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Delaware Senate Passes Unclaimed Property Reform Bill

On June 18, 2015, the Delaware Senate approved a S.B. 141 bill that would restrict the look-back period and permanently extend the Voluntary Disclosure Agreement program (VDA).  If the House passes the bill, the legislation would offer additional protections to holders; however, it also contains several obstacles that should not be ignored.

The bill would limit the examination look-back period in Delaware to 22 years, starting in 2017. It would also modify the governing statute to allow interest of 0.5 percent per month (up to 25 percent of the amount due) to accumulate from the due date for any late-filed unclaimed property reported and remitted on or after March 1, 2016. The bill also requires that when a holder files an annual report they must designate an employee, rather than an outside counsel, to serve as the primary State contact.

The proposed VDA program is not really voluntary (i.e., participate or be audited). Additionally, because the look-back period would remain more than 20 years, the anticipated interest increase will likely “cost” holders more than the potential “savings” due to the shortened look-back period.

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