Karen Kidd Aug. 16, 2016, 11:58am


HARRISBURG – Provisions in Pennsylvania's new budget will make Delaware the odd state out when it comes to notifying property owners prior to the Department of Treasury taking over unclaimed property, an administrative law attorney said during a recent interview.

"That's the big one, the big change," Raymond Pepe, of counsel at K&L Gates in Harrisburg, said during a Pennsylvania Record interview.

Historically, Pennsylvania and Delaware have been the only two states in the nation not to require notification be given to property owners before unclaimed property is transferred to the state. When this new provision is implemented, only Delaware will not require the notification.

"It'll be the way it is in every other state but Delaware," Pepe said.

This change is one of several that affect unclaimed property owners – most of whom have no idea they own the unclaimed property – included in amendments to Pennsylvania’s Fiscal Code, which was adopted as part of the state’s 2016-17 budget. The changes are expected to take effect Sept. 10.

The tweaks to the state's unclaimed property requirements, which were hammered out largely by state treasury department officials with input from representatives of fiduciary institutions, are applied to the Pennsylvania Unclaimed Property Act, Pepe said.

A holder of property presumed abandoned is to be sent notice not more than 120 days and not less than 60 days before the date on a report about the property to the state treasurer.

That notice, sent via first class mail unless the property owner previously opted for electronic communication, must provide a description of the property, the property's owner, its value and how to contact the state treasury department.

The amendments to the Pennsylvania Unclaimed Property Act are included in House Bill 1605, the fiscal code vehicle written to help implement the hard-fought fiscal year 2016-17 state budget. That legislation was signed into law July 13. Amendments regarding how Pennsylvania handles unclaimed property account for only part of the bill's amendments.

The state provides a variety of steps to report and retrieve unclaimed property. Pennsylvania's Treasury Department currently is seeking the owners of $2.3 billion in unclaimed property, according to the department's website, which also says that one in 10 residents have unclaimed property waiting for them.

Pennsylvania, like other states, makes a real effort to find the owners of unclaimed property, including hoping the U.S. Postal Service can find them, Pepe said.

"If they send an account holder something first class mail and it comes back as undeliverable, that means that person can no longer be contacted," he said.

The state then waits a certain period for the account holder to turn up on their own and makes other efforts as well. However, after all that time passes and all the efforts fail, there is only one place for that property to go, Pepe said.

"That would be the date the property is turned over to treasury," he said.

Until the notification provision that is part of the state's new budget, no additional notification had to be attempted prior to that transfer. After Sept. 10, that additional notification will happen, Pepe said.

While Pennsylvania will become like most other states in reference to that one provision, none of the states is entirely like another in reference to how it handles unclaimed property, Pepe said.

"Every state's unclaimed property laws are a little bit different from the others," he said. "The laws of most states are base on a version of the Uniform Unclaimed Property Act."

While this may seem a dry, almost dull topic for those whose names don't turn up in unclaimed property lists, the value of those unclaimed assets is enough to drive states into litigation.

Earlier this summer, in what has been called the "Unclaimed Property Hunger Games," a fight over millions of dollars in unclaimed property broke out between multiple states that asked the U.S. Supreme Court to let them bring their cases there rather than start in the lower courts.

Delaware asked to sue Wisconsin and another state, while Wisconsin asked to sue Delaware. Twenty-one other states also asked to be allowed to sue Delaware.

Pennsylvania is pursuing its own lawsuit against Delaware, seeking $10 million in unclaimed property.

Whatever arguments the states have with each other over unclaimed property, the states seem to agree that their own treasury departments are the best custodians of unclaimed property, Pepe said.

"The states have been saying, 'We'll do a better job than U.S. Treasury in finding these people and getting their money and property to them,'" he said. "There has been back and forth about that and litigation, but that is, generally, the states' position."

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