DOVER — Seven months after a federal judge rebuked Delaware for its abandoned property practices, lawmakers have brought a bill designed to fix the issues raised by the court.

Delaware, which was being sued by packaging company Temple-Inland over the state’s effort to claim more than $1.4 million in uncashed accounts payable and payroll checks, “engaged in a game of ‘gotcha’ that shocks the conscience,” District Court Judge Gregory Sleet wrote.

The state, which went back 22 years in the audit, failed to inform the company it should retain records for the audit, used a biased method of estimation and took advantage of “loopholes,” the judge said in his ruling.

Although the state and Temple-Inland ultimately reached a settlement, the terms of which were not disclosed, the underlying problems surrounding unclaimed stocks, checks and gift certificates remained.

On Jan. 13, three days into the legislative session, a bipartisan coalition of lawmakers filed legislation making changes the main sponsor described as “major.”

Bryan Townsend

“The intention is to address the concerns that the federal district court raised last year, which in effect really kind of froze parts of the program. Most importantly, the lookback is no longer going to be 20, 30 years. It’s going to be 10,” Sen. Bryan Townsend, D-Newark, said.

“Companies are now required to retain records that line up with that timetable. The state also has to retain records. Tthose are some of the key aspects of just making sure this program is sustainable, legally sustainable far in the future.”

Because Delaware is home to so many incorporated businesses, thanks to its case history, Court of Chancery and friendly laws, it often benefits when an asset’s owner cannot be found. In such cases, according to the priority rules established by the U.S. Supreme Court, the property’s value goes to the state of incorporation.

As a result, abandoned property is a major moneymaker for the state, projected to bring in $554 million in the current fiscal year. Only the personal income and franchises taxes are expected to generate more revenue.

Sen. Townsend’s bill, which passed the Senate with no votes against last week, came about as part of a collaborative effort with the administration of former Gov. Jack Markell, who left office last week.

“Delaware is unique in the unclaimed property world, because of our role as the state of incorporation for so many entities, we get so much of this property. It’s part of the blessing,” Sen. Townsend said.

“But we work hard as a legislature, work hard as a judiciary, work hard as a community to remain at the forefront of corporate law. So we shouldn’t apologize for the fact that we get so much of this, but the court politely/pointedly let us know that our program has gotten to a point where it was no longer legally defensible in a variety of ways.”

The measure allows any business currently under an audit that began before July 22, 2015, to change the audit into a voluntary disclosure agreement, and an amendment to the bill makes some technical changes and removes virtual currency from the definition of unclaimed property as originally included in the proposal. A separate bill will be brought later dealing with virtual money.

Gov. John Carney said in a statement the changes “would make our system more consistent and fair.”

The House Administration Committee will hear the bill today, and it could be voted on by the full chamber Thursday.