Posted on Tuesday, 25th May 2010 by The Keane Organization
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This is to advise that on May 14, 2010, the Delaware General Assembly introduced legislation that proposes significant changes to the administration and enforcement of Delaware’s unclaimed property statute.
Specifically, this Act improves the administration of the Delaware Abandoned and Unclaimed Property Statute by providing holders with additional clarity and certainty regarding the enforcement of the Delaware abandoned property statute.
Section 1 of the Act provides for an administrative review process at the conclusion of an unclaimed property examination.
This review process may be invoked at the option of the holder. It will allow the holder to file a written protest, submit additional information in support of the protest and request that the Audit Manager reconsider the Department’s findings following an examination.
The Audit Manager must make a written determination based on the protest and on the entire record of the examination and the materials submitted with the protest by the holder.
After the Audit Manager makes a determination on a protest, the holder may request further review by the Secretary of Finance, who will appoint an Independent Reviewer to make a determination on the holder’s appeal.
The Secretary of Finance may adopt or reject the Independent Reviewer’s report in whole or in part.
Section 2 of the Act creates a limited exemption from the definition of property for abandoned property purposes that arises from transactions between merchants covered by the Uniform Commercial Code where, for whatever reason, a merchant holder receives goods for which the holder was never invoiced by the seller.
The Act is not intended to change the reach of the definition of “property” in Delaware’s unclaimed property statute – § 1198 – to the extent that it applies to a merchant holder’s accounts payable, accounts receivable or any other type of credit due from a holder to a creditor.
No generally applicable business-to-business exemption is intended to be created by this section.
Sections 3 and 4 of the Act clarify that, in accordance with established accounting and industry practice, the State may employ estimation techniques in certain circumstances in order to determine a holder’s liability for abandoned or unclaimed property.
Sections 5 through 10 reduce the administrative burden of compliance by holders by reducing the number of reports to be made and eliminating the duty to hold such reports for public inspection in their headquarters.
Section 11 of the Act corrects the unintended omission to include all enumerated items of property in the exception to the definition of property for purposes of the Abandoned Property Law in subdivision 1198(11) when that definition was amended in 76 Del. Laws, c. 277, §2 (June 30, 2008). Prior to its amendment, the exception had included all enumerated items in subdivision 1198(11), and the General Assembly did not intend to change that result when it amended the subdivision in 2008.
Section 12 of the Act is a severance provision.
Section 13 of the Act provides for effective dates for the various sections of the Act.
Please see the following Department of Finance page for more information on Delaware’s unclaimed property statute.
We will continue to track any changes regarding Delaware legislation in our unclaimed property blog and our quarterly unclaimed property newsletter, Keanotes.
Posted in Abandoned Property Law, Legislative Alerts, State Escheatment, Unclaimed Property Compliance, Unclaimed Property Law | Comments (0)
