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New Oregon law requires cash back for Gift Card balances under $5

by Tracey Reid on 06/21/11

The Oregon Governor signed SB 756 on June 14, 2011, further limiting how retailers can manage gift cards in the Beaver State.  The new law will require retailers to refund balances of less than $5.00 to gift card holders that request it.  The law forbids the sale of gift cards that cannot be redeemed for cash when the value declines to amount less than $5,  provided that the card has been used for at least one purchase.  Oregon already prohibited the sale of gift cards with expiration dates, service fees or the application of a balance reduction for the passage of time or inactivity.  Consumers can rejoice, but retailers will be required to refund these small dollar items, causing tax issues and an overall increase in the cost of administering gift card programs.  Another hit to the Holder community....

Texas Gov. signed HB257: reduces dormancy periods & changes reporting date!

by Tracey Reid on 06/20/11

The Texas Governor signed HB 257 on Friday, reducing dormancy periods for several property types and changing the Lone Star State's reporting date, which will drive a big shot of revenue back into the state's coffers starting this fall.  Here are the shortened dormancy periods, effective SEPTEMBER 2011:

  • utility deposits -- 18 months (reduced from 3 years);
  • money orders -- 3 years (reduced from 7 years);
  • bank deposits -- 3 years (reduced from 5 years);
  • savings accounts -- 3 years (reduced from 5 years);
  • matured certificates of deposits (CD's) -- 3 years (reduced from 5 years)

Your list of due diligence letters to be mailed next month for Texas "last known addresses" just got ALOT longer....

This new law will also result in a change to the reporting schedule effective January 1, 2013. Under this revised reporting schedule, reports will be due July 1, as of the previous March 1.   Texas will now join Michigan in throwning a wrench into our compliance processes by using a July/March report date.  Now, unclaimed property compliance has 3 Seasons.....SPRING, SUMMER AND FALL.  Enough change for you yet?  Stayed tuned...more to come from Illinois this week!

 

 

Texas & Illinois Trying to Shorten Dormancy Periods

by Tracey Reid on 06/14/11

The Governors of Texas and Illinois are both considering bills to shorten the dormancy period on several types of unclaimed property.

The Illinois House has passed a bill that would shorten the dormancy period for payroll from three years to 1 year, which is common across the US. On June 10, House Bill 1560 was sent to the Governor for signature.  The bill, which would take effect immediately, says that "unclaimed wages, payroll, and salary, in any form, shall be reported after remaining unclaimed for one year."

The Texas Governor is considering House Bill 257, which would shorten the dormancy period for utility deposits from three years to 18 months; money orders from seven years to three years; and bank deposits, savings accounts, and matured certificates of deposits from five years to three years. That bill has been approved by the state legislature and has been sent to the Governor for signature.

The summer has been BUSY in the Unclaimed Property World.  These shortened dormancy periods will mean an increase in your upcoming Fall Reporting Due Diligence, so stayed tuned for developments!

 

Michigan & Missouri Considering B2B Exemption for Unclaimed Property

by Tracey Reid on 06/01/11

The Michigan legislature is currently considering House Bill 4563.  The bill would add a "business-to-business" exemption to the Michigan Unclaimed Property Act.  The new law would consider transactions between 2 business entities to be exempt from unclaimed property reporting.  The bill says:  "This act does not apply to any property issued, held, due, or owing in any commercial transaction between 2 or more business associations or other business entities."  That bill is still pending before the Michigan House.  With Missouri still considering their bill   H.B. 401 to exempt B2B transactions, which was introduced back in February,  this has made a very positive atmosphere for Unclaimed Property Holders across the country!  Stay tuned for developments!

NY Reduces Dormancy Period on Several Property Types effective 4-1-11

by Tracey Reid on 05/31/11

Recent Changes to New York's Abandoned Property Law

  • Effective April 1, 2011, the dormancy periods for bank, court and other miscellaneous property types were reduced from five (5) years to three (3) years.

Because of the reduction in the dormancy periods, during this reporting cycle from April 1, 2011 until March 31, 2012, holders will need to perform required due diligence and remit any abandoned accounts covered by the changes in the law which have been dormant for three, four or five years. The chart below lists the property types affected:

Code

Property Type

1A

Demand Deposit Accounts

1B

Savings Accounts (includes Club, Security Deposit, and Retirement Accounts)

1C

Time Deposit Accounts

1D

Money on Deposit to Secure Funds (if separate from 1A and 1B)

1E

Unidentified Deposit (if separate from 1A and 1B) and Suspense Accounts

1F

Escrow Funds (Mortgages, Performance Guarantees, Surety Bonds, etc.)

1G

Credit Balances Arising from Loans (includes liquidated mortgages, consumer loans, remainder of collateral amounts, etc.)

7A

Trust Funds

7B

Bail Funds

7C

Funds for Support of Spouse or Child

7D

Condemnation Awards

8D

Surplus from the Sale of Pledged Property

8E

Lost Property (cash only)

 

  • Negative and preliminary reporting requirements were removed from banks, utility companies, insurance companies and condemnation award reports filed in this State.
  • The Verification and Checklist (AC2709)notarization requirement was lifted.

To ensure compliance, every organization should review the New York State Abandoned Property Law, which can be found in McKinney's Consolidated Laws of New York, Book 2 ½, or on the Internet at: http://public.leginfo.state.ny.us/("Laws of New York,” then "ABP Abandoned Property”).

Contact the Office of Unclaimed Funds:

http://www.osc.state.ny.us/ouf/handbook_online/MyWebHelp/Content/Contacts/contacts.htm

UP Case news: Federal Appeals Court Reverses KYTravelers Check Injunction

by Tracey Reid on 05/24/11

Remember last year when we were all excited that a court struck down a Kentucky law reducing dormancy periods for traveler’s checks because the Legislature’s intent was to raise money instead of a more equitable “public good” reason?  Well, THAT has been reversed, unfortunately.  The U.S. Court of Appeals for the Sixth Circuit released an opinion reversing a Kentucky federal court decision preventing Kentucky from shortening the dormancy periods for traveler's checks to seven years down from 15.  The court ruled that the district court erred by not scrutinizing the legislation under a straightforward "rational basis" standard of review.  Under a "rational basis" standard, a court will not invalidate legislation so long as it is in furtherance of some legitimate government purpose.  In the earlier proceedings, the district court (i.e., the lower court) ruled that the legislation was required to pass a more restrictive standard.  Now, back to the courtroom! The appeals court sent the case back to the district court to consider AmEx's other challenges to the law.  The court did not decide those claims in its prior opinions because it had invalidated the law on due process grounds. Stay tuned for developments!

 

Texas introduces bill to change UP reporting due date to July 1!

by Tracey Reid on 05/05/11

Texas introduces HB 257 which would change their Nov. 1 report date to July 1, ala Michigan's recent holder smackdown. HB 257 will make the report date for all holders July 1st with a cut-off date of March 1st as well asreduce dormancy periods for several property types, creating an instant cash injection to Texas coffers. Stay tuned for developments!  Click here for the full text of the bill:  Texas HB 257

$20 Million Unclaimed Property Audit finding against John Hancock has Insurance Industry On Alert

by Tracey Reid on 04/29/11

Many of you probably saw the widely publicized $20 Audit Assessment handed down, with the help of the third-party bounty-hunter audit firm, Verus Financial LLC, against John Hancock as discussed in the recent Wall Street Journal Article.    Verus was contracted to audit John Hancock, plus 2 dozen other life insurers by 36 different states, claiming that life insurance companies were not doing enough to located deceased policy holders to ensure that their beneficiaries got payouts in a timely manner.   Besides California, the other states that settled included Georgia, Idaho, Illinois, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, New Hampshire, New Jersey, North Dakota, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Wisconsin, and the District of Columbia.  Several other states participated in the audit, but have not yet handed down their findings, including Arizona, Colorado, Delaware, Florida, Indiana, Mississippi, Missouri, Nebraska, Nevada, Ohio, Rhode Island, Vermont and Washington.

 

 

The basis of the audit findings is that the states claimed the life insurance industry is not doing enough to locate beneficiaries after a policyholder dies, and disputing that the companies are complying with state unclaimed property reporting procedures.   The states are claiming that life insurance companies must make “reasonable efforts” to locate life insurance beneficiaries after a policyholder dies, BUT the states are also claiming that following THEIR OWN STATE UNCLAIMED PROPERTY DUE DILIGENCE LAWS IS NOT ENOUGH!   While state laws only require that companies perform due diligence based upon the last known address of the policyholder, according to their books and records, by sending a letter to the person before escheating, these audit findings are claiming that the state administrators want the insurance companies to DO MORE THAN THE LAW REQUIRES. 

 

This can have FARREACHING affects on the ENTIRE unclaimed property community…especially if following the law for finding true owners of unclaimed property is found, by administrative ruling, to be NOT ENOUGH to meet the compliance standards for reporting unclaimed property under the law.  We will be following this issue closely and keeping everyone apprised of developments.

 

DE collecting $35 million MORE UP than expected in 2011

by Tracey Reid on 04/22/11

According to an AP article released Monday, Delaware lawmakers are reveling in their good fortune, planning on spending the $35 Million in bonus unclaimed property collections that make up their $156 Million in unexpected revenue this fiscal year.  Too bad that it comes at the expense of thousands of business nationwide that are incorporated in that state and are subject to their outrageous audit practices.  Delaware is one of only a handful of states that does not require due diligence to contact the true owners of the unclaimed property they collect, so that they may use it for the government's benefit for an indefinite period of time.  Here is a link to the article itself....try not to have a mouthful of liquid that may spew forth onto your computer as you read it...I've learned from experience that computers do NOT enjoy liquid refreshments....lol.

AP article:  Delaware Panel to Update Financial Forecast

Time has run out for Indiana UP Amnesty!

by Tracey Reid on 03/01/11

Indiana Amnesty officially expired yesterday on Monday, February 28.  $5,000 Penalty notices are scheduled to go out for any "non responders" by late next week! If you receive a notice, drop us a line and we'll see what we can do to help!  treid@reidunclaimed.com or 614.804.8486.