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  • Unclaimed Property Q&A with Dept of Trust Lands Commissioner Jodi A. Smith

    Unclaimed Property Q&A with Dept of Trust Lands Commissioner Jodi A. Smith

    When the 67th Legislature of the State of North Dakota passed Senate Bill 2048, it made sweeping changes to the North Dakota Department of Trust Lands’ Unclaimed Property, making necessary updates and modernizing some of their processes. GNDC sat down with Commissioner Jodi Smith to discuss these changes and how they impact those working and living in North Dakota. Unclaimed Property is a division of the Department of Trust Lands which serves under the direction and authority of the Board of University and School Lands. One of their top priorities is reuniting owners with their lost or misplaced property. They are also dedicated to educating and providing guidance to holders of unclaimed property to ensure compliance with the unclaimed property laws.

    GNDC video question: How does the unclaimed property division impact the lives of North Dakotans and ND businesses?

    GNDC: What is Unclaimed Property?
    Smith: Unclaimed property refers to accounts in financial institutions and companies that have had no activity generated (or contact with the owner) for a specific period called the dormancy period. Common forms of unclaimed property include savings or checking accounts, stocks, uncashed dividends or payroll checks, refunds, traveler’s checks, trust distributions, unredeemed money orders or gift certificates (in some states), insurance payments or refunds, life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safe deposit boxes.

    Property becomes unclaimed at the end of the dormancy period.  After this time, the property – by law – must be turned over to the state for safekeeping until the rightful owner or heir can make a claim to recover the property.

    How does new legislation affect North Dakota Businesses?
    The primary function of the Unclaimed Property Division is to protect consumers by ensuring the unclaimed property is returned to the rightful owner or heir.

    Any entity doing business in North Dakota is required to review their books and records on an annual basis to ensure they are not holding property that belongs to someone else.  In the event they are, then the business must submit a report along with the property to the Division.  This new law provides much clearer instruction into details of this process. The new legislation also incorporates changes that bring unclaimed property reporting in line with current technology.
    Who must report Unclaimed Property?
    Reporting is an essential component of the unclaimed property cycle.  Businesses and organizations report the unclaimed property as part of their accounting processes.  All businesses, nonprofits, and other entities doing business in North Dakota must comply with unclaimed property statutes.  No business is too small to be exempt from the law.

    Some examples include:
    Banking and financial organizations, trust companies, investment companies, retail establishments, service industries, corporations, partnerships, cooperatives, insurance companies, utilities, State, County, and City governments, non-profit organizations, and estates.
    I read that the new law gives you the authority to request property reports and examine records. Whose records would you be requesting?
    States have the ability to audit companies to determine their compliance with unclaimed property laws.  It is important to remember that auditors can only review records related to abandoned property compliance, and only years outlined in the statute.

    Tell me about the reporting process, and how the property is moved to your Department.
    The reporting process can be condensed to a six-step process.
    The Reporting Process:
    1. Identify Abandoned/Unclaimed Property
    2. Perform Due Diligence
    3. Prepare Report (electronic format required)
    4. Submit Report
    5. Remit Payment
    6. Retain Records (Ten Years after reporting to the Administrator)
    How is the interest income used?
    In North Dakota, income generated from unclaimed property is invested in the Common Schools Trust Fund to help fund public education. Monies managed by the Board of University and School Lands – including unclaimed property – now cover 15 percent of the cost of K-12 public education in North Dakota. It is important for business leaders to understand that these funds impact their local public schools as well as every other public school in the state.
    For more information, visit our website: https://unclaimedproperty.nd.gov/app/reporting-guidelines