Latest news with #SB155
Yahoo
19-02-2025
- Business
- Yahoo
Unclaimed property trust fund passes committee
SIOUX FALLS S.D. (KELO) — A resolution calling for a statewide vote next year on whether a trust fund for unclaimed property revenue should be created has won approval from a committee of the South Dakota Legislature. In a unanimous vote of 8-0 on Wednesday, the proposed ballot measure now goes to the full Senate. McCook Lake bill waits for panel action Senate Joint Resolution 505 would seek to propose and submit to the voters at the next general election an amendment to the Constitution of the State of South Dakota, establishing the trust for unclaimed property fund. The resolution states that a trust fund will be created and named the trust for unclaimed property fund: 'Upon passage of this Act and after each receipt of any unclaimed property thereafter, the state treasurer shall, after paying all claims, expenses authorized by law, and deposits into the general fund as authorized by law, deposit into the trust fund the net receipts from unclaimed property.' The bill adds that beginning July 1, 2027, and each July first thereafter, the state treasurer shall distribute a portion of the interest and income of the trust fund into the general fund. The calculation of the amount to be distributed must be determined by law and must promote growth of the trust fund and a steadily growing distribution amount. The resolution is intended to work in tandem with Senate Bill 155, which calls for creating a trust fund and allowing for the drawdown of unclaimed property funds from the general fund into the trust fund. SB 155 starts with just over $61 million of unclaimed property being used for the budget that starts July 1 and then gradually draws down to $25 million ongoing. South Dakota has an entire chapter of state laws on unclaimed property and defines it as 'money, rights to claim refunds or rebates, postal savings deposits, bonds, United States savings bonds, notes, certificates, policies of insurance, other instruments of value, choses-in-action, obligations whether written or unwritten and anything of value of any nature whatsoever' that has been abandoned or forgotten. Lt. Gov. Tony Venhuizen said the interest would more than replace this revenue and then South Dakota would have a more fiscally prudent plan going forward. 'Currently, we rely on unclaimed property as an ongoing revenue source this year, $60 or $65 million,' Venhuizen said. 'We don't want to just blow a $60 million hole in the budget this year, so there's a plan in that bill to ramp that reliance down over the next several years and transition so that these funds go into a trust fund available to pay claims.' No one spoke in opposition of the resolution on Wednesday. State government in 2024 received what was then a record amount of unclaimed property totaling $133,617,777, minus $38 million paid in claims. This year, Haeder's office had taken in an estimated $247,259,387 as of February 12, plus another $60 million targeted for the state budget. Yeas- Beal (R), Deibert (R), Karr (R), Larson (D), Mehlhaff (R), Perry (R), Peterson (R), Pischke (R) Excused- (R) Jensen Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
18-02-2025
- Business
- Yahoo
Deal reached to limit state's use of unclaimed property
PIERRE, S.D. (KELO) — A compromise that would gradually reduce the amount of unclaimed property revenue in South Dakota's state government budget and would increase the amount that the state treasurer holds in reserve to pay future claims has cleared a key test in the Legislature. SD native deals with loss of federal job The Senate Committee on Appropriations gave a nod of approval on Tuesday to a proposal that originated from one of its members, Republican Sen. Taffy Howard. Appropriators voted 9-0 to recommend the amended version of Senate Bill 155 to the full Senate for debate. That could come as early as Thursday afternoon. The amended version of Howard's legislation was reached through negotiations involving the office of Gov. Larry Rhoden, Lt. Gov. Tony Venhuizen, State Treasurer Josh Haeder, state Finance Commissioner Jim Terwilliger and several lawmakers including Howard and Republican Rep. Chris Kassin. South Dakota has an entire chapter of state laws on unclaimed property and defines it as 'money, rights to claim refunds or rebates, postal savings deposits, bonds, United States savings bonds, notes, certificates, policies of insurance, other instruments of value, choses-in-action, obligations whether written or unwritten and anything of value of any nature whatsoever' that has been abandoned or forgotten. After three years, financial institutions, businesses and others holding unclaimed property must remit it to the state treasurer. The state treasurer must deposit nearly all of it in state government's general fund. However, there's no limit of time for a legitimate claim to be filed. Currently state government has $1.2 billion of liability for unclaimed property revenue that's been spent but could be claimed by its rightful owners at any time. State government in 2024 received what was then a record amount of unclaimed property totaling $133,617,777, minus $38 million paid in claims. This year, Haeder's office had taken in an estimated $247,259,387 as of February 12. The amended version of SB 155 calls for using no more than $61,384,827 for state government's general fund expenses in the 2026 budget. That cap would decrease by $4 million annually through 2035, when the amount would reach $25 million. It would remain at $25 million after that. At the same time, the amended SB 155 calls for placing whatever is left after payments and expenses in what would be known as the unclaimed property trust fund. The legislation calls for state government to then receive 4% of the earnings from the unclaimed trust each year. Howard has introduced various proposals on unclaimed property in past years but none won acceptance. On Tuesday, Lt. Gov. Venhuizen told appropriators that he's been working with Howard on the latest one, including while he was still in the Legislature. 'It's an idea that in my estimation, its time has come,' he said. State Treasurer Haeder told the panel there's currently no money set aside for any large future claim. He said establishing an unclaimed trust fund would protect state government and taxpayers and, through the interest-bearing feature, would ensure a long-term stable revenue source. 'We have the opportunity to plant a tree today,' Haeder said. The amended version had support from South Dakota Retailers Association executive director Nathan Sanderson and from state Finance Commissioner Terwilliger. 'I think this puts a well thought-out process into place over the next several years,' Terwilliger said, noting that establishing a trust would improve state government's annual financial statements by eliminating most of the unfunded liability that unclaimed property represents. 'This is a huge step in the right direction.' Republican Sen. Glen Vilhauer, a committee member, recalled the struggle from a week ago when appropriators decided how much unclaimed property revenue should be included in revenue estimates for 2025 and 2026. Vilhauer said as an accountant he had been concerned that state government was treating unclaimed property as revenue rather than as a liability. 'It will make our budgeting process easier to grapple with as we go forward,' he said. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
18-02-2025
- Business
- Yahoo
Lawmakers aim to stabilize ‘volatile' unclaimed property revenue with trust fund
State Sen. Taffy Howard, R-Rapid City, listens to a presentation during a South Dakota legislative budget committee meeting on Jan. 15, 2025, at the Capitol in Pierre. (Joshua Haiar/South Dakota Searchlight) South Dakota lawmakers, the Governor's Office and the state Treasurer's Office hope to bring more predictability to a volatile revenue source and protect the state from a large liability by creating a trust fund for unclaimed property. Senate Bill 155, advanced by the Senate Appropriations Committee on Tuesday at the Capitol in Pierre, would limit the amount of unclaimed property funds that could be used in the state's general fund budget. The bill would also create an interest-bearing trust fund to pay claims and accrue interest on the rest of the money. That interest could then be used as a revenue stream. Unclaimed property consists of an array of abandoned or forgotten private assets, including money from bank accounts, PayPal accounts, stocks, life insurance payouts, uncashed checks, unused refunds, and even the contents of safe deposit boxes. Holders of the money or items, such as banks, try to find the owners. The property reverts to the state after three years. Huge surge in 'unclaimed property' is sole revenue bright spot for SD legislators Unclaimed property revenue surged to record levels during the past few years as people left assets behind during pandemic-motivated relocations, and because of Bancorp's relocation of its national headquarters to Sioux Falls. The state typically spends much of the revenue, while setting aside only a portion of it for people who come forward to claim their property. Yet rightful owners can claim their assets from the state at any time, which has so far created a $1.2 billion perpetual and unfunded liability for the state, said Sen. Taffy Howard, R-Rapid City, who introduced the bill. Much of the money is never claimed. Last year, as the state took in about $175 million of unclaimed property, it paid out $38 million in claims to 6,768 claimants. South Dakota has received $310 million worth of unclaimed property so far this year. 'It's been a benefit for our citizens, but I hope you'll agree that the time is now to create this trust fund and alleviate the burden that has also been placed on our citizens because of this,' Howard said. Unclaimed property 'is fine in some ways,' Lt. Gov. Tony Venhuizen told lawmakers, but it's problematic, volatile and unpredictable as well, he said. 'Even though we know that a lot of these unclaimed property items will never be claimed, they could be and they stay on our books as a claim against the state,' Venhuizen said. Under SB 155, lawmakers would only be able to use $61.4 million of unclaimed property money for the general fund in fiscal year 2026. The rest of the funds would be placed into a trust fund used to pay out claims and accrue interest. The amount of unclaimed property that could be used for general fund expenses would gradually decrease to $25 million in fiscal year 2035 and would remain there. The state would begin drawing 4% of the market value of the trust fund to use as general fund revenue by 2031, while still retaining the rest of the trust fund to pay potential claims. 'There's concern that we may not have some one-time money or we're going to slowly reduce our ongoing revenue,' said state Treasurer Josh Haeder, 'but you're going to make it up from that interest earned at the end of the day.' The Senate Appropriations Committee unanimously approved the bill, sending it to the Senate. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
