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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Advocacy Update

Posted By Administration, Thursday, July 2, 2020

To help members remain aware of UPPO’s advocacy activities, the Unclaimed Property Focus blog presents the recurring Advocacy Update when legislatures are active or significant advocacy activity has occurred. Following are recent activities and trends from UPPO’s Government Relations and Advocacy Committee (GRAC).

 

Retirement Account Dormancy

With the COVID-19 pandemic disrupting so many areas of our lives in the past few months, it’s little surprise that it has led to complications related to unclaimed property. Passed last year, the SECURE Act changed the required minimum distribution date for individual retirement accounts from 70.5 to 72. The CARES Act, designed to ease the economic impact of the pandemic, waives the required minimum distribution for 2020. Because the required minimum distribution date may begin the unclaimed property dormancy period, holders are affected. GRAC is currently developing questions for holders to use when working with states to respond appropriately to this issue.

 

Certified Mail

Because some states have included language in their RUUPA bills requiring certified mail to be used for due diligence letters, GRAC is developing a position paper for UPPO expressing its objection to a certified mail requirement. However, should language be included in a RUUPA bill, UPPO’s position is to specify certified mail receipt cards be accepted as a form of contact, regardless of who signed the cards.

 

Savings Account Language

GRAC is also drafting recommended language to provide states that introduce RUUPA bills using incorrect language to address the treatment of Demand Deposit accounts versus standard savings accounts, which has become a trend.

 

Unclaimed Savings Bonds

Over the past several years, states have battled with the U.S. Treasury over unredeemed U.S. savings bonds. Kansas State Treasurer Jake LaTurner led the state charge in the courts, arguing that proceeds from matured, unredeemed bonds should be turned over to the states. Last year, a federal appeals court ruled the Treasury is not required to do so. The plaintiffs are asking the U.S. Supreme Court to review the case. GRAC is reviewing the case to evaluate whether it is appropriate for UPPO to draft an amicus brief, taking a position on this issue.

 

Positive Legislation

Ohio HB 270, the Unclaimed Funds Reform Act, is moving quickly, having passed the House and under consideration in the Senate. Among other things, the bill would clarify the treatment of auto-renewing certificates of deposit.

 

Tennessee SB 1634 was signed into law by the governor on June 22, 2020. The bill increases the time before the state treasurer liquidates securities from “eight months to a year” to “32 to 36 months.” 

 

Reporting in California

California normally required unclaimed property reports to be filed via CD and paperwork. The state is now allowing holders to send reports via FTP. However, to take advantage of this process, holders first need to request permission. Contact the California State Controller’s Office for details.

Tags:  Advocacy  dormancy  due diligence  IRAs  unclaimed property 

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UPPO Works with Utah to Improve Proposed Rules

Posted By Administration, Tuesday, April 7, 2020

On Jan. 13, 2020, the Unclaimed Property Professionals Organization submitted comments to Utah officials to voice concerns about Proposed Regulations R966-1 Unclaimed Property Act Rules. The rules appeared to be a nearly verbatim adaptation of Illinois Unclaimed Property Regulations. However, because Utah’s version of the Revised Uniform Unclaimed Property Act is vastly different from those in Illinois, adoption of the proposed rules would conflict with Utah’s law.

 

Utah Unclaimed Property Administrator Dennis Johnston subsequently responded to UPPO with proposed revisions to the rules. UPPO’s Government Relations and Advocacy Committee reviewed the revised rules and provided follow-up comments on March 5, 2020. Although Utah addressed some of UPPO’s concerns outlined in January, a few were unaddressed. UPPO outlined these areas in its March comments:

  • Tax-deferred accounts: UPPO raised concerns about an apparent drafting error in Utah’s Revised Uniform Unclaimed Property Act that significantly affects the treatment of tax-deferred accounts. The proposed rules acknowledge the problem, but the rule intended to address the error conflicts with the Act itself.
  • Securities sales and claims: UPPO requested removal of a provision in the rules that would allow the administrator to liquidate escheated securities before the three-year  period defined in the Act, as it conflicts with the intention of the Act to protect the property owner.
  • Retention of records by holder: Although Utah addressed one of UPPO’s concerns about record retention in its revised rules, an inconsistency with the Act remains. As drafted, the rules would expand record retention requirements beyond what is included in the Act and indirectly expand the state’s estimation authority.
  • Due diligence notice by holder: UPPO raised concerns about a provision in the rules requiring due diligence notice to be sent via certified mail for securities valued at $1,000 or more. This requirement is not included in the Act, so UPPO requested it be amended to ensure consistency between the Act and the rules.

UPPO appreciates Utah promptly addressing some of the concerns identified in January and is hopeful the state will do the same with the remaining issues discussed in the organization’s March comments.

 

 

Tags:  advocacy  unclaimed property  utah 

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UPPO Advocacy Update: February 2020

Posted By Administration, Thursday, February 27, 2020

To help members remain aware of UPPO’s advocacy activities, the Unclaimed Property Focus blog presents the recurring Advocacy Update when legislatures are active or significant advocacy activity has occurred. Following are recent activities and trends from UPPO’s Government Relations and Advocacy Committee (GRAC).

 

Following UPPO’s comments to Utah officials to voice concerns about Proposed Regulations R966-1 Unclaimed Property Act Rules and a call with state administrator Dennis Johnston, Utah revised its proposed rules. UPPO’s Government Relations and Advocacy Committee is currently reviewing a draft of the revised rules to evaluate which concerning aspects of the regulations remain. Once the revised rules are published, another 30-day comment period will open, and UPPO will provide additional comments as needed.

 

Vermont also responded to comments from UPPO last month, correcting some of the issues with its RUUPA-inspired bill, H.550. Both houses of the state legislature subsequently passed the bill with amendments. 

 

Minnesota continues to work on drafting its RUUPA-inspired legislation, which will not be ready for consideration during the current session. UPPO commends the Commerce Department for its thoughtful, proactive approach to this legislation, bringing together the unclaimed property administrator and industry stakeholders to have a voice in the process. UPPO continues to participate in hopes of a final bill worthy of support by all affected parties.

 

Wyoming introduced H.B. 0135, a bill amending the state’s unclaimed property statute with a time limit for consumers to file claims for their property. On Jan. 30, 2020, the Holders Coalition – a group of organizations, including and administrated by UPPO, whose members hold or represent owners of property – submitted comments to Wyoming’s Joint Appropriations Committee to voice concerns about the draft version of the bill. At that time, the proposed legislation would have limited the length of time consumers could file a claim for property valued at less than $100 to 25 years. Unfortunately, the modified bill under consideration by the legislature would erode consumer rights even further. H.B. 0135 raised the property value from $100 to $250 and reduced the time limit from 25 years to 20 years. The Holders Coalition has subsequently responded with additional comments, opposing these limits.

 

Two states – Maryland and Utah – introduced requirements for unclaimed property holders to use certified mail for due diligence outreach. In Maryland, certified mail would be required for any property valued at more than $10,000. More concerning, the Utah legislation would require certified mail for all property, regardless of value. This change would be costly not only for holders, but also for the state. Although the Utah bill  has been amended to remove the certified mail provisions, consideration of such legislation is becoming more frequent. As such, GRAC is developing a position paper related to certified mail requirements.

 

As more and more legislatures and regulatory agencies take on issues affecting unclaimed property compliance, advocacy has become an increasingly important role for UPPO.

Please take a few minutes to complete our 
Government Relations and Advocacy Survey to help us build our grassroots network. Responses will give us the ability to mobilize UPPO members when we are faced with legislative and regulatory challenges and opportunities.

Tags:  advocacy 

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UPPO Advocacy Update: January 2020

Posted By Administration, Thursday, January 30, 2020

To help members remain aware of UPPO’s advocacy activities, the Unclaimed Property Focus blog presents the recurring Advocacy Update when legislatures are active or significant advocacy activity has occurred. Following are recent activities and trends from UPPO’s Government Relations and Advocacy Committee (GRAC).

 

Legislation and Regulation

Many states’ new legislative sessions reconvened less than a month ago, and 2020 is already shaping up to be an extremely busy year for unclaimed property legislation. 

 

Introduced in April 2019 and passed by the House in May 2019, Vermont H.550 – RUUPA-inspired legislation – is now under consideration by the state Senate. The Government Operations Committee is holding hearings about the bill. GRAC identified some concerns with the legislation and submitted comments to the state. 

 

Wisconsin has begun holding hearings regarding A.B. 752, and Oklahoma scheduled the first reading of H.B. 3714 for early February. Both bills are RUUPA-inspired legislation, although OK H.B. 3714 is still just a pre-file bill with no text available yet.  

 

Unclaimed property legislation is under consideration in Washington, with two separate RUUPA-inspired bills on the move. Stalled since last February, H.B. 1179S has been reintroduced. In addition, H.B. 2234 received its first reading and was referred to the Finance Committee. 

 

In Minnesota, UPPO continues participating in the work group convened by the state ULC commissioners to explore a RUUPA bill. Representatives from the Commerce Department, the unclaimed property administrator and industry stakeholders, are discussing the ramifications of potential unclaimed property legislation before it is introduced. UPPO appreciates Minnesota taking this proactive approach and appreciates the opportunity to participate in these meetings.  

 

Utah has published proposed rules clarifying when tax deferred accounts are reportable, elaborating on safe deposit box reporting processes and adding clarity about which ACH activity indicates owner interest, among other amendments. GRAC submitted comments and subsequently had a call with state administrator Dennis Johnston. He welcomed UPPO’s input and collaboration as they continue to fine-tune the regulations. The state plans to publish revised rules for another round of comments. 

 

Litigation

Unclaimed property litigation is also heating up early in 2020. Taking on similar issues addressed in the Univar case, additional lawsuits have been filed against Delaware by AT&T Capital Services, Eaton Corporation, Fruit of the Loom and Siemens USA Holdings. These lawsuits take aim at the state’s audit practices, including over-reaching data requests, estimation and the use of auditors under a contingent fee structure. 

 

As more and more legislatures and regulatory agencies take on issues affecting unclaimed property compliance, advocacy has become an increasingly important role for UPPO.

Please take a few minutes to complete our 
Government Relations and Advocacy Survey to help us build our grassroots network. Responses will give us the ability to mobilize UPPO members when we are faced with legislative and regulatory challenges and opportunities.

Tags:  Advocacy 

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UPPO Advocacy Year in Review

Posted By Administration, Wednesday, January 8, 2020

UPPO’s Government Relations and Advocacy Committee (GRAC) had another busy year in 2019. 

Following is a review of key highlights of the advocacy work by GRAC and the Holders Coalition, a group of organizations, including and administered by UPPO, whose members hold or represent owners of property.

 

January

The GRAC Priority Issue Workgroups developed talking points and single-page position papers about key issues. These materials were designed to help consistently demonstrate support or opposition of state legislation that is likely to affect unclaimed property compliance. 

 

March

On March 31, 2019, UPPO along with organizations representing life insurers, bankers, shareholder services professionals and transfer agents submitted a letter regarding RUUPA-inspired legislation to the Minnesota Department of Commerce. The coalition raised several concerns with Article 13 of H.F. 2208 and companion bill S.B. 2611. The Minnesota legislature adjourned without action on these bills.

 

April

Seeking to refine its processes and operate as efficiently as possible, GRAC implemented a new structure consisting of four sections. The committee established responsibilities for each section and a process for section leaders to report to the GRAC co-chairs. The four GRAC sections are:

  • Issue Identification: Identifies important issues and determines legislative, regulatory and legal issues to address.
  • Strategy Implementation: Determines and ensures the execution of the strategy for addressing identified issues, working with legislators, regulators and other officials to promote UPPO’s position.
  • Position and Policy Drafting: Creates work product to support the strategy to promote UPPO’s position.  
  • Communication: Works with UPPO staff to update members and other stakeholders about advocacy initiatives.

 

June

With most state legislatures recessing or adjourning for the year, GRAC and the Holders Coalition continued to work on federal issues, including the Internal Revenue Service’s position on individual retirement account escheatment, the tax treatment of unclaimed 401(k) accounts highlighted by the recent GAO report, and the SECURE Act. GRAC also continued its work promoting introduction of a voluntary disclosure program in California

 

September

To make it easier for members to submit ideas and issues for the committee’s consideration, UPPO has added a form to the advocacy web page. Please use this form to share advocacy suggestions, ideas and issues for GRAC to consider. 

 

October

On Oct. 3, 2019, Bloomberg Tax published an article outlining potential unclaimed property issues that could result from a whistleblower case brought against JPMorgan Chase & Co., regarding the company’s unclaimed property practices. UPPO shared its concerns in the article about unintended consequences that could harm unclaimed property holders.

 

On Oct. 15, 2019, UPPO sent a letter to Texas Director of Unclaimed Property Joani Bishop and Assistant Director of Unclaimed Property Bryant Clayton, requesting clarification from the state regarding issues related to controlling interest, third-party vendors and combined reporting implementation contained in H.B. 3598. 

 

UPPO received a prompt response, accepting a request to discuss UPPO’s concerns. A subsequent call was held on Oct. 30, 2019, and additional email follow-up discussions have occurred, with Texas soliciting UPPO’s insight regarding its new unclaimed property holder website.

 

November

The Holders Coalition submitted comments on Nov. 19, 2019, to Internal Revenue Service and Department of Treasury officials regarding IRS Revenue Ruling 2018-17. The comments seek clarification and guidance regarding compliance with the ruling, issued by the IRS on May 29, 2018.

 

The Minnesota ULC commissioners convened a work group, including representatives from the Commerce Department, the unclaimed property administrator and stakeholders, to explore a state RUUPA bill. Holding discussions with all affected parties in this manner before an unclaimed property bill is introduced is rare. UPPO appreciates Minnesota taking this action and will continue to participate in these meetings.  

 

December

In response to California’s adoption of S.B. 109, UPPO submitted comments to the comptroller’s office regarding the law’s provision requiring development of a “one-time unclaimed property amnesty, or other options to increase compliance with unclaimed property law in lieu of an amnesty program, and options for increasing the return of unclaimed property to rightful owners.” UPPO spelled out reasons the state would benefit from an ongoing voluntary disclosure agreement program.

 

On Dec. 12, 2019, the Holders Coalition submitted comments to Colorado officials, highlighting practical issues and recommendations regarding implementation of S.B. 88, RUUPA-inspired legislation that goes into effect on July 1, 2020.

 

Let Your Voice Be Heard

As more and more legislatures and regulatory agencies take on issues affecting unclaimed property compliance, advocacy has become an increasingly important role for UPPO. Please take a few minutes to complete our Government Relations and Advocacy Survey to help us build our grassroots advocacy network. 

 

Responses will give us the ability to better provide you with the information you want and need, and will allow us to mobilize UPPO members when we are faced with legislative and regulatory challenges and opportunities. 

Tags:  advocacy 

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