By Susan Han
New legislation that benefits the holder community has just been enacted by Delaware. House Bill 2 (“H.B. 2”) was signed into law by Delaware Governor Jack A. Markell on January 30, 2013. The new law essentially provides for several key changes to the Delaware Secretary of State’s unclaimed property Voluntary Disclosure Agreement (VDA) program, which was first enacted into law last summer via Senate Bill 258 (“S.B. 258”). First, H.B. 2 will allow for participation “with respect to property types or periods or both property types and periods” or “subsidiaries or related entities” that were not included in a prior VDA submission made with the Delaware Department of Finance. Note: Holders who had submitted a VDA prior to June 30, 2012 appeared ineligible to participate in the new VDA program under the provisions of S.B. 258. Thus, H.B. 2 affords a significant planning opportunity for such holders, allowing them to participate in the new VDA program and achieve current compliance for property types, report years, and legal entities, which may have been omitted from the prior VDA submission to Delaware. Second, H.B. 2 allows holders who elect to participate in the new VDA program by June 30, 2013 an additional 12 months to complete their VDA submission. For larger companies, or companies with complex structures or complex property types, the extra 12-month period to conclude the VDA represents a significant improvement over the prior legislation. In summary, the two key changes to the Delaware VDA program offer substantial improvements to the program, which benefit the holder community.
The Delaware Department of Finance, in deference to the rollout of the new 2012 VDA program of the Delaware Secretary of State, had been temporarily withholding the issuing of any new audit notices for unclaimed property audits to allow holders an opportunity to enroll in the new Delaware VDA program. However, our understanding is that the “informal stay” ended February 1, 2013, and a number of new unclaimed property audit letters will be issued by the Department of Finance after February 1, 2013. Thus, holders with exposure in this area may want to carefully review the benefits of enrolling in the new Delaware VDA program prior to being selected for audit.
Ryan’s Unclaimed Property professionals can assist in analyzing how these recent developments impact your company.