Unclaimed Property and Corporate Compliance News

Delaware Proposes Regulations to Shorten Look-Back Period

Delaware is proposing another step to bring the state's unclaimed property program more in line with other states. Holders have long lamented the fact that under a Delaware audit, they are subject to a look-back period of 1981, or the year of incorporation, if more recent. With the rapid change in office technology, records are often not available or accessible for the earlier years.

New Bill on New Jersey Gift Cards

And the debate over New Jersey gift cards continues...

Just over a week ago, New Jersey amended its gift card laws with the passage of Senate Bill 1928. Some critics were outspoken about their dislike for the bill, saying that it did not go far enough to protect both issuers and gift card recipients.

Now, Assemblyman Paul D. Moriarty (D-Turnersville) has sponsored A.B. 3189. If passed, this would remove gift cards from reportable unclaimed property.

Christie Signs SB 1928, Amending NJ Gift Card Law

Store Gift Card Display New Jersey Senate bill 1928 was signed into law on Friday by New Jersey Governor Chris Christie. SB 1928 amends the New Jersey gift card escheat law that was passed in 2010 and subject to much litigation and scrutiny.

Delaware Bill to Provide for Alternative Voluntary Disclosure

On June 28, 2012, the Delaware House passed SB 258. It has now been passed by both the Senate and the House and proceeds to the governor.

Many questions remain about this program. Although the VDA would proceed through the Secretary of State, the Secretary can refer them at any time to the State Escheator instead of accepting the submission. Further, there is no reason to believe that the Secretary has any unclaimed property experience and would have to consult with the Escheator on whether to accept an agreement.

Originally Posted: June 27, 2012

States Can't Collect Unclaimed Savings Bonds from Federal Government

Seven states joined together to file a lawsuit against the U.S. Federal Government, trying to claim proceeds of matured but unredeemed U.S. savings bonds from the U.S. Treasury as unclaimed property. According to the States involved, the U.S. Treasury has approximately $16 billion of unredeemed savings bonds, of which $1.6 billion belongs to the seven states in the suit. The States were attempting to collect their portions as unclaimed property under their respective unclaimed property acts.

Staples and Delaware Settle Unclaimed Property Lawsuit

Staples, Inc. and the State of Delaware issued a joint press release announcing that the lawsuit surrounding Delaware's audit of Staples, Inc.'s unclaimed property has been settled. The terms of the settlement are confidential.

From the press release:

New Jersey Legislature Acts on Gift Cards; Bill Sent to Governor

Both the New Jersey Senate and the Assembly passed Senate Bill 1928. The bill, as amended, would provide for a five year dormancy period for cards issued on or after July 1, 2010. Only 60% of the card value would be reportable. Furthermore, the address data collection would not begin until 49 months after the bill becomes effective. Closed network cards would be subject to a cash refund once the outstanding balances dips below $5. Dormancy fees and expiration dates are generally not permitted.

The bill now proceeds to Governor Christie for signature.


North Carolina Bill to Eliminate Contingent Fee Auditors

North Carolina legislator Darrell McCormick introduced H.B. 462 - An Act to limit use of contingent‑based contracts for audit or assessment purposes. HB 462, if passed, would prohibit the use of contingency-fee third party auditors for unclaimed property and other taxes in North Carolina.

On June 12, a Senate amendment did pass that would exclude life insurance company audits from the prohibition against contingency fee audits.


California Under Fire for Unclaimed Property Notification Practices

On Wednesday, May 30, 2012, a hearing was held to determine whether the Court would stop the June 1st remittance reports. Judge Mendez denied the motion for a temporary restraining order, allowing the June collection of unclaimed property by the State of California.

Originally Posted: May 16, 2012

Corporate holders often lament the two-step process of reporting and remitting unclaimed property to the state of California. The first report is due October 31, where the holder lists all properties that it intends to turn over to the state. California then sends out notices to these property owners, giving owners until May 31 to respond. Holders then reconcile the preliminary fall report with the owners that responded to the California notices and remits all properties which remain by June 15.

A Solution for Governor Christie on New Jersey Gift Cards

The New Jersey Senate acted on S.B. 1928 on May 31, with an amendment. (Text available here)

In the meantime, New Jersey Governor Chris Christie has been taking to the airwaves to make his position known.

“This is a big fight about who gets to keep the money,” said Christie, “Is it the companies, or the government?”