Regulations regarding unclaimed property estimation are expected by December 1, 2017.
Keane Compliance Update – July 7, 2017: Delaware SB 79, as substituted by Senate Substitute 1 (“SS1”), was signed into law and made effective June 29, 2017.
Delaware seeks to extend the deadline to promulgate and adopt regulations regarding estimation until December 1, 2017 with the amendment of Senate Bill 79 on June 2, 2017. Originally introduced on May 5, 2017, DE SB 79, as amended by SS1 seeks to revise several provisions of the new Delaware Unclaimed Property Law (DE SB 13).
These changes include:
- An extension to December 1, 2017 as the deadline by which the Secretary of Finance must promulgate regulations pertaining to estimations.
- Clarification that Delaware will indemnify and defend a holder against claims made by a foreign jurisdiction for property paid or delivered to the State Escheator in good faith.
- A waiver of interest for holders who file their intent to enter into an expedited audit within 60 days of the adoption of the new regulations
The original July 1, 2017 deadline in SB 13 was followed by a 60-day period whereby holders could convert an existing audit into an expedited audit or enter into a voluntary disclosure program. The proposed interest waiver greatly incentivizes eligible holders to convert their audits into expedited audits.
SB13’s restriction on a holder’s ability to transfer or assign its unclaimed liability was removed in SB79 but now would appear to remain in SB13 under SS1.
Waivers of Interest
Pending approval of the revised provisions, the State Escheator is authorized to waive, in whole or in part, the calculable interest for unclaimed property remitted to the state with a required report or for unclaimed property remitted to the state as a result of a securities examination where estimation is not required.
The State Escheator may also waive up to 50% of the calculable interest for all other unclaimed property remitted to the state not specifically provided for above.
Keane will continue to track the progress of this bill and ensure that you are aware of any unclaimed property developments in Delaware and in all other jurisdictions.
If your company is facing an unclaimed property audit by one or multiple states, please contact us for assistance. Our expert team works in collaboration with you and your counsel to manage all aspects of the unclaimed property audit process – from kickoff to resolution.