Most legislation passed in South Dakota takes effect on the following July 1, unless it has an emergency clause or has specific other effective dates in the enacting language. The 2025 legislature adopted, and Governor Rhoden signed, some bills of interest to financial institutions.
TRUSTS
Senate Bill 69 was the Trust Task Force Bill which substantively added the position of trust tax advisor to the directed trust provisions, allowing the person creating the trust to give a tax advisor certain powers to direct the trustee as to tax matters and absolving the trustee from liability for following the directions. At least one tax advisor must be a fiduciary. Other provisions updated certain code references and clarified some provisions which allow changes to irrevocable trusts.
LIENS AND LENDING
House Bill 1083 modified the requirements to obtain an agricultural processor’s lien, requiring a statement to be filed with the UCC records for perfection of the lien, rather than the local register of deeds filing which was previously the rule. The thresher’s or processor’s lien must be filed within 30 days after the threshing or processing was furnished, and provisions are made for the notice to purchasers or consignees, and allows the lien to be treated as an agricultural lien under the UCC with the UCC enforcement mechanisms. This Act, however, is an exception to the general rule and is not effective until January 1, 2027.
Senate Bill 88 increased the amount of exempt proceeds when a homestead is sold or divided by court order from the current $60,000 to $100,000. The exemption is $175,000 for a person who is seventy years plus or a surviving spouse of such a person so long as it remains a homestead.
MOTOR VEHICLE TITLES
HB 1129 created a new procedure for the transfer of motor vehicles and boats at death. Upon the existing title owner’s death or the death of the last survivor with joint tenancy, if the title owner wishes, they may designate a beneficiary on the certificate of title. A trust may be the beneficiary, and there are procedures which must be followed to designate the transferee-beneficiary. This procedure cannot be used if the titled vehicle has any lien or encumbrance noted on the title.
SB 131 also dealt with vehicle titles and established an electronic option for vehicle titles. This bill makes a number of amendments to SDCL 32-3 concerning vehicle titles, liens, and transfer, and provides a one-year period of rulemaking, stating that by July 1, 2026, the South Dakota Department of Motor Vehicles “shall” establish an electronic title or registration system for motor vehicles, and the statute provides a number of requirements for that system. The bill also makes several technical amendments concerning title registration, liens, and transfers, and provides some additional changes amending treatment of mobile homes or sectional homes for real estate tax purposes. Financial institution lenders who note liens on vehicle titles will want to be sure to keep up with the rules and regulations promulgated in the system established by the South Dakota Department of Motor Vehicles in the next year before July 1, 2026.
CASH PAYMENTS FOR SCHOOL EVENTS
A group of related bills which led to much discussion and finally passed involved acceptance of cash payments for admission to a school-affiliated event for a school district or accredited nonpublic school. The bill which was finally passed and reached the Governor’s desk for signature was Senate Bill 219, which basically says that if the school district doesn’t want to accept cash, it must let the person into the event if they have sufficient cash and seating is available, and the admission fee charged is less than $200 per person. A school-affiliated event includes any events sponsored or conducted by the school or in which the school participates.
PROHIBITIONS OF FIREARMS CODES
Finally, Senate Bill 81 states that no financial institution may require the use of a firearms code that distinguishes a firearms dealer from a general merchandise retailer or sporting goods dealer, and may not discriminate against the firearms dealer by declining a card transaction or declining to do business with or charge a higher transaction of interchange fee to a customer or merchant based on the assignment or non-assignment of a firearms code, or otherwise discriminate for such reasons. This bill was the result of many discussions between the South Dakota Bankers Association, the NRA, and The National Sports Shooters Federation, and has been adopted in many states.
Questions? Contact a Davenport Evans lawyer at 605-336-2880, [email protected], or find a specific attorney on our Our Lawyers page.
Davenport, Evans, Hurwitz & Smith, LLP, located in Sioux Falls, South Dakota, is one of the state’s largest law firms. The firm’s attorneys provide business and litigation counsel to individuals and corporate clients in a variety of practice areas. For more information about Davenport Evans, visit www.dehs.com.