1.This Act may be cited as
the Unclaimed Savings Bond Act of
2009
.
2.Congress finds the following:
(1)To maintain
public confidence in the United States savings bond program, sound public
policy favors diligent and productive efforts to locate the owners of matured
unredeemed savings bonds and return to such owners the more than
$16,500,000,000 in associated bond proceeds.
(2)The Government
does not have an organized program to identify the owners of all matured
unredeemed savings bonds and return to such owners their bond proceeds.
(3)All 50 States,
the District of Columbia, the Commonwealth of Puerto Rico, and the United
States Virgin Islands operate unclaimed property programs that return to
rightful owners over $1,500,000,000 of property annually, and but for the
efforts of State unclaimed property programs, this property would almost
certainly remain lost.
(4)Providing
assistance to State unclaimed property programs to help return the proceeds of
matured savings bonds to their rightful owners would benefit owners of savings
bonds, stimulate the economy, and recognize the important, longstanding role of
these programs in consumer protection.
(5)For the
Government to develop and administer an unclaimed property program like the
successful ones that States already have would be costly, duplicative, and
administratively burdensome, and would involve the Government in an area that
historically has been the province of the States.
(6)Although the
proceeds of matured unredeemed savings bonds are held in the United States
Treasury, these proceeds are not Federal funds and belong to bond owners, not
the Federal Government.
(7)Income taxes on
matured savings bonds are due at final maturity. To promote equity among all
taxpayers, estimated taxes due should be withheld from savings bond proceeds in
Federal Government possession.
3.Demonstration
program to return the proceeds of matured unredeemed U.S. savings bonds to
their rightful owners
(a)Establishment
of demonstration program
(1)Subject to the succeeding provisions of this section,
beginning in the first fiscal year beginning after the date of the enactment of
this Act, the Secretary shall conduct a demonstration program (referred to in
this section as the demonstration program
) under which the
Secretary—
(A)attempts to
identify and locate the owners of specified unredeemed savings bonds,
and
(B)provides
assistance to States in the form of bondholder location and assistance grants
(as defined in subsection (b)) for the purpose of owner location and
notification activities with respect to such bonds.
(2)Participation
in demonstration programA State electing to participate in the
demonstration program for any fiscal year by receiving a bondholder location
and assistance grant shall notify the Secretary of such election on or before
September 1 of the fiscal year preceding such fiscal year by filing a grant
application with the Secretary, in such manner and accompanied by such
information as the Secretary may reasonably require.
(3)Under the demonstration program, the Secretary shall
attempt to locate the owners of specified unredeemed savings bonds for which
the registered address (as determined under subsection (c)(2)(C)(i)(II)) is
located in a State not participating in the demonstration program in the fiscal
year in which such bond would otherwise have been referred to such State under
subsection (c)(2)(C)(iii), or is not located in any State.
(4)Authorization
of appropriationsThere is authorized and appropriated from the
general fund of the Treasury such sums as are necessary to carry out the
purposes of this section. Such sums shall be available until expended.
(5)The Secretary shall report to Congress not later than
October 31 of each fiscal year regarding the program established under this
subsection. Such report, which may be combined with other reports of the
Secretary to Congress, shall include—
(A)a description of
the actions taken under this subsection in the preceding fiscal year,
(B)for each State,
the number of specified unredeemed savings bonds referred to such State during
the preceding fiscal year,
(C)for each State,
the amount and number of such bonds referred to such State in all fiscal years,
by year of referral, that were redeemed in the preceding fiscal year,
(D)the average
amount of time between the receipt of valid claims for such bonds and the
issuance of payment to redeem such bonds, and
(E)the States
receiving a bondholder location and assistance grant under the demonstration
program during the preceding fiscal years of such program, the total number of
such grants awarded during such fiscal years, and the total amount of grant
funds distributed under subsection (b)(2) during such fiscal years.
(b)Bondholder
location and assistance grants
(1)For purposes of the demonstration program established
under subsection (a), a bondholder location and assistance grant is a grant
issued by the Secretary to a State for the purpose of locating the owners of
specified unredeemed savings bonds referred to the State as provided in
subsection (c)(2)(C)(iii) and providing the owners of such bonds with
assistance in claiming the proceeds of such bonds.
(2)Subject to the availability of funds, the Secretary shall
make an award in each fiscal year of a bondholder location and assistance grant
under the demonstration program established under subsection (a) to any State
that has submitted for such fiscal year a grant application under paragraph (2)
of such subsection that satisfies all requirements stipulated by the Secretary
for such applications. The funds under such grant shall be made available to
the State within 30 days of the later of the start of such fiscal year or the
appropriation of funds for the demonstration program for such fiscal
year.
(3)The amount of each bondholder location and assistance
grant awarded to a State for any fiscal year shall be an amount equal to the
product of—
(A)the number of
bonds that will be referred to such State in such fiscal year, as estimated by
the Secretary based on the recommendation of the State coordinator under
subsection (c)(2)(C)(i), and
(B)$30,
such amount
to be made available to the State until expended.(4)
(A)A State receiving a bondholder location and assistance
grant in any fiscal year shall conduct the following activities under such
grant in such year:
(i)Written
notification effortsWritten notification, mailed to each owner
of record of each specified unredeemed savings bond referred to the State with
respect to whom an address suitable for the delivery of mail can be determined,
of—
(I)the existence of
such bond,
(II)the fact that
such bond is no longer earning interest, and
(III)the fact that
the bond may be redeemed through agents of the Department of the
Treasury.
(ii)Inclusion in
State databasesIn the case of any State that operates a
searchable database of unclaimed property, inclusion in such database of
information about each specified unredeemed savings bond referred to the State
and the owner of such bond.
(B)In addition to the activities required under
subparagraph (A), funds received by a State under a bondholder location and
assistance grant may be used for the following activities:
(i)Owner location
and notification effortsIn addition to the activities required
under subparagraph (A)(i), activities to locate the owners of specified
unredeemed savings bonds referred to the State and to notify such owners of
such bonds, including matching bond records against State databases or
constituent lists maintained by State legislators, researching the location of
such owners, and publishing notices in newspapers and magazines of general
circulation.
(ii)Assistance to
bondholdersActual and attempted communications with owners of
specified unredeemed savings bonds about methods of bond redemption,
requirements for filing claims for missing bonds or other similar claims, the
status of claims for bonds, and similar matters.
(C)Restrictions on
location and notification effortsThe Secretary may provide for
such restrictions on methods used to locate and notify owners of specified
unredeemed savings bonds as the Secretary deems appropriate, including any
restrictions on the use of commercial locator services.
(5)Provision of
bond recordsSubject to any other requirements and limitations
provided in this section, the State coordinator shall provide to a State
receiving a bondholder location and assistance grant such records with respect
to the bonds referred to such State under subsection (c)(2)(C)(iii) as are
necessary and appropriate to carry out the purposes of such grant.
(c)Examination and
referral of bonds
(1)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 for the purpose of—
(A)identifying the
owners of specified unredeemed savings bonds, and
(B)referring
specified unredeemed savings bonds to the State of residence of the owner, in
the case of a State that is participating in the demonstration program by
receiving a bondholder location and assistance grant under subsection (b) for
the fiscal year in which the referral is made.
(2)The cooperative agreement entered into under
paragraph (1) shall provide for the following with respect to specified
unredeemed savings bonds:
(A)The Secretary shall provide the State coordinator with
full access to records related to such bonds.
(B)Compilation of
informationThe 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.
(C)Referral of
bonds to States for processing
(i)Recommendation
of State of referral
(I)The State
coordinator shall make a recommendation to the Secretary regarding to which
State each bond should be referred for owner location and notification
activities.
(II)Such
recommendation shall be based on the registered owner's address of record being
in the State to which the bond will be recommended to be referred as determined
in accordance with Government Auditing Standards for appropriateness and
sufficiency.
(ii)Finality of
determinationThe Secretary shall make the final determination
regarding the State, if any, to which each bond should be referred 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.
(iii)Subject
to clauses (iv) and (v), in the case of a State that is participating in the
demonstration program by receiving a bondholder location and assistance grant
under subsection (b) for the fiscal year in which the referral will be made,
the Secretary shall refer to such State each bond that the Secretary has
determined should be referred to such State, for activities under such
grant.
(iv)Limitation
based on availability of fundsThe Secretary shall not refer a
bond to a State described in clause (iii) unless sufficient funds are available
to provide to such State the full grant amount described in subsection (b)(3)
for the fiscal year in which the referral will be made.
(v)Limitation
based on maximum allowable number of bonds
(I)The State coordinator shall not examine under the
agreement described in this subsection more than the number of bond records
that is reasonably expected to result in the referral to the States of a number
of such bonds that is not greater than such maximum allowable number.
(II)Maximum
allowable number of specified unredeemed savings bondsFor
purposes of this clause, the maximum allowable number of specified unredeemed
savings bonds is a number of such bonds such that the sum of—
- (aa)the product
of—
(AA)the number of
bonds, and
(BB)$30, and
- (bb)the estimated
amounts to be paid by the Secretary to the State coordinator under paragraph
(3),
equals $300,000,000.(D)After the Secretary concurs with the information
compiled under subparagraph (B), the State coordinator shall establish a
searchable database which includes such information specified by the Secretary
with respect to each bond and the State to which each bond is recommended to be
referred 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.
(3)The cooperative agreement entered into under this
subsection shall specify that the Secretary shall pay to the State coordinator,
from the funds appropriated for the demonstration program, an amount equal to
the reasonable costs of carrying out the State coordinator's duties under the
agreement.
(d)
(1)Except as provided in paragraph (2), for purposes of
section 6103 of the Internal Revenue Code of 1986, records provided to the
State coordinator or to a State by the Secretary under this section shall be
treated as return information as defined in section 6103(b)(2) of such
Code.
(2)Notwithstanding
section 6103(b)(2)(A) of the Internal Revenue Code of 1986, for purposes of
this paragraph, the name and address of the holder of a bond and such other
information as may be specified by the Secretary shall not be treated as return
information when provided to the State coordinator or to a State by the
Secretary.
(e)For
purposes of this section—
(1)The term registered address means the
address of the bond owner inscribed on the face of the bond or maintained by
the Secretary at the time of final maturity of such bond.
(2)The
term Secretary means the Secretary of the Treasury or the
Secretary's delegate.
(3)Specified
unredeemed savings bondThe term specified unredeemed
savings bond means each outstanding United States savings bond, except
that such bond shall not be treated as a specified unredeemed savings bond
until the later of—
(A)the date that is
5 years after the date of the maturity of such bond; or
(B)the date of the
enactment of this Act.
(4)The
term State includes the District of Columbia and any territory or
possession of the United States that maintains a program for the administration
of unclaimed property.
(5)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 (c). For purposes of the preceding sentence, the term eligible
entity means any State or the National Association of Unclaimed Property
Administrators.
4.Withholding of
tax on unclaimed interest
(a)The Secretary of the Treasury shall deduct and withhold
from the proceeds of any matured outstanding United States savings bond, on the
later of the date of maturity of such bond or the date of the enactment of this
Act, a tax in an amount equal to the applicable percentage of the amount which,
if such bond were redeemed, would constitute interest.
(b)For purposes of this section, the applicable
percentage is the 2nd highest rate of individual income tax under section 1(c)
of the Internal Revenue Code of 1986.
(c)Treatment in
same manner as wage withholdingExcept as otherwise provided by
the Secretary of the Treasury, for purposes of sections 3403 and 3404 of the
Internal Revenue Code of 1986 and so much of subtitle F of such Code (except
section 7205) as relates to chapter 24 of such Code, payments to any person as
a result of the redemption of any bond subject to withholding under this
subsection shall be treated, at the time of maturation of such bond, as if such
payments were wages paid by an employer to an employee.
(d)Inclusion in
income of bondholderEffective on the date of maturity of any
matured outstanding United States savings bond, the amount which, if such bond
were redeemed, would constitute interest shall be treated as gross income of
the holder of such bond for purposes of section 61 of the Internal Revenue Code
of 1986.
(e)Filing of
amended returns
(1)Upon redemption of any matured outstanding United States
savings bond, the bondholder may file an amended Federal income tax return for
the taxable year of the maturity of such bond in order to claim a credit for
the amount withheld in such year under subsection (a), provided that such
amended return includes the inclusion in the income of the bondholder of the
amounts specified in subsection (d).
(2)Exception to
statute of limitationsAn amended return filed by reason of
paragraph (1) shall be considered a return for purposes of sections 6501(a) and
6511(a) of the Internal Revenue Code of 1986.
(f)Subsection (b) of section 1324 of title 31, United
States Code, is amended—
(1)by striking
and
at the end of paragraph (1);
(2)by striking the
period at the end of paragraph (2) and inserting ; and
;
and
(3)by adding at the
end the following new paragraph:
(3)refunds due from
the credit provision of section 4(e)(1) of the
Unclaimed Savings Bond Act of
2009.
.