After the Uniform Law Commission’s Revised Uniform Unclaimed Property Act (RUUPA) was released many states have proposed bills that relate to unclaimed property and escheatable assets. This includes Utah Senate Bill 175, which was recently proposed and contravenes the regulations established by RUUPA.
Revised Uniform Unclaimed Property Act (RUUPA)
RUUPA was approved by the Uniform Law Commission (ULC) on July 13, 2016. The first draft of this act occurred in 1954 and was then revised in 1981 and renamed the Uniform Unclaimed Act. The act has since been revised in 2016 and adopted by the ULC.
Every state has unclaimed property laws that apply to every organization or person who holds property. If a property is considered abandoned, then the person responsible for the property must report this to a state official who is responsible for implemented RUUPA.
Under Article 2 of RUUPA, properties are considered abandoned if they are left unclaimed for a certain period of time. This period of time is determined by which type of property it is. A property is not considered abandoned if the apparent owner has shown some interest in the property throughout this dormancy period. This interest can be shown by insurance payments, deposits or some other record.
Senator Lyle W. Hillyard proposed S.B. 175 during the 2017 general session and it is currently being debated. This bill directly contravenes RUUPA, and this is explicitly stated in the article. If enacted, this bill would revise the standards for determining/reporting for abandoned property, the provisions regarding claiming property and the enforcement of regulations surrounding abandoned property.
Under S.B. 175, a property is considered abandoned if it has been unclaimed for the specified periods:
A traveler’s check: 15 years
A money order: 7 years
State or municipal bond: 3 years after the bond matures
Debt of business association: 3 years after obligation to pay
Savings or time deposit: 3 years after earlier maturity of property
Money or credit owed to customer: 3 years after obligation to pay
Amount owned by insurance policy: 3 years after obligation to pay
If a property is considered abandoned but there is a dispute between the administrator and presumed owner, the burden of proof falls upon the administrator.
If the holder has an address for the apparent owner of the property, the apparent owner must be notified before 60 days of a report being filed on the property.
Problematic Provisions of SB 175
There are several provisions of SB 175 that contravene RUUPA and SEC regulations, such as:
Section 67 – 4a – 208: Subsection b of this provision references an inactivity standard that directly contradicts SEC regulations that require outreach to the apparent owner prior to escheatment. If this regulation is enacted it could deprive Utah citizens of their property particularly seniors.
Section 67 – 4a – 702: This allows the state to liquidate securities after receipt, which does not satisfy Supreme Court concerns about due process.
Section 67 – 4a – 804: This provision doesn’t make the shareholder whole when securities are sold, which devalues shareholders.
There are many other provisions that violate RUUPA and SEC regulations and as such it is concerning to citizens, particularly Utah residents. These issues should be revised and debated by the Utah Senate before this law is enacted and it contracts federal law.