An Act to apportion interest earnings from the unclaimed property trust fund to school districts.

Be it enacted by the Legislature of the State of South Dakota:

Section 1. That § 13-13-1 be AMENDED:

13-13-1. The commissioner of school and public lands, after any adjustments that have been made pursuant to § 5-10-18.3, shall apportion the school funds as follows:the:

(1) The commissioner shall ascertain from the division of education the total number of resident pupils students in average daily membership, as defined in § 13-13-1.1, in each school district and the total number of pupils students in average daily membership in all school districts, and on that basis of the school population, the; and

(2) The commissioner shall apportion to each school district, pro rata, such share, as its population of resident pupils students in average daily membership in the school district bears to the total number of pupils students in average daily membership in all school districts.

The funds to be apportioned include funds derived from the lease of school lands, the lease of public lands not apportioned to any educational, penal, or charitable institution, the interest, dividends, and other income on invested funds derived from the sale of school lands and public lands not apportioned to any such institution of these institutions, and the interest, dividends, and other income on invested funds derived from the five percent paid by the United States on the sale of public lands within the state, and the distribution amount from the unclaimed property trust fund, pursuant to § 43-41B-24.5.

Section 2. That § 43-41B-24.4 be AMENDED:

43-41B-24.4. There is created in the state treasury the trust fund for unclaimed property. The fund consists of any net receipts from unclaimed property that exceed the maximum deposit requirements of § 43-41B-24.3.

The state treasurer shall administer the fund. The purpose of the fund is to provide for the return of unclaimed property, provide for the payment of audit expenses, and deposit into the general fund the distribution amount, in accordance with § 43-41B-24.5. Distribution amounts from the fund must be budgeted through the general appropriation bill, as provided for in § 43-41B-24.5, or expended by special appropriation. Moneys comprising the principal amount in the trust fund for unclaimed property may not be appropriated by the general appropriation bill or by special appropriation.

Section 3. That § 43-41B-24.5 be AMENDED:

43-41B-24.5. Beginning in fiscal year 2026 and each fiscal year thereafter, the state treasurer shall, after paying from the unclaimed property operating fund all claims and any administrative costs associated with the sale of unclaimed property, deposit into the general fund the net receipts from unclaimed property, up to the general fund contribution limit, as established in § 43-41B-24.3.

Any net receipts from unclaimed property that exceed the general fund contribution limit as defined in § 43-41B-24.3, must be deposited into the trust fund for unclaimed property.

The state investment officer shall calculate an amount equal to four percent of the market value of the trust fund for unclaimed property, without invading principal, as eligible for distribution to the general fund commissioner of school and public lands for apportionment pursuant to § 13-13-1. Until fiscal year 2031, the distribution must be based on the market value as of each December thirty-first, beginning with the market value as of December 31, 2025. Beginning with the distribution in fiscal year 2031, the market value must be determined by adding the market value of the trust fund at the end of the sixteen most recent calendar quarters as of December thirty-first, and dividing the sum by sixteen. Upon notice of the amount by the state investment officer, the state treasurer shall transfer the distribution amount from the trust fund to the general fund commissioner of school and public lands, as soon as practicable after July first of the next fiscal year.