Just before a July 1 midnight budget deadline, Ohio Governor Mike DeWine approved Ohio’s $60 billion budget for the next fiscal year. Among the approved expenditures are $1 billion for “Cultural, Sports, and Major Sports Facilities” including $600 million “to support a transformational major sports facility mixed-use project . . . associated with a Brook Park economic development project”. This is a reference to a new stadium for the NFL’s Cleveland Browns.1 Tapping into public funds to pay for sports stadiums is hardly a new phenomenon. What makes this bill different, however, is that Ohio is providing this funding by permanently taking the unclaimed property held in the state’s possession for Ohio citizens.
The bill provides that all unclaimed funds and associated interest reported to the state “on or before January 1, 2016, are deemed abandoned and escheat to the state on January 1, 2026, if no valid claim is filed . . . on or before that date.”2 For property reported after January 1, 2016, the bill creates a rolling 10 year period whereby unclaimed funds are “deemed abandoned and escheat to the state on the tenth anniversary” of the reporting date.”3 Once the property escheats to the state “[a]ll property rights, legal title to, and ownership of unclaimed funds and interest vest solely in the state.”4
In other words, Ohio has enacted a “permanent escheat” statute pursuant to which the state ultimately takes legal ownership (not just custody) of unclaimed property, in stark contrast to the approach of nearly5 every other state. While every state has laws allowing the state to take custody of unclaimed property and states often earmark those funds for certain state expenses6 or projects7 the states’ use of the funds in those instances (unlike Ohio’s here) does not affect the owner’s future right to claim the property. It is not an overstatement to point out that the owner’s ability to claim property from the state in perpetuity has been a foundational justification of modern state unclaimed property laws for more than seventy years.8 As the National Association of Unclaimed Property Administrators (NAUPA) has explained, all versions of the Uniform Unclaimed Property Act dating back to 1954 “presume that an owner (or heir) can claim property from the state in perpetuity, regardless of when the property was transferred to state custody.”9 Indeed, NAUPA10 previously noted that this premise was central to the Uniform Law Commission’s adoption of the 2016 Uniform Unclaimed Property Act:
During the meetings of the drafting committee, numerous holders (i.e., reporters of unclaimed property) asserted that they were better suited to maintain a missing owner’s unclaimed assets than the states. While the Uniform Law Commission disagreed, it did so under the assumption that states would honor a missing owner’s claim in perpetuity. The view of the Uniform Law Commission would quite likely have been different, if states established a bar date for owner claims.11
Ohio’s new approach starkly calls into question whether the state is truly a more protective custodian of an owner’s funds than a bank, brokerage firm, or other holder having a relationship with the owner. The law means that Ohio owners whose property was reported to the state on or before January 1, 2016 have only until the end of this year to file a claim, otherwise they will permanently lose the right to reclaim their property. Thereafter, owners will have only a ten-year period to seek their unclaimed funds from Ohio, calculated retroactively,12 before permanently losing the right to do so.
The current Ohio Attorney General noted that this “timeline makes Ohio an outlier nationally and risks inadvertently harming taxpayers unaware they have money in the state’s unclaimed funds.”13 Notwithstanding the Attorney General’s comments, it appears that permanently taking the taxpayers’ property is precisely the point of the legislation, not an unintended side effect. For that reason, the new legislation is likely to be subject to constitutional challenges by owners claiming that the permanent escheat of property amounts to an unconstitutional taking of property for public use without compensation.14 Indeed, a former Ohio Attorney General announced his intention to file a lawsuit challenging the constitutionality of the measure before it was even enacted.15 The new legislation also calls into question the extent to which an unclaimed property holder can pay the rightful owner after reporting property and seek reimbursement from the state.
Any entity that ever had an Ohio address should search the Ohio Department of Commerce website to see if the state is holding its property. That said, companies should understand that filing a claim may lead the Department of Commerce to review their compliance with Ohio’s unclaimed funds law.
- Ohio Am. H.B. No. 96 at p. 2475 (Ohio Code 229.40).
- Ohio Am. H.B. No. 96 at p. 406 (amendments to Ohio Code 169.03(I)(1)).
- Id. (amendments to Ohio Code 169.03(I)(2)).
- Id. (amendments to Ohio Code 169.03(I)(3)) (emphasis added).
- In Indiana, unclaimed property permanently escheats to the state after 25 years. See Ind. Code § 32-34-1.5-48(c). In Hawaii and Rhode Island, owners have 10 years to claim funds valued at less than $100 and $50, respectively. Haw. Rev. Stat. § 523A-19(c); R.I. Gen. Laws § 33-21.1-28.1.
- For example, in Florida unclaimed property revenue is deposited into the State School Fund. Fla. Stat. § 717.123(1).
- See e.g. La. Rev. Stat. § 9:165.1 (authorizing issuance of bonds backed by unclaimed property revenue to fund renovations of I-49).
- See Prefatory Note, 1954 Uniform Unclaimed Property Act (“The Uniform Act is custodial in nature, --that is to say, it does not result in the loss of the owner’s property rights. The state take custody and remains the custodian in perpetuity); Even courts in Ohio have understood that the priority of unclaimed property laws is to return the property to the rightful owner. Ohio courts have likewise cited many justifications for that state’s unclaimed property laws – raising revenue for the state not among them. See Sogg v. White, 860 N.E.2d 163 (Ct. Com. Pl. 2006) (stating that, “[t]he purpose of the Ohio Unclaimed Funds Act is threefold: (1) to protect the property right of the owner and reunite the owner with his or her funds, (2) to provide a centralized contact for potential unclaimed-funds owners, and (3) to relieve holders of unclaimed funds from further legal liability.”).
- National Association of Unclaimed Property Administrators, Establishing a Time-bar on an Owner’s Right to Reclaim Unclaimed Property from the State is Both Unnecessary and Contrary to the Purposes of the Unclaimed Property Laws, at p. 1, available at pdf (hereinafter “NAUPA Whitepaper”).
- For their part, both NAUPA and NAST representatives voiced opposition to the Ohio legislation. See D. Monk, As deadline for a deal nears, Paycor Stadium’s fastest path to state funding may be unconstitutional, available at Dayton Daily News (Jun. 24, 2025); M. Jarboe, National experts raise red flags about Ohio lawmakers' plan to take unclaimed funds, available at News 5 Cleveland (June 24, 2025).
- NAUPA Whitepaper at p. 2.
- For example, funds remitted to the state on or before January 1, 2017 can only be claimed until December 31, 2027 and so on.
- See June 27, 2025 Letter from Ohio Attorney General D. Yost to Hon. Mike DeWine re: Browns Brook Park Stadium Project and Unclaimed Funds Escheatment Language in House Bill (HB) 96.
- See e.g., NAUPA Whitepaper at p. 4 (noting that “[t]o the extent that a state effectively cuts-off an owner’s right to claim the property, the state may be subject to an argument that it has engaged in an improper taking of private property”).
- D. Monk, Lawsuit threatened over Ohio’s use of unclaimed funds for projects like Paycor Stadium, available at WCPO.com (June 25, 2025).
Client Alert 2025-174
