Nebraska State Treasurer Don Stenberg testified at a legislative hearing today that an estimated $95 million in matured, unredeemed U.S. Savings Bonds belonging to Nebraskans, former Nebraskans, and heirs should be turned over by the U.S. Treasury to the Nebraska Treasurer’s Unclaimed Property Division. And he asked the Nebraska Legislature for its help.
For a variety of reasons, the bonds have been lost or forgotten over the years, and little effort has been made by the federal government to locate the owners or the heirs, Stenberg said.
In testimony before the Nebraska Legislature’s Banking, Commerce, and Insurance Committee, Stenberg urged passage of LB873, which would provide a legal mechanism for the State of Nebraska to take title to the bonds so that the money can be returned to rightful owners in Nebraska through the Treasurer’s Unclaimed Property Division.
Specifically, LB873 would enable the State Treasurer to file an escheat proceeding in Lancaster County District Court for a court order vesting title in the U.S. Savings Bonds to the State of Nebraska. Current state law does not provide for such a proceeding.
“Once that proceeding has been concluded, the State of Nebraska will be the owner of matured unclaimed U.S. Savings Bonds issued to Nebraskans and former Nebraskans, and we will make a claim on the U.S. Treasury for those funds,” Stenberg testified. “Upon receiving the funds, we will make a diligent effort to locate the rightful owners of those bonds.”
Stenberg thanked Sen. John Murante of Gretna for sponsoring LB873, which is patterned after a Kansas statute. Eighteen states have passed legislation similar to LB873, allowing the states to take title to and redeem matured U.S. Savings Bonds that are the property of the residents of those states. It is estimated that the total value of U.S. Savings Bonds being held by the U.S. Treasury for residents of all states is $17 billion and growing.
“I appreciate Senator Murante’s help in seeing that U.S. Savings Bonds that have been lost or forgotten are turned over to their rightful owners in Nebraska. And I thank him for his efforts in bringing this issue and a remedy to the attention of the Legislature,” Stenberg said.
“Unlike the State of Nebraska, the U.S. Government makes no effort to locate the rightful owners of U.S. Savings Bonds. This legislation will, in my opinion, result in several millions, hopefully, tens of millions of dollars being returned to Nebraskans who purchased U.S. Savings bonds many years ago or to their heirs,” Stenberg testified.
“The bottom line is that going back as far as the 1930s and 1940s Nebraskans have loaned the Government of the United States money in good faith,” Sen. Murante told committee members in prepared remarks. ”The U.S. Government has made no effort whatsoever to locate those persons and repay those loans. This legislation is intended to collect those funds from the U.S. Treasury so that the State of Nebraska can return them to their rightful owners.”
Stenberg said the U.S. Government has resisted turning over U.S. Savings Bonds to the State of Kansas and others. However, in August the State of Kansas obtained a favorable ruling in the U.S. Court of Federal Claims. While that litigation is not yet concluded, the preliminary decision is very favorable to the position held by Kansas, Stenberg said.
The Nebraska State Treasurer’s Office returned more than $11.8 million in unclaimed property to more than 15,000 Nebraskans and former Nebraskans in 2015. Nebraska’s Unclaimed Property Division took in $21.7 million in unclaimed property last year. Since 1969, receiving unclaimed property from banks, businesses, and others and returning that property to owners has been the responsibility of the Nebraska Treasurer’s Office.