CT legislators package unclaimed property reform into budget bill
State legislators are making a last-minute push to pass legislation that would help return millions of dollars in uncashed checks, forgotten security deposits, unclaimed insurance policies and other misplaced financial assets to Connecticut residents.
The Democratic leadership in the legislature tucked several reform measures for the state’s Unclaimed Property Program into this year’s budget implementer bill, which lawmakers sometimes use as a vehicle to pass a variety of legislation that didn’t gain traction during the session.
That effort could salvage proposals that are meant to make the state’s unclaimed property program more efficient and user-friendly.
Connecticut Treasurer Shawn Wooden asked lawmakers earlier this year to pass a bill that would overhaul several aspects of the unclaimed property program, which the state uses to accumulate millions of dollars from banks, utilities, insurance companies and other financial institutions every year.
Wooden, who is not seeking reelection this fall, advocated for changes to the program after the Connecticut Mirror published an investigation that highlighted how the state had returned less than 37% of the $2.3 billion in unclaimed property it collected in the past two decades.
Lawmakers want to improve that return rate by giving people more notice when the state takes possession of their money.
The language that is wrapped into the budget bill would require the treasurer’s office to mail notices to anyone who has unclaimed property that was seized by the state within the past year.
Those changes could help to make more individuals, businesses, nonprofits and local governments aware that the state is in possession of their cash and enable them to file a claim with the treasurer’s office.
But the pending legislation will likely fail to accomplish one of Wooden’s primary goals this session: to enable the treasurer’s office to return money to individuals even if they didn’t formally file a claim.
The budget bill includes a section that gives the treasurer permission to issue checks to anyone with unclaimed property valued at $2,500 or less. But that change won’t do much in practice, since lawmakers don’t intend to give the treasurer’s office the tools it needs to locate individuals and verify their current addresses.
The legislation that Wooden initially requested this year would have allowed the treasurer’s office to cross-check the list of unclaimed property with data from the Department of Motor Vehicles, the Department of Revenue Services and the Department of Labor.
State lawmakers, however, stripped that data-sharing requirement out of the current budget bill. And without it, the treasurer’s office won’t be able to track down people in order to return their money.
Gabriella Martin, a spokeswoman for Wooden, said it is unlikely that the treasurer’s office will be able to automatically issue checks to a large number of people without receiving additional data from other state agencies.
“The treasurer made his recommendations clear in his proposed language to the Legislature, but it is ultimately up to legislators to set the legal parameters of the program,” Martin said. “By removing the requirement for certain state agencies to confirm or provide the current address for rightful owners, our ability to expand the pool of potential automatic payments will be limited.”
During an earlier committee hearing, Sen. John Fonfara, D-Hartford, said he was concerned about the treasurer’s office automatically mailing payments to people because he was not certain the addresses would be accurate.
Fonfara could not be reached immediately for this story.
Ron Lizzi, a Connecticut resident who has lobbied for improvements to the unclaimed property program for years, said the bill lawmakers are currently considering is a step in the right direction.
But he wished Connecticut would join the growing number of other states that are proactively returning money to people.
“I’m happy that we finally made some progress on this issue, but I’m disappointed that automatic return of money was essentially disabled in the bill,” Lizzi said. “If we are going to reform the program, we should look at what other states are doing and adopt best practices.”