Delaware Amends the Secretary of State Unclaimed Property Voluntary Disclosure Program
January 31, 2013
In July 2012, the State of Delaware established an alternative method for resolving Delaware unclaimed property liability by means of a Voluntary Disclosure Agreement (“VDA”) negotiated with the Office of the Delaware Secretary of State. Pursuant to this new voluntary program, an entity could resolve all past Delaware unclaimed property liability and thus avoid a traditional audit by the Delaware Department of Finance by first filing an intent to participate in the program prior to June 30, 2013 (in order to receive a potential five-year reduction in liability) or prior to June 30, 2014 (in order to receive a potential two-year reduction in liability). However, once a company receives an audit notice from the Delaware Department of Finance, it becomes ineligible to participate in the new Delaware Secretary of State VDA program.
On January 30, 2013, Delaware Governor Markell signed House Bill No. 2, which amended the Secretary of State VDA program as follows: (i) a participating company now has until June 30, 2015 to resolve its unclaimed property liability in order to receive the full five-year reduction in liability (previously this date had been June 30, 2014); (ii) the statute was amended to clarify that an affiliate or subsidiary that was not included in a previous Department of Finance VDA filing is eligible to participate in the Secretary of State VDA program; and (iii) the statute was amended to clarify that if certain property types were not included in a prior Department of Finance VDA filing, a company is eligible to participate in the Secretary of State VDA program with respect to those property types.
In addition to the changes to the Secretary of State VDA program, the statutory amendments clarified that the State Escheator’s publication requirements as well as the relevant confidentiality requirements with respect to collected unclaimed property also apply to unclaimed property collected pursuant to the new Secretary of State VDA program.