United States: Washington Legislature Introduces Revised Uniform Unclaimed Property Act

On January 10, 2018, a bill was introduced in the Washington State Legislature that would substantially enact the Revised Uniform Unclaimed Property Act (RUUPA) finalized by the Uniform Law Commission (ULC) in late 2016. The bill, House Bill (HB) 2486, is sponsored by Representative Paul Graves at the request of the ULC and would be effective beginning January 1, 2019. The House Committee on Finance conducted a public hearing on the bill on January 16, 2018, but only the sponsor testified and the bill was held for further consideration.

While similar (or identical) to RUUPA in most respects, the bill contains a number of significant deviations. Below is a brief summary of several provisions that we flagged in our initial review and the potential impact on Washington holders.

  1. Scope of Property Subject to Act

The legislation would define "property" consistent with the RUUPA definition. Based on the existing Washington unclaimed property law, the enactment of this definition would result in a number of property types becoming specifically defined as property subject to the law for the first time in 2019, including payroll cards, virtual currency, stored-value cards (that are not exempt "gift cards"), municipal bonds, health savings accounts, commissions, employee reimbursements, custodial accounts for minors and mineral proceeds. The existence of the RUUPA "transitional provision" should raise concerns for any holders of these property types that have not historically reported the property to the state. HB 2486 also contains many of the RUUPA carve outs, including "gift cards" (but defined consistent with current law—not RUUPA), loyalty cards and game-related digital content. Other property types that would be exempt include unused tickets without obligation for refunds, worthless securities, non-freely transferrable securities and property held in Achieving a Better Life Experience Act of 2014 (ABLE) accounts. While RUUPA contains an optional carve out for in-store credits for returned merchandise, the introduced Washington bill does not incorporate it. Thus, holders of in-store credits for returned merchandise in which a gift card is offered may have to grapple with whether this property is an exempt "gift card" or returned merchandise credit subject to remittance.

  1. Dormancy Periods

Consistent with RUUPA, HB 2486 would reduce the dormancy periods required before a presumption of abandonment arises for a number of specific property types from five to three years, including securities, debt obligations, deposit accounts, and miscellaneous types of intangible property that fall within the catch-all provision. The only existing property type that would see an increased dormancy period would be non-exempt gift certificates, which would see the dormancy period increased from three to five years.

  1. Periods of Limitation and Repose and Holder Record Retention

While HB 2486 would adopt the periods of limitation and repose (Section 610) and holder record retention (Section 404) contained in RUUPA, the impact of doing so will be an increase in both periods for holders. Specifically, holders will be required to retain records for 10 years, while existing law generally requires records to be retained for 6 years. See Wash. Rev. Code Ann. § 63.29.310. Current law also provides that no action or proceeding may be commenced by the department with respect to any duty of a holder more than six years after the duty arose. See Wash. Rev. Code Ann. § 63.29.290(2). HB 2486 would extend this period to 10 years after the duty arose; however, the period would be reduced to 5 years if the holder files a nonfraudulent report with the department. Thus, if enacted, holders would be wise to ensure that negative reports are filed every year in which no property is due to preserve the five year period of limitation.

  1. Transitional Provision

Unfortunately, HB 2486 contains the problematic RUUPA "transitional provision" (Section 1503) that was carried over from the ULC's 1995 Uniform Act. This provision states that property not required to be reported before the effective date of the legislation (e.g., not subject to escheat under current or prior law), but that would be required going forward, would have to be included on the holder's initial (i.e., 2019) report as if it had been presumed abandoned during the preceding 10 year period. To the extent holders have not historically reported certain property types that would expressly become subject to escheat (such as virtual currency, health savings accounts, and stored-value cards), this provision presents a serious risk of retroactive application of the law. Aside from its questionable legality, a strict interpretation of this provision represents poor public policy and would result in a windfall to the state at the expense of compliant holders.

  1. Administrative and Judicial Appeals

HB 2486 does not mirror the administrative and judicial review provisions of RUUPA, but instead adopts a complex (and arguably, at least partially, illegal) review process. Specifically, the judicial review provisions do not apply to "one who has failed to keep and preserve records as required in this chapter" (i.e., maintain records for 10 years). Denying a holder their day in court because they failed to comply with a records retention requirement is poor public policy and unconstitutional. Unlike RUUPA, the judicial appeal provisions also requires a holder or owner to pay or deliver the property to the administrator prior to appealing the decision of an administrator and require the notice of appeal to occur within 30 days of the denial of a refund request.

  1. Liquidation of Securities

Contrary to RUUPA (which provides that the administrator may not sell or otherwise liquidate securities until three years after receipt and notice to the apparent owner), HB 2486 would require the administrator to sell all securities delivered as soon as practicable but gives the administrator significant discretion to not sell securities in certain instances (i.e., not cost-effective to sell). The bill also would not allow the owner to receive dividends, interest and other increments up to the time of the claim when the security is sold or liquidated by the state. This is distinguishable from RUUPA, which allows the owner to recover these items in certain instances.

  1. Other Provisions of Note

A few other provisions to note in HB 2486 include the incorporation of the RUUPA provisions governing "knowledge of death of insured or annuitant" and the requirement that life insurance companies validate death of insured if there is a Social Security Administration (SSA) "death master file" match. The bill also omits a business-to-business exemption, consistent with RUUPA and current law.

Practice Note

This is a very brief summary of a few of the provisions in HB 2486 that deviate from RUUPA or could impact holders beginning in 2019, if enacted. Because no two holders are the same and this list is not exhaustive, holders are encouraged to contact the authors for a more in-depth review and analysis of the potential impact tailored to your business model and transactions. In the meantime, we will closely monitor HB 2486 as it advances through the Washington Legislature.

Washington Legislature Introduces Revised Uniform Unclaimed Property Act

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions