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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Objections to CA A.B. 1275

Posted By Guest Author - Ethan D. Millar, Partner, Alston and Bird, Wednesday, June 12, 2013

California A.B. 1275, which passed the Assembly on May 9, 2013 and which was heard by the Senate Judiciary Committee today (June 11, 2012), proposes to amend Section 1540 of the California Code of Civil Procedure to eliminate claims by persons with an "interest in” unclaimed property and to limit such claims to a person who was the legal owner of the property immediately prior to its escheat (with some exceptions for heirs, guardians, etc.).

We understand that this bill was primarily intended to eliminate the ability of creditors of the property owners from claiming such property, in response to the California Court of Appeal’s recent decision in Weingarten Realty Investors v. Chiang, 212 Cal.App.4th 163 (2012). However, the bill goes much further, by restricting property owners from assigning their rights in property that has been escheated (regardless of whether the property owner is aware of such escheatment).

UPPO has sent a letter to the Chair of the Senate Judiciary Committee (as well as the State Controller, who is pushing this legislation) objecting to A.B. 1275 on the basis that it is contrary to the primary purpose of state unclaimed property laws (which are designed to return missing property to the rightful owner, and not to interfere with the owner’s rights) as well as other laws (such as the UCC) that were intended to facilitate these sorts of assignments, which are common in business transactions. UPPO also made several other comments to this proposed legislation, including that A.B. 1275 would result in greater non-uniformity by amending a standard provision in the Uniform Unclaimed Property Acts that has been adopted by most states.


 The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.

Tags:  Advocacy  Compliance  Policy  UP Laws 

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Regulatory UP-Date 2013: The Story So Far

Posted By GRAC Member, Michael Rato, Sunday, May 12, 2013
Updated: Wednesday, May 8, 2013

When UPPO issued its last Regulatory UP-Date in January, the headline item was about Delaware: specifically, the creation of a new (and temporary) Voluntary Disclosure Agreement program run by the Secretary of State’s office. While that program has received a significant amount of publicity from the state, service providers, and the unclaimed property media (to the extent that there is such a thing), the first third of the year has also seen a variety of other legislative developments that may be of interest to holders in particular industries or states. We encourage you to follow UPPO’s govWATCH for the most up to date information, but below is a sampling of some of legislative changes that have already been enacted in 2013.

Developments for Insurers

The past few years have seen substantial regulatory developments relating to life insurers, and this year seems to be continuing that trend. For example, on March 29, Montana enacted the "Unclaimed Life Insurance Benefits Act” (Montana Senate Bill 34), which will require insurers and related entities, starting next year, to compare their policies against the Social Security Administration’s death master file (or a similar database) on a semiannual basis. Similar searches will be required in New Mexico beginning July 1 of this year, and in North Dakota before next November, as a result of legislation that passed in those states (New Mexico Senate Bill 312, enacted April 1; North Dakota House Bill 1171, enacted April 30). Back on the East Coast, insurers in the Empire State will be required to make these searches on a quarterly basis as a result of NY Assembly Bill 1831, enacted March 15.

Gift Cards

There have also been a few developments relating to gift cards. In Colorado, new legislation (Colorado House Bill 1102, enacted March 15) created a reporting exemption for "small” issuers of gift cards, providing that holders selling less than $200,000 per year of gift cards are not required to report unclaimed cards to the state. Also of note, the newly created Bureau of Consumer Financial Protection (CFPB) published its long awaited determination concerning whether Maine and Tennessee unclaimed property laws relating to gift cards are preempted by federal law. UPPO’s earlier coverage of the decision can be found here, but in short, the CFPB ruled that all of the applicable laws were valid and enforceable with the exception of one provision of the Tennessee Act that would permit an issuer to refuse to honor a gift card as soon as two years from the date of issuance (which is inconsistent with provisions of federal law generally requiring most gift cards to remain valid for at least five years).

Process and Procedure

A number of bills signed into law thus far this year deal with the procedural nuts and bolts of reporting, remitting, and/or claiming abandoned property. In Florida, Senate Bill 464 (enacted April 30) allows the Department of Financial Services to accept owner claims electronically. Conversely, Indiana Senate Bill 222 (enacted April 12) will require holders to report property electronically. That law also purports to change the priority rules (and other requirements) for safe deposit box items, providing that Indiana may take custody of both (a) abandoned safe deposit boxes in Indiana and (b) abandoned safe deposit boxes outside of Indiana held for Indiana residents. In Alabama, House Bill 112 made a wide variety of changes – substantive and procedural – to Alabama’s Unclaimed Property Act. UPPO’s earlier overview of that legislation can be found here. Two unclaimed property bills have been passed in North Dakota, one adding a definition of "money orders” to the Unclaimed Property Act (North Dakota House Bill 1162, approved April 1), the other allowing the state to contract with private parties to perform audits where the state has "reason to believe” a holder has not complied with the Act (North Dakota Senate Bill 2058, approved March 14).

Although Delaware has grabbed most of the headlines in 2013 thus far, other state legislatures have also been busy in the unclaimed property area. We encourage you to consult govWATCH for the most up-to-date information.

OTHER RESOURCES
govWATCH
Michael Rato - LinkedIn


The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.

Tags:  Advocacy  Compliance  Due Diligence  Gift Cards  Insurance  Members  Policy  UP Laws 

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ULC Study Committee Convenes in Washington, D.C.; UPPO to Host ULC Educational Webinar

Posted By Administration, Friday, April 26, 2013

Representatives from UPPO and unclaimed property leaders from across the country joined members of a Uniform Law Commission (ULC) study committee on Wednesday, April 24 in Washington, D.C. for a stakeholders meeting to discuss possible review and revision of the Uniform Unclaimed Property Act (UUPA).

Changes to the UUPA – which was last updated in 1995 – would have a significant impact on unclaimed property holders, as well as state administrators and lawmakers. Wednesday’s meeting was designed for the ULC’s study committee to gather viewpoints from a broad assemblage of stakeholders and evaluate the input before reporting back to the ULC’s Scope and Project Committee with a recommendation.

The ULC will make its final determination about whether or not to revise the UUPA during its 2013 annual conference in July.

The preliminary feedback shared at the meeting was incredibly useful as a starting point for discussions about revising the UUPA, and nearly all participants agreed on a need for some sort of revision. So much has changed since 1995, including information resources like the Internet and digital record-keeping rendering many portions of the UPPA outdated or unclear.

Other issues discussed during the meeting included:

  • The need for more clarity and uniformity in reporting requirements.
  • The need for better and timelier outreach to reunite owners/heirs with their property earlier in the process.
  • The use and acceptance of electronic methods for owner contact and due diligence.
  • Review of the activity standard for triggering dormancy periods.
  • How advances in technology, legal decisions, competing statutes and federal regulations require a review of the current UUPA.

To help the unclaimed property community better understand and navigate any proposed UUPA changes, UPPO will be hosting a Uniform Law Commission webinar on Wednesday, May 22 at 1:00 p.m. EDT.

During the webinar, UPPO President Karen Anderson from Unclaimed Property Recovery and Reporting, LLC, UPPO Government Relations and Advocacy Committee Co-Chair Kendall Houghton with Alston & Bird LLP and UPPO First Vice President Debbie Zumoff with Keane will provide attendees with an overview of the April 24 ULC stakeholders meeting, including a listing of some of the issues presented by stakeholders as potential areas for amendments or inclusion in a revised UUPA and discuss the ULC’s potential next steps.

Multiple employees are welcome to participate with only one webinar connection, and one CPE credit is available upon completion.

Subscribe to UPPO Focus and stay informed about breaking news from the Uniform Law Commission regarding the UUPA.


The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.

Tags:  Advocacy  Due Diligence  education  Members  Policy  UP Laws 

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Modernizing the Uniform Disposition of Unclaimed Property Act

Posted By Administration, Sunday, April 7, 2013
Updated: Friday, April 5, 2013

During UPPO’s 2013 Annual Conference held in San Diego, March 24-27, there was a lot of buzz about the possibility of revisions to the Uniform Disposition of Unclaimed Property Act ("the Act”). The current Act hasn’t been updated since 1995. There is little disagreement that since that time our world has changed in many ways that impact unclaimed property professionals as never imagined in 1995. To further complicate matters, many of the states have not adopted the 1995 Act and are still using modified versions of the 1981 and 1954 Acts or even homegrown unclaimed property statutes.

The Uniform Law Commission (ULC) has formed a study group to determine the feasibility of revising the 1995 Act to bring it current with today’s business environment including but not limited to new property types, financial instruments, accounting practices and technologies. The study group is holding an exploratory meeting in Washington, D.C., on April 24 to solicit input from the unclaimed property community. Key stakeholders, including UPPO, have been invited to attend the meeting to participate in the preliminary discussions.

A revision to the Act is not a task that will be done quickly or in a vacuum. If the study group recommends that the ULC move forward with revisions to the Act, the actual process may take several years to complete. UPPO’s Government Relations and Advocacy Committee (GRAC) is establishing work groups to begin the process of identifying changes that will be beneficial to its membership, considering the needs of the wide variety of industries our members represent.

At this point, one thing is for certain: UPPO pledges its support and resources to assist in the revision process. We will establish and/or join coalitions, as well as work independently, to develop position statements as deemed appropriate. We will be conducting educational and informational meetings throughout the process to assure members are informed and to be sure our membership has a voice.

The possibility of revisions to the Act is an exciting and perhaps much overdue. The apparent support from other industry groups including NAUPA, ICI, and ABA, just to name a few, bodes well for the overall collaboration of the unclaimed property community to affect changes. At this point, the key message is to stay tuned!

ADDITIONAL RESOURCES
ULC Study Committee - Unclaimed Property Act
UPPO LinkedIn Group
Follow us on Twitter for the latest information


The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.


Tags:  Advocacy  Members  News  Policy  UP Laws 

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Guest Post: DE Secretary of State Bullock - VDA Program

Posted By Administration, Sunday, February 17, 2013
Updated: Saturday, February 16, 2013

Delaware’s New Voluntary Disclosure Program

By the Honorable Jeffrey W. Bullock, Delaware’s Secretary of State


Editor’s note: Secretary of State Bullock wrote this post as a guest author to help explain his state’s new VDA process to UPPO members. His office is the driving force behind Delaware’s new VDA process, which we featured in an earlier legislative update. Sec. Bullock will be part of our govSPEAK panel at the 2013 UPPO Annual Conference, where he will answer specific questions about Delaware’s new VDA program, as well as provide an update regarding the Delaware VDA program register online to secure your spot at the conference.

As the state that nearly a million business entities call home, Delaware values each and every company domiciled in the First State. Delaware is a state where companies want to do business because ours is a state with a reputation for clarity and fairness.

It was with that in mind that, on July 11, 2012, Governor Jack Markell signed into law Senate Bill 258, which created a new abandoned and unclaimed property voluntary disclosure program (the "VDA Program”) in Delaware. The new unclaimed property voluntary compliance program is administered through my department, the Delaware Department of State, and offers Delaware-registered business entities an opportunity to come into compliance with Delaware’s unclaimed property laws. The new VDA Program is intended to build on Delaware’s business reputation and specifically the reputation of the Department of State in providing quality service to Delaware’s corporate clients by making abandoned and unclaimed property compliance for Delaware companies cheaper, faster and easier.

Because we have designed a business-friendly VDA process, I believe almost every Delaware-registered business entity, regardless of their reporting history, should take advantage of Delaware’s new VDA Program. Companies that have made recent acquisitions, or have not retained complete and researchable records for 10 years or more, can avoid an audit, interest and penalties, and significantly reduce potential liability, all at the same time, regardless of reporting history. Even companies who have a robust unclaimed property reporting history that believe they are in compliance with Delaware law will receive greater certainty by going through our new VDA process tailored to that company’s circumstances and getting a release of all historic unclaimed property liability.

Under the new program, companies that enroll by June 30, 2013, will only be responsible for reporting abandoned or unclaimed property dating back to 1996. That’s 15 years less than under a Delaware unclaimed property audit. Additionally, companies that choose to participate will not have to pay any interest or penalties on that property.

Most importantly, companies that successfully complete the new VDA Program receive a release of all past due unclaimed property liability up to the present. After entering and completing the VDA Program, companies that fulfill their future annual reporting requirements are protected against Delaware unclaimed property audits for all prior years up to the date of execution of the final VDA Program documents. All the state asks in return is that companies continue to fulfill their ongoing responsibility to report and remit annually their Delaware abandoned or unclaimed property.

Since Senate Bill 258 was enacted in July 2012, I have been speaking to chief financial officers and professionals who have previously represented companies in Delaware unclaimed property audits about ways we can improve Delaware’s process for voluntarily reporting unclaimed property. As a result of those conversations, we have designed a VDA process to fit the needs of each and every company that enrolls. From the introductory meeting through the execution of the final release agreement, our goal is no different than that of the companies I have spoken to, which is to get into compliance as soon as possible in a way that is reliable, efficient, cost-effective, and most importantly, fair.

The alternative to voluntarily participating in the new VDA Program, of course, is the possibility of an unclaimed property audit, in which the Delaware Division of Revenue ("Division”) can examine a company’s books and records for unclaimed property compliance dating back to at least 1986. Such unclaimed property audits often take several years to complete, and the Division has the right to assess interest and penalties of up to 100 percent of a company’s total liability. Accordingly, the potential exposure for a company under audit can be as much as twice the potential exposure as under the new VDA Program.

As the Delaware Secretary of State, I take seriously my responsibility to listen to the concerns of our corporate constituents. My goals remain very straightforward: to administer a VDA Program that brings your company into compliance as soon as possible in a way that is reliable, efficient and cost-effective and also fair to all participants. I believe that this program is a good deal for Delaware companies and one that can save Delaware-registered business entities time and money. As a result, I urge every Delaware company to go to our new website, www.DelawareVDA.com, to learn more about the program and take advantage of this new initiative.


The analysis and opinions expressed herein are those of the authors and do not necessarily represent the views of the Unclaimed Property Professionals Organization or its officers, directors or members. This summary document provides background information and is not intended as a substitute for legal advice.

Tags:  Due Diligence  education  Policy  UP Laws 

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