Del. Code 12, § 1156 : Decedents' Estates And Fiduciary Relations — Escheats — Abandoned Or Unclaimed Property — Internal revenue procedure; court of chancery - jurisdiction Date: 15 Aug 2016 TEXT PDF Current through 2016 Legislative Session, Act 399 (a) If, after examining any report required by this chapter and filed by or on behalf of a holder (as defined in § 1198 of this title) or after the conclusion of an examination of a holder, the Abandoned Property Audit Manager (hereinafter the "Audit Manager") determines that a holder has underreported abandoned or unclaimed property due and owing under this chapter, the Audit Manager shall mail a statement of findings and request for payment to the holder that filed, or on whose behalf the report was filed, or that was the subject of an examination. Sixty days after the date on which the Audit Manager mails a statement of findings and request for payment, it shall constitute the Audit Manager's final determination of the amount of the holder's liability, including interest and penalties, if any, for the abandoned or unclaimed property specified in the statement of findings and request for payment, excepting only the property types and amounts included in the statement of findings and request for payment as to which the holder files a timely protest with the Audit Manager pursuant to subsection (b) of this section. The State Escheator may thereafter enforce any final determination in accordance with subsection (k) of this section. (b) Within 60 days after the date of the mailing of a statement of findings and request for payment under subsection (a) of this section the holder may file with the Audit Manager a written protest of the statement of findings and request for payment in which the holder shall set forth the property type or types and amount of abandoned or unclaimed property protested, and the specific grounds upon which the protest is based. The protest is intended to allow the holder to have its objections to the final request for payment reconsidered in the first instance internally within the Department of Finance by the Audit Manager as a means of expediting resolution of any dispute. If the holder elects to file a protest and to have its objections to the final request for payment reconsidered internally within the Department of Finance, as provided by subsections (b) through (k) of this section, the holder shall exhaust these administrative remedies before initiating any proceeding in any Delaware court of competent jurisdiction. (c) The only matters that the Audit Manager shall reconsider on a protest are those property types, amounts and issues related to the examination that are set out in the written protest of the holder. The holder shall remit with the protest any abandoned or unclaimed property liability attributable to property types for which payment is requested in the statement of findings and request for payment that are not protested and shall also remit with the protest the amount of abandoned or unclaimed property liability, if any, that the holder believes to be due and owing with respect to the property types or liability that are the subject of the protest. The pendency of a protest shall not prevent the accrual of interest on any protested amount finally found to be due and owing. Holders may remit the entire amount in the statement of findings and request for payment in order to prevent the accrual of additional interest without waiving any rights for reconsideration or review of protested amounts under subsections (a) through (j) of this section, and such remittance shall be subject to refund, without interest, to the extent not finally determined to be due and owing. Failure to remit amounts required by this subsection shall result in termination of the protest and the State Escheator may thereafter enforce any final determination in accordance with subsection (k) of this section. (d) The holder may submit additional documentation and written submissions to the Audit Manager in support of the protest, provided, however, that such additional documentation and written submissions shall be made no later than 30 days following receipt of the holder's protest. The Audit Manager may convene meetings with the holder to facilitate review of the statement of findings and request for payment and the protest thereof. (e) The Audit Manager shall, within 60 days of the receipt of the holder's protest, or if additional documentation is submitted, no later than 90 days after the receipt of the holder's protest, make a written determination on the protest setting forth the Audit Manager's basis of any determination that is adverse, in whole or in part, to the holder, provided, however, that the time periods set forth in this subsection shall be subject to extension by the Audit Manager for good cause, but in no event shall any extension hereunder exceed 540 days from the day the Audit Manager received the holder's protest. The Audit Manager shall mail the written determination on the protest to the holder by certified or registered mail at the address set forth in the holder's protest. (f) Thirty days after the date on which it is mailed, the determination by the Audit Manager of a holder's protest shall be final, unless within that time a holder files a notice of appeal with the Secretary of Finance. If the holder does not file a timely notice of appeal with the Secretary of Finance, the State Escheator may enforce any final determination in accordance with subsection (k) of this section. The notice of appeal shall set forth the holder's name, mailing address, telephone number, the name of the person or persons representing the holder, the mailing address and telephone number of such persons and the matters in which the holder asserts that the Audit Manager erred in the determination on the protest of the holder. (g) After receipt of a holder's written notice of appeal, the Secretary of Finance shall as soon as practicable, but in no event later than 90 days after receipt, appoint a person who is not otherwise currently employed by the Department of Finance to act as an independent reviewer to consider the appeal of the Audit Manager's findings and make a written report to the Secretary of Finance. The independent reviewer shall be a former member of the Delaware judiciary, an individual who has been previously appointed and served as a master of any Delaware court, or an attorney licensed in the State who is qualified by experience or training to serve. (h) The appeal to the independent reviewer is de novo on the record. The record on the appeal to the independent reviewer shall be based solely upon documents submitted during the course of the examination to the Audit Manager or a person who conducted an examination on the Audit Manager's behalf, other nonprivileged materials prepared by or for the Audit Manager during the conduct of an examination, expert reports submitted to the Audit Manager by the person filing a protest, other nonprivileged materials and expert reports prepared by or for the Audit Manager during the consideration of a protest. (i) The independent reviewer shall hold an oral hearing on the appeal, which shall be held, absent agreement of the parties, within 90 days after the date on which the Secretary of Finance appoints the independent reviewer pursuant to subsection (g) of this section. At least 5 days prior to the oral hearing date, or at such other time ordered by the independent reviewer, the holder and Audit Manager shall each submit to the independent reviewer and each other a brief containing argument and referencing supporting documentation from the record before the Audit Manager or an explanation as to why such supporting documentation is not available. A decision in writing by the independent reviewer setting forth findings of fact and conclusions of law shall be sent simultaneously via certified mail from the independent reviewer to the Secretary of Finance and holder within 90 days from the date of the conclusion of the oral hearing or the completion of any post-hearing briefing requested by the independent reviewer, whichever is later. The independent reviewer shall assess costs, including the independent reviewer's fee, against a party or between the parties in the independent reviewer's discretion. (j) Unless further appealed by the Secretary of the Department of Finance or the holder as hereinafter provided, the determination of the independent reviewer as to those liabilities that are subject of the appeal shall be final as to the Department of Finance, and amounts determined to be due and owing shall be subject to collection by the State Escheator under subsection (k) of this section below if unpaid after the review. Either the holder or the Secretary of Finance may, within thirty days after the Secretary of Finance shall have mailed the independent reviewer's written determination to the holder, appeal the independent reviewer's written determination to the Court of Chancery. The Court's review shall be limited to whether the independent reviewer's determination was supported by substantial evidence on the record. If the Court determines that the record is insufficient for its review, it shall remand the case to the agency for further proceedings on the record. (k) If any person refuses to pay or deliver property, including penalty or interest thereon, to the State Escheator as required by this chapter, the State Escheator may bring an action in the Court of Chancery in the county wherein the holder resides or has a principal place of business (or if none such exists, in New Castle County) to enforce such payment or delivery. (l) Whenever a holder disputes whether reasonable cause exists for abating penalty or interest determined by the State Escheator to be due under this chapter, such holder may bring an action in the Court of Chancery for the purpose of showing an abuse of discretion by the State Escheator in making the determination that penalty or interest was due. Del. C. § 1156 Amended by Laws 2015, ch. 2,s 1, eff. 1/29/2015. 68 Del. Laws, c. 122, §7; 70 Del. Laws, c. 186, § 1; 77 Del. Laws, c. 417, § 1.;