SB 281

Abstract

This Act clarifies various aspects of the State’s unclaimed property laws, specifically: (1) Section 1 specifically exempts property owed to non-Delaware government entities and payment or credit arising under the 2022 Delaware Relief Rebate Program, Chapter 290 of Volume 83 of the Laws of Delaware. (2) Section 2 clarifies and confirms current practice that a holder under examination or in the voluntary disclosure program shall retain records from ten years plus the dormancy period to present day until completion of the examination or voluntary disclosure agreement. (3) Section 3 clarifies and confirms current practice regarding the timing of the liquidation of securities and the mailing of written notice to owners to eliminate litigation risk for the State. Under current practice, the State Escheator liquidates securities and mails written notice to owners relatively contemporaneously in weekly batches. Practically, however, at times liquidation may precede the mailing of notice by several days. However, because a claimant’s recovery is determined by the date the claim is filed relative to the date of notice, the claimant’s recovery is not impacted by this change. Because owner addresses reported by holders are often incomplete or have obvious errors, this Section also allows, but does not require, the State Escheator to take reasonable steps to update, correct, or validate owner addresses to make delivery of the written notice more likely, and limits liability for the State Escheator for any such actions or lack of actions. (4) Section 4 clarifies and confirms current practice regarding the timing of the liquidation of securities and the mailing of written notice to owners. (5) Section 5 clarifies how to determine the value of claims for securities property by clarifying a date certain for the statutory 558-day period to begin when the date of notice cannot otherwise be determined or when notice is not required or sent. (6) Section 6 clarifies and confirms current practice that the time for a claimant appeal to the Tax Appeal Board, where the State Escheator has paid the claim, begins to run on the initial issuance of payment, and is not reset or tolled by the re-issuance of a check. This Section also expressly permits the State Escheator to pay claims on a pro rata basis for property received before August 1, 2022, or resulting from a bankruptcy proceeding, when the reported amount of property exceeds the remitted amount, and expressly prohibits holders from relying on this Section to engage in this practice prospectively. (7) Section 7 clarifies and confirms current practice that the time for a claimant appeal to the Tax Appeal Board, where the State Escheator has paid the claim, begins to run on the initial issuance of payment, and is not reset or tolled by the re-issuance of a check. (8) Section 8 makes changes to allow the State Escheator to issue a notice of examination to any holder who has failed to respond to requests made pursuant to a verified report or compliance review or to complete a verified report or compliance review. This Section also makes changes to clarify and confirm current practice that a “reason to believe” standard does not apply to inquiries under § 1170 of Title 12. (9) Section 9 allows the State Escheator to issue a notice of examination to any holder who has failed to respond to requests made pursuant to a verified report or compliance review or to complete a verified report or compliance review under § 1170 of Title 12. (10) Section 10 responds to feedback received from the professional finder industry and clarifies and confirms current practice that the State will not disclose the exact amount of claimable property until a claimant’s rightful ownership of the property has been established and permits finder agreements to reflect this fraud prevention measure. (11) Section 11 states that Sections 1, 8, 9, and 10 of this Act take effect on enactment. (12) Section 12 states that it is the intent of the General Assembly that Sections 2, 3, 4, 5, 6, and 7 of this Act apply retroactively to any claims, examinations, voluntary disclosure agreements, or litigation pending as of the effective date of this Act. This Act also makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.