CHAPTER 122

FORMERLY

HOUSE BILL NO. 346

AN ACT TO AMEND CHAPTER 11, TITLE 12, OF THE DELAWARE CODE RELATING TO ESCHEATS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Section 1142, Chapter 11, Title 12 of the Delaware Code by deleting existing subsection (a) thereof and substituting therefor a new subsection (a) to read as follows:

"(a) In the month of October of each year the State Escheator shall publish in a daily newspaper of this State a statement of abandoned or unclaimed property or funds paid to him during the 12 months ending July 1 next preceding such publication which shall not have been paid to claimants and which shall not have been previously advertised under the provisions of Sections 1161, 1172, or 1183 of this title."

Section 2. Amend Section 1200, Chapter 11 of Title 12 of the Delaware Code by striking said section in its entirety.

Section 3. Amend Section 1201, Chapter 11 of Title 12 of the Delaware Code

by striking the following phrase as it appears therein in its entirety:

if the owner establishes his right to receive the abandoned property to the satisfaction of the holder within the 90-day period specified in §1200 of this title, or if it appears for some other reason" and substitute in lieu thereof the phrase if it appears".

Section 4. Amend Section 1152, Chapter 11, Title 12 of the Delaware Code by striking existing section 1152 in its entirety and substituting therefor a new section 1152 to read as follows:

"§1152. Penalties and Interest.

(a) Any banking organization failing to pay over any amounts or property as required by this subchapter or which underpays any amounts or property shall, if such failure or underpayment is due to negligence or intentional disregard of rules and regulations, pay a penalty in the amount of .5% per month of any underpayment up to a maximum of 10% of such amount.

(b) Any banking organization which fails to file any report of amounts or property required by this subchapter or who underreports any amount or property shall pay as a penalty an amount equal to .5% per month of the amount underreported up to a maximum of 5% of such amount.

(c) The State Escheator for good cause shown before the due date of any report may extend the time for filing any report or making any payment under this subchapter, and he may waive all or any portion of the penalty imposed under subsection (b) of this section or interest imposed under subsection (d) of this section if the failure is due to reasonable cause and not willful neglect.

(d) Interest at .5% per month on outstanding unpaid amounts, including penalty, shall accrue from the date the amounts or property were due under this subchapter until paid. Interest due in accordance with this
subsection shall in no event exceed 50% of the amount required to paid; provided, however, that penalties under subsections (a) or (b) of this section shall not be deemed to be interest for purposes of this subsection."

Section 5. Amend Section 1192, Chapter 11, Title 12 of the Delaware Code

by striking existing Section 1192 in its entirety and substituting therefor a new section 1192 to read as follows

"§ 1192. Penalties and Interest.

(a) Any person failing pa/ user any amounts or property as required

by this subchapter which nderpays any amounts or property shall, if such failure or underpayment is due to negligence or intentional disregard

of rules and regulations, pay as a penalty an amount equal to .5% per month of such underpayment up to a maximum of 10% of such amount.

(b) Any person which fails to file any report of amounts or property required by this subchapter or who underreports any amount or property shall pay as a penalty an amount equal to .5% per month of the amount underreported up to a maximum of 5% of such amount.

(a) The State Escheator for good cause shown before the due date of any report may extend the time for filing any report or making any payment under this subchapter and he may waive all or any portion of the penalty imposed under subsection (b) of this section or interest imposed under subsection (d) of this section if the failure is due to reasonable cause and not willful neglect.

(a) Interest at .5% per month on outstanding unpaid amounts, including penalty shall accrue from the date the amounts or property were due under this subchapter until paid. Interest due in accordance with this
subsection shall in no event exceed 50% of the amount required to be paid; provided, however, that penalties under subsections (a) or (b) of this section shall not be deemed to be interest for purposes of this subsection."

Section 6. Amend Chapter 11, Title 12 of the Delaware Code by deleting existing §1207 thereof and substituting therefor a new §1207 to read as follows:

11207. Penalties and Interest.

(a) Any person failing to pay over any amounts or property as required by this subchapter or who underpays any amounts or property shall, if such failure or underpayment is due to negligence or intentional disregard of rules and regulations, pay as a penalty an amount equal to .57. per month of such underpayment up to a maximum of 10% of such amount.

(b) Any person which fails to file any report of amounts or property required by this subchapter or who underreports any amount or property shall pay as a penalty an amount equal to .5% per month of the amount underreported up to a maximum of 5% of such amount.

(c) The State Escheator for good cause shown before the due date of any report may extend the time for filing any report or making any payment under this subchapter and he may waive all or any portion of the penalty imposed under subsection (b) of this section or interest imposed under subsection (d) of this section if the failure is due to reasonable cause and not willful neglect.

(d) Interest at .5% per month on outstanding unpaid amounts, including penalty shall accrue from the date the amounts or property were due under this subchapter until paid. Interest due in accordance with this subsection shall in no event exceed 50% of the amount required to be paid; provided, however, that penalties under subsections (a) or (b) of this section shall not be deemed to be interest for purposes of this subsection."

Section 7. Amend Chapter 11, Title 12 of the Delaware Code by adding

thereto a new Section 1156 to read as follows:

"§1156. Court of Chancery - Jurisdiction.

(a) If any person refuses to pay or deliver property, including penalty or interest thereon, to the State Escheator as required by this Chapter, the Escheator may bring an action in the Court of Chancery in the County wherein the holder resides or has his principal place of business (or if none such exists, in New Castle County) to enforce such payment or delivery.

(b) Whenever a holder disputes whether reasonable cause exists for abating penalty or interest determined by the Escheator to be due under this Chapter, such holder may bring an action in the Court of Chancery for the purpose of showing an abuse of discretion by the Escheator in making the determination that penalty or interest was due."

Section 8. Amend § 1160(a)(1), Chapter 11, Title 12 of the Delaware Code

by striking the phrase "20 years" and substituting in lieu thereof the phrase: "5 years".

Section 9. Amend § 1160(a)(2), Chapter 11, Title 12 of the Delaware Code by striking the phrase "15 years" and substituting in lieu thereof the phrase "5 years".

Section 10. Amend § 1198(8), Chapter 11, Title 12 of the Delaware Code by striking the following sentence of said subsection(8) in its entirety:

The term does not apply to a period of time during which the owner has failed or neglected to make a demand or file a claim within the time prescribed in an order or decree of court or in a legal notice served and published pursuant to law or an order of court and the period of dormancy shall not commence to run with respect to claims, demands or other property held by a holder pursuant to a written agreement which contemplates that there shall be a contemplated period of inactivity, until the expiration of the contemplated period of inactivity."

and substituting in lieu thereof the following sentences:

For good cause shown, and upon notice to the State Escheator, the Court of Chancery may, with respect to property over which the court has otherwise assumed jurisdiction, extend the period of dormancy to a specific date by which an owner may exercise a right, make a demand, or file a claim, provided each extension is set forth in a separate order of the court referring specifically to this section and each extension is no longer than three years, provided further there shall be no more than two extensions under this subsection. Except as provided in Section 1210 of this Title, the period of dormancy shall not commence to run with respect to which claims, demands or other property held by a holder pursuant to a written agreement which contemplates that there shall be a specific period of inactivity, until the expiration of the contemplated period of inactivity."

Section 11. Amend Chapter 11, Title 12 of the Delaware Code by striking §1210 thereof in its entirety.

Section 12. Amend Chapter 11, Title 12 of the Delaware Code by striking §1211 thereof in its entirety.

Section 13. Amend Chapter 11, Title 12 of the Delaware Code by inserting a new §1210 to read as follows:

u§1210. No Private Escheats.

Any provision in a certificate of incorporation, by law, trust agreement, contract or any other writing regulating the relationships between an owner and a holder, relating to property which is or may be subject to the provisions of this chapter, which provides that upon the owner's failure to act or make a claim regarding property in possession of the holder, that such property reverts to or becomes the property of the holder, in contravention of this chapter, shall be void and unenforceable."

Section 14. Amend Chapter 11, Title 12 of the Delaware Code by adding

thereto a new §1156 to read as follows:

§1156. Presumption of abandonment of personal property held by federal

government.

(a) All tangible personal property or intangible personal property, including choses in action in amounts certain, and all debts owed or entrusted funds or other property held by the federal government, or any federal agency, or any officer, or appointee thereof, shall be presumed abandoned in this state if the last known address of the owner of the property is in this state and the property has remained unclaimed for five years.

(b) This section shall apply to all abandoned property held by the federal government, or any federal agency, or any officer, or any appointee thereof, at the time of enactment, or at any time thereafter, regardless of when such property became presumptively abandoned."

Section 15. Sections 1 and 2 of this Act shall be effective for

publications required to be made by the Escheator on or after July 1, 1991. Sections 4, 5, 6, and 7 of this Act shall beeffective for property which was required to have been paid or delivered to the State Escheator but which has not been so paid or delivered as of the effective date of this Act or thereafter;provided, however, that no penalty or interest shall be incurred for payments or deliveries required to have been made prior to the effective date of this Act but which are made prior to a date 90 days after the effective date of this Act. Sections 8 and 9 of this Act shall be effective for property that has remained unclaimed for five years as of the date of its enactment into lawor thereafter. Section 10 of this Act shall be effective for property that has remained unclaimed for five years as of the date of its enactment into law or thereafter; provided, however, that such property shall not be subject to escheat until a date six months from enactment, during which time the Court may order extensions of time as provided in this Act. All other provisions shall become effective upon their enactment into law.

Section 16. If any section, part, phrase or provision of this Act or the application of such provision to any person or circumstance shall be held invalid, the remainder of this Act and the application of such provision of this Act to other persons or to other circumstances shall not be affected thereby.

Approved July 8, 1991.