Illinois unclaimed property law was drastically overhauled with the passage of IL Senate Bill 9 on July 6, 2017. IL SB 9 makes numerous changes to current Illinois unclaimed property law, including eliminating exemptions and reducing dormancy periods on certain property types.
The new law brings to mind a previously introduced bill, IL HB 2603, that was widely opposed by the unclaimed property holder community. A corresponding bill was introduced on July 3, 2017 that would repeal the new law in its entirety.
Changes to Illinois Unclaimed Property Law
Originally introduced on January 11, 2017, Illinois SB 9 was part of a package of 13 bills known as the “Illinois Grand Bargain,” designed to assist in resolving the state’s budget impasse. SB 9 underwent a series of eight amendments in the Senate before arriving in the House, where it was further amended. House Amendment 3 was enacted after an override by both Houses of the Governor’s total veto on July 6, 2017.
The new law introduces the Illinois Revised Uniform Unclaimed Property Act, revamping the existing unclaimed property law.
The Illinois Revised Uniform Unclaimed Property Act includes many provisions that alter current law, including:
- Eliminating the business to business exemption
- Exempting gift cards while not amending the definition of a stored value card to exclude gift cards, such that stored value cards that are not gift cards or loyalty cards are reportable
- Adding new provisions for specific property types, including health savings accounts and other tax deferred accounts as well as custodial accounts for minors
- Reducing dormancy periods and changing the dormancy triggers for many property types, including, for example, for securities (the earlier of 3 years after return mail or 5 years after the owner’s last indication of interest)
- Adopting a 10-year record retention period and statute of repose
- Adding a transitional provision that requires holders to report all items of unclaimed property that would have been presumed abandoned during the 5 year period preceding the effective date of the Act had the Act been in effect during that period
The effective date of SB 9 is July 6, 2017; however, certain Articles, including the Revised Uniform Unclaimed Property Act (Article 15), will not take effect until January 1, 2018.
IL HB 4078: The Repealer Bill
HB 4078 was introduced on July 3, 2017 and states that “if and only if Senate Bill 9 becomes law,” as amended by House Amendment number 3, the Revised Uniform Unclaimed Property Act created in that bill is repealed. Should the bill pass, the new unclaimed property law would be repealed, effective immediately. Though currently in recess (likely until November 2017 for the veto session), the legislature may act on the bill until the official adjournment date of January 9, 2018. If it does not act, the Bill could be carried over to the 2018 session. It will be an uphill battle for the bill, not only due to the recess, but also because the bill, introduced by Republican David McSweeney, is facing a Democrat-controlled House.
Keane will continue to monitor the activities taking place in Illinois and provide updates here on our blog and in Keanotes, our premier unclaimed property compliance journal.