TITLE:  District of Columbia Courts Unclaimed Deposits, B-286687, April 13, 2001
BNUMBER:  B-286687
DATE:  April 13, 2001
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District of Columbia Courts Unclaimed Deposits, B-286687, April 13, 2001

Decision

Matter of: District of Columbia Courts Unclaimed Deposits

File: B-286687

Date: April 13, 2001

DIGEST

The District of Columbia Courts are required, pursuant to the National
Capital Revitalization and Self-Government Improvement Act of 1997
(Revitalization Act), to deposit unclaimed deposits, currently held in the
District of Columbia Treasury, in the United States Treasury, and should use
the mechanism provided by 31 U.S.C.

sect.sect. 1321 and 1322 (dealing with trust funds and payments of unclaimed trust
fund amounts), in consultation with the United States Treasury, to enable
lawful owners to file claims for the unclaimed deposits.

DECISION

The District of Columbia Courts request an advance decision on the proper
disposition of unclaimed deposits currently held in the accounts of the
Courts in the District of Columbia Treasury, and if current legislation
requires the unclaimed deposits to be deposited in the United States
Treasury, what the proper mechanism is for lawful owners to file claims upon
these funds. We conclude that the Courts are required to deposit the
unclaimed deposits in the United States Treasury and should use the
mechanism provided by 31 U.S.C. sect.sect. 1321 and 1322 (dealing with trust funds
and payments of unclaimed trust fund amounts), in consultation with the
United States Treasury, to enable lawful owners to file claims for the
unclaimed deposits.

BACKGROUND

The District of Columbia Court Reform and Criminal Procedure Act of 1970
(Court Reform Act) transferred jurisdiction over all local judicial matters
to a unified court system for the District. The Court Reform Act required
fiscal officers in the District of Columbia court system to deposit in the
United States Treasury all fines, forfeitures, fees, unclaimed deposits, and
other moneys. Pub. L. No. 91-358, title I,

sect. 111, 84 Stat. 511 (1970) (now codified as D.C. Code sect. 11-1723(a)(2)). In
1973, the District of Columbia Self-Government and Governmental
Reorganization Act (Home Rule Act) established that all money received by
any agency, officer, or employee of the District in its or his official
capacity belonged to the District government and had to be paid promptly to
the Mayor for deposit in the appropriate fund. Pub. L. No. 93-198, 87 Stat.
774 (1973), D.C. Code sect. 47-130. The District of Columbia Courts interpreted
this as effectively suspending D.C. Code sect. 11-1723(a)(2) and began
depositing all receipts, including fines, fees, forfeitures, and unclaimed
deposits, with the District of Columbia government. The District of Columbia
Courts periodically deposited the unclaimed deposits, resulting, for
example, from unclaimed escrow funds in civil, family and criminal cases and
inheritance of heirs and legatees, into special accounts established by the
District of Columbia Treasury. These funds currently remain available for
distribution to claimants who establish a right to the funds.

In 1981, the District of Columbia enacted a Uniform Disposition of Unclaimed
Property Act. D.C. Code sect.sect. 42-201--42. Under the District's Unclaimed
Property Act, property held by public officers that remains unclaimed by the
owner for more than one year is presumed abandoned, D.C. Code sect. 42-212, and
must be paid and delivered to the Mayor. D.C. Code sect. 42-219. Rules issued by
the Mayor under the authority of the Unclaimed Property Act provide that
"[for] the purposes of [D.C. Code sect. 42-112], unclaimed property shall
include, but is not necessarily limited to, escrow funds, condemnation
awards, and missing heir funds." The District of Columbia assumes custody
and responsibility for the safekeeping of the property, and pays claims made
thereon. D.C. Code sect. 42-220. The act gives the District of Columbia custody
in perpetuity of unclaimed funds, but ownership of the property does not
transfer to the District of Columbia government. Rightful owners can file a
claim for the funds or property without time limitation.

As noted earlier, prior to enactment of the Unclaimed Property Act, funds
coming into the Courts were already going into the District of Columbia
Treasury pursuant to D.C. Code sect. 47-130. Since D.C. Code sect. 47-130 required
that all money received by any agency, officer, or employee of the District
shall be paid promptly to the Mayor for deposit in the appropriate fund, the
Courts did not address the application of the Unclaimed Property Act to the
District of Columbia Courts. However, in 1997, the National Capital
Revitalization and Self-Government Improvement Act of 1997 (Revitalization
Act) amended D.C. Code sect. 47-130. Section 11243 (c) of the Revitalization Act
provides that all money received by the District of Columbia Courts must be
deposited in the United States Treasury or the Crime Victims Fund. Pub. L.
No. 93-198, 87 Stat. 774 (1973), as amended by Pub. L. No. 105-33, 111 Stat.
251 (1997). Accordingly, the Courts would like clarification as to whether
the Court's unclaimed deposits should be deposited in the United States
Treasury pursuant to the Revitalization Act, or remain with the District of
Columbia pursuant to the District's Unclaimed Property Act.

Further, if the unclaimed deposits should be deposited in the United States
Treasury, the Courts ask what procedures are appropriate for rightful owners
to make claims upon the funds. The Revitalization Act is silent as to the
reclamation of unclaimed deposits; however, according to the District of
Columbia Courts, it is not clear that Congress intended to preempt a valid
claimant's right to unclaimed property.

DISCUSSION

The Revitalization Act requires the District of Columbia Courts to deposit
all funds it receives into the United States Treasury or Crime Victims Fund.
See Pub. L. No. 105-33, sect. 11243 (c), 111 Stat. 251 (1997). The language of
the act clearly supports the conclusion that the Congress intended the
Courts to include unclaimed deposits with the other funds they are required
to deposit in the United States Treasury. As noted earlier, D.C. Code sect.
11-1723 (a)(2) required the District of Columbia Courts to deposit in the
United States Treasury all fines, forfeitures, fees, unclaimed deposits, and
other moneys. The District of Columbia government interpreted D.C. Code sect.
47-130 as effectively suspending D.C. Code sect. 11-1723 (a)(2), and accordingly
deposited all receipts, including fines, fees, forfeitures, and unclaimed
deposits with the District of Columbia government. Now, with the amendments
to D.C. Code sect. 47-130 made by the Revitalization Act, the United States
Treasury again became the depository for all Court funds (except for fines
and fees that are deposited in the Crime Victims Fund). The unclaimed
deposits, therefore, should be deposited in the United States Treasury
pursuant to the Revitalization Act and not in the District of Columbia
Treasury.

While the Revitalization Act requires the Courts to deposit unclaimed
deposits in the United States Treasury, we do not believe that a valid
claimant's right to file a claim is automatically preempted once the funds
are deposited with the United States.

All 50 states have some form of an abandoned property act; however, today,
most state "escheat" statutes are custodial and title to the property or
funds never vests in the state. [1] Similarly, lawful owners of unclaimed
deposits retain the right to file a claim after funds are deposited in the
United States Treasury. In addition, the United States Supreme Court held
that the transfer of funds from a district court to a general account in the
United States Treasury does not extinguish valid claims. United States v.
Klein, 303 U.S. 276, 282, 58 S. Ct. 536 (1938). In effect, the United States
has no beneficial interest but holds money as statutory trustee for rightful
owners when and if they are determined by the court. See United States v.
8.0 Acres of Land, 197 F.3d 24, 30 (1st Cir. 1999), In Re Moneys Deposited
in and Now Under the Control of the United States District Court for the
Western District of Pennsylvania, 243 F.2d 443, 445 (3rd Cir. 1957). [2]

In the absence of legislation providing otherwise, unclaimed money held by
the United States Treasury also is held in a trust capacity. A statutory
mechanism exists for depositing as well as reclaiming these funds.
Subsection (a) of 31 U.S.C. sect. 1321 identifies 91 trust funds in the United
States Treasury, and subsection (b) instructs agencies who receive funds as
trustee that are analogous to any of the 91 listed accounts to establish a
new trust fund account and deposit the funds into this account. One year
after the funds are deposited, the trust fund balance is transferred to a
United States Treasury trust fund receipt account called "Unclaimed Moneys
of Individuals Whose Whereabouts are Unknown." 31 U.S.C. sect. 1322(a). Claims
upon the fund are handled by the agency that transferred the funds to the
trust fund account. If the agency determines that a claim is valid, the
agency may certify a payment voucher to the Treasury. The Congress
established a permanent, indefinite appropriation to pay claims from the
Unclaimed Moneys account. 31 U.S.C.

sect. 1322(b)(1).

The Courts unclaimed deposits are required to be deposited in the United
States Treasury, pursuant to the Revitalization Act; however, lawful
claimants continue to have a right to file a claim upon these funds. The
Courts should use the mechanism provided by 31 U.S.C. sect.sect. 1321 and 1322
(dealing with trust funds and payments of unclaimed trust fund amounts), ),
in consultation with the United States Treasury, to enable lawful owners to
file claims for the unclaimed deposits.

Anthony H. Gamboa
General Counsel

Notes

1. Andrew W. McThenia, Jr. & David J. Epstein, Issues of Sovereignty in
Escheat and the Uniform Unclaimed Property Act, 40 Wash. & Lee L. Rev. 1429,
1432 (1983).

2. A statutory mechanism exists for claimants to file for the unclaimed
deposits of federal courts. Money that has gone unclaimed for five years
after the right to withdraw it has been adjudicated must be deposited in the
United States Treasury "in the name and to the credit of the United States."
Any claimant entitled to such money may petition the court to establish a
right to the money and to obtain an order directing payment to him. 28
U.S.C. sect. 2042.