Posted on Friday, 8th January 2010 by Keane Unclaimed Property Team
This Mississippi bill died in committee but shows how state legislators are proposing changes that make unclaimed property compliance more complicated for corporations.
The bill contemplated dormancy period reductions (which would increase the amount of property escheated) as well as a host of fines and penalties. Specific details of the proposal are shared below:
Mississippi
HB 73
Prefiled 12/28/09, Introduced 1/5/10, Died in Committee 2/2/10
This bill proposes to repeal the present Unclaimed Property law and to implement categorical changes. Dormancy periods for many property types have been reduced and fines for late or nonexistent reporting have been increased dramatically.
1) It is proposed that the dormancy periods for the following property types be reduced to 3 years from 5 years: Retail Credits, Gift certificates, Life Insurance, and IRA’s. The bill further proposes the dormancy periods for following property types be reduced from 5 years to 1 year: Property distributable in the course of dissolution, Wages or other compensation and Deposits or refunds owed by a utility. All other property shall be presumed abandoned after 5 years.
2) With respect to Dormancy charges, a holder may now deduct from property presumed abandoned a dormancy charge if there is a valid and enforceable written contract between the holder and the owner pursuant to which the holder may impose the charge and the holder regularly imposes the charge, which is not regularly reversed or otherwise canceled. The amount of the deduction is limited to an amount that is not unconscionable.
3) The bill will also require yearly reporting with the report due before November 1 of each year (life insurance companies to report May 1). Due diligence will be required not more than 120 days or less than 60 days before the report is filed.
4) Under this bill, an agreement entered into by an owner to locate or recover or assist in the recovery of property that is presumed abandoned is void and unenforceable if it was entered into on the date the property was presumed abandoned and extending to 24 months after the property is paid or delivered to the administrator.
5) A holder who fails to report within the time prescribed shall pay the administrator interest of 12% on the property or value thereof from the date the property should have been reported. Other penalties include:
(a) Civil penalty of $200 a day for each day the report is not performed up to a maximum of $5,000 (raised from a maximum of $100 in 1982).
(b) Penalty for willfully failing to report is $1000 a day for each day the report is not performed up to a maximum of $25,000 plus 25% of the value of any property that should have been but was not reported.
(c) Penalty for a holder who renders a fraudulent report is $1000 a day with a maximum of 25,000 plus 25% of the value of the property that should have been but was not reported.
(d) Upon good cause the administrator may waive interest under subsection.
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April 14th, 2010 at 12:33 pm
[...] States have a clear incentive to offer these programs as it helps them collect escheated funds and revenue. Simultaneously, it can help major unclaimed property holders like financial institutions, insurance companies, retail organizations, manufacturers, etc. regain a compliant status. [...]