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News & Press: State Legislative and Regulatory News

Changes Proposed to New Illinois Unclaimed Property Statutes

Monday, November 6, 2017   (0 Comments)
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On Nov. 1, Illinois Rep. Michael J. Zalewski filed House Amendment 2 to Senate Bill 868, which would make significant changes to the unclaimed property statutes passed under S.B. 9 in July 2017 and scheduled to take effect on Jan. 1, 2018.

 

Following are some of the most noteworthy changes included in the amendment:

  • Gift Card Exemption: The amendment more clearly defines “stored value card” (redeemable upon presentation at multiple unaffiliated merchants for goods and services or usable at automated teller machines) and “gift card” (cards that do not expire and are not subject to inactivity or post-sale service fees and that are for goods or services issued on a prepaid basis primarily for personal, family, or household purposes). It also eliminates gift cards from the definition of “property.”
  • Official Checks: The amendment includes in the definition of “property” any instrument on which a financial organization or business association is directly liable and gives it a three-year dormancy period.
  • Report Deadlines: Under the amendment, the report must be filed before Nov. 1 of each year by financial organizations and insurance companies other than life insurance companies. All other business associations, utilities and life insurance companies must file the report before May 1 of each year for the immediately preceding calendar year.
  • State Treasurer Interest Requirement: The amendment specifies that if an interest-bearing demand, savings or time deposit is paid or delivered to the administrator on or after July 1, 2018, then the administrator shall pay interest to the owner at the lesser of: (i) the percentage increase, if any, in the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor (CPI-U); or (ii) the rate the property earned while in the possession of the holder and reported to the administrator. Interest begins to accrue when the property is delivered to the administrator and ends on the earlier of the expiration of 10 years after its delivery or the date on which payment is made to the owner. The administrator may establish by administrative rule more detailed methodologies for calculating the amount of interest to be paid to an owner under this section using CPI-U or the rate the property earned while in the possession of the holder.
  • Escheat Fees: Under the amendment, an escheat fee is defined at "any charge imposed solely by virtue of property being reported as presumed abandoned." Section 15-602 expressly stipulates that a holder may deduct an escheat fee from reported property if certain conditions are met, and removes a clause forbidding a holder from deducting an escheat fee or other charges meeting the stated definition.

The amendment was assigned to the House Revenue and Finance Committee and is scheduled for a hearing on Nov. 7, 2017. Because this is the last week the Illinois legislature is scheduled to convene this year, this amendment represents the last chance for changes to the law before its effective date.

UPPO will continue to monitor and report on the progress of this legislation.

 

Update: UPPO has received reports that Illinois unclaimed property officials plan to submit administrative rules to the Joint Committee on Administrative Rules by the end of December 2017, with the goal of making the rules effective in late spring of 2018.  


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