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State senators pass abandoned property updates

Delaware Public Media

After a recent fiery rebuke from a federal judge, state lawmakers are trying to significantly change Delaware’s escheat law.

Companies would have to keep accounting records for 10 years of all the leftover gift cards, inactive bank accounts and stock and other abandoned property they hold.

Currently, state audits can reach back for decades and officials estimate how much corporations may owe.

Last year, paper company Temple-Inland won a federal case in which the judge said Delaware’s practice of estimating what a company might owe if they didn’t retain accounting records was likely unconstitutional.

“This stabilizes the structure, I would say, fully coming off the court ruling. What that means in terms of the dollars that come in over the long term, we’ll have to see,” said state Sen. Bryan Townsend D-Newark), the bill's chief sponsor.

Companies under audit before July 22, 2015 would also be able to enter into a voluntary disclosure program that could be less financially painful than continuing with the audit. They'd have until Sept. 1 of this year to make that decision.

The future of the program had been in question after the opinion, but Townsend says these tweaks will ensure its viability.

“The hope for the future is: stable and sustainable. Hopefully, it’s a matter now with the 10-year look back, a 10-year statute of limitations all that clarity in the law we’ll have annual filings from companies,” he said.

Townsend admits the changes may lead to less money, but overall add stability to one of its most profitable, yet volatile revenue sources.

$528.3 million in abandoned property flowed into the state's bank account in fiscal year 2016 and projections estimate another $540 million in the current year.

Delaware is also facing legal challenges from 22 other states in the U.S. Supreme Court over whether or not it can lay claim to uncashed MoneyGram wire transfers purchased outside of its borders.

From May 2011 to March 2015, Delaware took in more than $160 million from abandoned MoneyGrams in all 50 states.

The state Senate passed the bill nearly unanimously Thursday. It now goes to the House for consideration.

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