South Dakota Treasurer reveals over $1 billion in unclaimed funds awaiting rightful owners

This article was created by AI using a video recording of the meeting. It summarizes the key points discussed, but for full details and context, please refer to the video of the full meeting. Link to Full Meeting

The Joint Committee on Appropriations of South Dakota convened on January 15, 2025, to discuss various budgetary matters, including a significant focus on unclaimed property. The meeting began with a request for a one-time allocation of $50,000, which was not included in the governor's budget proposal.

The discussion transitioned to the unclaimed property division, where it was revealed that the state treasurer currently holds over $1.2 billion in unclaimed funds. These funds remain available for claim indefinitely, a policy established by state statute. The committee clarified that the term "receipts" is used to describe these funds, as they are owed to individuals rather than being classified as revenue generated from taxes.

Budget estimates presented included $581,000 for employee salaries and benefits, $2.9 million for operating expenses, and $40,000 for supplies. Additionally, the treasurer's office anticipates approximately $35 million in claims payments to rightful owners, a figure based on previous years' data and current trends.

Questions arose regarding the perpetuity of unclaimed funds, with representatives inquiring about the legal basis for this policy and how it compares to practices in other states. The treasurer's office confirmed that while some states have modified their laws, South Dakota maintains a policy of indefinite claims.

The committee also discussed the potential risks associated with unclaimed property, particularly the possibility of financial institutions withdrawing from the state, which could drastically reduce future receipts. It was noted that while the state does not generate interest on these funds, they are required to return any claims made by individuals.

Further inquiries addressed the nature of unclaimed property, which includes not only cash but also items from safety deposit boxes. The treasurer's office confirmed that nearly all unclaimed property is converted to cash, with a small percentage consisting of physical items.

The meeting concluded with a discussion on the potential establishment of a trust fund for unclaimed property, which could provide a more stable financial framework for managing these funds. The treasurer expressed support for this initiative, emphasizing the need for a responsible approach to handling unclaimed property to avoid financial vulnerabilities for the state.

Overall, the meeting highlighted the complexities surrounding unclaimed property management in South Dakota, the financial implications for the state, and the ongoing efforts to ensure rightful owners can reclaim their funds. The committee plans to continue discussions on these topics in future sessions.

Converted from Joint Committee on Appropriations - Day 2 meeting on January 15, 2025
Link to Full Meeting