Senate wants a trust fund for unclaimed property
PIERRE, S.D. (KELO) — South Dakota lawmakers may have found a way to forever save some golden eggs that have been unexpectedly falling into state government's lap.
Senators on Thursday unanimously approved legislation that would gradually reduce the amount of unclaimed property revenue that's been used to prop up state government's budgets year after year.
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The legislation, Senate Bill 135, would instead steer into a special interest-bearing account the millions of dollars of revenue from unclaimed property that owners neglect or have forgotten about, and that banks and others by law must turn over to state government after three years.
An accompanying measure, Senate Joint Resolution 505, calls for a statewide vote in 2026 on adding a trust fund for unclaimed property to the South Dakota Constitution.
For decades revenue from unclaimed property has by law flowed into state government's general fund for use as the Legislature sees fit. Republican Sen. Taffy Howard has tried for years to get lawmakers to change the law, so that most of the money wouldn't be spent.
On Thursday, that day came.
Howard modestly said her legislation 'took a lot of collaboration, negotiation' that through the years involved the commissioner of the Bureau of Finance and Management, Jim Terwilliger; current State Treasurer Josh Haeder and his predecessor, Rich Sattgast, who's now state auditor; current Lt. Gov. Tony Venhuizen, while he was still a House member; former state Sen. Brock Greenfield, who's now state school and public lands commissioner; 'many state senators' including Republicans Chris Karr, Ernie Otten, Glen Vilhauer and Carl Perry; and several House members such as Republican Chris Kassin and Democrat Erik Muckey.
'So many hands went into making this,' Howard told the other 34 senators. 'And this is something that is going to benefit our citizens, I believe, for generations to come.'
She explained why. 'We are liable in perpetuity for any claims to that money. So we have spent the money, but we have nothing set aside to pay their own claims. This will remedy that,' Howard said.
According to State Treasurer Haeder, state government's liability for unclaimed property now exceeds $1.2 billion. His office works through promotional advertising and other means to let people know they have money waiting to be claimed, and tens of millions of dollars have been paid in recent years. But that's just a fraction of how much state government has received.
Vilhauer noted how Howard spread the recognition. 'But I have to give all the credit to her for quarterbacking this, this year,' he said. As an accountant, Vilhauer said he had asked himself why unclaimed property was considered state revenue when it's legally not 'At best, it's an interest-free loan that we're using,' he said. With the increasing amounts that have been turned over to the state treasurer in recent years, it's now become 'a huge issue,' Vilhauer said.
Karr, now in his ninth year as a legislator, said that the legislation would be memorable, in a good way.
'I think this is one of those moments when we all need to take a second and realize that, I think, you're going to be really proud of this and what we are doing here today,' Karr said. 'This is going to be something you're going to look back in 20 years and — as this compounds and grows, it creates a revenue stream all of its own, in a responsible way, to help take care of the needs of South Dakota — we started that today. We started it here.'
Karr turned toward Howard. 'The good senator has championed this,' he told the rest of the Senate. 'We wouldn't be here today, I think, without the senator, being the champion since I've been here. (She) brought this several times — uphill battle — and it's great that so many parties got together to work this out in a responsible way. We didn't just pull the rug out underneath the revenue and say, 'Yup, we got a hole, good luck.' We figured out a responsible way to do this and set up something we are going to be proud of for South Dakota.'
The legislation would cap unclaimed-property revenue at $61,384,827 in the 2026 budget for state government and $58 million for the 2027 budget. From there, the amount would go down $4 million each subsequent year until it reaches $25 million for the 2035 budget. It would remain at $25 million after that.
Karr turned again and looked at Howard. 'I just want to recognize that and all those that have been involved with this,' he said.
Said Perry, 'This is something we can look back on and say, this is a great idea.'
The legislation and the resolution will next be considered by the House of Representatives, where Kassin is lead sponsor.
Howard busied herself with desk work as the Senate roll call vote proceeded. She looked up and smiled after Republican Sen. Tom Pischke enthusiastically responded 'Yes!' when his turn came.
Senate Secretary Peggy Laurenz read the tally: 'Mr. President, we have 35 yeas, zero nays.' Howard looked up again.
This time, the smile was that of a long fight, finally won.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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