This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
ABANDONED AND LOST PROPERTY -- Money (unclaimed redemption payments on bearer serial bonds)
BONDS AND NOTES -- Redemption (disposition of unclaimed moneys representing amounts paid on matured bearer serial bonds)
ABANDONED PROPERTY LAW, §§300(1)(h), 500(1)(b), 501: A village acting as its own fiscal agent, or a banking organization acting as the village's fiscal agent, is required to pay to the State Comptroller unclaimed moneys representing the principal amounts and accrued interest, if any, of matured, unredeemed bearer serial bonds issued by the village, when such amounts have remained unpaid or unclaimed for three years. Prior inconsistent opinions are hereby superseded.
This is in reply to your letter regarding the disposition of moneys held for the redemption of bonds issued by the village. You state that 35 serial bonds, issued in bearer form by the village, matured on August 1, 1984, and that as of the date of your letter, only 10 of such bonds had been redeemed. You inquire about the period of time for which these funds must be held and the disposition of the funds upon expiration of the required holding period.
Article V of the Abandoned Property Law contains provisions which include as abandoned property certain types of property held by "public corporations". The term "public corporation" is defined for this purpose to include villages (see Abandoned Property Law, §500[b], as amended by L 1989, ch 61; General Construction Law, §66,).
Section 501(1) of the Abandoned Property Law, as added by L 1991, ch 166, generally provides, in relevant part, that any amount which, on or after January 1, 1947, shall have become payable or distributable by a public corporation to a "resident" as the owner or former owner of a "security" is deemed abandoned property if such amount has remained unpaid to or unclaimed by the resident for a period of three years as of December 31 of any year. The three year period is measured from the earlier of the maturity date of the security or the date the security has been called for redemption (Abandoned Property Law, §501[a][ii]). Pursuant to section 502 of the Abandoned Property Law, every public corporation is required to pay or deliver to the State Comptroller, on or before March 10th of each year, all property which on the preceding December 31st was deemed abandoned pursuant to section 501.
The term "security" includes "any instrument issued by a ... public corporation or any entry on the books and records of such ... public corporation evidencing an obligation to make any payment of the principal amount of a debt ..." (Abandoned Property Law, §500[a]). Abandoned Property Law, §500(7)(a) defines "amount" to include "any dividend, profit or other distribution, whether in cash or securities and any interest or other payment on or of principal, including the cash value of any security which has matured ..." For the purposes of section 501, the holder or owner of a security or the payee of an amount is deemed to be a "resident" when, inter alia, the records of the public corporation "do not indicate a last known address outside this state or when the address of such holder, owner or payee is unknown to such ... public corporation ..." (Abandoned Property Law, §501).
Pursuant to the above provisions of the Abandoned Property Law, the bonds issued by the village are "securities," and the moneys held by the village for principal and interest payments are "amounts" which are deemed abandoned if unpaid to or unclaimed by a "resident" for a period of three years from the earlier of the maturity date of the security or the date such security has been called for redemption (see Abandoned Property Law, §501[a]). Since the securities which are the subject of this opinion are bearer bonds, the last known address of the holders or owners thereof generally would be, of necessity, unknown to the village within the meaning and intent of section 501 (cf. Kubli v Rosetti, 34 NY2d 68, 356 NYS2d 29; Fuentes v Wendt, 106 Misc 2d 1030, 436 NYS2d 801). Accordingly, in our opinion, such holders, owners or payees would be deemed to be "residents". Therefore, because the amounts held by the village since 1984 have remained unclaimed for more than three years, they must be paid to the Comptroller as abandoned property.
It should be noted that, where a banking organization acts as fiscal agent for a public corporation for purposes of paying principal and interest on obligations issued by the public corporation (see Local Finance Law, §70.00), Abandoned Property Law, §300(1)(h) is applicable. That section provides that any "amount" of a public corporation for which a banking organization acts as agent or trustee, "shall be deemed abandoned property in the same manner and under the same conditions" as such amounts are deemed abandoned property under article 5 of the Abandoned Property Law. Thus, a banking organization acting as fiscal agent for a public corporation must pay to the State Comptroller moneys it holds representing principal and interest due on matured, unredeemed bearer bonds issued by the public corporation where such moneys have remained unclaimed for more than three years. These moneys are required to be reported, paid and/or delivered to the State Comptroller on or before November 10 each year, for property deemed abandoned as of the prior June 30th (Abandoned Property Law, §§300[h], 301, 302).
1982 Opns St Comp No. 82-16, p 20, 1979 Opns St Comp No. 79-620, p 117 and other opinions of this Office rendered prior to the 1989 and 1991 amendments to the Abandoned Property Law are superseded to the extent inconsistent herewith.
April 15, 1992
Bruce W. Migatz, Esq., Village Attorney
Village of Manorhaven