On July 13, 2016 the Uniform Law Commission (ULC) approved its drafting committee’s final draft of the Revised Uniform Unclaimed Property Act (RUUPA). The approved RUUPA is now considered the latest version of a model law that will serve as reference for state legislatures in modifying and enhancing current state unclaimed property statutes. The introduction of the 2016 RUUPA by the ULC has prompted state legislatures to review their often antiquated unclaimed property laws, and in many cases introduce legislation to amend or wholly revise these laws.
The most recent state(s) to enact RUUPA inspired legislation:
District of Columbia B 373
Enacted August 26, 2021. The language of the emergency act and the original Bill DC 24-0285 are identical. Provisions of this emergency legislation will remain in effect for 90 days. By that time, it is expected that DC’s original RUUPA bill will be enacted. Sovos has confirmed with DC that the provisions will not affect 2021 filings since it was enacted after the June 30, 2021 cutoff date.
The new law tracks closely with RUUPA provisions with the following key exceptions:
- Does not include an exemption for in store credit for returned merchandise or gift cards.
- Keeps the reference to age 70.5 in the tax deferred retirement account provision despite the changes to required minimum distribution age as a result of the SECURE Act.
- Includes language in the demand, savings and time deposit provision that only references maturity as the trigger for dormancy.
- Includes a very short 60 day holding period after which the Administrator is authorized to sell escheated securities.
- Defines Virtual Currency and indicates that it is included in the definition of Property, although has no provision addressing its dormancy and reporting other than the standard catch-all provision.
- Does not explicitly include linking language to establish that contact on one account constitutes an indication of an owner’s interest in all accounts maintained by a holder for the same owner.
Indiana S 188
Effective July 1, 2021. Due to the cut-off date for the fall cycle, and the lack of a “transitional provision,” this bill will not change holders’ obligations for reporting in 2021.
The new law has standard RUUPA provisions with the following exceptions:
- Does not include information on gift cards and value cards.
- Uses general language regarding minimum distribution age for tax-deferred retirement accounts.
- Sets the statutes of limitation general and after filing of a non-fraudulent report.
- Allows for the sale of securities upon receipt.
- Includes a business to business exemption for certain property types.
- Non-return of mail and activity concerning another account or relationship constitute indications of interest for specific property types.
North Dakota S 2048
Effective August 1, 2021.
The new law has standard RUUPA provisions with the following exceptions:
- Retains North Dakota’s dormancy period for banking property.
- Reduces the due diligence threshold.
- Includes language to clarify that the retirement account provision is applicable to Roth IRAs by expanding it to cover “tax-deferred and tax-exempt” retirement accounts.
- Specifically earmarks unclaimed property to the state’s “common schools trust fund.”
- Does not include the Administrative Review provisions of Article 11 of RUUPA with respect to examination findings.
- Requires holders to request a waiver and/or pay penalties ($1,000 per day up to $25,000) and interest (1% per annum, assessed monthly) within 30 days of receipt of a notice.
Our dedicated unclaimed property compliance and regulatory team is updating our solutions so they encompass all the information from these bills to ensure compliance in time for the 2022 reporting year. If you are concerned about compliance or audit preparedness for District of Columbia, Indiana, North Dakota or any other jurisdiction, contact our consulting services for help.
Other states that have enacted RUUPA inspired legislation:
Nebraska L 532
Enacted March 17, 2021. Changes provisions relating to property under the Uniform Disposition of Unclaimed Property Act and the School Employees Retirement Act. It also changes a security deposit provision under the Uniform Residential Landlord and Tenant Act.
Vermont H 550
Effective January 1, 2021. VT H 550 borrows heavily from the 2016 RUUPA, but also contains key differences.
Similarities to RUUPA include:
- For most property types, dormancy periods will not change from the current law, as the RUUPA dormancy period for most property types is three years.
- Linking language in RUUPA – activity in one account with a financial organization counts as activity in all accounts with the same financial organization – is expanded to also include business associations.
- Similar provisions for retirement accounts, other tax deferred accounts, custodial accounts and securities. For IRAs, age 70.5 is increased to age 72 to align with the SECURE Act.
- Pre-presumption outreach required for holders of certain property types.
- Amends the Unclaimed Life Insurance Benefits section to require semiannual DMF comparisons (current law requires annual comparisons).
- Similar provisions with respect to examinations, the use of estimation, and interest and penalty provisions.
Differences from RUUPA include:
- Dormancy acceleration for specific situations, like if the holder imposes an inactivity fee or a fee for the failure to claim the property within a specified period of time.
- Specific rules for insurance companies for life or endowment policies or annuity contracts.
Colorado S 88
Effective July 1, 2020. CO S 88 is similar to RUUPA in that new property types are eligible to escheat (i.e. HSAs and UGMA/UTMAs), dormancy periods and trigger dates for many property types are updated, and additional electronic outreach is required for holders who do not communicate with owners of retirement accounts, custodial accounts or securities via regular mail. As a result, dormancy periods will be reduced for many property types and new trigger dates will determine when an account is eligible to escheat. Due diligence letter timelines, minimum values and content are now the same as in RUUPA.
Significant additional changes to the law include:
- Increase in the time the administrator must hold securities prior to sale/liquidation.
- Increase in the record retention period to 10 years.
- Enacts the Unclaimed Life Insurance Benefits Act.
- Adds a qualified local governments exception.
- Colorado becomes a “current pay” state, such that, for mineral interests (including royalties), once the abandonment period is met for the first payment, all subsequent amounts due, held or owing to an owner become reportable.
Maine S 481/LD 1544
Effective October 1, 2019. This RUUPA-inspired rewrite of the unclaimed property law incorporates new and updated definitions and property types eligible to escheat, including health savings accounts and custodial accounts for minors. It also includes updates to pre-presumption outreach and electronic due diligence for certain owners and property types.
Some of the significant deviations from RUUPA include:
- Reporting due dates did not change to align with RUUPA.
- For life insurance and other property for which ownership vests in a beneficiary upon the owner’s death, reports must contain the name and last known address of the insured or owner of the policy or contract and of the beneficiary.
- The administrator may sell/liquidate securities after one year.
Nevada S 44
Effective July 1, 2019. NV S 44 revises many provisions of the unclaimed property law. Key changes include:
- New and revised definitions for a holder, property, payroll cards, money orders, and stored-value cards.
- Revised trigger dates for retirement accounts, defined benefit plans and other tax-deferred accounts; life or endowment insurance policies and annuities; and burial plans.
- That the due diligence notice be sent via regular mail and electronic mail if an owner has consented to electronic mail delivery.
- That holders file reports and make payments electronically via an online portal.
- New penalty provisions relating to fraudulent claims and the failure to properly file reports and make payments electronically.
Kentucky H 394
Effective July 13, 2018. Under this act dormancy periods remain the same for some property types, others either increase or decrease. Dormancy triggers are updated to conform to RUUPA-like standards and new property types are also introduced, including health savings and custodial accounts. Holders who communicate with their account owners via electronic mail are required to perform additional electronic mail outreach for retirement accounts, custodial accounts and securities. The due diligence notice period is increased and the property value threshold is decreased.
Illinois S 9
Effective January 1, 2018. This law includes most aspects of RUUPA including record retention requirements, electronic due diligence, reduction in dormancy periods and information on reporting of loyalty cards. There are deviations from RUUPA including a transactional requirement that holders report property types that were previously exempt from unclaimed property requirements during the five year period preceding the effective date.
Tennessee H 420
Effective July 1, 2017. TN H 420 includes significant reductions in dormancy periods, updated due diligence requirements, dormancy trigger changes, information on stored value/gift cards, new reporting and remittance requirements.
Utah S 175
Effective May 9, 2017. UT S 175 adopts most of the provisions of RUUPA and revises the standards for determining and reporting unclaimed property, the provisions regarding claiming property and the enforcement of unclaimed property regulations. Specific provisions related to securities and life insurance were altered due to discussions between stakeholders and Utah legislators.
Delaware S 13
Effective February 2, 2017. Many of the changes in DE S 13 align with RUUPA. This bill increased penalties and interest applicable to unclaimed property, includes updated due diligence mailing requirements, provides language and clarification around loyalty cards and more. In relation to audits and audit associated items this bill includes reduced lookback periods, record retention clarification, estimation regulations, new definitions and new exemptions.
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