Michigan Considers B-to-B Exemption & Some Thoughts on Nomenclature
The Michigan legislature is currently considering House Bill 4563. The bill would add a so-called "business-to-business" exemption to the Michigan Unclaimed Property Act providing that "This act does not apply to any property issued, held, due, or owing in any commercial transaction between 2 or more business associations or other business entities." That bill is still pending before the Michigan House.
Of course, such "B2B" property is big business for the state too. According to the Michigan House Fiscal Agency, the bill would have a "negative impact" on "revenue" from this source. Daily readers might recall that yesterday's post quoted a news article that described Texas's shortening of dormancy periods as "allowing unclaimed property to revert more quickly to the state." What do these statements have in common? A presumption (practically correct, but legally invalid) that unclaimed property "belongs" to the state. In the Michigan example, the House Fiscal Agency candidly states what is obvious - that the states consider unclaimed property (i.e., money that belongs to someone else) - to be "revenue." In the Texas example, the underlying presumption appears to be that all property belongs to the state, but requires the Unclaimed Property Act to "revert" back to its rightful owner (not the person entitled to the funds, but the state).
Granted, it would be much more cumbersome for those drafting legislative analysis to write that "the bill negatively impacts unclaimed property collection, which is treated as revenue by the state during the time it is held in trust for the rightful owner, until the same is claimed." But, if the state truly stands in the shoes of the owner, it should make that clear even when describing its own functions.