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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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New Tennessee Administrative Rules go into Effect

Posted By Administration, Thursday, March 7, 2019

On March 4, 2019, new administrative rules regarding unclaimed property went into effect. The rules are the latest in a series of updates to the state’s unclaimed property laws and practices, which also include the passage of H.B. 420, the state’s version of the Revised Uniform Unclaimed Property Act, and H.B. 2278, which changed the state’s unclaimed property reporting date from May 1 to Nov. 1. 

 

Noteworthy sections of the rules for holders include:

 

Reporting

  • Electronic reporting is required.
  • Negative reports may be filed. 
  • Reported cashier’s checks must include the name and address of the payee and purchaser, if known.
  • When filing initial safe deposit box reports, property should continue to be held for an additional year before filing a final report and turning over the property to the state.

 

Property Delivery

  • Most property should be remitted electronically via ACH or other method approved by the treasurer. 

 

Securities

  • Remitted securities shall include all dividends, interest, warrants or other rights, or associated cash payable by check or electronically.
  • Holders shall remit securities in such a form that future earnings will be delivered in cash rather than an increase in the number of shares. 
  • Holders shall remit securities in a form that allows the treasurer to sell them. 

 

Examinations

  • Holders will receive a notice of examination at least 30 days before an examination begins.
  • An examination will begin with an entrance conference at which time the examiner will identify other states participating; a tentative timeline and duration; a description of responsibilities; the potential types of records subject to examination; the lookback period; and an explanation of methods and estimation techniques that may be used.
  • An examination may include records of current accounts, dormant accounts and accounts that may have been closed and archived; agreements regarding the deduction of service charges; increases or decreases in account value; and interest payments; and policies and procedures.
  • If records are unavailable, estimation of liability may be used. The examiner will provide written notice of the estimation methodology and for which years. The examination subject may object to the estimation methodology by following the process defined by state law. 

 

Due Diligence

  • Holders are expected to conduct due diligence.
  • The return of first-class or superior mailing sent to the owner’s last-known address is considered evidence that the owner’s location cannot be ascertained. 
  • First-class or superior mailings that are not returned as “undeliverable” are considered owner contact and an indication of interest in the property. Examples include computerized account  or interest earning statements. 

 

Holders with unclaimed property reportable to Tennessee can access the new rules, related Tennessee laws and regulations, and additional compliance information on the state’s Treasury Department website.  

Tags:  audits  due diligence  examinations  reporting  securities  spring reporting  Tennessee 

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Tennessee Reduces Dormancy Period, Adds Requirements

Posted By Tim Dressen, UPPO, Thursday, August 10, 2017
Updated: Wednesday, January 9, 2019

Among the first states to pass a version of the Revised Uniform Unclaimed Property Act this year was Tennessee. On May 25, 2017, Tennessee Gov. Bill Haslam signed H.B. 420 into law, effective July 1, 2017. The new law includes several substantial changes to the state’s unclaimed property requirements. Noteworthy provisions include:

 

New property types: Among the new property types addressed in H.B. 420 are health savings accounts (HSAs) and stored value cards. HSAs are presumed abandoned if unclaimed three years after the earlier of either the date distributions must begin to avoid tax penalty or 30 years after the account was opened. Stored value cards (other than payroll or gift cards) are presumed abandoned five years after the later of: Dec. 31 of the year in which the card was issued or funds were last deposited; the most recent indication of owner interest in the card; or a verification of the balance by or on behalf of the owner. 

 

Due diligence: Holders must perform due diligence for property valued at $50 or more. Notices must be sent to apparent owners by first-class mail between 180 days and 60 days before the unclaimed property report is filed. Owners who have consented to receive electronic communications must be sent the notice by both first-class mail and email unless the holder believes the email address is invalid. 

 

DMF matching requirement: The new law specifies that life insurers must perform searches of the death master file and comply with the Unclaimed Life Insurance Benefits Act. 

 

Dormancy periods: Most property type dormancy periods have been reduced from five years to three years under H.B. 420.

  

Record retention: Holders are required to retain records for 10 years after the unclaimed property report was filed or was due to be filed. 

 

Promulgation of examination rules: The new law specifies that the state treasurer should develop rules for examinations, including procedures and standards for estimation, extrapolation and statistical sampling.

 

Sale of securities: H.B. 420 requires the treasurer to sell a security between eight months and one year after receiving it and giving the apparent owner notice. If the treasurer sells the security within five years, and a valid claim is filed before the five-year period expires, the owner will be entitled to receive a replacement of the security or its market value plus interest.

 

Informal conference provision: This law establishes provisions for an informal conference in situations where an examination results in a determination that a holder has failed to pay or deliver reportable property to the treasurer. It also allows for judicial review of the treasurer's decision. 

 

Exemptions: The law retains the state’s business to business and gift card exemptions. 

 

For the latest information about this and other noteworthy unclaimed property bills, visit UPPO’s govWATCH website

 

Tags:  audits  DMF  dormancy periods  due diligence  record retention  RUUPA  securities  Tennessee  unclaimed property 

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2017 Unclaimed Property Legislative Roundup

Posted By Administration with contribution by Marcella Easly, senior compliance advisor at UPCR, Thursday, July 13, 2017

Across the nation, unclaimed property has been a popular topic for state legislatures this year. Although a handful of state legislatures are still in session, most have completed their work. Following is a brief summary of some of the most noteworthy unclaimed property bills that became law during the 2017 session. 

 

Delaware

Effective on Feb. 2, 2017, S.B. 13 adopts in substance many provisions from the 2016 Revised Uniform Unclaimed Property Act promulgated by the Uniform Law Commission. In addition, it adopts certain recommendations from the Delaware Unclaimed Property Task Force formed under Senate Concurrent Resolution No. 59 of the 147th General Assembly, and makes significant changes to the state's unclaimed property reporting process and compliance initiatives. More specifically, these changes include reducing the look-back period of all voluntary disclosure agreements and audits to 10 report years, and creating a 10-year statute of limitations for the state to seek payment of unclaimed property due to the state. In addition, this legislation aligns the state’s record retention requirement for companies with the statute of limitations and look back period, which brings State law into conformity with a majority of other states. This bill also offers any company currently under audit prior to July 22, 2015, the opportunity to convert their audit into a voluntary disclosure agreement by entering into the Secretary of State Voluntary Disclosure Agreement program. All companies who received a notice of examination and are currently under audit as of the effective date of this Act will have the opportunity to engage in an expedited audit review process. Finally, the bill mandates that interest be assessed on any late-filed unclaimed property, as a means to incentivize voluntary compliance. See previous UPPO’s May 4 blog post for more information about S.B. 13. 

 

Effective on June 29, 2017, S.B. 79 makes changes and corrections to SB 13. Among these changes, the amended bill ensures holders have sufficient time to comply with SB 13’s due diligence requirements with owners. It further clarifies that the state will indemnify and defend a holder against claims made by a foreign jurisdiction for property paid or delivered to the state escheator in good faith.

 

Idaho

Effective on July 1, 2017, H.B. 152 establishes an exemption from Unclaimed Property law for nonprofit corporations providing telecommunications service and delivery of electric power.

 

Illinois

Effective on Jan. 1, 2018, S.B. 9 creates the Revised Uniform Unclaimed Property Act. It adds language concerning definitions, applicability, rulemaking, and presumptively abandoned property. The bill also includes rules for taking custody of property that is presumed abandoned, reporting requirements, and required notice to property owners, among other provisions. The bill expressly excludes gift cards, loyalty cards and game-related digital content from property subject to escheat. However, it does not exclude gift cards from the definition of “stored-value cards,” which are subject to escheat, creating a potential conflict. The bill also specifies that virtual currency is subject to escheat. The state’s business-to-business exemption is not retained under the new bill.

 

New Hampshire 

Effective on Jan. 1, 2018, H.B. 473 increases the threshold above which merchants can sell gift cards with expiration dates from $100 to $250. The bill further clarifies that gift certificates of $250 or less shall not be considered abandoned property, and it revises the definition of gift certificate by removing the requirement that a gift certificate be in writing. The bill also provides that gift certificates and store credits remitted to the state prior to Jan. 1, 2018, must remain in the custody of the state until returned to the owner.

 

South Dakota

Effective on March 10, 2017, S.B. 34 revises provisions related to securities held as unclaimed property. It requires the state treasurer to sell all stocks, bonds, and other negotiable instruments within 90 days of confirmed receipt, unless the property is on an open claim.

 

Effective on July 1, 2017, H.B. 1081 revises provisions for establishing a trust for a mineral owner who cannot be located. It provides that a person or entity holding interest in a tract of land may petition a county court to create a trust in favor of an undetermined owner of a mineral interest in that tract of land. It further provides conditions for the creation and administration of such a trust.

 

Tennessee

Effective on July 1, 2017, H.B. 420 repeals and reenacts the Uniform Unclaimed Property Act. It includes dormancy periods, reporting and due diligence requirements, and abandoned life insurance provisions, among other measures. The bill requires the treasurer to sell or liquidate securities between eight months and one year after receiving the security. 

 

Texas 

Effective on Sept. 1, 2017, S.B. 561 relates to unclaimed life insurance and annuity contract proceeds. Among its provisions, the bill requires an insurer to periodically compare its applicable in-force life insurance policies, annuity contracts, and retained asset accounts against a Death Master File. In the event of a match, insurers are required to complete a good faith review of the situation, and if proceeds may be due, to conduct outreach to beneficiaries within 90 days and provide assistance in making a claim. The bill further requires an insurer to report and deliver unclaimed proceeds to the comptroller of public accounts.

 

Effective on Sept. 1, 2017, H.B. 2964 adopts a Senate amendment and provides that a holder of mutual fund shares must notify an owner at initial purchase that the owner may designate a representative to receive a notice of abandonment.

 

Utah

Effective on May 8, 2017, H.B. 175 repeals and reenacts the Revised Uniform Unclaimed Property Act. Among its provisions, the bill revises presumptions of abandonment, amends reporting procedures, and addresses the duties of a holder of abandoned or unclaimed property.

 

Effective on May 8, 2017, H.B. 42 makes comprehensive revisions to insurance law. Among other changes, the bill amends definitions under the Unclaimed Life Insurance and Annuity Benefits Act by removing the definition of "Knowledge of death."

 

For the latest information about these and other noteworthy unclaimed property bills, visit UPPO’s govWATCH website. 

 

About the contributor 

Marcella Easly, senior compliance advisor at Unclaimed Property Consulting & Reporting (UPCR), contributes to UPPO’s regular legislative update blog posts. Easly has more than 30 years of unclaimed property experience with special focus in state legislative tracking and resolving client-state advocacy issues. She was Unclaimed Property Manager for the State of Oregon for 14 years.  She was active in the National Association of Unclaimed Property Administrators (NAUPA), serving as president, and regional vice president.  She was instrumental in the creation of the NAUPA property type reporting codes.  She has been with UPCR for 11 years, and has been active in UPPO for more than 13 years.   

 

 

Tags:  Delaware  Idaho  Illinois  legislation  New Hampshire  South Dakota  Tennessee  Texas  unclaimed property  Utah 

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