Program to reunite bondholders with matured unredeemed Federal savings bonds

(a)

Owner location and claims

(1)

In general

Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury shall prescribe regulations providing that States may enter into owner location and claims agreements with the Secretary for the purposes of locating owners of specified unredeemed savings bonds, identifying such owners to the Secretary, and processing and verifying claims for the redemption of such savings bonds. Such regulations shall provide 1 year (beginning with the date of publication of such regulations) for the agency with responsibility for administration of unclaimed property to enter into an owner location and claims agreement with the Secretary. If no such agreement is entered into during such year, such agency or the chief executive of the State shall have 6 months (beginning at the end of such 1-year period) to enter into such an agreement with the Secretary. If, at the end of such 6-month period, no agreement has been entered into, the Secretary shall conduct owner location and claims processing with respect to such State. (2)

Owner location and claims agreements

Each owner location and claims agreement shall be substantially the same for each State and shall provide for the following with respect to specified unredeemed savings bonds assigned for processing to such State: (A)

Provision of records to States

The Secretary shall provide the State or its representative such records with respect to such bonds as the Secretary determines are necessary or appropriate to carry out the purposes of this section. (B)

Written notification to bondholders of record

The State or its representative shall mail to each owner of record of such a bond, with respect to whom an address suitable for the delivery of mail is determined under subsection (b), a written notification regarding the existence of such bond and that such bond is no longer earning interest. (C)

Additional notification efforts; restrictions

The State or its representative shall make such additional efforts to locate the owners of such bonds as the Secretary may provide. The Secretary may provide for such restrictions on efforts utilized to locate such owners as the Secretary determines appropriate, including any restrictions on the use of commercial locator services. (D)

Claims processing and verification

The State or its representative shall receive, process, and verify claims for such bonds and shall transmit to the Secretary verified claims. (E)

Reunification payments to States

Subject to the limitation of subsection (c)(4)(B), the Secretary shall direct the Federal depositary referred to in subsection (c) to pay the State a fee each month equal to 25 percent of the amount paid under subsection (c)(3) during the preceding month with respect to bonds verified by such State. Any fee otherwise payable under this subparagraph shall be reduced by the amount of any payment made under subparagraph (F). (F)

Advance payment of State administrative costs

Subject to the limitation of subsection (c)(4)(B), the Secretary shall, upon request from the State, direct the Federal depositary referred to in subsection (c) to pay the State such amount as the Secretary determines reasonable for the estimated cost of the State to carry out activities pursuant to this subsection. The aggregate amount paid to the State under this subparagraph may not exceed 5 percent of the aggregate amount which would be paid from the redemption account if all the specified unredeemed savings bonds assigned to the State were redeemed. (b)

Examination of bond records; establishment of database

Not later than 90 days after the date of the enactment of this Act, the Secretary shall enter into a cooperative agreement (within the meaning of section 6305 of title 31, United States Code) with the State coordinator which provides for the following with respect to the specified unredeemed savings bonds: (1)

Access to bond records

The Secretary shall provide the State coordinator with full access to records related to such bonds. (2)

Compilation of information

The State coordinator shall compile relevant information with respect to such bonds and make the results of such compilation available to the Secretary for the Secretary’s review and concurrence. (3)

Assignment of bonds to States for processing

The State coordinator shall make a recommendation to the Secretary regarding to which State each bond should be assigned for processing under subsection (a). Such recommendation shall be based on the registered owner’s address of record as determined in accordance with Government Auditing Standards for relevance, competence, and sufficiency. The Secretary shall make the final determination regarding the State to which each bond is assigned for processing after taking into account the recommendation of the State coordinator. Such determination by the Secretary shall be conclusive and shall not be subject to judicial review. (4)

Searchable database

After the Secretary concurs with the information compiled under paragraph (2), the State coordinator shall establish a searchable database which includes such information with respect to each bond and the State to which each bond is assigned for processing. The State coordinator shall update the information contained in such database (including information indicating which bonds have been redeemed) in such manner as the Secretary may provide. (c)

Agreement with Federal depositary

Not later than 90 days after the date of the enactment of this Act, the Secretary shall enter into an agreement with a Federal depositary which provides for the following: (1)

Transfer of funds

The Secretary shall transfer to the Federal depositary the excess of— (A)the aggregate amount payable upon redemption of each specified unredeemed savings bond, over (B)the amount of tax withheld under subsection (d) with respect to such bond. (2)

Separate account; investment of funds

The Federal depositary shall establish and maintain a separate account (the reunification account) which shall consist of amounts transferred under paragraph (1) and any earnings thereon. The Federal depositary shall invest amounts in such account in accordance with such standards as may be specified by the Secretary. (3)

Payments on redeemed bonds

The Secretary shall notify the Federal depositary of any redemption of a specified unredeemed savings bond. The Federal depositary shall, promptly after notification by the Secretary, make the appropriate payment from the redemption account with respect to such redemption as directed by the Secretary and notify the State coordinator that such bond has been redeemed. The amount of any payment under this paragraph with respect to the redemption of any bond (determined without regard to this sentence) shall be reduced by the amount of the tax withheld under subsection (d) with respect to such bond. (4)

Use of earnings for administrative expenses, etc

(A)

In general

The Federal depositary shall make the following payments as directed by the Secretary: (i)

Fees of Federal depositary

Payment of reasonable fees of the Federal depositary for services provided by the Federal depositary. (ii)

Expense of bond examination, etc

Payment to the State coordinator designated under subsection (b) for reasonable costs in carrying out such subsection. (iii)

Reunification payments to States

Payment of the administrative and reunification payments described in subparagraphs (E) and (F) of subsection (a)(2). (iv)

Administrative costs of Treasury

Payment to the Secretary, not in excess of $5,000,000 for any fiscal year, for the administrative costs of the Department of the Treasury in carrying out this Act. (v)

Account excess transferred to general fund

Payment to the general fund of the Treasury of such amounts as the Secretary determines, from time to time, are in excess of those necessary to provide for the payments from the reunification account which are required under this Act (other than this clause). (B)

Administrative costs limited to reunification account earnings

No payment may be made under subparagraph (A) if such payment would result in the balance of the reunification account being less than the excess of— (i)the aggregate amounts transferred under paragraph (1), over (ii)the aggregate payments made from such account under paragraph (3). (d)

Withholding of tax on unclaimed interest

(1)

In general

The Secretary shall deduct and withhold from any amount transferred under subsection (c)(1) with respect to any bond a tax in an amount equal to 33 percent of the amount which, if such bond were redeemed, would constitute interest. (2)

Treatment in same manner as wage withholding

Except as otherwise provided by the Secretary, for purposes of section 3403 and 3404 of the Internal Revenue Code of 1986 and for purposes of so much of subtitle F of such Code (except section 7205 of such Code ) as relates to chapter 24 of such Code, payments to any person under subsection (c)(3) with respect to any bond subject to withholding under this subsection shall be treated as if such payments were wages paid by an employer to an employee. (e)

Report to Congress

The Secretary shall annually report to the Congress regarding the program established under this section. Such report shall include a description of the actions taken under this section and the amount and number of bonds redeemed pursuant to the program during the preceding fiscal year. The report for fiscal year 2016 shall include the recommendations of the Secretary regarding the steps which should be taken with respect to any specified unredeemed savings bonds still outstanding and the balance of the reunification account. (f)

Definitions

For purposes of this section: (1)

Reunification account

The term reunification account means the account established under subsection (c)(2). (2)

Secretary

The term Secretary means the Secretary of the Treasury. (3)

Specified unredeemed savings bonds

The term specified unredeemed savings bond means each outstanding series E bond, except that such bond shall not be treated as a specified unredeemed savings bond until the later of— (A)the end of the 1-year period beginning on the date that such bond ceases to accrue interest, or (B)the date of the enactment of this Act. (4)

State

The term State includes the District of Columbia and any territory or possession of the United States. (5)

State coordinator

The term State coordinator means the eligible entity which is determined by the Secretary, after consultation with the States, to be best suited to carry out the activities described in subsection (b). For purposes of the preceding sentence, the term eligible entity means any State (including any representative of a State) or the National Association of Unclaimed Property Administrators. (g)

Conforming amendment

Subsection (b) of section 1324 of title 31, United States Code, is amended by striking and at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting ; and, and by adding at the end the following new paragraph:

(3)refunds due from the credit provision of section 2(d)(2) of the Unredeemed U.S. Savings Bond Return Act of 2006.