Arkansas Unclaimed Property

1. Arkansas Unclaimed Property Charlie Daniels, Arkansas Auditor of State

2. Arkansas Unclaimed Property

3. Texas v. New Jersey

4. Texas v. New Jersey (cont.) • We know where a piece of expensive art is. • Where does the debt owed to a client in the form of a remaining escrow balance? • Where does a car lien exist (the lien, not the car)? • Where does a student loan exist? • We know where houses are. • Where does an old, unpaid payroll check exist? • But intangible property, such as a debt which a person is entitled to collect, is not physical matter which can be located on a map. • 379 U.S. 674 at 677. • We know where that ’83 El Camino is (on blocks in your uncle’s yard)

5. Texas v. New Jersey (cont.)

6. Texas v. New Jersey (cont.)

7. Texas v. New Jersey (cont.) • 4 Choices of a Rule to apply: • Where is the principal office of the creditor? • Attempts to make the domicile rule more clear cut, but still has similar effect • Last known address of creditor. Common Law doctrine of mobiliasequunturpersonam, or “personal property follows the person”. Decedant domiciled in jurisdiction A dies in jurisdiction B, property legally treated as if it were in jurisdiction A. • Which state has the most contacts with the debt? • Lacks the “clear rule” which courts want states to be able to rely on. • Encourages litigation and causes a “money grab” effect in which states would argue the weight and number of contacts with the jurisdiction. • Where is the debtor domiciled? • The state of incorporation would play too great a role on companies that do business in many states. • Not creditor-friendly, either

8. Texas v. New Jersey (cont.) • We therefore hold that each item of property in question in this case is subject to escheat only by the State of the last known address of the creditor, as shown by the debtor's books and records. 379 U. S. at 682. • It is fundamentally a question of ease of administration and of equity. We believe that the rule we adopt is the fairest, is easy to apply, and, in the long run, will be the most generally acceptable to all the States. 379 U. S. at 683.

9. Texas v. New Jersey (cont.) • Under the primary rule, unclaimed intangible property is reported to the state of the owner’s last known address as shown by the debtor’s books and records. • What you need to take away: • Codified in • A.C.A. § 18-28-204(1) and (2)

10. Delaware v. New York

11. Delaware v. New York • Codified in A.C.A. § 18-28-204(3): • (3) the records of the holder do not reflect the last known address of the apparent owner and it is established that:(i) the last known address of the person entitled to the property is in this state; or(ii) the holder is domiciled in this state or is a government or governmental subdivision, agency, or instrumentality of this state and has not previously paid or delivered the property to the state of the last known address of the apparent owner or other person entitled to the property • Your takeaway: the state in which the intermediary is incorporated has the right to escheat funds belonging to beneficial owners who cannot be identified or located.

12. Reporting Escrow Balances On Transactions That Never Closed

13. Reporting Escrow Balances (cont.) • 1) When does the obligation to repay the original owner begin? • 2) When is an escrow account considered abandoned property? • Answer: 3 years after the obligation accrues, the property is considered abandoned • Answer: The obligation to repay escrow money accrues/begins at the closing (assuming this is the last contemporaneous, owner-initiated communication). • §18-28-202(a)(6)- “money or credits owed to a customer as a result of a retail business transaction, three (3) years after the obligation accrued… • A.C.A. §18-28-202(c) • The obligation to repay will be when closing occurred OR if closing never happens, three years after the date of last owner-initiated written or contemporaneous recorded communication with the holder. A.C.A. §18-28-202(a)6 & (c)

14. Reporting Escrow Balances (cont.) • https://www.ark.org/upr/app/annual_report_form.html • Google search: Arkansas Auditor Annual Report • Highly recommend uploading a report rather than entering properties via the website (web browser issues vary) • E-Reporting (UP Exchange)

15. Other property types • Payroll and wages Arkansas Auditor of State • Refunded earnest money (more for Real Estate company) • The People of Arkansas • Personal property which you hold for another or which has been paid to you for the purposes of conveying to another.

16. Arkansas Auditor of State Outreach Efforts • The AOS constantly implements more effective and efficient ways to increase the volume of property returned to our Arkansans. • Since 1980 The Arkansas Unclaimed Property Division has returned over $103 million dollars to the rightful owners.

17. Arkansas Auditor of State Outreach Efforts

18. Targeted marketing Reaching out specific counties to drive up web traffic Send letters to current address of owners through investigation • Direct Mail • The People of Arkansas “I didn’t know there was a website to check for that..” Reaching out to more people through Facebook • Social Media • Electronic Claim Filing

20. Arkansas Voluntary Compliance Program

21. Arkansas Voluntary Compliance Program (cont.)

22. Arkansas Voluntary Compliance Program (cont.) • The People of Arkansas

23. AOS Reporting Booklet

24. Reporting Methods Mail to AOS office • CD-Rom Filing • Online Filing (AOS Website) • Manual Filing Use AOS website • UP Exchange

25. AOS Claims Contact Information Phone Number: 1-800-252-4648 (1-800-CLAIM-IT) Josh Wood/Brad Tillbrooks- Voluntary Compliance Curtis Irvin- Holder Relations Email: HOLDERS@auditor.ar.gov

26. Now… UP Exchange and online filing