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Unclaimed Property Focus
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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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UPPO Discusses H.B. 3598 Concerns with Texas

Posted By Administration, Thursday, December 12, 2019

Earlier this year, the Texas legislature passed H.B. 3598, which the governor subsequently signed into law. Among other things, the legislation outlines requirements for combined reporting of unclaimed property for affiliated companies. The new law raises many questions for holders and service providers.

 

Organized by UPPO’s Government Relations and Advocacy Committee (GRAC), Texas Director of Unclaimed Property Joani Bishop and Assistant Director of Unclaimed Property Bryant Clayton accepted a request to discuss issues raised by H.B. 3598, and a conference call was held on Oct. 30, 2019. 

 

Clayton explained that the overall goal of H.B. 3598 is to better identify who is reporting unclaimed property to Texas and the relationships between entities. The state plans to offer two options for reporting:

  1. Affiliated group: Submission of one NAUPA file including separate Federal Employer Identification Numbers for the parent company and its affiliates. 
  2. Each affiliate group reports independently: The report must identify the reporting affiliate and parent FEINs. 

The state plans to include instructions on its website and in its unclaimed property reporting manual. The new Texas reporting website is scheduled for introduction in July 2020.

 

Bishop and Clayton responded to several other questions generated by GRAC representatives:

 

Regarding the definition of “controlling interest,” if entities are equal partners, how would the controlling corporation be determined? Holders would self-identify the controlling corporation.

 

Will the new Texas reporting website allow third parties to report on holders’ behalf? Yes. The advocate will be able to report and provide the parent FEIN to indicate the holder.

 

What happens when there are different types of stock, such as common stock and employee stock? When considering securities and transfer agents, trying to identify the parent FEIN for stocks could require outreach to thousands of companies. Similarly, payroll and rebate processors would have only the FEIN for the company with which it is doing business, and extensive outreach could be necessary to identify the parent FEIN. Texas will need to review this type of situation. 

 

How will indemnification apply? Indemnification will be afforded all of the entities identified via FEIN in the report.

 

What are the possible penalties for noncompliance? Holders must comply. Texas will reject and return noncompliant reports.

 

How will negative reports be handled? The holder could file the negative report separately, or the new NAUPA file format would allow for a negative report to be included in the consolidated file (using the one and nine records).

 

How will insurance companies with a holding company and insurers be handled? Would holders report the holding company as the parent and then the insurers? Also, how would life insurance companies handle non-life-insurance property? Reporting is based on the nature of the property rather than the nature of the holder. Life insurance companies with non-life-insurance property will report that property in July and report its life insurance property on Nov. 1 with the holder company as the parent FEIN.

 

Should due diligence letters be sent by the individual members of the affiliated group or by the affiliated group? Texas prefers that the letter be sent from each individual entity because they would have knowledge of the property when it comes to questions or claims.

 

Which entity in the affiliated group is required to sign the report? Does each member of the affiliated group have to sign? Some corporations can have many owners and principles who would know little, if anything, about the report. Texas needs to research this question. 

 

How should holders handle scenarios in which the parent corporation is in Texas but the subsidiary and actual property are in another state? Property should go to the state where it resides. The NAUPA file format (record 1) allows for each FEIN to indicate the state of incorporation. 

 

Texas plans to send UPPO a mockup of its proposed website redesign for comment. The new website will allow more than one FEIN to be uploaded. The state is also working to complete website instructions and its updated Unclaimed Property Holder Reporting Manual as quickly as possible. UPPO offered to review this information and provide feedback and additional questions for clarification before the July 2020 filing requirements.

 

UPPO thanks Joani Bishop and Bryant Clayton for their cooperation and their clarification of issues raised by H.B. 3598. We will continue to provide additional updates to UPPO members as more information becomes available. 

 

 

Tags:  consolidated reporting  H.B. 3598  Texas  unclaimed property 

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UPPO Advocacy Update: October 2019

Posted By Administration, Thursday, October 24, 2019

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).

 

Texas H.B. 3598 Update

Earlier this year, the Texas legislature passed H.B. 3598, which the governor subsequently signed into law. Among other things, the legislation outlines requirements for combined reporting of unclaimed property for affiliated companies. The new law raises many questions for holders and service providers.

 

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. 

 

UPPO received a prompt response. Texas unclaimed property officials are currently drafting guidance regarding the new law and welcomed a call to discuss our questions. We look forward to our discussion, scheduled for Oct. 30, and will provide additional member updates when more information is available.     

 

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:  consolidated reporting  Texas 

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UPPO Advocacy Update: September 2019

Posted By Administration, Thursday, September 26, 2019
Updated: Thursday, September 26, 2019

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).

 

Whistleblower Litigation

Among the issues GRAC has been closely monitoring is the increase of whistleblower court cases related to unclaimed property. Bloomberg Law recently covered one such case, which involves allegations surrounding JPMorgan Chase’s unclaimed property liability in New York. 

 

UPPO is concerned that the case could result in unintended consequences affecting unclaimed property compliance: 

  • The outcome of the case could diminish the incentive to voluntarily come into compliance. 
  • The case also raises issues regarding multiple state agencies interpreting the same statute differently.
  • The case could result in new operational burdens for both holders and administrators.

Please watch the UPPO blog in the coming weeks for more information about whistleblower cases and steps holders can take to protect themselves. 

 

Texas H.B. 3598 Questions

Earlier this year, the Texas legislature passed H.B. 3598. Among other things, the legislation outlines requirements for combined reporting of unclaimed property for affiliated companies. The new law raises many questions for holders and service providers. GRAC has begun compiling a list of these questions, which will be used to request clarification from the state. UPPO will email members shortly with additional information and an invitation to contribute questions to GRAC. 

 

Do You Have Ideas for GRAC?

GRAC is interested in your feedback. 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. 

 

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:  consolidated reporting  litigation  qui tam  Texas  whistleblower 

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UPPO Advocacy Update: May 2019

Posted By Administration, Thursday, May 9, 2019

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).

 

Colorado Passes RUUPA-Inspired Bill

Colorado Governor Jared Polis signed S.B. 88 into law on April 16, 2019. The RUUPA-inspired bill includes provisions that eliminate the state’s previous reporting deduction, allow for estimation, reduce several dormancy periods, define virtual currency and stored-value cards as escheatable property types, and maintain the state’s gift card exemption. 

 

The new law becomes effective on July 1, 2020, allowing holders to become familiar with its provisions and appropriately adjust their practices. 

 

Other Noteworthy Bills on the Move

Texas H.B. 3598 revises unclaimed property recordkeeping requirements and provides guidelines for affiliated group reporting. It stipulates that the state may not begin an unclaimed property examination after the seventh anniversary of the date a person filed a property report and removes the condition that the existence of unclaimed property be unknown to the holder for longer than three years for it to be presumed abandoned. On May 3, 2019, the House passed the bill and subsequently sent it to the Senate. 

 

Two additional states recently introduced RUUPA-inspired bills. Following the trend set by other states that have introduced RUUPA-inspired legislation, these bills deviate from the intent of RUUPA to provide uniformity across the states and to establish consumer-friendly practices that are also reasonable for holders and the states. 

 

Maine’s Judiciary Committee is currently reviewing L.D. 1544, the state’s RUUPA-inspired legislation.

 

Vermont’s RUUPA-inspired bill, H.B. 550, was fast-tracked through the House. Following its initial committee reading on April 26, the House passed the bill just five days later and sent it to the Senate for review. The bill includes language that may be problematic for holders in the financial services industry, as it appears to eliminate the linkage provision allowing customer activity on one account to also act as activity on the customer’s other accounts held by the same company.  

 

GRAC Develops New Structure

Seeking to refine its processes and operate as efficiently as possible, GRAC is in the process of implementing a new structure consisting of four sections. The committee has 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.
  • Position and Policy Drafting: Determines the strategy for addressing identified issues and writes support materials for doing so.
  • Strategy Implementation: Executes the strategy, working with legislators, regulators and other officials to promote UPPO’s position.
  • Communication: Works with UPPO staff to update members about advocacy initiatives. 

 

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:  Colorado  Maine  RUUPA  Texas  unclaimed property  Vermont 

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Unclaimed Property News Roundup

Posted By Administration, Thursday, September 21, 2017

Unclaimed property has been in the headlines lately with a variety of stories appearing in local and national media outlets. Following is a recap of some of the most noteworthy reports.

 

Delaware’s pro-business image slides, in part from aggressive unclaimed property enforcement

On Sept. 11, 2017, Delaware Online published an article about a U.S. Chamber of Commerce study that dropped Delaware from the top state for business litigation to 11th. Among the reasons noted was the state’s aggressive enforcement of unclaimed property laws.

 

Unclaimed property takes center stage in Louisiana treasurer election

On Sept. 9, The Advocate published a lengthy article discussing how Louisiana’s former treasurer and current senator John Kennedy raised the profile of unclaimed property in the state. As a result, candidates for the upcoming treasurer election have made unclaimed property central to their campaign platforms.

 

Even celebrities appear on state unclaimed property lists

Reports in numerous media outlets, including WCVB TV, in the past few weeks have reported on members of pop group New Kids on the Block appearing on the Massachusetts unclaimed property list. Although celebrity unclaimed property reports are often a little hokey, they receive a lot of media and online attention, raising awareness of unclaimed property nationwide.

 

Texas unclaimed property rule changes receive coverage

On Aug. 30, Ignites, a Financial Times company, published an article discussing Texas unclaimed property rules that subsequently went into effect on Sept. 1. Commenting on behalf of UPPO, Kendall Houghton addressed the new Texas Designation of Representative form: “While there appears to be a maintenance requirement, there doesn’t appear to be a record retention period established through the form or, to my knowledge, by the comptroller’s office.”

 

Wall Street Journal looks at the JLI Invest unclaimed property case against Delaware

On Aug. 18, The Wall Street Journal published an article about the lawsuit brought by two French scientists against Delaware for seizing and selling their stock, considered by Delaware as unclaimed property. The value of the stock increased significantly after Delaware sold it but before the scientists learned their stock had been seized, causing them to lose millions of dollars, according to their complaint. The author of the WSJ article subsequently appeared on CNBC’s Closing Bell, discussing the article and the issues raised by the JLI case.

 

Bloomberg looks at issues with Delaware’s proposed unclaimed property rules

On Aug 14, Bloomberg BNA’s Salt Talk Blog published an article about Delaware’s work to develop new unclaimed property rules, required by S.B. 13. The article notes that many of the issues raised after Delaware released its previous version of the proposed rules remain present in the new version.

 

Tags:  Delaware  Louisiana  Texas  unclaimed property 

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