Abandoned and Unclaimed Property


Since the beginning of 2017, Delaware’s abandoned and unclaimed property law has undergone continuous statutory and regulatory changes, e.g., the enactment of SB 13 (Delaware’s new unclaimed property statute) and SB 79 (an amendment to SB 13), as well as the promulgation of final regulations from the Secretary of State (the “SOS”) regarding estimation practices in its voluntary disclosure agreement (“VDA”) program. To read our prior coverage relating to these unclaimed property developments in Delaware, see Delaware Issues New Abandoned and Unclaimed Property Regulations, Technical Correction to Delaware’s Unclaimed Property Overhaul Legislation Includes Extension of Time to Convert an Audit to a Voluntary Disclosure Agreement, and UPDATE: The Delaware Secretary of State Releases the Final Version of its Estimation Regulations With No Substantive Changes.

Holders of unclaimed property should take note that Illinois’ state budget bill, SB 9, enacted July 7, 2017, includes significant changes to Illinois’ unclaimed property law. Just days before it was enacted, the Illinois General Assembly amended SB 9 to include a modified version of the Uniform Law Commission’s 2016 Revised Uniform Unclaimed Property Act.  Illinois’ new unclaimed property law will become effective January 1, 2018 and will repeal the state’s current unclaimed property law, the Uniform Disposition of Unclaimed Property Act. 

On April 1, 2017, Delaware issued proposed regulations to establish instructions and guidelines for the administration of the state’s newly enacted abandoned and unclaimed property statute, SB 13. The proposed regulations would repeal and replace the existing unclaimed property regulations in Delaware and would be the primary guidance for implementing SB 13. SB 13 was introduced in the Delaware General Assembly in early January and was, ultimately, signed into law on February 2, 2017. SB 13 was enacted, in part, to address concerns raised in recent litigations, especially those constitutional concerns raised by the federal court in Temple-Inland Inc. v. Cook, 1:14-cv-00654 (D. Del. June 28, 2016) (“Temple-Inland”). (See our prior coverage Delaware Proposes Unclaimed Property Legislation).

On January 12, 2017, significant unclaimed property legislation, SB13, was introduced in the Delaware General Assembly.  If enacted, which appears likely, SB13 would make numerous changes to the state’s much-maligned procedures for enforcing its abandoned and unclaimed property laws.  Legislation has been widely expected in the wake of last summer’s summary judgment decision against Delaware in Temple-Inland Inc. v. Cook, 1:14-cv-00654 (D. Del. filed May 21, 2014). In Temple-Inland a federal district court invalidated many of the unclaimed property audit practices authorized by Delaware and implemented by the state’s contract auditors (See our prior coverage Federal District Court Holds Delaware’s Unclaimed Property Enforcement Practices “Shock the Conscience” and Delaware Unclaimed Property Litigation Update). The parties agreed to dismiss the Temple-Inland case before the court could consider remedies to the substantive due process violations it found, and thus, the state was left with the opportunity to pass legislation likely in an effort to preserve the stream of unclaimed property receipts that have become one of Delaware’s largest sources of revenue. Among other changes, the proposed legislation addresses some of the federal district court’s concerns, and provides a path to the state’s voluntary disclosure agreement (“VDA”) program for companies already under audit.  Descriptions of some of the more significant provisions of SB13 follow. Unless otherwise specified, the provisions below would be effective upon enactment of the legislation.