Released Oct. 21, 2005

NAST President and West Virginia State Treasurer John Perdue, joined by other treasurer colleagues, traveled to Washington, D.C. Oct. 20 in the ongoing effort to support Operation Rightful Owner.

Operation Rightful Owner is the treasurers’ attempt to introduce federal legislation that would give return of unclaimed U.S. Savings Bonds to states’ unclaimed property programs.

“During my tenure as state treasurer we have returned more than $50 million in unclaimed funds and led the nation in the percentage of property returned in fiscal 2003,” Perdue said. “My colleagues can claim similar rates of success. With that proof behind us, it only makes sense that states be allowed to return U.S. Savings Bonds.”

Perdue met with Republican Dave Camp of Michigan, the subcommittee chairman of the House of Representatives’ Ways and Means committee. House Ways and Means Committee Chairman Bill Thomas expressed initial optimism at the proposed legislation and asked Camp to meet with the treasurers.

An estimated 230,000 bonds issued between 1941 and 1974 are worth an estimated $14 billion nationwide. They have matured and stopped earning interest but remain unclaimed.

U.S. Treasury officials have in the past denied states the right to return unclaimed savings bonds. It only gives states the right to return federal savings bonds if the state has assumed actual and legal ownership by statute.

Federal officials have simply retired the bonds and deposited the funds in the general treasury. The money cannot be spent and nothing is being done about returning the proceeds to their rightful owners.

If states were given the right to return savings bond proceeds, treasurers would use their already established unclaimed property systems to find as many bond owners as possible. What remained would constitute a “residual” amount, of which states could invest and earn interest for other programs.

The federal government, meanwhile, would hold in reserve a predetermined amount for unpaid claims.

As funds are returned to missing owners, the federal government will have to issue new debt to replace the outstanding debt, which is earning no interest. That hole should be easily made up by the amount collected in income tax on the interest portion of the proceeds paid to reclaiming owners.

“We sincerely hope not only our congressional delegation but the majority of our nation’s lawmakers will see that allowing states to search for U.S. Savings Bond owners is beneficial for all parties,” Perdue said. “The federal government would more than recoup the lost amount; states would find a new source of revenue; and bondholders would finally receive what has been due them for some years now.”