ARC 8129C

ARC 8129C

Proposing rulemaking related to unclaimed property
and providing an opportunity for public comment

ITEM 1.Rescind rule 781—9.3(556) and adopt the following new rule in lieu thereof:

781—9.3(556) Forms.

9.3(1) Appropriate forms must be completed on paper or online (whichever is applicable for the requested actions) to perform the actions listed below. Current forms are available online at www.greatiowatreasurehunt.com or as supplied by the state treasurer’s office.

9.3(2) Forms required by the office include but are not limited to the following:

a.

Claim Form.

b.

Holder Reimbursement Form.

c.

Affidavit of Administration.

This rule is intended to implement Iowa Code chapter 556.

ITEM 2.Amend rule 781—9.4(556), definition of “Gift certificate,” as follows:

“Gift certificate” means a merchandise certificate or electronic gift card conspicuously designated as a gift certificate or electronic gift card and generally purchased by a buyer for use by a person other than the buyer.

ITEM 3.Adopt the following new definitions of “Electronic authentication,” “Gift card” and “Locator” in rule 781—9.4(556):

“Electronic authentication” means the use of an automated government or private sector database to confirm the identity of a claimant.

“Gift card” means an electronic gift card conspicuously designated as a gift card and generally purchased by a buyer for use by a person other than the buyer redeemable for goods or services from the issuing merchant or its affiliates.

“Locator” means a person hired or engaged to assist in the recovery of unclaimed property reported into the Act.

ITEM 4.Rescind the definitions of “Finder” and “Finder agreement” in rule 781—9.4(556).

ITEM 5.Amend subrule 9.5(3) as follows:

9.5(3) Except for unclaimed accounts of less than $50 at the time of reportingreported pursuant to Iowa Code section 556.11(1), all dormancy fees assessed against an unclaimed account must be disclosed in the report of unclaimed property filed with the division.

ITEM 6.Amend rule 781—9.7(556) as follows:

781—9.7(556) Reporting of stocks—non-freely transferableand worthless securities. A holder is not required toshall not report or deliver to the division a security identified by the holder as a non-freely transferable security. Upon determination by the division or the holder that a security is no longer a non-freely transferable security, the security shall be subsequentlyreported and remitted on the next regular (annual) date prescribed for delivery of securities pursuant to the Act. The holder shall make a determination annually whether a security that has not been reported or delivered to the division on the basis that it is non-freely transferable is no longer non-freely transferable.

This rule is intended to implement Iowa Code section 556.5.

ITEM 7.Amend rule 781—9.8(556) as follows:

781—9.8(556) Reporting of individual retirement accounts (IRAs) and other retirement accounts.

9.8(1) TheExcept as provided in subrule 9.8(2), the reporting and delivery of property in an individual retirement account, defined contribution plan, defined benefit plan, or other account or plan that is qualified for tax deferral under the income tax laws of the United States shall be extended until three years after the earliest of the following has occurred:

a.

The date of unsuccessful distribution;

b.

The date of the required distribution, as stated in agreements governing the account; or

c.

The date specified in the income tax laws of the United States by which a distribution must occur in order for the owner to avoid a tax penalty, including where the owner has died.

9.8(2) The reporting and delivery of a property in a Roth IRA shall be extended until three years after the date specified in the income tax laws of the United States by which a distribution must occur in order to avoid a tax penalty following the death of the owner. In the absence of knowledge of the life status of a Roth IRA owner, the owner will be presumed to have died upon reaching 110 years of age.

9.8(2) 9.8(3) In reporting individual retirement accounts and other retirement accounts, holders shall include the name, address,relationship to the owner, and social security number of the account beneficiary, to the extent such information is known.

9.8(4) In reporting individual retirement accounts and other retirement accounts, holders shall comply with the Internal Revenue Service Revenue Ruling 2018-17 and all other applicable tax withholding and reporting requirements.

This rule is intended to implement Iowa Code section 556.7.

ITEM 8.Amend rule 781—9.12(556) as follows:

781—9.12(556) Reporting of tax-advantaged college savings accounts.

9.12(1) Property held in a planaccount described in SectionSections 223, 529 and 529A of the Internal Revenue Code or held in ana nonretirement account or plan that qualifies for tax deferral under the income tax laws of the United States is presumed abandoned if it is unclaimed by the owner three years from the later of:

a.

The date a second item sent to the owner by first-class mail was returned as undeliverable by the United States Postal Service (USPS), unless a later mailing by first-class mail to the apparent owner was not returned as undeliverable or, for an apparent owner not receiving communications from the holder by first-class mail, the date of the last indication to the holder by the apparent owner of interest in the property; or

b.

Thirty years have elapsed after the date the account was opened.

9.12(1) The date a second item sent to the owner by first-class mail was returned as undeliverable by the United States Postal Service (USPS), unless a later mailing by first-class mail to the apparent owner was not returned as undeliverable or, for an apparent owner not receiving communications from the holder by first-class mail, the date of the last indication to the holder by the apparent owner of interest in the property; or

9.12(2) Thirty years have elapsed after the date the account was opened.Uncashed distribution checks issued from tax-advantaged accounts are reportable three years from the date the property became reportable pursuant to Iowa Code section 556.7.

This rule is intended to implement Iowa Code section 556.7.

ITEM 9.Amend rule 781—9.13(556) as follows:

781—9.13(556) Reporting of unused gift certificateand gift card balances.

9.13(1) Except as provided in subrules 9.13(2) and 9.13(3), an unused balance on a gift certificateor gift card is reportable five years from the date of issuance of the gift certificateor gift card or last usage, whichever is later.

9.13(2) An unused balance on a gift certificateor gift card that is not redeemable for cash, which was issued prior to July 2, 2014, is reportable five years from the date of issuance of the gift certificateor gift card or last usage, whichever is later.

9.13(3) An unused balance on a gift certificateor gift card that is not redeemable for cash, which was issued after July 1, 2014, and is not subject to expiration or service fees, is not subject to reporting and delivery under Iowa Code chapter 556.

This rule is intended to implement Iowa Code section 556.9.

9.13(4) An unused balance on a gift certificate or gift card that is not redeemable for cash, which was issued after July 1, 2014, and is subject to expiration or service fees, is subject to reporting and delivery under Iowa Code chapter 556. A gift certificate or gift card is subject to expiration or service fees if the face of the gift certificate or gift card so indicates, regardless of whether the issuer of the gift certificate or gift card waives such expiration or fees.

This rule is intended to implement Iowa Code section 556.9.

ITEM 10.Amend rule 781—9.18(556) as follows:

781—9.18(556) Information required to be included in report.

9.18(1) Every Holder Report Formholder report form submitted to the division must include, to the extent such information is available to the holder, the following information:

a.

to i.

No change.

9.18(2) The division may determine that the information included in the Holder Report Formholder report form is nonconforming and may require that a holder revise its report in circumstances where the Holder Report Formholder report form:

a.

to g.

No change.

This rule is intended to implement Iowa Code section 556.11.

ITEM 11.Amend rule 781—9.19(556) as follows:

781—9.19(556) Early reporting of unclaimed property.

9.19(1) A holder may request permission to report and deliver property to the division before it is presumed abandoned by sending a written request to the division.

9.19(2) The request must identify the property to be reported and delivered and the reasons for requesting permission to report and deliver the property prior to the date it is presumed abandoned.

9.19(3) The division may, at its sole discretion, consent to early reporting and delivery according to terms and conditions prescribed by the division.

9.19(4) A retirement plan administrator or other responsible fiduciary terminating a retirement plan may, following a diligent search for missing participants, report and remit any unclaimed benefits contemporaneous with the termination of the plan and is neither required to wait for three years to elapse pursuant to Iowa Code section 556.7 nor obtain written permission from the division for early reporting.

This rule is intended to implement Iowa Code section 556.11.

ITEM 12.Amend rule 781—9.20(556) as follows:

781—9.20(556) Owner notification and holder due diligence.

9.20(1) Holders shall exercise reasonable and necessary due diligence consistent with good business practice in attempting to reactivate dormant accounts and to locate owners of unclaimed property.

9.20(2) If a holder fails to perform due diligence as required by Iowa Code section 556.11(5), the treasurer may charge five dollars for each name and address account reported if 35 percent or more of the accounts are claimed within 24 months immediately following the filing of a holder report.

9.20(3) If a holder fails to undertakeperform due diligence as required by Iowa Code section 556.11, the holder will not have met the good-faith reporting standard of Iowa Code section 556.14 and the division will not be obligated to defend the holder against any claim of liability.

This rule is intended to implement Iowa Code section 556.11.

ITEM 13.Rescind rule 781—9.21(556) and adopt the following new rule in lieu thereof:

781—9.21(556) Reporting aggregate amounts to the division. Holders may report in the aggregate property with a value under $50, but holders are discouraged from doing so since it impedes the ability of the division to expeditiously pay claims. For this reason, holders are encouraged not to aggregate, regardless of item value. If a holder chooses to report in the aggregate, the holder shall be responsible to provide information required to verify and validate a claim made to aggregated properties.

This rule is intended to implement Iowa Code section 556.11.

ITEM 14.Amend rule 781—9.23(556) as follows:

781—9.23(556) Regulation of finderslocators.

9.23(1) Pursuant to Iowa Code section 556.11(10), agreements or contracts between finderslocators and owners to pay compensation to recover or assist in the recovery of abandoned property are unenforceable if made within 24 months of the date the property was received by the division. Additionally, if a holder is in possession of property that has been deemed abandoned but has not yet been timely reported and delivered to the division, an agreement to pay compensation to recover or assist in the recovery of such property is unenforceable. In no case shall the finderlocator fees or compensation exceed 15 percent of the amount of the property subject to claim.

9.23(2) A claim form signed by a finderlocator shall not be reviewed by the division. The apparent owner or owner’s legal representative shall make direct contact with the division and sign the claim form. All communication regarding the claim will be sent to the claimant. A signed, dated and notarized copy of any original agreement or contract between a finderlocator and an owner shall be included with the filing of any claim. Handwritten agreements or contracts will not be accepted. To be valid, the agreement must disclose the nature and value of the property and the name and address of the person in possession.

9.23(3) The division shall not release to a locator information deemed confidential pursuant to Iowa Code section 22.7(59), even where a claimant has authorized such release.

9.23(3) 9.23(4) Owner informationCertain publicly releasable information about owners shall be reproduced at least annually in a format to be determined by the treasurer and shall be provided to anyone requesting the information for. The treasurer may assess a fee of $20 per copy. The fee shall be paid in the form of an official check or money order and made payable to the State of Iowa. All fees for owner information shall be received by the division before the owner information is made available.

This rule is intended to implement Iowa Code sectionsections 22.7(59) and556.11.

ITEM 15.Amend subrule 9.24(1) as follows:

9.24(1) Except as stated in subrules 9.24(2) and 9.24(3), the contents of safe deposit boxes and other tangible property received by the division shall be held by the division for not less than one year, after which time the property may be sold, held, or destroyed.

a.

No employee, person related to an employee of the Iowa treasurer of state living in the same household, or contractor that providedauction or appraisal services may directly or indirectly bid on safe deposit box contents or other tangible property offered for sale by the division.

b.

For purposes of this subrule, “related to an employee” shall mean the employee’s spouse, child, stepchild, grandchild, parent, stepparent, sibling, stepsibling, or spouse of any of the foregoing persons.

ITEM 16.Amend rule 781—9.25(556) as follows:

781—9.25(556) Filing of owner claims.

9.25(1) All claims for abandoned property shall be filed with the division on the division’s claim form or through such other means or process as the division finds acceptable.

9.25(2) The claim form shall be completed in its entirety and must include the following information:

a.

Social security number or Federal Tax Identification Number, or both, of every claimant;

b.

Name, complete mailing address, telephone number and e-mailemail address, if applicable, of every claimant;

c.

Signature of claimant(s). If the claim includes stock(s) or safe deposit box contents, the signature must be notarized. The treasurer may set through policy a cash claim limit which requires, stock estimated value, and safe deposit box contents that require a signature to be notarized.

9.25(3) The treasurer shall consider any claim filed under the Act.

9.25(4) The treasurer may waive the filing of a claim form pursuant to Iowa Code section 556.19.

This rule is intended to implement Iowa Code section 556.19.

ITEM 17.Amend subrule 9.27(1) as follows:

9.27(1) A business may, in addition to providing other evidence of entitlement, be required to provide the following supporting documentation with its claims, as applicableclaim:

a.

Proof, as deemed suitable by the division, that the person signing the claim form is an officer of the business and has the authority to conduct business on behalf of the entity, such as corporate resolution or other documentation deemed suitable by the treasurer.

b.

Documentation setting forth the claimant’s federal Employer Identification Number (EIN).

c.

A copy of the claimant’s biennial report as filed with the office of the secretary of state or a copy of a current corporate tax return.

ITEM 18.Amend rule 781—9.30(556) as follows:

781—9.30(556) Claims by holders for owner reimbursements. A holder may request payment from the division under the circumstances set forth below. Regardless of whether the holder is represented by a bona fide third party, the claim must be signed by an officer of the holder. A third party may not act on behalf of the holder to request payment from the division unless such third party provides evidence satisfactory to the division in its sole discretion that such third party is acting as the holder’s bona fide representative through general power of attorney, court designation, or similar legal authority. The division may, in its sole discretion, establish a policy whichthat allows a transfer agent or a reporting agent to sign a holder reimbursement subject to meeting all the requirements set forth by the division under that policy. The establishment of such a policy shall not be construed as creating any right or entitlement of transfer or of reporting agents to sign holder reimbursements, and any such policy may be rescinded or modified at any time at the sole discretion of the division.

9.30(1) The holder has made payment to the apparent owner and filed proof of payment with the division for such a reclaimed asset. As a condition precedent to receiving reimbursement from the division, the holder shall assume liability for the reclaimed assets and indemnify and hold harmless the division from all future claims related to the reclaimed assets.

9.30(2) The holder directs the division to make payment directly to the rightful owner. The holder shall assume liability for the claimed asset and indemnify and hold harmless the division from all future claims related to the claimed asset.

9.30(3) 9.30(2) The holder reported the asset in error. As a condition for receiving reimbursement from the division, the holder shall assume liability for the reclaimed asset and indemnify and hold harmless the division from all future claims related to the reclaimed asset.

This rule is intended to implement Iowa Code section 556.19.

ITEM 19.Amend subrule 9.33(3) as follows:

9.33(3) For the purposes of the Act, a moneyor similar judgment against an apparent owner does not create an interest in the specific property held by the division on behalf of the apparent owner.

ITEM 20.Amend rule 781—9.34(556) as follows:

781—9.34(556) Approval of claims. Each claim submitted to the division is subject to the approval process outlined below. Claims overwith a cash value ofgreater than $5,000 must be authenticated either electronically or throughundergo electronic authentication or undergo such other or additional approval process as may be determined by the division. The treasurer may enter into a contract with a suitable third party that provides identity authentication. Claims over a cash value of $5,000 must receive an additional level of approval from a division manager.

9.34(1) to 9.34(3) No change.

This rule is intended to implement Iowa Code section 556.19.

ITEM 21.Amend subrule 9.35(1) as follows:

9.35(1) Claims shall be paid as follows:

a.

In the case of cash claims, final approval shall cause the claim to become part of the settlement process. The settlement file will be submitted to the department of administrative services for payment. State warrants will be mailed or may be obtained from the treasurer’s office. At the treasurer’s discretion, the division may electronically deliver funds to a claimant’s financial institution account.Fees associated with the electronic delivery of funds may be assessed to the claimant.

b.

In the case of a claim requiring the transfer of securities, final approval shall result in the division’s sending a letternotification to a third-party agent responsible for the transfer of ownership of the stocks/mutual funds, instructing the agent to have ownership of the appropriate number of shares of the property reregistered in the name of the claimant.

ITEM 22.Adopt the following new subrules 9.37(5) to 9.37(8):

9.37(5) Report of the examination findings and demand for delivery. Upon completion of an examination, the division shall provide a written report reflecting the total unclaimed property reporting liability and, pursuant to the Act, any interest due on amounts due and owing for failure to report and deliver property due and payable for prior years. The division has the discretion to hold an audit exit conference with the holder to provide the written report.

9.37(6) Informal conference. During the course of an examination, the holder may request an informal conference within the division and its representatives.

9.37(7) Delivery of examination findings by the holder. The holder shall deliver to the division within 30 calendar days of issuance of a report of examination and demand for delivery any unclaimed property and interest due, if any, to the division.

9.37(8) Examination closure letter. Upon receipt of the examination report and delivery of unclaimed property resulting from the examination, the division or its agent shall issue an examination closure letter informing the holder that the examination is closed.

ITEM 23.Amend rule 781—9.38(556) as follows:

781—9.38(556) Estimation. The division may use estimation techniques where no holder records exist or the records are insufficient to determine the holder’s obligation due pursuant to the Act.

9.38(1) Report of the examination findings. Upon completion of an examination, the division shall provide a written report reflecting the total unclaimed property reporting liability and, pursuant to the Act, any interest due on amounts due and owing for failure to report and deliver property due and payable for prior years. The division has the discretion to hold a conference with the holder to provide the written report.

9.38(2) Delivery of examination findings by the holder. The holder shall deliver to the division within 30 calendar days any unclaimed property and interest due to the division based upon the examination findings.

9.38(3) Examination closure letter. Upon receipt of the examination report and delivery of unclaimed property resulting from the examination, the division shall issue an examination closure letter informing the holder that the examination is closed.

This rule is intended to implement Iowa Code section 556.23.

ITEM 24.Renumber rules 781—9.42(556) and 781—9.43(556) as 781—9.43(556) and 781—9.44(556).

ITEM 25.Adopt the following new rule 781—9.42(556):

781—9.42(556) Confidentiality of holder data. All information provided by a holder in the form of any report, record, claim, or other document submitted to the division or its agents, with the exception of the name and last-known address of a person appearing to be entitled to unclaimed property actually delivered to the division, shall be confidential and not subject to public release or disclosure.

This rule is intended to implement Iowa Code section 22.7(59).

ITEM 26.Amend renumbered rule 781—9.44(556) as follows:

781—9.44(556) Holder amnesty program. The division may offer a holder amnesty program in order to facilitate compliance by holders that have never reported unclaimed property or have not reported in the last three years. The treasurer may provide notification of an amnesty program via the treasurer’s Web sitewebsite. The treasurer may waive interest and penalties for the amnesty program.

This rule is intended to implement Iowa Code chapter 556.