Title of Regulation: 1VAC75-40. Unclaimed Property Administrative Review Process (amending 1VAC75-40-10 through 1VAC75-40-60).

Statutory Authority: § 55.1-2541 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: February 16, 2022.

Effective Date: March 3, 2022.

Agency Contact: Brad Earl, Director of Unclaimed Property, Department of the Treasury, James Monroe Building, 101 North 14th Street, 4th Floor, Richmond, VA 23219, telephone (804) 807-0073, FAX (804) 786-4653, or email bradley.earl@trs.virginia.gov.

Basis: Pursuant to § 55.1-2541 D of the Code of Virginia, the State Treasurer or Treasurer's designee shall promulgate regulations pursuant to which any person (i) asserting ownership of property remitted to the Commonwealth under this chapter, (ii) required to pay or deliver abandoned property pursuant to this chapter, or (iii) otherwise aggrieved by a decision of the administrator may file an application for administrative appeal and correction of the administrator's determination.

Purpose: The purpose of this revision to the Unclaimed Property Administrative Review Process regulations is to update language in response to recent recodification of Title 55 to Title 55.1 via Chapter 712 of the 2019 Acts of Assembly. The Department of Treasury affirms that the consistency between statute and regulation is important to public health, safety, and welfare with regard to the unclaimed property regulations.

Rationale for Using Fast-Track Rulemaking Process: Outside of the renaming of the statute and several minor semantic changes, there were no substantive changes to the statute so the action is deemed to be noncontroversial.

Substance: The Department of Treasury has amended 1VAC75-40 to conform the regulation to the recodification of Title 55 to Title 55.1 via Chapter 712 of the 2019 Acts of Assembly.

Issues: The primary advantage of the regulatory update to the public is elimination of potential confusion because of outdated statutory citations. There are no disadvantages to the public. There are no primary advantages and disadvantages to the agency or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia (Code) and Executive Order 14 (as amended, July 16, 2018). The analysis presented represents DPB's best estimate of these economic impacts.¹

Summary of the Proposed Amendments to Regulation. As the result of a legislative mandate,² the State Treasurer proposes to amend 1VAC75-40 Unclaimed Property Administrative Review Process (regulation) to update Code of Virginia citations that are no longer valid due to the recodification of the Uniform Disposition of Unclaimed Property Act³ in 2019. Additionally, obsolete text would be removed and non-consequential wording changes would be made.

Background. Pursuant to a recommendation of the Virginia Code Commission, Title 55.1 (Property and Conveyances) was created in the Code of Virginia as a revision of then existing Title 55 (Property and Conveyances).⁴ The Uniform Disposition of Unclaimed Property Act was in Title 55 prior to the legislation, but is now in Title 55.1 and renamed the Virginia Disposition of Unclaimed Property Act. The regulation contains citations to the Uniform Disposition of Unclaimed Property Act using what are now obsolete numbers. The proposed action would update the name of the act and the citations to the Title 55.1 numbers in the regulation.

Estimated Benefits and Costs. Updating citations to the Code of Virginia would be beneficial because it helps enable readers of the regulation to find relevant information. Otherwise, the proposed amendments would not have any substantive impact in practice.

Businesses and Other Entities Affected. The proposed amendments affect readers of the regulation. The regulation pertains to any person or entity (i) asserting ownership of property remitted to the Commonwealth under the Virginia Disposition of Unclaimed Property Act or (ii) required to pay or deliver abandoned property pursuant to the Virginia Disposition of Unclaimed Property Act. Such persons or people who work for such entities may be particularly interested in reading the regulation.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁵ An adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined. The proposed amendments do not produce adverse impact.

Small Businesses⁶ Affected.⁷ The proposed amendments do not appear to adversely affect small businesses.

Localities⁸ Affected.⁹ The proposed amendments neither disproportionally affect any particular localities nor affect costs for local governments.

Projected Impact on Employment. The proposed amendments do not affect employment.

Effects on the Use and Value of Private Property. The proposed amendments do not affect the use and value of private property or real estate development costs.

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¹ Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

²See https://townhall.virginia.gov/l/viewmandate.cfm?mandateid=1239

³See https://law.lis.virginia.gov/vacode/title55.1/chapter25/

⁴See Chapter 712 of the 2019 Acts of Assembly at https://lis.virginia.gov/cgi-bin/legp604.exe?191+ful+CHAP0712

⁵Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁶Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁷If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to Code § 2.2-4007.1, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁸"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁹§ 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency's Response to Economic Impact Analysis: The Department of Treasury concurs with the economic impact analysis of the Department of Planning and Budget.

Summary:

The amendments (i) update citations to the Code of Virginia that changed due to the recodification of Title 55 to Title 55.1 pursuant to Chapter 712 of the 2019 Acts of Assembly; (ii) remove obsolete text; and (iii) update definitions, clarify language, and remove a form.

1VAC75-40-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise.

"Abandoned property" means funds or other property, tangible or intangible, presumed abandoned under the act.

"Act" refers to the Uniform Virginia Disposition of Unclaimed Property Act, Chapter 11.1 25 (§ 55-210.1 55.1-2500 et seq.) of Title 55 55.1 of the Code of Virginia.

"Administrator" means the Director of the Unclaimed Property Division at the Department of the Treasury or such other person as shall be designated by the State Treasurer or the State Treasurer's designee.

"Applicant" means any person (i) asserting ownership of property remitted to the Commonwealth under the Uniform Virginia Disposition of Unclaimed Property Act, (ii) required to pay or deliver abandoned property pursuant to the Uniform Virginia Disposition of Unclaimed Property Act, or (iii) otherwise aggrieved by a decision of the administrator.

"Division of Unclaimed Property" means the Division in the Department of the Treasury of the Commonwealth of Virginia responsible for administration of the Uniform Virginia Disposition of Unclaimed Property Act.

"Holder" means a person, wherever organized or domiciled, who is (i) in possession of property belonging to another, (ii) a trustee in case of a trust, or (iii) indebted to another on an obligation.

1VAC75-40-20. State Treasurer Administrator to give written notice to any person asserting ownership of property when payment denied.

The State Treasurer administrator will issue a denial of payment letter to any person asserting ownership of property remitted to the Commonwealth under the act where it is determined that the evidence submitted does not provide sufficient proof of ownership.

1VAC75-40-30. State Treasurer Administrator to give written notice for failure to pay or deliver abandoned property.

The State Treasurer administrator shall issue a written notice to any person who he the administrator ascertains has failed to pay or deliver abandoned property. The notice will demand the remittance of the property and payment of any penalties and interest. The notice will be accompanied by a detailed explanation of the person's right to administrative or judicial review. The notice will require the holder to remit the demanded property, plus penalties and interest, if any, to the State Treasurer administrator within 90 days from the date the notice is received by the holder unless the holder requests (i) an administrative review in accordance with this regulation, or (ii) a judicial review in accordance with § 55-210.22 55.1-2534 of the Code of Virginia.

1VAC75-40-40. Request for administrative review.

Any person aggrieved by a decision of the administrator may file an application a request for administrative review and correction of the administrator's determination.

1. Any person asserting ownership of property remitted to the Commonwealth receiving a denial of payment letter from the State Treasurer administrator may file an application for administrative review within 90 days from the date the notice is received by such person.

2. Any person receiving a written notice from the State Treasurer administrator demanding the remittance of property and the payment of penalties and interest, if any, may file an application for administrative review within 90 days after receipt by the holder of the written notice.

3. Any person otherwise aggrieved by a decision of the administrator may file an application for administrative review within 90 days from the date the written notice is received by such person.

1VAC75-40-50. Application Submission of request for administrative review.

All requests for an administrative review are required to be submitted on the form entitled "Application for an Administrative Review" within the prescribed time period. The Application for an Administrative Review must be in writing and accompanied by the documentation to support the review or an explanation as to why such supporting documentation is not available. No application request shall be denied solely on the basis that no supporting documentation is available or that additional documentation may be desirable. Failure to submit the Application for an Administrative Review request within the prescribed time period will bar administrative but not judicial review of the matter.

1VAC75-40-60. Administrative review process steps.

A. The Application for an Administrative Review form request must be submitted to the administrator as agent for the State Treasurer within the prescribed time period.

B. The administrator will contact the applicant to schedule the administrative review meeting within 30 calendar days of the receipt of the Application for an Administrative Review request.

C. The administrative review will be held at the office of the State Treasurer Department of the Treasury at an agreed upon time during the next 30 calendar days or at such later time as is mutually agreed upon by the applicant and the administrator. Prior to the review meeting, the applicant shall present any additional evidence and pertinent information supporting the basis for the Application for an Administrative Review request.

D. The review panel for the Department of the Treasury will consist of the State Treasurer or designee, the Director of Unclaimed Property or designee, and a representative from the Office of the Attorney General. A representative from the Division of Unclaimed Property Audit or Claims area may also participate in the administrative review meeting. The applicant may be assisted at the review meeting by his agent or by legal counsel, or both.

E. During the administrative review meeting, the applicant will have an opportunity to explain his reason for requesting a correction. Members of the State Treasurer's review panel may ask questions to clarify their understanding of the issues. There will be no examination or cross-examination of any of those present at the meeting. The Division of Unclaimed Property (Division) shall allow the applicant to make an audio recording of the administrative review meeting at the applicant's expense and using the applicant's equipment. The division may make an audio recording of the administrative review meeting at the division's expense and using the division's equipment. The division shall, upon request of the applicant, provide the applicant a transcript of a meeting recorded by the division. The division may charge the applicant for the cost of the requested transcription and reproduction of the transcript. Receipts from the charges for the transcripts shall be credited to the division for reimbursement of transcription expenses.

F. The State Treasurer's review panel has the ability to approve claims, correct errors and amend or withdraw any denial of payment letter or other written notice from the administrator or State Treasurer.

G. Based on the evidence and additional information presented during the review meeting, the State Treasurer will issue a written determination to the applicant within 90 days of the receipt of the Application for an Administrative Review request. The State Treasurer will notify the applicant and the administrator if a longer period is required. The State Treasurer's written determination will also advise the applicant of his right to seek judicial review pursuant to § 55-210.22 55.1-2534 of the Code of Virginia.

FORMS (1VAC75-40)

Application for an Administrative Review (eff. 9/04).