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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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2017 Unclaimed Property Legislative Roundup

Posted By Administration with contribution by Marcella Easly, senior compliance advisor at UPCR, Thursday, July 13, 2017

Across the nation, unclaimed property has been a popular topic for state legislatures this year. Although a handful of state legislatures are still in session, most have completed their work. Following is a brief summary of some of the most noteworthy unclaimed property bills that became law during the 2017 session. 

 

Delaware

Effective on Feb. 2, 2017, S.B. 13 adopts in substance many provisions from the 2016 Revised Uniform Unclaimed Property Act promulgated by the Uniform Law Commission. In addition, it adopts certain recommendations from the Delaware Unclaimed Property Task Force formed under Senate Concurrent Resolution No. 59 of the 147th General Assembly, and makes significant changes to the state's unclaimed property reporting process and compliance initiatives. More specifically, these changes include reducing the look-back period of all voluntary disclosure agreements and audits to 10 report years, and creating a 10-year statute of limitations for the state to seek payment of unclaimed property due to the state. In addition, this legislation aligns the state’s record retention requirement for companies with the statute of limitations and look back period, which brings State law into conformity with a majority of other states. This bill also offers any company currently under audit prior to July 22, 2015, the opportunity to convert their audit into a voluntary disclosure agreement by entering into the Secretary of State Voluntary Disclosure Agreement program. All companies who received a notice of examination and are currently under audit as of the effective date of this Act will have the opportunity to engage in an expedited audit review process. Finally, the bill mandates that interest be assessed on any late-filed unclaimed property, as a means to incentivize voluntary compliance. See previous UPPO’s May 4 blog post for more information about S.B. 13. 

 

Effective on June 29, 2017, S.B. 79 makes changes and corrections to SB 13. Among these changes, the amended bill ensures holders have sufficient time to comply with SB 13’s due diligence requirements with owners. It further clarifies that the state will indemnify and defend a holder against claims made by a foreign jurisdiction for property paid or delivered to the state escheator in good faith.

 

Idaho

Effective on July 1, 2017, H.B. 152 establishes an exemption from Unclaimed Property law for nonprofit corporations providing telecommunications service and delivery of electric power.

 

Illinois

Effective on Jan. 1, 2018, S.B. 9 creates the Revised Uniform Unclaimed Property Act. It adds language concerning definitions, applicability, rulemaking, and presumptively abandoned property. The bill also includes rules for taking custody of property that is presumed abandoned, reporting requirements, and required notice to property owners, among other provisions. The bill expressly excludes gift cards, loyalty cards and game-related digital content from property subject to escheat. However, it does not exclude gift cards from the definition of “stored-value cards,” which are subject to escheat, creating a potential conflict. The bill also specifies that virtual currency is subject to escheat. The state’s business-to-business exemption is not retained under the new bill.

 

New Hampshire 

Effective on Jan. 1, 2018, H.B. 473 increases the threshold above which merchants can sell gift cards with expiration dates from $100 to $250. The bill further clarifies that gift certificates of $250 or less shall not be considered abandoned property, and it revises the definition of gift certificate by removing the requirement that a gift certificate be in writing. The bill also provides that gift certificates and store credits remitted to the state prior to Jan. 1, 2018, must remain in the custody of the state until returned to the owner.

 

South Dakota

Effective on March 10, 2017, S.B. 34 revises provisions related to securities held as unclaimed property. It requires the state treasurer to sell all stocks, bonds, and other negotiable instruments within 90 days of confirmed receipt, unless the property is on an open claim.

 

Effective on July 1, 2017, H.B. 1081 revises provisions for establishing a trust for a mineral owner who cannot be located. It provides that a person or entity holding interest in a tract of land may petition a county court to create a trust in favor of an undetermined owner of a mineral interest in that tract of land. It further provides conditions for the creation and administration of such a trust.

 

Tennessee

Effective on July 1, 2017, H.B. 420 repeals and reenacts the Uniform Unclaimed Property Act. It includes dormancy periods, reporting and due diligence requirements, and abandoned life insurance provisions, among other measures. The bill requires the treasurer to sell or liquidate securities between eight months and one year after receiving the security. 

 

Texas 

Effective on Sept. 1, 2017, S.B. 561 relates to unclaimed life insurance and annuity contract proceeds. Among its provisions, the bill requires an insurer to periodically compare its applicable in-force life insurance policies, annuity contracts, and retained asset accounts against a Death Master File. In the event of a match, insurers are required to complete a good faith review of the situation, and if proceeds may be due, to conduct outreach to beneficiaries within 90 days and provide assistance in making a claim. The bill further requires an insurer to report and deliver unclaimed proceeds to the comptroller of public accounts.

 

Effective on Sept. 1, 2017, H.B. 2964 adopts a Senate amendment and provides that a holder of mutual fund shares must notify an owner at initial purchase that the owner may designate a representative to receive a notice of abandonment.

 

Utah

Effective on May 8, 2017, H.B. 175 repeals and reenacts the Revised Uniform Unclaimed Property Act. Among its provisions, the bill revises presumptions of abandonment, amends reporting procedures, and addresses the duties of a holder of abandoned or unclaimed property.

 

Effective on May 8, 2017, H.B. 42 makes comprehensive revisions to insurance law. Among other changes, the bill amends definitions under the Unclaimed Life Insurance and Annuity Benefits Act by removing the definition of "Knowledge of death."

 

For the latest information about these and other noteworthy unclaimed property bills, visit UPPO’s govWATCH website. 

 

About the contributor 

Marcella Easly, senior compliance advisor at Unclaimed Property Consulting & Reporting (UPCR), contributes to UPPO’s regular legislative update blog posts. Easly has more than 30 years of unclaimed property experience with special focus in state legislative tracking and resolving client-state advocacy issues. She was Unclaimed Property Manager for the State of Oregon for 14 years.  She was active in the National Association of Unclaimed Property Administrators (NAUPA), serving as president, and regional vice president.  She was instrumental in the creation of the NAUPA property type reporting codes.  She has been with UPCR for 11 years, and has been active in UPPO for more than 13 years.   

 

 

Tags:  Delaware  Idaho  Illinois  legislation  New Hampshire  South Dakota  Tennessee  Texas  unclaimed property  Utah 

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Legislative process offers multiple opportunities for member advocacy

Posted By Administration, Thursday, February 23, 2017

Just two months into 2017, the year is already shaping up to be one of the busiest in recent memory for unclaimed property bills under consideration by state legislatures across the country. Because these bills have the potential to significantly change compliance requirements, unclaimed property professionals not otherwise inclined to participate in the political process beyond voting in the elections may develop a greater interest in advocacy.

 

Many of us remember the basics of how a bill becomes a law from Schoolhouse Rocks or high school civics lessons—the legislative branch of government considers the bill and, if passed, the governor decides whether to sign it into law. However, the path a bill takes is a bit more detailed than that, and definitely worth understanding to recognize where in the process advocacy efforts are likely to be most effective.

 

“Understanding how a bill progresses is really important,” says Karen Anderson, senior manager, state and local tax, unclaimed property for KPMG LLP. “A bill usually goes through two chambers, and it goes through committees in each, so there are several components to the process where communication is not only important but also welcomed by state legislatures and governors.” 

 

Every state operates under slightly different procedures and processes, so the nuances of the legislative process will vary. However, this overview should provide a reasonable understanding of the journey an unclaimed property bill is likely to take on its way to becoming a law or not.

 

Introduction and First Reading

Other than Nebraska, state legislatures have two chambers. Any legislator in either chamber can introduce a bill. Some issues tend to skew heavily toward introduction by one political party, but unclaimed property bill authors aren’t so easily defined.

 

“Legislators introducing unclaimed property bills could be doing so for one of several reasons,” says Kendall Houghton, partner with Alston & Bird LLP. “A constituent may have approached them after experiencing an issue related to unclaimed property. A committee member works with a state administrator who encourages introduction of a bill. Or another stakeholder may push for new legislation. So, because legislation may originate in many different ways, there isn’t really a ‘typical’ profile of an unclaimed property bill.”

 

State legislative procedures usually require bill to go through three official readings before becoming law. Depending on the state, the first reading may occur either before or after being assigned to a committee. Some states have rules preventing bills from proceeding through the system too quickly, preventing adequate time for study and public comment. California, for example, specifies that bills cannot receive a vote until at least 30 days after introduction.  

 

Committee Consideration

Either before or after the first reading of the bill, depending on the state, a committee made up of members of the legislative chamber where the bill was introduced receives the bill for consideration. The process for assigning bills to specific committees varies by state, but it generally goes to a committee deemed to have the appropriate interest or expertise in the subject being considered. It may go to a banking, finance, taxation or revenue committee, however it’s not uncommon to find an unclaimed property bill assigned elsewhere, depending on the state and specific issues the bill addresses.

 

“If someone wants to get active, the committee assigned to review the bill is the first place to have a great impact advocating for or against it,” says Michelle Andre, managing member of Tre Towers Advisory Group LLC. “Getting information to the chair and members of that committee, as well as the sponsors of the bill makes a lot of sense. Most legislators don’t understand unclaimed property from an owner and holder perspective, so you need to be very clear about where you stand on an issue and why.”

 

The committee may review and vote on the bill or, in some cases, the committee chair may decline to move the bill forward. The committee may hold a public hearing to gather additional information. The committee may table the bill or vote on it. If tabled, a vote may or may not be held later. If a vote is held, the committee can either advance the bill, in which case it returns to the house of origin, or defeat the bill, killing it in committee.

 

Because committees hold the power to advance or kill a bill, this is an important stage in the process for parties interested in supporting or fighting the legislation. Contacting the committee chair and members to educate them on the bill’s potential effects can be beneficial.

 

Second and Third Reading

If the bill returns to the chamber of origin, that chamber’s leadership typically decides whether to schedule the bill for its second reading. If not, the bill dies. If the bill receives a second reading, legislators may have a chance to debate and suggest amendments, which are incorporated into the bill if approved by a majority vote. Again, each state and each legislative chamber has its own rules; some prohibit debate and/or amendments until after the third reading.

 

When the third reading occurs, legislators generally get an opportunity to discuss, debate and amend it before a final vote. If the legislature approves the bill, it transfers to the other chamber of the legislature.

 

Because unclaimed property is not a high-profile issue, many legislators responsible for voting on it will not know its intricacies or understand the potential ramifications of the bill they are considering. That’s where constituents play an important role. Contacting legislators in your district to encourage them to favor or oppose a bill and explain why they should take that position can make a significant difference.

 

“The value of grassroots contacts cannot be underestimated,” Houghton says. “If you reside in the legislator’s district or your business is headquartered in their district, those contacts mean a lot to elected officials. Education on the issues is really important to help them understand what their vote really means. That type of outreach doesn’t take a lot of time, but it can be very impactful.”

 

The Other House

If the bill moves to the other chamber, the process repeats. It is assigned to a committee in the second chamber and may move on or die. It again will go through the three-reading process and may move forward or die at any stage. Again, interested parties have a chance to educate and influence committee members and elected officials from their districts.

 

If the second chamber approves the bill with no amendments, it moves on to the governor. If it has been amended, it returns to the chamber of origin, which may vote to approve the amended bill, sending it to the governor, or vote against the new bill, sending it instead to a conference committee. If a conference committee receives the bill, members of both legislative chambers work to reach an agreement on the language of the bill. If they fail to reach an acceptable compromise, the bill dies. If they reach agreement, the bill returns to both chambers for another vote.

 

Governor

Once both chambers of the legislature agree upon and approve a bill, it moves to the executive branch of government for consideration by the governor. However, the governor’s influence on a bill may occur well before it reaches this stage. While a bill is still under consideration in the legislature, the governor may suggest to legislators or to the public whether a bill is likely to be signed into law and under what conditions. This may influence how legislators draft, amend and/or vote on a bill.

 

“Sometimes people forget that governors are such a key component to the legislative process,” Anderson says. “They aren’t merely a last step, but in many cases they’re involved as a bill moves through the legislatures.” 

 

When a bill that has been approved by the legislature reaches the governor, three things can happen. The governor may sign it, allow it to become law without signing it or veto it. Upon a veto, the legislature typically has the ability to override the veto with a two-third vote in both chambers.

 

Some bills will include an effective date as part of their language. Others may not, in which case it is effective on a specific date as mandated by the state’s laws. Some states, for example, specify that the bill is effective immediately upon receiving the governor’s signature unless otherwise specified, while others designate a timeframe (30 days after the governor’s approval, for example) or a certain date, such as Jan. 1 of the following year.

 

govWATCH

As you can see, there are a lot of stages to any bill’s path from inception to enactment. This enables you to express your support for or opposition to the bill at several points throughout the process. Fortunately, tracking a bill’s progress is easy for UPPO members. UPPO monitors all of the pertinent bills affecting members and reports on their status via the govWATCH website and email updates. Let your voice be heard and make a difference.

 

“If members are trying to get a handle on issues that are likely to be the subject of legislation this year, they should read the Revised Uniform Unclaimed Property Act and pay close attention to govWATCH,” Houghton says. “Those are the two resources that provide great information on issues that matter to the unclaimed property community (states, holders, industries, audit firms and owners) and what is being introduced.”

 

 

Tags:  legislation  unclaimed property 

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2016 Trends are sure to Shape 2017

Posted By Administration, Thursday, December 22, 2016

With 2016 coming to an end, the approaching new year offers a good opportunity to look at some of the major trends shaping the unclaimed property landscape. Over the past year, we’ve seen some significant litigation, a slowdown in new legislation and the Uniform Law Commission’s (ULC) release of the 2016 Uniform Unclaimed Property Act (UUPA). All of these noteworthy trends set the stage for what is sure to be an interesting and action-packed 2017 for unclaimed property professionals.

 

Legislation

Unclaimed property professionals have become accustom to a high volume of legislation affecting state unclaimed property statutes. While 2016 wasn’t completely absent of noteworthy bills working their way through the nation’s statehouses, there was a significant slowdown in legislative activity compared to the previous few years.

 

“Looking back at the year, I was struck by the low level of legislative activity,” says Michelle Andre, managing member of Tre Towers Advisory Group LLC. “This may have resulted from 2016 being an election year combined with states knowing the Uniform Law Commission was finalizing the 2016 Uniform Unclaimed Property Act.”

 

Some of the bills that did arise this year added to trends that have been building over the past several years. For example, states continue to modify their gift card rules. Some states that have exemptions from reporting unredeemed balance on gift cards are requiring issuers to provide cash refunds to card owners if the value of the card meets certain dollar amount thresholds. New York recently revised its gift card rules, effective on Dec. 25, delaying the trigger for when issuers can assess a service fee from after the 12th month of dormancy to after the 24th month. Another state, Wyoming removed a sunset provision allowing its gift card exemption to become permanent.

 

States are also continuing to enact provisions requiring life insurance companies to perform routine Death Master File searches. Five states passed such legislation in 2016. Although modeled loosely after the National Conference of Insurance Legislators’ Unclaimed Life Insurance Benefits Act, each of the laws are different. Florida’s law, for example, has a longer reach-back period than most states.

 

Technology has also played a role in some statute revisions as states account for increasing surge in electronic transactions and communication. California, for example revised its unclaimed property law to include electronic transactions as official contacts that prevent accounts from becoming dormant.

 

State laws are finally recognizing that people are communicating electronically rather than by snail mail or phone calls,” Andre says. “Increasingly, people stay in touch with investments via the internet rather than by making a call or waiting for a statement in the mail.”

 

Pennsylvania also included electronic communications provisions within unclaimed property statute revisions that were tucked into a budget bill. However, its treatment of owners who receive electronic communication is inconsistent with owners who receive communication through traditional means.

 

“Pennsylvania’s new statute pertaining to fiduciary accounts and IRAs states that if a holder doesn’t communicate with an owner through U.S. mail but rather electronic mail, then the holder is required to send an email notice to the owner,” says Karen Anderson, senior manager at KPMG. “If the email bounces back or there is no response, then the holder must send a due diligence letter via the U.S. Postal Service (USPS). If that mailing is returned as undelivered, the property would be reportable three years after the last owner activity. On the other hand, if the holder communicates with the owner of such accounts via US mail the account isn’t reportable until three years after the second returned USPS mailing. So, depending upon the holder’s method of communication with owners of these accounts, the Pennsylvania statute requires different due diligence treatment and a different dormancy trigger.”

 

Despite the recent decline in legislative activity, 2017 is likely to bring an immediate surge in new bills as a result of the ULC’s adoption of the 2016 UUPA.

 

“You could tell from recent activity that some states are aware of the language in the new UUPA,” Andre says. “Because the revised act addresses so many new areas addressed and is a true modernization of the act, I expect to see a flurry of activity resulting from it. States have been reviewing the act and planning what they’ll do, so there will likely be a lot of activity in early 2017.”

 

Some of the provisions that could gain traction address jurisdictional standards and triggers for property types not previously included in the act, such as health savings accounts and 529 college savings plans. The popularity among states of other areas remain less certain.

 

“It’s difficult to say whether state legislatures will adopt the transparency measures pertaining to audits that were built into the 2016 Uniform Unclaimed Property Act,” Anderson says. “Some of these provisions include reporting certain statistics regarding use of auditors. I’m not sure whether states will adopt those provisions as they may consider them too intrusive to their process.”

 

Litigation

While legislation slowed in 2016, noteworthy litigation didn’t show any signs of decreasing. Some of the most noteworthy areas being reviewed by ongoing and recently decided cases include:

  • Foreign property: JLI Invest S.A. et al. v. Cook et al. tackles the interplay between federal securities law, international law and Delaware state law. 
  • Derivative rights: “The Bed Bath and Beyond case will give some renewed emphasis to holders that they can assert derivative rights concepts in demonstrating that items states think are unclaimed property are actually not,” says Diann Smith, state and local tax attorney at McDermott Will & Emery. “So we could see similar types of litigation in other states, and derivative rights asserted in other property types beyond merchandise credits.”
  • Gift cards: Delaware ex rel. French v. Card Compliant LLC raises the question whether property holders can shift their liability via a contractual arrangement with another company.
  • Jurisdictional issues: Multiple cases involving MoneyGram consider whether certain unclaimed funds are governed by the general priority rules or by the specific rules of the Federal Disposition Act.
  • Benefit plans: “States frequently take the position that while the Employee Retirement Security Act of 1974 (ERISA) may preempt them from claiming property in ERISA-covered plans, they still have the authority to audit them,” Smith says. “So ERISA continues to be a problem that will likely play out via litigation.”
  • Savings bonds: States are increasingly looking to the U.S. government for unclaimed property funds in the form of unredeemed savings bonds. Especially noteworthy is Florida’s use of estimation to claim the United States owes the state $1 billion from unredeemed savings bonds.

 

As expected going into 2016, Temple-Inland Inc. v. Cook proved to be the most intriguing case of the year. On June 28, 2016, the U.S. District Court for the District of Delaware issued an opinion granting Temple-Inland’s request for summary judgment. The court called several aspects of Delaware’s audit practices “troubling.” On Aug. 5, 2016, Temple-Inland and the defendants filed a joint motion to dismiss the case, signaling a settlement and ending the dispute. 

 

Audits/VDAs

The full ripple effect from Temple-Inland on audits and estimation practices remains to be seen, but the settlement immediately triggered changes to Delaware’s voluntary disclosure agreement (VDA) program. Delaware reduced the look-back period for VDAs to 10 years plus dormancy, rather than the previous static date of 1996. The Delaware Department of Finance also is recommending changes to the state’s record revision provision for unclaimed property.

 

“There is more uncertainty now in terms of where things are going with both Delaware audits and the VDA program than I’ve seen before,” says Susan Han, principal, abandoned and unclaimed property consulting for Ryan. “This comes on the heels of the Temple-Inland decision and subsequent settlement, as well as changes we anticipate when the new legislative session begins in January.”

 

In the meantime, audit activity involving estimations in Delaware has essentially come to a halt, according to Troy Wangen, director of unclaimed property for True Partners Consulting LLC.

 

I think Temple-Inland is going to be game-changing for years to come,” he says. “Will other states look to benefit from this? Do holders look to benefit from it? Is there a potential for refunds? This all depends on what happens with estimation in that state in 2017. It could significantly change things.”

 

Another noteworthy audit trend is an increase in the number of audit firms in the unclaimed property marketplace. Particularly in Delaware, where a large percentage of audits have traditionally been handled by a single company, multiple firms are now auditing holders.

 

“Litigation shined a light on Delaware’s practice of giving most of its audit business to one firm,” Han says. “So the state enacted S.B. 11, which provides that no audit firm can be assigned more than 50 percent of all examinations commenced after Jan. 1, 2015. As a result, we are seeing both established and newer third-party auditors becoming much more active in unclaimed property.”

 

Looking Ahead

As 2017 unfolds, UPPO will continue to track and report on these and other developing trends. Watch this blog for updates and attend UPPO educational events to help you adapt to the ever-evolving unclaimed property environment.

 

 

Tags:  advocacy  audits  legislation  litigation  RUUPA  ULC  unclaimed property 

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Recent state law changes may affect fall reporting

Posted By Administration with contribution by Marcella Easly, senior compliance advisor at UPCR, Thursday, September 8, 2016

With Labor Day weekend signaling the end of summer, fall reporting season is rapidly approaching. A handful of changes to unclaimed property laws in states with fall reporting deadlines have gone into effect since last reporting season. Following is a brief summary of some of the relevant changes.

 

Colorado

Effective on Aug. 10, 2016, H.B. 1090 includes rules regarding the premium, also known as a “finder’s fee,” that a person may charge for offering assistance in recovering the balance of the purchase price of foreclosed property after all liens and claims against the property have been satisfied. The bill also reduces the dormancy period during which the public trustee must hold the funds from five years to six months. It also voids any contract for payment of a finder’s fee during the first six months of the public trustee’s custody of the fund and during the first two years of the state treasurer’s custody of the funds. It caps the finder’s fee at 20 percent of the amount recovered once these periods expire. For amounts that have been in custody of the state treasurer for three years or more, the finder’s fee may be up to 30 percent.

 

Idaho

Effective on July 1, 2016, S.B. 1347 revises existing law to allow transfer of authority and responsibility of handling excess proceeds from tax deed sales to the state treasurer and to provide duties of the board of county commissioners. The revision states, “Once the tax deeded property has been sold, the board of county commissioners shall immediately transfer the excess proceeds to the state treasurer's office. The county shall then deliver all unclaimed funds to the unclaimed property division of the office of the treasurer of the state of Idaho. The state treasurer's office shall be responsible for the safekeeping and distribution of any requests for the excess funds in accordance with chapter 5, title 14, Idaho Code.”

 

Rhode Island

H.B. 7832 and companion bill S.B. 2753 became effective on July 11. They specify the procedure for the escheat of unclaimed U.S. savings bonds, requiring that such bonds escheat to the state three years after becoming unclaimed property.

 

Wisconsin

A.B. 721, effective on April 1, 2016, provides that a savings bond that remains unredeemed by the owner for more than five years after the date of final maturity is presumed abandoned. “Final maturity” means the date a bond stops earning interest upon reaching its final extended maturity date. The adopted substitute amendment provides that the five-year abandonment provision in the bill applies only if the three circumstances for abandonment under current law do not apply. If one of the three circumstances under current law applies, then the applicable abandonment period under current law applies.

 

Wyoming

Effective on July 1, 2016, H.B. 95 removes the scheduled repeal date on provisions governing the abandonment of gift certificates, merchant store value cards and credit memos.

 

For the latest information about these and other noteworthy unclaimed property bills, visit UPPO’s govWATCH website.

 

About the contributor

Marcella Easly, senior compliance advisor at Unclaimed Property Consulting & Reporting (UPCR), contributes to UPPO’s regular legislative update blog posts. Easly has over 30 years of unclaimed property experience with special focus in state legislative tracking and resolving client-state advocacy issues. She was Unclaimed Property Manager for the State of Oregon for 14 years.  She was active in the National Association of Unclaimed Property Administrators (NAUPA), serving as President, and Regional Vice President.  She was instrumental in the creation of the NAUPA property type reporting codes.  She has been with UPCR for 10 years, and has been active in UPPO for over 12 years.

 

Tags:  fall reporting  legislation  unclaimed property 

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2016 Legislative roundup

Posted By Administration with contribution by Marcella Easly, senior compliance advisor at UPCR, Tuesday, July 19, 2016

In 2015, the legislative trends crossing state borders were the decrease in dormancy periods and requirement the escheatment of U.S. Savings Bonds. This year, there was everything from finder fee caps, to DMF search requirements, and audit provisions. Below is a roundup of legislation enacted so far this year that will impact the unclaimed property community.

Asset recovery

Colorado H.B. 1090
The bill limits the premium, also referred to as “finder’s fee”, that a person can charge for offering assistance in recovering unclaimed property. It also voids any contract for payment of a finder's fee during the first six months of the public trustee's custody of the funds and during the first two years of the state treasurer's custody of the funds, and caps the finder's fee at 20 percent; of the amount recovered once these periods expire. For amounts that have been in the custody of the state treasurer for three years or more, the finder's fee may be up to 30 percent.

Dormancy periods

Michigan H.B. 5017
A credit union may allow a member to designate an account as inactive. If the designation is not removed within five years, the credit union must deliver the property to the Treasurer. 

Gift certificates

Connecticut H.B. 5564
It requires an issuer of a gift card to provide the purchaser with an electronic or paper copy of a proof of purchase or gift receipt, and to provide the purchaser of goods or services with cash, on request, if the balance is under $3 and the purchaser provided the proof of purchase or gift receipt.

Wyoming H.B. 95
There is a provision in the Uniform Unclaimed Property Act that repeals the provisions governing the abandonment of gift certificates, merchant store value credits, and credit memos on July 1, 2019. This act removes the scheduled repeal date. 

Life insurance

Florida S.B. 966
This requires life insurers to compare its life insurance policies against the Death Master File annually.

 

Missouri H.B.AL 2150
This bill creates the Unclaimed Life Insurance Benefits Act.

Property types

Rhode Island H.B. 7832 & Rhode Island S.B. 2753
Requires the escheatment of U.S. Savings Bonds. Holders are required to remit unclaimed Savings Bonds to the state three years after they become unclaimed.

Wisconsin A.B. 721
Requires the escheatment of U.S. Savings Bonds.

Reporting

Florida H.B. 783
This bill contains various provisions including a revision of the aggregate value that constitutes a small estate account, revisions to requirements for a power of attorney used in the recovery of unclaimed property, and the elimination of a maximum fee provision for such recovery.

Michigan S.B. 538
This bill creates a streamlined audit process available to eligible holders and it stipulates property valued at less than $25 is not subject to custody of the state.

Back in March, UPPO talked to Michigan Treasurer Khouri about S.B. 538 and how it will impact the business community.

State administration

Arizona H.B. 2343
This bill requires the Department of Revenue to establish measurements of contingent fee auditor performance, and to provide holders with a notice of rights when under audit.

Read our interview with Joshua Joyce, administrator of unclaimed property for Arizona’s Department of Revenue, about H.B. 2343.

Delaware S.B. 285
Allows state to provide compensation for maintaining abandoned property payment systems.

Michigan H.B. 5294 & Michigan H.B. 4102
Funds are appropriated to contract with private auditing firms to audit for and collect unclaimed property due to the state.

Miscellaneous

Tennessee S.B. 1633
Electric cooperatives hold onto abandoned property rather than remitting it to the state thought out the specified period of notice and publication. Once the period of publication and notice has expired the cooperative can use the abandoned property for charitable purposes, economic development, low-income energy assistance or educational purposes.

For additional bill information, login in to your govWATCH account. If you’re not a member consider joining to receive weekly legislative email updates and access to our govWATCH site. 

About the contributor
Marcella Easly, senior compliance advisor at Unclaimed Property Consulting & Reporting (UPCR), contributes to UPPO’s regular legislative update blog posts. Easly has over 30 years of unclaimed property experience with special focus in state legislative tracking and resolving client-state advocacy issues. She was Unclaimed Property Manager for the State of Oregon for 14 years.  She was active in the National Association of Unclaimed Property Administrators (NAUPA), serving as President, and Regional Vice President.  She was instrumental in the creation of the NAUPA property type reporting codes.  She has been with UPCR for 10 years, and has been active in UPPO for over 12 years.   

 

Tags:  2016  legislation  unclaimed property 

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