Opponents have killed a bill in the California Legislature that would have protected BankAmerica Corp. from a lawsuit alleging it had mishandled billions of dollars of municipal bonds.

A lobbying effort last week by the San Francisco city attorney's office and the state attorney general, two of the suit's plaintiffs, convinced Rep. Carole Migden, D-San Francisco and chairwoman of the Assembly's Appropriations Committee, not to send the bill to the floor for a vote.

"This would have shielded BankAmerica from any damages and would have made our claims in this case moot," said deputy San Francisco attorney Marc Slavin. "When lawmakers became aware of the true impact of this, support just evaporated."

Plaintiffs in the suit are seeking damages of at least $1 billion, according to the California Attorney General's Office.

San Francisco and the state, along with about 300 other municipalities, are suing the banking company for allegedly not returning millions of dollars in unclaimed bond interest and principal to government agencies. The suit also claims that the $265 billion-asset company covered up the alleged mismanagement by falsifying documents.

The bill, which was pushed by the California Bankers Association and the California Association of Manufacturers, would have barred the state from pursuing bank accounts and other funds that had gone unclaimed for more than four years.

Current state law lets the government claim, or "escheat," accounts for which owners cannot be located. In addition, the measure would have restricted the ways the state could audit unclaimed accounts.

Mr. Slavin accused BankAmerica and the bankers group of sneaking the language into the bill, which was introduced by Rep. Anthony Cardenas, a Democratic assemblyman from Mission Hills. Aides of the lawmaker were unaware of the provision's probable effect on the BankAmerica lawsuit until they started getting calls from Mr. Slavin's office and Attorney General Daniel Lungren last week, he said. "BankAmerica is the biggest member of the California Bankers Association, so any denials that they had anything to do with this sound a little disingenuous," Mr. Slavin said.

BankAmerica spokesman Michael A. Zampa denied that the company had played any part in pushing the legislation.

"It is really simple: We did not lobby for this, and we had no hand in drafting this, and if Mr. Slavin cannot accept this fact, that is his problem," Mr. Zampa said.

A spokesman for the California Bankers Association argued that the trade group's sole interest in the bill was to protect depositors if they happen to forget about an account. For instance, elderly depositors sometimes simply forget to roll over or withdraw a mature certificate of deposit, said spokesman John Stafford. In many cases, the state may deem the money unclaimed and collect it, even if the depositor is actively using another account at the same financial institution, he said.

"All we were asking was that if one account is active, then all the accounts related to that person should be treated as active," Mr. Stafford said.

"The state is aggressively overeager to get its hands on what are actively managed accounts," he added.

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