« Back to Blog

Major Change to Pennsylvania's Unclaimed Property Law

image

Earlier this year, the Pennsylvania legislature amended the state’s Disposition of Abandoned and Unclaimed Property Law (the “Unclaimed Property Law”) to change the way business associations report unclaimed properties. House Bill 2167 moved to amend Pennsylvania’s Unclaimed Property Law relating to dividends, stocks, and investments. The bill passed into law and went into effect June 22, 2018. Here’s what you should know about the changes to Pennsylvania’s Unclaimed Property Law:

Significant Reporting Changes for Business Associations

The Unclaimed Property Law permits holders of intangible properties (e.g., bank accounts, stocks, bonds, insurance benefits) to claim ownership if the rightful owner abandons them. HB 2167 refers to property held by “business associations” and changes the reporting requirements for certain types of investment accounts. By law, an investment account is legally “abandoned” or “unclaimed” if the following is true for that account:

· A stock certificate or other participating right in a business goes undelivered after issuance, and the owner doesn’t express interest in the property for three or more years.

· Dividends, profits, or shares of a principal that go unclaimed by the owner for at least three years.

· Any amount due as principal or interest on bonds or coupons that goes unclaimed by the owner for at least three years.

HB 2167 amends the articles relating to stock certificates and dividends. It adds a requirement for business associations before they can claim abandoned stocks, dividends, or investments: To wait at least three years after the holder has “lost contact” with the owner to report the unclaimed property to the Pennsylvania Treasury. The Treasury posted the details on its website for businesses interested in how the amendment will affect them.

What Does “Lost Contact” Mean?

The key modification to the state’s Unclaimed Property Law is a new requirement for the holder to have lost contact with the rightful owner for at least three years before claiming abandoned intangible properties. According to HB 2167, the date a holder has “lost contact” with an owner can vary according to the situation:

1. The date the United States Postal Service returns a second consecutive communication to the holder as “undeliverable.”

2. The date the first communication comes back “undeliverable” if the second communication comes more than 30 days after the first.

3. The date the holder receives notification that an electronic mail communication to the owner is undeliverable, or if the owner doesn’t reply within 30 days. A holder must send an electronic mail communication within two years of the owner’s last expressed interest in the property.

A holder must attempt to contact an owner by physical mail after a failed attempt to contact via electronic mail. If the physical mail comes back “undeliverable,” the holder has officially lost contact with the owner and may report the property as unclaimed to the Treasury.

How to Report Unclaimed Property

If you qualify as a business association and believe you have reportable unclaimed property, you must report it to the Treasury. For instructions on how to prepare and file unclaimed property reports, please refer to the Pennsylvania Holder Reporting Booklet. If further assistance is needed, JMS Advisory Group has a team of professional consultants ready to help. Contact Us

Tagged: pennsylvania unclaimed property, pennsylvania escheat securities unclaimed property pennsylvania securities