SB 267

Abstract

This Act clarifies various aspects of the State’s unclaimed property laws, specifically: Section 1 clarifies and confirms current practice regarding the definition of “foreign country” or “foreign jurisdiction.” Section 2 clarifies and confirms current practice regarding the definition of “owner.” This section is not intended to limit holder reimbursement claims, where a holder seeks to claim from the state previously reported property that the holder returned to the owner subsequent to the filing of the report. Section 3 conforms Delaware's unclaimed property statute more closely to the 2016 Revised Uniform Unclaimed Property Act (RUUPA), clarifying that foreign-addressed property that is reportable to (or specifically exempted by) a foreign country is not reportable to Delaware. This section applies to reports filed and property remitted after the effective date of this Act. This Section shall not be construed to allow for holder refunds under 12 Del. C. § 1144 for reports filed or property remitted prior to the effective date of this Act. Section 4 limits the filing of amended reports by holders seeking a refund of property when claims have been filed and paid on the property; when the original report was filed in conjunction with an examination or voluntary disclosure agreement submission; or after 3 years, when the holder seeks a refund due to an error in a cost of goods sold (COGS) calculation, as it usually pertains to the reporting of gift card property. This section is not intended to limit holder reimbursement claims, where a holder seeks to claim from the state previously reported property that the holder has since returned to the owner. Section 5 clarifies when the owner notice requirements enacted on February 2, 2017, took effect. Section 6 clarifies and confirms current practice that holders must pay and deliver property at the same time they file their report. Section 7 section enacts provisions that have allowed Texas to successfully pursue claims in bankruptcy for unclaimed property reported, but not paid to the state, prior to a bankruptcy, should Delaware pursue similar claims in the future. Section 8 clarifies the state’s indemnification obligations and definition of good faith generally and specifically for property reported "early" (before the full dormancy period has run). This section also establishes that the State Escheator may enter into written indemnification agreements with holders requesting to report and remit property "early" (before the full dormancy period has run). The amendment of this section to clarify the State Escheator’s complete discretion to grant or deny early escheatment requests under § 1155(b) merely recognizes the unreviewable discretion already provided under that section. Section 9 clarifies and confirms current practice, allowing the State Escheator to decline to take custody of physical property, including savings and bearer bonds, any property that may present a future litigation risk to the state, worthless or nonfreely transferable securities, and virtual currency for which no ready public market exists. Section 10 clarifies and confirms current practice, allowing the State Escheator to submit an affidavit after a review of business records and procedures as evidence of owner notice and publication. Section 11 eliminates inefficient administrative processes and ensures that unclaimed property reported as owned by state agencies and discretely presented component units included in the state’s annual comprehensive financial report of the state remains in the state’s General Fund to be allocated only via the conventional legislative budget process. This section is similar to a statute adopted by Illinois. Section 12 clarifies and confirms current practice that during an examination, the State Escheator may send or direct a holder or agent to send an owner notice letter (commonly called a “due diligence letter”) in the format specified by the State for any item identified as potential unclaimed property, including items that may be part of a sample population in conjunction with estimation, extrapolation, and statistical sampling, even if the item is not or would not be reportable to Delaware. Section 13 clarifies that requests to the Secretary of Finance to review certain discretionary determinations of the State Escheator during expedited examinations must be submitted in writing within 30 days of the State Escheator’s determination. Section 14 clarifies and confirms current practice that Voluntary Disclosure Agreements administered by the Secretary of State must comply with all provisions of this title. Section 15 states that Sections 1, 3, 6, 7, 8, and 9 of this Act take effect on enactment. Section 16 states that it is the intent of the General Assembly that Sections 5, 10, 12, 13, and 14 of this Act take effect upon enactment and also apply retroactively to any claims, examinations, voluntary disclosure agreements, or litigation pending as of the effective date of this Act. Section 17 states that it is the intent of the General Assembly that Sections 2, 4, and 11 of this Act take effect upon enactment and also apply retroactively to reports filed or property remitted prior 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.