Judiciary Committee - Senate

First up on the agenda is SB 5, I spoke to Senator King this morning, and he is not running SB 5 or SB 6 today, so according to rule, both those will go on the deferred list dropped down and then it gets. but it just drops upon. I've been corrected. First, it goes to the bottom of the list, and then the next time it'll go to the deferred list, but so those bills will drop to the bottom of the agenda. Uh So we are to SB 14 Central Wallace. This is from the auditor's office. Oh. Central Walla, you are recognized to present your bill. Thank you, Mr. Chair. Senator Dave Wallace, District 19, fellow senators, Mr. Chair, this is a really good bill. It is an agency bill brought to me. It is a bill that will give money back to the citizens to whom the money is owed. Uh, they ask is for an enabling language to automatically mail unclaimed property checks valued between $50 and $5000. This is a best practice bill. It's currently used by 24 other states including Louisiana, Texas, Mississippi, North Carolina. 359,796 citizens of Arkansas are eligible. For property valued at roughly 83.5 million. 59 million of this. of these claims are less than 1000. In fact, over 90% of the claims in Arkansas are under 90,000 and what the audit team is wanting to do is to return that money to the people it belongs to. Uh, they've been very careful in how they're they're looking at this, how they're orchestrating this, the fraud prevention methods include but are not limited to the Lexus Nexus, the Irish tax identification verification, national change of address. And it's only released if the claimant. can be identified through multiple identification matches to include Social Security number. what it includes is only individuals one owner claims and only claim property that will be included and again it will be run through the the fraud system. Here's why it does not include. Claims with incomplete on. Information. Securities are tangible property, property owned by somebody who is deceased. Open claims or claims already started. And claims started by anybody outside the US Members, it's a good bill and I stand by for your questions. So Tarash, you recognize? Thank you. Good morning, uh, Senator Wallace, thank you for bringing this bill. Auditor Milgan, appreciate your work and your office for uh improving this. My question is, when I heard about this, I heard Dr. Me on the radio this morning and I hadn't had not read the bill. Uh, the only interaction I've had with with this program, I guess when Charlie Daniels First started, I believe, and it's improving I was back in administration ago, uh, my mother, uh, and I, I I can't remember at that time and she'd had a stroke and she's passed since, but, uh, was Uh, disabled for 4.5 years. And it wasn't, it wasn't a large amount of money, less than $200. Um, but I had somebody text me that knew me, not that well, but knew me and said, I saw on the website that your mother's got some money. I said, really? I said, there's another lady who's got her first name and last name but two different people check sure enough it was. I thought we were pretty good at keeping up with her, with her money, but as you know, these things come in, so it's like I think $185 or something, we went through the process. Now I question is, For a larger amount of money to be concerned with. And I understand. The security stuff you have, but in real life, how does this work? Dysfunctional families, sometimes you've got a niece taking care of somebody that's more responsible than maybe there are uh a mother's own child, give us a real-life circumstance, how that works to get it to make sure that person gets their money. That's just basic. Senator Rice I may, TJ Fowler, I'm legal counsel for the auditor's office, um, and so as I understood your question, there's sort of two components. You, you, your first component was what happens when you have maybe deceased owners. No, I'm talking about a living owner, OK, that, that has something coming back. But if they contact That in somebody, somebody gets I don't know if you're going to contact them by mail. How are you going to contact them? They may have personal information on them, but they may not have the best interest of the person that should be getting the money. So under this program, it's going to use what we call PII personal identification information. It's going to be run through multiple databases. So if you've got a living owner this only operates for sole owner property, so it's not a property that is owned by multiple people or has been divided, so the person that owns it is going to be the only person receiving communication. How is that communication going to be sent to that person right now there will be an initial notice that is sent to anyone who would be receiving my mother, let go back a few years. My mother's In the nursing home with a stroke. can talk, can be verbal. paralyzed on one side. And she gets a letter. And maybe sibling or something I'm putting this in. We had no family problem. But say in a family that has a problem that doesn't have the best interests, has a drug problem or something. Has to be there, gets that mail, can they? Interact with This office and get that money, not unless they have a durable power of attorney or medical power of attorney. You're going to require a power of attorney. If this is only going to operate and the check will only be cut to the named owner, so the only way another family member could cash the check or use the check as if they had some legal document. I couldn't go to the bank and cash a check that was made out to my father or mother unless I had some durable power of attorney, so Woods, if you had someone who was incapacitated. And someone else in the family was living with them. Could they intercept the check? Yes, there's nothing we can do about someone grabbing someone else's mail, but the check will only be made out to the owner, and there would have to be some other legal instrument in order for someone else to use that negotiable instrument. I appreciate the answer, and again, Somebody gets $185 check. And somebody signs it over and takes it to to some businesses, they go out and catch it. They're not going to do that for $5000 check. I don't think so. Uh, they're safeguards in there, and again, I appreciate the program. I'm just trying to get some real world stuff in it. Thank you. I've got some. Uh, I'm Going to do this twice this session, and the first time early, uh, Senator Clark, you're recognized. Now this is actually Senator Tucker. But since everybody else does it, I thought I would do it. He has, he has a very special first name, but it's his first name, Senator Tucker, you're recognized. I've always said Representative Johnny Rod is the only one who calls me Senator Clark on purpose. Well, he calls me Central and so that's understood. That's right. So thank you, gentlemen. My, um, and I, I get Senator Rice's concern, but if the person's deceased, it would only go to the estate, correct? and then a family member couldn't claim that unless it goes through the estate and there's an executor of the estate and all of that. Correct. That's correct, Senator Tucker. And in fact, if someone is deceased and this is passed on to multiple heirs, then it wouldn't be eligible for this program. It's only for single owner properties. Yeah, and, and if they're living the only way they can cash the check is if they're the guardian or have durable power of attorney. So my question is, I understand what you're doing here. I just have one point of confusion, and if you explain this when you open for the bill and I missed it, I apologize. But in the bill, On E3 I just see where it says the property has a value of less than $5000. But on this summary sheet that you all passed out, it says unclaimed property checks value between 50. Oh, I just clarified it. I just answered my own question. My apologies. Thank you. Center D's you recognize? Thank you, Mr. Chair. Uh, I think my question is just uh why do we need statute for this first maybe a rule and I love the heart. I want us to do this, but I mean in your, in your information sheet, it does, it does appear that There's $59 million in lower end smaller amounts of multiple, multiple citizens, but why can't we just do this without statute today. The statute currently requires that anyone who wants to receive money from the unclaimed property program has to file a claim, so they have to know that the program exists. Go affirmatively look for their money and then start a claim with the program and frankly, despite our best efforts at outreach, some people don't know. the program exists and they don't know how they have money and so this statutory change allows us on these low value amounts or the PII is very certain to just send the check unilaterally without these people ever knowing. They're just going to receive a notice, Hey, you're going to receive a check pretty soon and then within 90 days they're going to get a check in the mail without ever having to file a claim. That's helpful in clarity. So, so this, you can be a little more proactive. You don't have to wait for a claim. And then I guess last follow up question would be, is there a timeline Of a check has been sent out but has not been cashed or received. What happens to those funds at that point. Already in the system, the checks have a void date, so if they sit dormant for so long, those checks are automatically voided on our end, and the auditor issues, as you know, all state warrants, so we issued these checks and control the voiding. Thank you. Senator Gilmore and then Senator Johnson. Thank you Mr. Chair. Thank you, gentlemen. Thank you for bringing this bill. I think it's a, it's a good bill. I think it's a good idea. Just a question or a couple of questions actually. So first, how many, how many people, so I know that there's, you know, 350 some odd 1000 people that are in the program, how many are eligible to receive a check between the 50,000 and 5000 range. Any idea? I don't know off the top of my head on the 155,000, I can tell you in more incremental in smaller increments because I think the plan is to do this in smaller increments. We're not going to send out every single check in the first month. We just don't have the manpower, the ability the lower, the lower dollar values focusing on people that are in Arkansas at first, and then we'll roll it out slowly over time. And Senator, I'd like to add that 24 other states are actively doing this. A lot of the kinks have been worked out so many of the questions that were being asked this morning really we're satisfied in our minds that the se security's there that and we're just kind of stepping off into the cold water a toe at a time, if you will, to get this implemented. Well, and to be clear, I support this and I think it's a great idea that At the end of the day, it's their money. We need to get back to them, so, so why at this point, and I understand when you maybe when you start talking larger dollar figures, things get a little more, um, you know, interesting in people's minds. Maybe they want to try to figure out a way to game the system or whatever, but why, why stop at 5000? So when this program has been rolled out in other states, the 5000 is sort of seen as a consumer protection security issue, just keeping it at a lower dollar figure for now, you are sending checks out and that's sort of what I wanted to hear that's why, OK, no, that's helpful. Thank you. Senator Johnson, you recognize? So you addressed, you know, these are individuals, um, in a circumstance, you know, in a death. The, uh, and, and there's a trust involved. I mean, the individual gets a check. There's a trustee. Can they put that into the estate? So for this program again, it's only for single owner claims. So if it's if if the owner, the original owner, has died, and we have some information that tells us that, and it is now part of a trust that has multiple beneficiaries of the trust, then that property wouldn't be eligible. Now, if your question is more general as to whether or not unclaimed property operates that way where it goes into a trust and makes sure it's distributed. Yes, that happens often. A big part of my job is legal. council is when you have claims that are now the owner is deceased and it has moved through some sort of intestite or testite succession, I helped figure that out to make sure the money goes to the right place, i.e., the trust or the heirs. So the, so the trustee can't act on that if it's a if the trustee would have trust documentation saying I am now the trustee. I am the one who should receive property that belonged to this now deceased owner, and we accept that and then send money to trustees. We do that with some regularity. Thank you. Mr. Tucker. Thank you, Mr. Chair. So I'm curious now about communication with the public about this. And maybe the maybe the issue is what do you all do for communication now? We have, we have an outreach department and in fact our outreach department is here today, and their sole job is to get out and spread the word about the unclaimed property program, the great Arkansas treasure Hunt. They travel all over the state. They go to different meetings and clubs and events. We'll set up kiosks where people can actually look up their unclaimed property when they're at these events with our outreach department and start their claim right there, so the Milligan administration has done a really good job of trying to the word out that this exists and this program that y'all are voting on today is just one more step in that direction to try and get more money back to Arkansas citizens, I guess one notion for for doing this is as hard as y'all tried to get the word out. Some people still haven't got the word, and you're just going to send them the money whether they apply for it or not, make a claim for it or not. 100%. You know, the, the key point here, members and Mr. Chair, this is just one more tool in their tool belt. They already do a good job of trying to get information out. I personally received a letter about A year ago saying that I had $200 that I didn't know about in this system, so they're already doing a lot of this is just another tool that lets them get it out to folks that May not have good access to the internet or might not be getting their mail or whatever. They're just one more tool to help get money that belongs to the citizens back to the citizens. Yeah The Central Wallace, Mr. Archter, the We've discussed these things at length. Uh Your office and Senator Wallace and me, uh, but There is purposefully, well, I'll just start with this. Everything requires money to do. How's this going to be funded? So, uh, just from background, the entire unclaimed property program is already self-funded. Y'all appropriate us a budget every year, but the entire set of line items that pay for the unclaimed property program come out of state central services at the beginning of the year and then at the end of the year we take money out of interest generated from the unclaimed property proceeds Trust, which is just the fancy word for the pool of money where all these private citizens' money sits. Interest is generated and We repay state central services at the end of every year. Now I know that Senator Wallace had asked that question about a week ago. Are we going to make sure that this portion is also self-funded, and I believe that there has been some language drafted. I don't know if the plan is added or not, but to just Say one more time that it is only the interest from the program that will pay for these items, but whether or not that language exists, the program is self-funded. OK, that's just wanted to get that on record. Any other questions from the committee? See none, uh. There's no one signed up to speak on the bill. Central Wallace, would you like to close for your bill? Mr. Chair, I am closed. Uh, so Tucker, you're recognized promotion. 2nd from center Gilmore, uh, any discussion? All for the motion signified by saying aye, all opposed. Motion carried. Congratulations, Central Wallace. You have passed your bill. Thank you, Senators. Thank Leave next on the agenda. We have House Bill 1006 is center flippo here go ahead to the end of the table. So go ahead, you're Senator Gilmore. Well, I just had great concern with the senator wasn't here and I don't know if we wanted to wait if the House sponsor wanted to wait for him to arrive or no. Thank you, Mr. Chair, for the indulgence. It's sometimes alarming when a center doesn't show up for his bill, so. The, uh Representative Painter, you are recognized to present your bill. Thank you, Mr. Chair. And with your permission, I would like to have the 14th judicial prosecuting attorney joined me at the table if that's all right with you. Yes, if you will both introduce yourselves, uh, painter District number 3. I'm David Etheridge. I'm the prosecuting attorney for the 14th Judicial District. You may proceed. Thank you, Mr. Chair. Uh, senators, let me just say it's, it's a privilege to be in front of you because this is the first time that I have presented in front of a Senate committee, so it's pretty interesting and of all committees to pick the judiciary Committee, so great. This is House Bill 1006. All this is doing, there's only 3 judicial districts left in the state that are Tier B, and this is just moving it the 14th judicial district to a TRA, making it. Full time. The other two districts are the 9th and the 15th, and so, um, the fiscal on this change is going to be coming out of other revenues which is already in the constitutional officers. It's a $40,796 starting FY 26, and that is due because of the independent commission on November passed that 6% raise and so that's what it's included. Other than that, I Glad to take any questions. Senator Johnson, you reckon that? Other revenues Can you be more specific in that? Uh, I, all I know is it's just coming out of the constitutional officers stuff, not out of general. OK. Any other questions from the committee? Good. So Representative This court is already Full time, the court itself, or it's not. The 14th judicial district, the way it was set up several years ago was a tier B, which allowed the prosecutor in that district to have a limited private practice. I don't think that at least in my situation that makes any sense based on the volume of caseload that I have in that district across 4 counties, and so it's just reached a point where it makes the most sense for the people I represent and I would love, it's not part time, it's just this is the way it needs to be is tier A where I am there, and that's my only responsibility is to be the here for those folks in that district. OK, so previously with other, how long have you been prosecutor there? This is my 11th year, sir. OK, so you've been there some time, uh, and up to now you've been part-time. I, I, I don't want to say this in a weird way. It's never part time. It's just you're doing two jobs because I'm in that office majority of the time. It's just I still have a private practice which I do not think makes sense because it creates conflicts, people that I can't do the things I need to with, and I think that's another reason you don't need in my district to be a tier B prosecutor. I don't need to have the conflicts that arise, and I like I said, I have a very, very limited practice at this time. OK, it occurs to me, and again it's not that that I don't think that you're on the up and up and and everything's square. It occurs to me that as you're testifying for this, you have a conflict of interest. Is there anyone else? From AOC or elsewhere to Tell us about Uh Whether this position ought to be part time or full time? The gentleman coming may have a conflict of interest too. Mr. Chairman Bob McMahon, prosecutor coordinator, this is, this bill is certainly supported by the Arkansas prosecuting Attorneys Association. The statutes that are in place allow the individual district and the individual elected prosecutor to come before you and make this request. Some districts have gone back and forth through the years, but the way the statute is set up, it's up to the elected prosecuting attorney to come before you and make this pitch, and, and Mr. Edge and Representative are following the statutory authority to come before you to do. That, so it's a decision that's again historically been left up to each individual prosecutor to come forward with the assistance of the local officials, and that that has been done. So if the prosecutors support it, it is your belief that the workload is there, or are you just supporting fellow prosecutor. No, sir, it's the workload is certainly there. We again, the elected prosecutor and the deputies, they know about the workload and they, they come before us and tell us that they're going to make this switch, so it is my opinion that the caseload certainly supports. Change. Thank you. I appreciate that testimony. Other questions Senator Gilmore Tucker. Thank you, Mr. Chair. I see that it has an emergency clause. Representative Painter, and I was curious why you put that on there. I put that on there, Senator, due to talking with the prosecuting attorney and with the case load and everything else and going with his advice that he requested that and so I was just following that suit. In my view, you know, the, the reason why in the state constitution we have to take separate votes on the emergency clauses because we are denying the people the ability to put a referendum on if we pass a law they don't like, so you think this is important enough to deny the people their opportunity for a referendum. I have had zero calls for or against this bill, and I believe at the end of the day if we put an emergency clause, we're actually going to do the goodwill of the people for Boone, Baxter, Marion, and Newton Counties. All right, thank you, sir. Senator Gilmore, you recognize Perhaps I missed this and so I apologize because I did have a motion at the proper time and I still will, uh, so the fiscal impact states a little over $40,000. Did we identify where that's coming out of? But clearly I wasn't paying attention. Senator. It comes out as all the elected prosecutors, whether they're A or B, are paid out of the constitutional officers fund, the 40,000 includes the match money, the actual increase in salary is not quite that much, but that includes match. OK, thank you. Centra Ds you recognize. Thank you, Mr. Chair. Can you educate me on our other judicial districts. How many are part time and how many are full time. Again, there are 28 elected prosecutors. We have 25 right now prior to this bill that are Division A and 3 are Division B. The prosecutors are prosecutors full time. They just, like David, I think called it tier A, tier B. We don't refer to them as part-time. They're, they're never part-time prosecutors, but it's 25 Division A at this point and 3 Division B. And if I can add on a little bit of that, Senator, it's the 9th judicial district and the 15th, if I remember correctly. So Senator Johnson Sure we question the help from the local officials of the senator won't show up. The center, the sender's here actually. Mr. Chairman, can we get the senator to the end of the table. Perfect timing, so you said they're all full time, but obviously there's a difference, so tire are full-time and don't have not working in a private practice, etc. Tier B, you're allowed to have a private practice and do whatever work you may want to do there. That is correct. Division A by statute is prohibited from having a private practice. What I mean by full time is, I mean, if there's a If there's a homicide at 2 o'clock in the morning and the prosecuting attorney gets called out. You're not going to have any of the prosecutors ever say I don't have to go to that because I'm, I'm not a full-time prosecutor. That's, that's incorrect. So, but the statutory distinction specifically says Division A is prohibited from having a private practice. Senator Gilmore, you reckon? Thank you, Mr. Chair, and I'm really happy the senator showed up for his bill. Senator Flippo, have you, have you read this bill? Uh, I have not yet said one. Uh, I have not yet said good one. The I do support, you know, Mr. Etheridge and his quest to, you know, be the lone prosecutor to have a full-time position. Hey, I'm very supportive of our prosecutors and the great work they do, including the prosecutors. Senator Gilmore. I appreciate our relationship that's built on honesty. I, I mean, I was just interested in the fact that most of this is an emergency clause, so I'm a little shocked that you hadn't read it, but thank you. No, you're not Representative Painter, you're aware that if this bill passes this committee, it'll still have to pass the Senate floor. Oh, I'm very aware, Senator, you're aware that you've chosen Senator Flippo to represent you on the Senate floor after facing my first committee on the Senate side, I will rethink my priorities There's nobody that's better at getting 18 votes on that Senate floor. This guy right here. We'll see. Exactly. Senator Ross, you recognize? Sir Flip on my seat mate, good friend, but just for clarity, this will not get any anything from Senator Flippo's past won't get him out of trouble with it. We, we've made a conscious decision to avoid such happenings in our district. Thank you. Any other questions from the committee don't, don't believe we have anyone signed up to testify on the bill. The uh So, uh, represent representative Painter and Senator Flippo, would y'all like to close for your bill? Again, I just think the committee appreciate it very much and appreciate a good vote. Will of the committee They pass from Senator Gilmore, 2 from Senator Johnson. Any discussion? All for the motion signified by saying aye, all opposed. Motion carried. Congratulations, Representative Painter. You have passed your bill. I. Not. Anybody see Representative Richardson or Senator Bryan out in the hallway. If, if not, do we have any other business before the committee? Say none, we are adjourned. Yeah