AAC-27-08-00004-P The Requirement of Acknowledgment Signatures for Certain Abandoned Property Forms and Agreements Submitted to the Comptroller

7/2/08 N.Y. St. Reg. AAC-27-08-00004-P

NEW YORK STATE REGISTER

VOLUME XXX, ISSUE 27

July 02, 2008

RULE MAKING ACTIVITIES

DEPARTMENT OF AUDIT AND CONTROL

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. AAC-27-08-00004-P

The Requirement of Acknowledgment Signatures for Certain Abandoned Property Forms and Agreements Submitted to the Comptroller

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed action:

Addition of section 129.1 to Title 2 NYCRR.

Statutory authority:

Abandoned Property Law, sections 1401, 1414 and 1416

Subject:

The requirement of acknowledgment signatures for certain abandoned property forms and agreements submitted to the comptroller.

Purpose:

To ensure no confidential information pertaining to abandoned funds is released to unauthorized persons.

Text of proposed rule:

Section 129.1 of Part 129 is added to Title 2 of NYCRR as follows:

Section 129.1

(a) Accordingly, the Comptroller shall not reveal any confidential information including the value of abandoned property to any claimant or their agent unless such person provides proof of an interest in the abandoned property and the following:

(i) a claim form, or other supplemental claim form deemed necessary by the Comptroller, signed by the person making claim and duly acknowledged by the person in the manner prescribed for the acknowledgement of a conveyance of real property in accordance with the Real Property Law;

(ii) in the case of claimant engaging the services of a finder for consideration, the finder must present to the Comptroller a finder agreement executed in accordance with section 1416 of the Abandoned Property Law signed by the claimant and such signature shall be duly acknowledged by the claimant in the manner prescribed for the acknowledgement of a conveyance of real property in accordance with the Real Property Law.

(b) Comptroller may waive subdivision (b) of this section may be waived within the discretion of the Comptroller provided that the Comptroller determines that satisfactory proof has otherwise been submitted by the claimant establishing that the claimant is the owner of the abandoned property.

Text of proposed rule and any required statements and analyses may be obtained from:

Wendy H. Reeder, Office of the State Comptroller, 110 State St., Albany, NY 12236, [phone], e-mail: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory Authority

This rule is authorized under sections 1401, 1414 and 1416 of the Abandoned Property Law. Section 1414 authorizes the Comptroller to make rules and regulations necessary to enforce the provisions of the Abandoned Property Law. Section 1401 provides that the Comptroller shall not reveal confidential information relating to funds reported to the Abandoned Property Fund except in the discretion of the Comptroller. Additionally, such section provides that the value of the property cannot be revealed to any person unless they have provided satisfactory proof of an interest or title to the property. Accordingly, it is proper for the Comptroller to promulgate rules that define uniform situations where it is proper to reveal any such confidential information. Further, section 1416 provides the method by which a claimant may enter into an agreement (“Finder Agreement”) with a third party (“Finder”), which is essentially an agreement whereby the claimant hires an agent to assist in the processing of his or her claim in exchange for a percentage of the property recovered. In order to synthesize section 1416 with section 1401, there must be a uniform method to determine that the identity of the claimant who has signed the Finder Agreement in order to release confidential information to the Finder.

2. Legislative Objectives

The proposed rule enables the Comptroller to continue to operate within the statutory requirement that no confidential information may be revealed to any claimant or Finder without a determination of their interest in the property.

3. Needs and Benefits

Since statutorily, confidential information cannot be released to any person unless the Comptroller has determined they hold an interest in the abandoned property, it is necessary to provide a uniform method to determine the identity of a claimant. This is of particular concern when the confidential information will be conveyed to Finders representing claimants who have Finder Agreements under section 1416, and by virtue of such agreement have an interest in recovering the abandoned property.

In the past the Comptroller has required that the Finder present the executed Finder Agreement and such agreement contain the notarized signature of the claimant before revealing any confidential information; however a recent Appellate Division decision concluded a rule must be promulgated in order for the Comptroller to exercise his discretion in this manner. Accordingly, in order to continue uniform processing of claims and avoid contravention with the Comptroller's statutory duties, this rule must promulgated.

4. Costs

Pursuant to section 136 of the Executive Law a notary may not charge more than $2 for taking an acknowledgment of a signature. Therefore the claimants will pay a fee up to $2 for each notarization. There will be no cost to the Comptroller's Office.

5. Local Government Mandates

Generally, local governments generally have notaries on staff therefore there will be little impact on the local government.

6. Paperwork

No new paperwork will be required.

7. Duplication

None.

8. Alternatives

An alternative to requiring notarization would be to require that all claimants provide their social security numbers. This would allow the Comptroller to determine the identity of the claimant with little impact to current processing.

This alternative must be rejected because, while currently the Office of Unclaimed Funds Claim Form requests the claimant's social security number, pursuant to State and Federal Law a response to such request is not mandatory. Because the Comptroller's Office cannot require the claimant report their social security number under law, it would be inappropriate to use this as a means of verifying identity in a uniform manner.

9. Federal Standards

This rule does not exceed any Federal standard.

10. Compliance Schedule

It is estimated that regulated parties will be able to achieve compliance immediately. Abandoned Property forms already request notarization and the majority of all claimants provide a notarized signature on such forms. As to Finder Agreements, the Comptroller's Finder Brochure already advises finders to obtain a notarized signature of the claimant on the Finder Agreement; therefore nearly all Finders are already in compliance.

Regulatory Flexibility Analysis

1. Effect of Rule

This rule will have a minimal on small businesses. Pursuant to section 136 of the Executive Law acknowledgments performed by a notary cost $2. Such fee is de minimus, considering most businesses do not institute multiple claims. As to local governments, generally, they have notaries on staff therefore; there is likely no cost to a local government.

2. Compliance Requirements

A local government or small business need only appear before a notary public if they wish to submit Abandoned Property forms or a Finder Agreement to the Office of Unclaimed Funds to recover abandoned funds.

3. Professional Services

Again, local governments and small businesses need only appear before a notary public if they wish to submit Abandoned Property forms or a Finder Agreement to the Office of Unclaimed Funds to recover abandoned funds.

4. Compliance Costs

Pursuant to section 136 of the Executive Law acknowledgments performed by a notary cost $2; therefore the cost to small businesses is de minimus. Further since local governments have notaries on staff there is likely to be no compliance costs to local governments.

5. Economic and Technological Feasibility

There are no issues to the economic and technological feasibility of this rule. The claimant need only appear before a notary public and at most pay the notary a fee of $2.

6. Minimizing Adverse Impact

This rule is designed to have minimal adverse economic impact on a small business and local government. The $2 fee for obtaining an acknowledgment before a notary public is de minimus. If the Comptroller's Office was obligated to verify the identity of the claimant in another non-uniform manner such verification would have a greater adverse impact on the operations of the Comptroller's Office.

7. Small Business and Local Government Participation

Since the Comptroller's Office has previously requested abandoned property claim forms and Finder Agreements contain an acknowledgment, small businesses and local governments have already been complying with this requirement. The Comptroller's Office has received very little response to this requirement and it is believed most small businesses and local governments have no issues with the implementation of this rule.

Rural Area Flexibility Analysis

1. Types and Estimated Numbers of Rural Areas

This rule will affect all rural areas.

2. Reporting, Recordkeeping and other Compliance Requirements; and Professional Services

The only necessary professional services required in rural areas are the services of a notary public.

3. Costs

Pursuant to the Executive Law a notary may only charge $2 for taking an acknowledgment, such fee is de minumus.

4. Minimizing Adverse Impact

This rule is designed to have minimal adverse economic impact on rural areas. The $2 one time fee for obtaining an acknowledgment before a notary public is de minimus. If the Comptroller's Office was obligated to verify the identity of the signer of the using other methods there would be greater economic impact.

5. Rural Area Participation

Since the Comptroller's Office has previously required abandoned property forms and Finder Agreements contain an acknowledgment, claimants in rural areas have already been complying with this requirement. The Comptroller's Office has received very little response to this requirement and it is believed claimants in rural areas have no issues with the implementation of this rule.