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Glossary of Terms
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Abandoned or Unclaimed Property 
A "fixed and certain” interest in intangible personal (or physical, in the case of safekeeping items) that is held, issued or owing in the ordinary course of business and has remained unclaimed by the apparent owner for a statutorily defined period of time after it became payable or distributable.

Activity 
An action by the property owner that "restarts" the applicable state dormancy period, under the laws of the relevant jurisdiction. For example, if the owner makes a deposit to his bank account this is considered "owner generated activity” and is sufficient to "restart" the dormancy period.

Aggregate Limit 
The dollar amount specified in some state laws or regulations under which the holder is not required to report owner/address and is permitted to group such item by property type and report the total of that grouping under the applicable property type code. However, some states may request or require that the owner/address detail information to be appended to the report, if it is available.

Amnesty 
A voluntary compliance program offered by state governments from time to time that allows holders to report and remit overdue unclaimed property while limiting or in some cases eliminating the potential liability of penalties and/or interest. Amnesty is an attempt to encourage holders, especially first time filers, to report unclaimed funds.

Apparent Owner
The owner of unclaimed property according to the books and records of the holder.

Asset Recovery
The process by which an owner of unclaimed property can recover the property. This term is sometimes used to mean the retrieval of property by businesses of property belonging to them.

Asset or Heir Finders
Individuals or businesses that offer to reunite the apparent owner or heirs with unclaimed property for a fee, sometimes referred to as "Locators”. This reunification can happen either before or after escheat has occurred.

Dormancy Period
A dormancy period is a specified period of time in which the property owner does not take action on his or her property. The dormancy period, also known as the abandonment period or escheat period, begins on the date of last activity by the owner. The duration of dormancy periods varies depending upon the property type.

Dual Reporting
Some states' laws require bifurcated reporting. In these instances, holders need to file an initial report, sometimes referred to as a publication report or a notice report. This report lists the names and addresses of individuals for which the holder has property that is presumed abandoned. The states may use the information in the "initial report” to publish or give notice to the listed owners within a defined time period. At a specified subsequent date, the holder is required to file a final or remittance report listing any property that remains unclaimed and to remit the property to the appropriate jurisdiction.

Due Diligence (Statutory/Regulatory)
The state mandated owner outreach to reunite owners with property. Unclaimed property laws or administrative rules typically specify the timing for and type of the notification. Some states require specific language; information and font requirements related to mandated correspondence and may have additional requirements such as certified mailing.

Due Diligence or Minimum
The dollar limit over which a state mandated due diligence letters are required to be sent to the apparent owner.

Escheat
The transferring or remitting of abandoned or unclaimed property to the appropriate state in accordance with its unclaimed property laws. The term commonly refers to the general process of reporting and remitting unclaimed property to states.

Holder
The business or other entity, which holds inactive property, that is payable or distributable to another.

Due Diligence Offset/Deduction
Certain states will allow holders to deduct the expenses or a portion of the expense of due diligence mailings. This is accomplished by deducting the expenses from the amount remitted. When available, it is not required to take these deductions, but they can be useful in defraying some of the costs of compliance.

Holder ID Number
Also can be referred to as State ID or Holder Number, this is a state specific unique identification number issued by some states to identify holders of unclaimed property that have previously filed in their state. This Identification number will typically need to be included on each subsequent filing with that state. States often use this number as a means to determine if a holder is filing reports and if they are filed timely, etc.

Indemnification
1. A holder's right to be protected against claims from customers (or other states) if the holder reports property in good faith according to the process set forth in the state's unclaimed property laws or administrative rules.

2. When a holder is the subject of a state examination/audit, the state will typically indemnify the holder against future exams and penalties related to the audit time period and for property types that are within the audit time period.

Intangible Personal Property
Property, such as stock, that is not in physical form. Stock certificates, for example, represent ownership interest in a company.

Last Activity Date 
The date of last owner-generated activity; for example, the last activity date can be date of check issuance or the date of last documented contact with an account owner, such as a customer making a deposit to a bank account. This date is used to determine the when the dormancy period begins to run.

Last Known Address
The address of record for an owner of unclaimed property, as identified on the holder's books and records.

NAICS & SIC Codes
North American Industry Classification System codes (NAICS) and Standard Industry Codes (SIC) are often required information on state unclaimed property reports. These codes specify what type of business in which a holder is engaged.

NAUPA
National Association of Unclaimed Property Administrators (NAUPA) is the trade association comprised of state unclaimed property officials.

NAUPA II Standard Electronic File Format
This is the standard file format for electronic unclaimed property filings.


NAUPA Holder Claim Form/Holder Reimbursement Form
Uniform holder claim form for holders to obtain funds remitted in error or paid to the owner after escheatment.

Negative Report
Also called a "zero” property report is a report stating the holder has no property to report for the filing period. Some states and some by states under specific circumstances require this type of report.

Owner
The person or entity to which property belongs or is payable.

Pre-escheat Owner Outreach 
Also called "procedural due diligence”. The actions taken by a holder beyond and prior to any state mandated due diligence, in an effort to locate property owners prior to escheatment to the state. These efforts can include reaching out to property owners via telephone, mail, e-mail or other means and they can also include searching for better addresses, in the event of the holder having received returned mail. It is advisable to clearly document all contact. Further, as a part of the "procedural due diligence process” some holders also perform accounting error review and research to resolve property items that may appear to be unclaimed property but are actually the result of accounting error.


Priority Rules
Also, sometimes referred to as the "jurisdictional rules”. The priority rules have been established by a series of U.S. Supreme Court cases that determine the order in which states/jurisdictions are entitled to receive unclaimed property. The first priority is given to the state of the last known address of the apparent owner, as shown on the holder's books and records. Where there is no such address sufficient for the delivery of mail, the second priority is given to holder's state of domicile incorporation.

Rightful Owner
A person or entity that has the legal right to property.

Reciprocity
An arrangement between two states in which information and unclaimed property is collected by one state and exchanged with another. These agreements allow companies holding incidental property whose owner's last known address is in another state, to report it to the domiciliary state. However, note that the property being reported to the domiciliary state must be reported according to the dormancy period and other requirements of the state to which the property would be required to be reported under the priority rules. Further, it is important to note, not all states have reciprocal agreements, therefore, research is recommended before pursuing this option. In addition, when reciprocal reporting is used, there is no indemnification granted by the states involved.

Record Retention
The maintenance of records for a period of time in accordance with state law or state administrative practices.

Record Review
The operational internal review of a holder's books and records to identify unclaimed property and/or to resolve items that may appear to be unclaimed property but are the result of accounting errors or subject to exemption or preemption.

Report and Remit
The simultaneous single filing of the final report containing owner and property detail and the associated remittance. While in the 1980s many state were "dual reporting” most states are now "report and remit "states.

Reporting Process
The process prescribed by state unclaimed property laws for the reporting and remittance of unclaimed property. States require holder to report through either via "report and remit” or "dual reporting.”

Search Letters
These typically refer to contact letters sent to apparent owners prior to statutory due diligence letters. While these are not required by law or regulation and may not replace the requirement for conducting due statutory diligence, some consider them a best practice and a method to enhance customer service.

SEC 17Ad-17
The Securities and Exchange Commission's rule which defines the requirement to search for lost security holders making use of an informational database. This rule mandates these searches for transfer agents and broker dealers. Please refer to the rule for more specific information on the holders covered by the rule and the rule's requirements.

SNAP Audit
This acronym stands for States National Audit Program. Audit conducted by state auditors on behalf of multiple states.

State of Corporate Domicile
The state of incorporation or formation of a holder.

Statues of Limitations
State statutes that establish time limits for pursuing a legal claim. In unclaimed property law, statutes of limitations are sometimes used to determine how far back a state may reach to claim funds held by a Holder in an audit. However, most state unclaimed property statutes contain an "anti-limitation” provision, which generally provide that statutes of limitation, other than those defined within the unclaimed property laws themselves, generally will not apply to defeat a state's right to unclaimed property. Further, even states that have a statute of limitations in their unclaimed property laws have restricted them so that they do not apply if a holder has not reported unclaimed property or has done so fraudulently.

Tangible Personal Property
Property that is physical in nature, such as a watch in a safe deposit box.

Third Party Audit
Audit performed by a state-contracted audit firm generally for a contingent fee and sometimes for hourly fees.

Underlying Shares
The shares of stock associated with a string of un-cashed dividend checks.

Unclaimed Property Laws
Laws that govern the handling and processing of unclaimed or abandoned property. These laws typically include criteria for identifying, reporting and remitting unclaimed property. Commonly, these laws are custodial in nature and jurisdictions act as custodians of escheated property until the rightful owner comes forward to claim the property.

Uniform Unclaimed Property Acts 
Uniform codes developed by the Uniform Law Commission intended to promote uniformity in state unclaimed property laws. The Uniform Disposition of Unclaimed Property was promulgated in 1954 and revised in 1966. Subsequently the Uniform Act of 1981 and the Uniform Act of 1995 were issued. All 50 states, Washington D.C., Puerto Rico, Guam and the Virgin Islands have adopted unclaimed property statutes; most jurisdictions have enacted unclaimed property laws based on one of the versions of the Uniform Acts.

UPPO
The Unclaimed Property Professionals Organization (UPPO) is the trade association for holders and other private sector unclaimed property professionals that is the premier resource for professional unclaimed property education, information, networking and advocacy.

VDA
Voluntary Disclosure Agreements are offered by states to encourage holders to come into compliance prior to receiving an audit notice. Typically, a VDA would involve conducting a self-audit and sending the results to the state as part of the VDA. VDAs can be useful in limiting liability for holders starting unclaimed property programs for the first time or expanding existing programs to include previously unreported property types. Some states have very formal VDA processes, while others are more informal.

 

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