HB-4289, As Passed House, October 22, 2013HB-4289, As Passed Senate, October 15, 2013

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4289

     A bill to amend 1995 PA 29, entitled

"Uniform unclaimed property act,"

by amending section 31 (MCL 567.251), as amended by 1997 PA 195.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 31. (1) The administrator may require a person who has

not filed a report under this act or a person who the administrator

believes has filed an inactive, incomplete, or false report, to

file a verified report in a form specified by the administrator.

The report shall state whether the person is holding any unclaimed

property reportable or deliverable under this act, describe

unclaimed property not previously reported or as to which the

administrator has made inquiry, and specifically identify and state

the amounts of property that may be in issue.

     (2) The administrator, at reasonable times and upon reasonable

notice, may examine the records of a person to determine whether

the person has complied with this act. The administrator may

conduct the examination even if the person believes he or she is

not in possession of any property reportable or deliverable under

this act. The administrator may contract with any other person to

conduct the examination on behalf of the administrator.

     (3) If a person is treated under section 13 as the holder of

the property only insofar as the interest of the business

association in the property is concerned, the administrator,

pursuant to subsection (2), may examine the records of the person

if the administrator has given the notice required by subsection

(2) to both the person and the business association at least 90

days before the examination.

     (4) Any examination performed by the administrator or his or

her duly authorized agents must be performed in accordance with the

generally accepted auditing standards to the extent applicable to

unclaimed property examinations. A person who has been audited by

the administrator or his or her duly authorized agents or a person

whose books, records, and papers have been examined by the

administrator or his or her duly authorized agents shall be

provided a complete copy in printed or electronic format of the

audit report, which shall identify in detail the work performed,

the property types reviewed, any estimation techniques employed,

calculations showing the potential amount of property due, and a

statement of findings as well as all other correspondence and

documentation which formed a basis for the findings. Not later than

6 months after the effective date of the amendatory act that added

this subsection, the administrator shall electronically file a

request for rule-making with the office of regulatory reinvention

pursuant to the administrative procedures act of 1969, 1969 PA 306,

MCL 24.201 to 24.328, to initiate rules on auditing standards.

     (5) When the person being examined does not have substantially

complete records, the administrator or his or her duly authorized

agents may determine the amount of any abandoned or unclaimed

property due and owing based upon a reasonable method of estimation

consistent with the standards described in subsection (4). If the

person being examined has filed all the required reports and has

maintained substantially complete records, then all of the

following apply to the examination:

     (a) The examination shall include a review of the person's

books and records.

     (b) The examination shall not be based on an estimate.

     (c) The administrator or his or her duly authorized agents

shall consider all evidence presented by the holder to remediate

the findings.

(6) (4) If an examination of the records of a person results

in the disclosure of property reportable and deliverable under this

act, the administrator may assess the cost of the examination

against the holder at the rate of $50.00 a day for each examiner;

however, the charges shall not exceed the value of the property

actually found to be reportable and deliverable. The cost of

examination made pursuant to subsection (3) shall be imposed only

against the business association.

(7) (5) If a holder fails after the effective date of this act

to maintain the records required by section 32 and the records of

the holder available for the periods subject to this act are

insufficient to permit the preparation of a report, the

administrator may require the holder to report and pay an amount as

may reasonably be estimated from any available records.

     (8) As used in this section, "substantially complete records"

means at least 90% of the records necessary for unclaimed property

examination purposes as defined under the principles of internal

controls. The determination of substantially complete records shall

not be made solely as a percentage of the total overall individual

records to be examined, but also on a materiality level of value of

the records. The lack of greater than 10% of records in 1

particular property class to be examined does not result in the

extrapolation of error in those areas in which a person has filed

all the required reports and has maintained at least 90% of the

overall records for that particular property class. Substantially

complete records are not meant to be an absolute measurement of all

available records.