FL HB 989 was prefiled on December 21, 2023. This bill proposes sweeping amendments to Florida’s unclaimed property law. The proposed changes are as follows:
Definitions
- New definitions are added for Audit, Audit Agent, Claimant Representative, Electronic, Person, Record, Unclaimed Property Purchase Agreement, Unclaimed Property Recovery Agreement, and Virtual Currency
- The definition of “Banking Organization” is expanded to include credit unions, private bankers, savings and loans associations, plus any corporation, business association or other organization that is a wholly or partially owned subsidiary of any banking, banking corporation or bank holding company that performs functions of a banking organization or performs functions pursuant to the terms of a contract with any banking organization. The definition specifically excludes federal reserve banks.
- The definition of “Business Association” is changed to mean any for-profit or nonprofit corporation other than a public corporation, joint stock company, investment company, unincorporated association or association of two or more individuals for business purposes, whether or not for profit, joint venture; sole proprietorship; business trust; trust company; land bank; safe-deposit company; safekeeping depository; financial organization; insurance company; federally chartered entity; utility company; or other business entity, whether or not for profit.”
- The definition of “Domicile” is expanded to specify that that in addition to the state of incorporation, domicile means the state of filing for a business association, other than a corporation, whose formation or organization requires a filing with a state; the state of organization for a business association, other than a corporation, whose formation or organization does not require a filing with a state; the state of home office for a federally charted entity. Providing written notice via email if the apparent owner has elected such delivery is added to the definition of “Due Diligence.”
- Added to the definition of “Financial Organization” are savings bank, bank, industrial bank, and banking organization.
- Added to the definition of “Holder” is a person who is obligated to hold for the account of, or to deliver or pay to, the owner.
- Virtual currency is added to the definition of “Intangible Property.” The definition includes digital units that are (i) used for gaming, (ii) that can be redeemed for goods and services as part of a rewards program with the issuers but that cannot be converted into fiat currency, and (iii) that are used as part of prepaid cards.
- Clarifying changes are made to the definition of “Owner.”
Owner Contact
- Certain activities are added to the list of activities that constitute contact. Automatic deposits and withdrawals are specifically excluded. A definitive statement that deceased owners are unable to express interest in their property is also added.
Presumption of Abandonment
- Securities: Florida has removed the returned mail (RPO) and undelivered distribution triggers from its law. Instead, under the new law securities are presumed abandoned following the earlier of: (i) 3 years of inactivity, (ii) three years after the date of death of the owner, or (iii) one year after the date on which the holder receives notice of death if the notices is received 2 years or less after the owner’s death and the holder lacked knowledge the owners death during that period of 2 years or less.
- Virtual Currency: Virtual currency is presumed abandoned after 5 years of inactivity. A holder may not deduct inactivity fees unless there is a valid and enforceable written contract, and the holder does not regularly reverse or otherwise cancel those charges.
- Virtual currency shall be liquidated 30 days before filing the report and delivered with the report. The holder is relieved of all liability once the state receives the liquidated proceeds.
Reporting Requirements
- Electronic reporting is now required for all reports. Paper reports are no longer accepted.
- The threshold value of property for which owner detail is required has been reduced from $50 to $10.
- For all property, the name, social security number or taxpayer identification number, date of birth, and last known address is required. All references to “if known” are removed.
- The aggregate reporting threshold is decreased from $50 to $10.
Due diligence
- For owners who have opted for email notice, due diligence can be sent via U.S. mail or email. The two means of contact are not mutually exclusive; if the mailing address is determined to be inaccurate, electronic mail may be used if so elected by the apparent owner.
- New required content for due diligence letters is proposed including a heading that reads: “Notice. The State of Florida requires us to notify you that your property may be transferred to the custody of the Florida Department of Financial Services if you do not contact us before (insert date that is 30 days after the date of notice).”
Indemnity
- The proposed law affirmatively states that when a holder is in substantial compliance with the law and in good faith delivers property to the state, the legal relationship between the holder and the owner with respect to the property reported is terminated and such compliance releases and discharges the holder from any and all liability to the owner, the owner’s heirs, personal representatives, successors, or assigns by reason of such payment or delivery, regardless of whether such property is in fact and in law abandoned property.
- Good faith is defined.
Statute of Limitations
- The statute of limitations period will now be tolled by the earlier of an audit notice or a holder’s election to enter into a VDA.
Audits
- What the state is authorized to do to conduct an audit is expanded.
- Additionally, the state may authorize compliance reviews of a report for a specified year. The authority looks similar to the process employed by Delaware.
- Contingent fee audits are authorized.
Record Retention
- The record retention period is increased from 5 to 10 years.
The new law would become effective upon enactment of the bill.
