Assembly Standing Committee on Banking and Finance

The Assembly Banking and Finance Committee is now called to order. Sergeants, please call on the absent Members. And Madam Secretary, please call the roll.

[Roll Call]

Thank you. We do have a quorum present. We'll go over some logistics while we wait for the Senate to conclude their session and wait for the Senator to present his bill. Written testimony can be submitted via the position letter portal on the Committee's website to ensure that we hear from as many people as possible.

Disruptive conduct, including behavior that incites or threatens violence, will not be tolerated. Primary witnesses must be those accompanying the author or those who have officially registered their stance with the Committee. Others may state their name, affiliation and position at the mic when called upon.

So we will now wait for the Senate to conclude and for the author to show. Please stand by.

Senator, welcome. Thank you. We will now continue moving on to bill presentations. SB 822 by Senator Becker. The recommendation is do pass as amended, to the Appropriations Committee. Senator, please open a statement when ready.

Great. Thank you, Chair Members. And we thank all the Committee staff for their work on the bill. I will be accepting the Committee amendments. And I'm here to present SB 822, which simply brings clarity to how virtual currencies should be handled under the unclaimed property law, just like we already do with our stocks.

Right now, there's a gap. Companies don't know how to report, Abandon Crypto, and people aren't getting reconnected with their digital assets. So this bill sets a clear process. If a virtual currency is abandoned for three years, holders must try to contact the owner and then turn it over to the controller's office.

It follows the same timeline as stocks. The state will hold the asset for 1824 months, then convert it to cash for safekeeping. We're modernizing law that hasn't kept up with technology, making sure Californians can claim what's rightfully theirs.

With Committee amendments, the bill provides criteria that the controller would need to consider when selecting a third party custodian to hold crypto assets as cheated to the state. Specify how an owner must show their ownership interest in a crypto asset, make it apparent the asset is not unclaimed, not subject to cheatment. Hope I'm pronouncing that right.

I think this bill is sponsored by a state controller with no opposition on file. Respectfully ask for an Aye vote and we have Evan Johnson in the Office of State controller here.

Thank you, Senator. And I think you put it probably more. More eloquently than I can, but I'll run through a few. A few thoughts here. Thank you. Chair Valencia, Members of the Committee, for the opportunity to speak on this. The Controller's office administers the state unclaimed property program, a law that was enacted in 1959.

The Unclaimed Property law applies to all intangible assets, which includes all manner of financial assets, just bank accounts, stocks, bonds, insurance policies, trusts and indeed virtual currencies. Digital assets such as Bitcoin and other currency based on blockchain technology are currently undefined in either state or federal law.

And as such, given this anomaly, the holders of unclaimed cryptocurrency, as the Senator just pointed out, are uncertain as to whether to liquidate crypto assets and send them cash equivalent to us or to transfer it to the state in its native form. And similarly, the Controller's office needs guidance as to the proper treatment and holding of cryptocurrency.

So Senate Bill 822 brings clarity and consistency by treating the property in the same manner in which securities are treated. Specifically, the bill clarifies the inclusion of all virtual currency.

And the unclaimed property law aligns notification procedures with existing law requires in kind transfer of property to the state mandates the liquidation of a cheated virtual currency following a specified holding period, after which the net proceeds received by the state remain available for the right for all owner in perpetuity.

And this Bill also ensures that California implements best practices for managing abandoned digital assets, will provide necessary consumer protections as well as practical Administration and a clear legal path forward for holders of unclaimed virtual currency as well as the controller's office. So thank you for the opportunity to speak.

I'm happy to answer any questions and I respectfully ask for your support for this bill.

Thank you. Escheated. What a word, huh? It's a good one. Yes, and a tongue twister. Say that 10 times fast. Any additional support in the room? Seeing none, thank you. Any opposition? Seeing none. Questions by Committee Members. Senator, would you like to close?

Thank you. I thank the Chair for all your work on this. Thank the Committee staff for such. Last for an Aye vote.

Appreciate that. Really excited that the Legislature is being forthright and proactive in taking on this new space. Really is unprecedented. And also want to thank the comptroller's office for her diligence on this particular matter. It's one step closer to ensuring that Californians assets, all assets are protected. With that. Madam Secretary, please call the roll.

SB 822, the motion is do pass as amended. Refer to the Committee on Appropriations. [Roll Call]

Wonderful. That bill passes and we will leave the roll open for absent Members. Thank you. Thank you.

Thank you.

We have now completed the agenda. We'll hold the roll open for absent Members. Madam Secretary, please call the roll.

SB 822, the motion is due pass as amended and referred to Kimmy on probations. [Roll Call]

Madam Secretary, please call the roll.

SB 822, the motion is due passes amended and referred to Committee on Appropriations. [Roll Call]

Madam Secretary, please call the roll.

SB 822, the motion is do pass as amended and refer to the Committee on Appropriations. [Roll Call]

Wonderful. That bill has nine votes. The Assembly Banking and Finance Committee is now adjourned.