Southeast Texas Record

Thursday, February 20, 2020

New bill to amend collections on abandoned, unclaimed properties by the state of Delaware

By Dawn Geske | Feb 8, 2017

Contract 09

DOVER, Del. – Both the Delaware House and the Senate have passed a bill that determines how the state goes about collecting on abandoned and unclaimed properties.

The bill, SB 13, has amendments to its Title 12 and 25 codes that outline the procedures for the state to collect unclaimed and abandoned properties. While this is a revenue stream for the state of Delaware, it has come under fire recently for its treatment of such properties and the reforms are being put in place to amend the codes and provide a shorter statute of limitations, according to a recent article in Texas Lawyer.

The bill took recommendations from Secretary of State Jeffery W. Bullock to limit the statute to 10 years instead of the current 22 years waiting period to audit companies and collect payment.

The amended bill is anticipated to provide greater predictability for companies as well as offer more efficiency and fairness when it comes to the reporting process of the state. This is in addition to bringing more accountability to its compliance initiatives.

Besides the 10-year statute of limitations to seek payment of unclaimed property to the state of Delaware, SB 13 also adds a 10-year “look-back” period for audits and voluntary disclosure agreements.

The new legislation puts Delaware in the same category as other states across the country in terms of limitation and “look-back” limits. It also offers companies that are undergoing an audit from the date of July 22, 2015, to be able to have the opportunity to move to a voluntary disclosure agreement. They will be able to do so by participating in the Secretary of State Voluntary Disclosure Agreement program.

All audits being conducted currently will be expedited once the act is passed. This is in addition to accessing interest on any claims that were late filed. This is designed to provide more of an incentive for voluntary compliance of the bill.

The bill comes in light of a lawsuit that was filed by the attorneys general of 23 states claiming that Delaware collected more than $170 million in unclaimed property collections that were improperly paid to the state. A certiorari has been granted in the case by the U.S. Supreme Court that centers on uncashed checks that were issued outside the state of Delaware that the plaintiff states argue are their property.

Delaware produces a significant revenue from the unclaimed properties payments which it uses as its operating budget. The legislation does provide for Delaware to collect payment from companies with unclaimed properties regardless of where the property was sold.

The Senate passed SB 13 on Jan. 19 and it is expected to go before the governor where it will be determined if it will be signed into law. Once signed into law, the bill will be immediately effective.

All members of the Senate voted to pass the bill with one absent vote by Gregory F. Lavelle. The bill also went before the House with all members passing the bill through on Jan. 26, 2017. House member Timothy D. Dukes was absent for the vote.

Want to get notified whenever we write about U.S. Supreme Court ?

Sign-up Next time we write about U.S. Supreme Court, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. Supreme Court