Unclaimed
Property Unclaimed Property Compliance: A Moving Target By Quin Moore, Senior Associate, KPMG, LLP (Researched by Karen Anderson, Senior Manager, KPMG LLP)
The imposition of multi-state unclaimed property audits and the expansion of unclaimed property compliance requirements into the nuances of the oil and gas industry have caused an acute awareness by the NADOA membership of a business’s obligations under state unclaimed property statutes. As the state enforcement momentum continues, it has become even more important for oil and gas professionals to gain and maintain information about statutory and regulatory changes and trends in order to better manage the risks of potential non-compliance. This article assists in closing the gaps between annual updates by providing insight into changing compliance requirements, including due diligence and report preparation requirements, recently enacted legislation, and pending state legislative measures on the move in state legislatures. Selected Recently Enacted Legislation and Adopted Regulations Due Diligence Requirements Kentucky – HB 394 – Effective 7/14/2019 Kentucky HB 394 was signed into law as Kentucky’s version of the Revised Uniform Unclaimed Property Act (“RUUPA”). KY HB 394 included some sweeping changes, but those potentially impacting oil and gas companies include: - A new due diligence threshold of $50. - If the owner has consented to receiving
Kentucky State Treasurer if you do not contact us before (insert date that is thirty (30) days after the date of this notice).” - Potentially the most impactful, HB 394 left some uncertainty as to whether Kentucky law continues to exempt the reporting of mineral proceeds. The state communicated that for fall 2018, the exemption would apply. Administrators indicated additional guidance may be provided in March, 2019. Oil and gas companies will want to track this closely to ensure that compliance with Kentucky law is maintained. North Dakota - 85-1-1-1 - Effective 1/1/2019 – Letter content requirements North Dakota Administrative Code 85-1-1-1 includes new requirements for letter content. When performing due diligence, holders must include the following in the written or electronic notice: a deadline to respond, property type, property value, and UCP division contact information. Annual Reporting and Remittance Requirements North Dakota - 85-1-1-1 - Effective 1/1/2019 – Report content requirements North Dakota revised their administrative rules and adopted the following new reporting requirements which may have a significant impact on the oil and gas industry: - Electronic reporting is now required. - If available, reports must include an owner’s Social Security Number, account number, date of birth, and, specifically for mineral
electronic communications, the holder is required to send due diligence notice via first class mail and electronic mail, notwithstanding invalid email addresses. - Updated letter content requirements, including a letter heading that reads substantially as follows: “Notice. The Commonwealth of Kentucky requires us to notify you that your property may be transferred to the custody of the
proceeds, a legal land description, well number, recording information, and any other applicable information to describe the lease.
At the time of this writing, the North Dakota Department of State Lands, which administers the state’s unclaimed
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