New York and New Jersey Propose Significant Unclaimed Property Amendments

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Struggling to balance their budgets in these economic times, New York and New Jersey are poised to enact significant unclaimed property changes. The New York bill reduces some dormancy periods and is pending in the Rules Committee. The New Jersey bill relates to stored value cards and was signed by the governor on June 30. A bill amending the New Jersey bill was introduced on July 1.

New York

The New York bill, S06610, is part of a growing trend to reduce the dormancy period of unclaimed property resulting in faster reporting (and paying over) unclaimed property to states. The bill seeks to reduce the dormancy period from five years to three years for property paid for services that were not rendered or for goods that were not delivered.

Sutherland Observation: This legislative change, if enacted, will help close the state budget gap for the next two years. The reduction in the dormancy period only applies to property that is already subject to the state’s existing unclaimed property laws so the change will accelerate remittances to the state in 2010 and 2011 (but “cost” the state in subsequent years).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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