SPRINGFIELD, Ill. -- The Illinois treasurer said he opposes a bill that would take away his office's authority to hire auditors to help recover residents' unclaimed property.
Businesses are legally required to make a good faith effort to find the owners of unclaimed property, such as unpaid life insurance benefits and forgotten bank accounts, and must turn it over to Treasurer Mike Frerichs' office if unsuccessful.
But Frerichs said audits are necessary because not everyone complies with the law.
"It would provide a get-out-of-jail-free card for companies that knowingly keep unclaimed property and would erase a tool used by every industry in America that double check that they're operating efficiently," Frerichs said.
Illinois holds more than $2 billion in unclaimed property, with more than one-fourth coming through audits, according to Frerichs' office.
But supporters of the bill argue that the hiring of contingency fee auditors, who collect a "finder's fee" on unclaimed property they recover, incentivizes behavior that rewards private companies at the expense of taxpayers, The State Journal-Register reported.
Illinois Chamber of Commerce President Todd Maisch said audits could still be done, but in a way that protects taxpayers
"Chamber initiative, SB 2901, allows all types of audits except for those funded on a contingency basis," Maisch said. "That is those audits conducted by an outside firm where the firm is compensated based on how much revenue they can extract from businesses."
The bill is sponsored by Republican Sen. Pamela Althoff and has been assigned to the Senate Judiciary Committee. A hearing has not yet been scheduled.
Information from: The State Journal-Register, http://www.sj-r.com