Washington D.C. Adopts Version of 2016 Uniform Unclaimed Property Act*
Washington D.C. has become the latest jurisdiction to adopt a version of the 2016 Uniform Unclaimed Property Act, by virtue of an Emergency Act approved by the Mayor on August 23rd. For most property types, a three-year dormancy period applies (as with prior law), and the revised Act contains many of the features of the 2016 Uniform Act, including:
- securities are deemed abandoned three years after the second instance of a communication being returned by the Post Office as undeliverable (a change from previous law);
- there is a specific dormancy period for "stored-value cards" – three years after December 31 of the year of issuance, or three years since last activity (note that the prior law’s five-year dormancy period for gift cards remains in place);
- the new law applies to “virtual currency,” such as most cryptocurrencies; and
- there are specific dormancy standards for UTMAs and other tax-deferred accounts.
The new law also provides additional detail regarding notices to owners of unclaimed property. The legislation includes specific language that must be included in holder due diligence letters and provides for additional by the Administrator via first-class mail and/or e-mail (instead of just relying upon notice by publication).
The new law goes into effect on October 1, 2021. For a while. Here’s where the asterisk comes in. The status of Washington D.C. in our federal system of government is unique. Article I of the Constitution gives Congress the power to “exercise exclusive Legislation” over the District of Columbia. Pursuant to the 1973 District of Columbia Home Rule Act, the Mayor and the elected District Council have the authority to write and pass legislation. But that power is subject to Congressional approval. Because this often takes a long time, the Mayor and Council have the ability to pass “emergency legislation” without the involvement of the federal government, but those emergency measures can only be in place for 90 days. D.C. Act 24-159, which includes the Unclaimed Property Act revisions, is an “emergency” act and expires in November of this year.
Does this mean that the D.C. Unclaimed Property Act revisions are temporary? Probably not. The “permanent” version of the bill is currently making its way through the legislative process. Upon approval by the District government, it will be submitted to Congress. Only if both houses of Congress pass a Joint Resolution rejecting the law, and that Joint Resolution is approved by the President, will the new law be rejected.