The Delaware Secretary of State recently finalized its estimation regulations without any substantive change to Delaware’s proposed estimation practices. The final version of these regulations, which became effective July 11, 2017, acknowledges that the state received numerous public comments criticizing the proposed regulations, including the state’s practice of extrapolating unclaimed property liability to Delaware based on all unclaimed property reported in the base period, including property that was escheatable to other states. However, as anticipated, the Secretary of State “decided to not make [any] suggested changes”. The Secretary of State’s finalized estimation regulations can be viewed here: Abandoned or Unclaimed Property Voluntary Disclosure Agreement Program.
Notably, the Secretary of Finance’s estimation regulations have not yet been finalized. The technical correction bill (“SB 79”), enacted on June 29, 2017, pushed back the deadline for the Secretary of Finance to finalize its version of the estimation regulations from July 1, 2017 to on or before December 1, 2017. Holders are still required to notify the Delaware Secretary of State of their intent to convert from an audit to a voluntary disclosure agreement (“VDA”) or expedited audit within 60 days of the Secretary of Finance finalizing its estimation regulations. While the Secretary of Finance’s estimation regulations have yet to be finalized, its proposed estimation regulations currently mirror the Secretary of State’s finalized estimation regulations. It seems likely the Secretary of Finance will follow the Secretary of State by not making any substantive changes to its proposed estimation regulations before the December 1, 2017 deadline; however, holders may want to take their time to prepare their records, consider their options, and “wait and see” what the final estimation regulations will look like before converting their ongoing audit into a VDA or expedited audit. See our prior coverage, Technical Correction to Delaware’s Unclaimed Property Overhaul Legislation Includes Extension of Time to Convert an Audit to a Voluntary Disclosure Agreement, July 11, 2017.