, a public
notice of the money and other abandoned or unclaimed liquid assets, in the
possession of said financial institution or holder the value of which is
twenty five dollars ($25.00) or more. The expenses incurred in relation
with the publication of the public notice are paid by the financial
institution or holder from the money or other liquid assets described in
the public notice, deducting the amount of said expenses from the amount
of the money or liquid assets.
However, Act 36 is not applicable to those banks
governed by Act No. 55 of May 12, 1933, as amended, known as the “Bank
Act”. The latter contains
similar provisions with the exception that it was recently amended in
order to increase to one hundred dollars ($100.00) the amount of the sums
which the persons are entitled to claim for purposes of the publication of
the public notice therein required.
This legislative bill pursues uniformity among all
financial institutions or holders by increasing to one hundred dollars
($100.00) or more the aggregate value of the moneys or other unclaimed
liquid assets for purposes of the publication of the public notice
required under Act 36. This
increase results in a small cost for publication of the notice. This implies that the expenses
incurred in relation with the publication of the public notice that will
be charged against the money or other liquid assets described in said
public notice shall be smaller, to the benefit of their owners.
In relation to the financial institutions or holders
that posses money or other abandoned or unclaimed liquid assets that must
be reported to Puerto Rico, they shall comply with the publication and
notice requirements to consumers imposed by the statutes of the state
where they are located.
This bill also intends to eliminate the period of ten
(10) years within which a person believing to have proprietary rights over
some money or other abandoned or unclaimed liquid assets may claim them
from the Commissioner of Financial Institutions. This obeys to the interest of not
depriving persons from their right to retrieve assets belonging to
them.
BE IT
ENACTED BY THE LEGISLATURE OF PUERTO RICO:
Article 1. - Short title.
This Act shall be known as the “Abandoned or
Unclaimed Money and Other Liquid Assets Act”.
Article 2. – Definitions.
For the purposes of this Act, the following terms
shall have the meaning stated hereinbelow, unless another meaning clearly
arises from the context:
a)
“Commissioner” - means the Commissioner of Financial
Institutions.
b)
“Owner” - means the person entitled to claim money
and other liquid assets abandoned or unclaimed whether because he is the
original owner, beneficiary, or heir to such assets.
c)
“Financial Institutions” - means any Federal savings
bank, Federal savings and loan association, savings and credit cooperative
union, mortgage institution, investment company, financing company, small
personal loan company, chattel leasing companies, money order sales
company, international banking entity, securities broker-dealer,
assignment of accounts receivable business, national bank authorized under
the laws of the United States but not covered by the Puerto Rico Banking
Act, and trust company not covered by the Puerto Rico Trust Companies
Act.
d)
“Other Liquid Assets” - means those assets that can
be changed into money easily or within a term less than one (1) year with
no loss or with a loss that does not exceed fifty percent of its value,
and includes checks, certified checks, certified money orders, bank,
postal, or other money orders, travelers checks, pass books, certificates
of deposit, stocks, shares, promissory notes, bonds, dividends, escrow
funds, sureties, credits and other similar assets.
e)
“Person” - means any natural or juridical person.
f)
“Holder” - means any person that in the course of his
business has in his custody, money or other liquid assets belonging to
another person, with the obligation of returning or paying them to said
other person, his beneficiaries, heirs or successors in law, on a specific
date or one to be determined, or when a certain or contingent event
occurs, whether foreseeable or not.
Article 3. - Applicability.
This Act shall apply to all financial institutions or
holders, as such terms are defined in this Act. Nevertheless, those sums of money
or liquid assets under the jurisdiction of the courts or agencies of the
Commonwealth of Puerto Rico, are hereby excluded.
Article 4. - Presumption of Abandoned and Unclaimed Assets.
(a) Those sums of money and other liquid assets, as
defined in this Act, in the custody of a financial institution plus the
interest or dividends that the same have accrued or accumulated and after
deducting the charges legally imposed thereon, shall be presumed as
abandoned and unclaimed when, within the five (5) preceding years, the
owner has shown no interest in said money or liquid assets, in any of the
following ways:
(1) Making some
transaction with regard to said money or other liquid assets, including
the presentation of a book or similar document to write or credit therein
the accrued interest or dividends;
(2) Communicating in
writing with the financial institution in custody of said money or other
liquid assets.
(3) Showing his interest
in said money or other liquid assets in any way.
In the case of certified
checks, certified money orders, bank, postal or other money orders, and
travelers checks drawn by any financial institution, they shall be
presumed as abandoned or unclaimed when the same have not been presented
for payment to the drawer or drawee within five (5) years after having
drawn the same.
(b) The sums of money and other liquid assets, as
defined in this Act, in the custody of a holder, plus the interest or
dividends they have accrued or accumulated and deducting the charges
legally imposed, shall be presumed as abandoned or unclaimed when after
the obligation to return or pay said money or other liquid assets has
matured and the owner has been advised that these are at his disposal,
five (5) years have elapsed from their maturity, without the owner having
claimed or stated in writing his interest in the same.
(c) The financial institution that alleges or
sustains that any of the three (3) actions described above has been
carried out within the five (5) preceding years, must prove it with
attesting evidence, be it through the presentation of an appropriate and
official record kept in the normal course of business from where it
clearly and unequivocally arises that a transaction was conducted with
regard to the money or other liquid assets, or by presenting written
evidence that proves, beyond any doubt that the owner has an interest in
the money or other liquid assets in the custody of said financial
institution, and in which he informs it of his address and other relevant
circumstances to be located.
(d) The holder who alleges or sustains that within
the five (5) years after the maturity of his obligation to return or pay
any sum of money or other liquid assets, its owner has claimed them or has
stated his interest in them, must show it with attesting evidence, be it
through an official and appropriate record kept in the normal course of
business from where it clearly and unequivocally arises that the claim and
payment was made or through the presentation of written evidence that
shows, beyond any doubt, that the owner has an interest in the sum of
money or other liquid assets in the custody of said holder, and in which
he informs it of his address and other relevant circumstances to be
located.
(e) Any holder of money or other abandoned or
unclaimed liquid assets belonging to persons whose last known address is
in Puerto Rico, who in accordance to the statutes of the state or
territory where they are located has the duty to report said chattels,
shall be bound to report and remit them to the Office of the Commissioner
of Financial Institutions of Puerto Rico. This provision shall be equally
applicable to money or other liquid assets in possession of a financial
institution or holder, as well as to money or other liquid assets reported
by a financial institution or holder to another state, possession or
territory of the United States, regardless of the date in which they were
reported.
Said financial institutions or holders shall be
exempt from compliance with the publication requirements of Article 6 of
this Act and shall satisfy the publication and notice-to-owner
requirements imposed by the statutes of the state, territory or possession
of the United States where they are located.
Article 5. - Obligation to Render Reports.
(a) Every financial institution or holder, as defined
in this Act, is under the obligation to render an annual report to the
Commissioner no later than the 10th day of August, as of the previous 30th
of June, stating the sums of money and other liquid assets in its custody,
having an aggregate value greater than one dollar ($ 1.00) that are
presumed abandoned or unclaimed by this Act.
(b) Said report shall state the name, if known, and
the last known address of the owner of said money and other liquid assets
and the value thereof, as well as a brief description of the abandoned
assets including any number that identifies them and any other information
that is required by the Commissioner through regulations.
(c) All the names that appear in said report shall be
in alphabetical order and those owners whose names are unknown shall
appear at the end of the report identified with the word "UNKNOWN".
(d) Every financial institution or holder, as defined
in this Act, that as of June 30 of any year, does not have in its custody
any [presumptively] abandoned and unclaimed moneys or liquid assets, shall
render a report to the Commissioner, stating this fact, no later than the
10th day of August of that same year.
Article 6. – Publication.
(a) Every financial institution or holder, as defined
by this Act, bound to render the report described in section (a) of the
above Article 5, shall publish annually, once during each month of August
and September, in a newspaper of general circulation, a notice entitled
“Notice of Unclaimed Money and Other Liquid Assets in the Custody of (name
of the financial institution or holder)”.
This notice shall contain:
(1) The names in
alphabetical order of the persons that according to the last report
rendered, are entitled to claim the money or other liquid assets whose
aggregate value is of one hundred dollars ($100.00) or more, the last
known address of each one of said persons, and the sums of money or other
liquid assets to which they are entitled.
(2) A statement declaring
that in accordance with the procedures established in this Act, the sums
of money or liquid assets that are not claimed from the financial
institution or holder concerned, shall be transferred to the Commissioner
of Financial Institutions, to whom all claims shall be addressed within
the term of ten (10) years counting from the date the unclaimed money and
assets are delivered to the Commissioner.
(b) During the following month of October, and no
later than the tenth (10th) day of said month, the financial institution
or holder concerned, shall file a certification of the publication of such
notice before the Commissioner of Financial Institutions. A copy of said notice shall be
posted in a visible and accessible place in each branch of the pertinent
financial institution or holder from the date of publication of the notice
until the 30th day of November of each year, to be examined by any
interested person.
The expenses incurred with regard to the publication
required by this Article, shall be defrayed by the financial institution
or holder against the money or other liquid assets described in said
notice, deducting the amount of such expenses from the total sum
thereof. This shall be the
only item that can be charged against the unclaimed money or other liquid
assets. It shall be illegal
for a financial institution or holder to impose service charges to the
unclaimed money or other liquid assets either before or after having been
declared as such, or that are otherwise stricken from the books.
(c) During the month of December of each year and no
later than December 10 of said month, any financial institution or holder
that after publishing the notice required above and handling the claims
made according to law, has in its custody unclaimed money or other liquid
assets, regardless of the amount, shall hand over the same to the
Commissioner, who shall transfer them to the Secretary of the Treasury to
be covered into the general fund of the Government of the Commonwealth of
Puerto Rico.
(d) No financial institution or holder shall be
liable for any money or liquid assets after having delivered the same to
the Commissioner pursuant to the provisions of this Act.
Article 7. - Term to Claim.
Any person who believes he is entitled to [receive]
money or other abandoned or unclaimed liquid assets delivered to the
Commissioner, as provided in Article 6 of this Act, may claim them from
the Commissioner. The
Commissioner is hereby authorized to return them to its owner with a four
percent (4%) annual interest, or the interest rate established by
regulation, computed from the date they were delivered to the
Commissioner, upon verification of the claimant's rights.
[The] Treasury Department, together with the
Commissioner, may engage the services of independent consultants, as they
deem necessary or appropriate, for the identification of sources and the
retrieval of money or other abandoned or unclaimed liquid assets.
Article 8. - Regulations.
The Commissioner is hereby empowered to approve,
promulgate, amend, stay or repeal any regulation he deems convenient for
the faithful compliance of this Act.
Article 9. – Penalties.
Any financial institution or holder who incurs a
violation to the provisions of this Act, may be penalized with an
administrative fine which shall not exceed five thousand (5,000)
dollars. The Commissioner may
also impose an administrative fine which shall not exceed five thousand
dollars ($ 5,000) for every five (5) days that it fails to comply with any
order for compliance issued by the Commissioner, and shall also be subject
to the corresponding provisions of the Penal Code of the Commonwealth of
Puerto Rico regarding misappropriation.
If the financial institution on which an
administrative fine is imposed by virtue of this Article, does not pay it
within the term of fifteen (15) days counting from the date that notice of
the imposition of the administrative fine is served, the Commissioner may
file a civil action for the collection of said administrative fine at the
Superior Court of Puerto Rico, San Juan Part, which shall have
jurisdiction in this procedure.
Article 10. - Application of the Uniform Procedure Administrative
Act.
All the provisions of this Act shall be ruled, in
that which is pertinent, by Act No. 170 of August 12, 1988, known as the
"Uniform Administrative Procedure Act".
Article 11. - Immediate Effect.
Every financial institution or holder that on the
date of approval of this Act, has in its custody any money or liquid
assets that have not been claimed by its owner during the past six (6)
years, shall be presumed to be abandoned and unclaimed for the purposes of
this Act.
Article 12. – Effectiveness.
This Act shall take effect immediately after its
approval.