Delaware may extend unclaimed property voluntary disclosure deadlines
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UPDATE: Delaware Gov. Jack Markell signed SB 228 into law on June 30, 2014.
On May 16, 2014, the Delaware Senate proposed Senate Bill 228, which, if passed, would extend multiple Voluntary Disclosure Agreement (VDA) program deadlines. Specifically, the legislation proposes to extend the current deadline to enroll in the unclaimed property VDA program from June 30, 2014, to Sept. 30, 2014; the time to make payment (or enter into a payment plan) from June 30, 2015, to June 30, 2016; and the period of time that the state escheator is prevented from auditing a holder who enters into a VDA from July 1, 2015 to July 1, 2016.
In addition to extending VDA deadlines, the legislation proposes to change the penalty for failing to file an unclaimed property report from 5 percent per month to the lesser of 5 percent per month or $100 per day. Moreover, the maximum penalty would change from 50 percent of the amount required to be shown on the report to $5,000. The proposed bill would also eliminate the assessment of interest on outstanding unpaid amounts and codify the long-standing practice of the Delaware Department of Finance and the Delaware Secretary of State to hold confidential the financial information obtained from holders during the course of examinations, settlements and voluntary disclosures.
If enacted, Senate Bill 228 would extend the period of time during which a holder can take advantage of the added benefits provided by the VDA program signed into law on Jan. 30, 2013. This VDA program is overseen by the secretary of state, rather than the state escheator. Benefits of the VDA program include a limited look-back period to 1993 and elimination of penalties and interest.
It is recommended that companies act quickly to take advantage of the Delaware VDA program. Holders that do not participate may be subject to a look-back period to 1981 under audit and may face penalties and interest. In the event Senate Bill 228 does not pass, it will be important for holders to submit a notice of intent to enroll in the VDA program by June 30, 2014, in order to take advantage of the program benefits.
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