Bolin, Mickelson Beat Looming Tide of Bills from Legislators

The deluge cometh—Lee Strubinger reports the Legislative Research Council has 640 bill requests on its desks, compared to 350 bill requests during week #1 of the 2017 Session.

As of my breakfast check, the Legislative hopper shows only a couple of those bills from legislators, compared to the dozens of pre-filed bills requested by interim committees and the Executive Branch.

One such legislator bill comes from Senator Jim Bolin (R-16/Canton), who offers Senate Bill 66 to require school districts to post on their websites information about the number of registered and participating voters in their districts. This information would help petitioners figure out how many signatures they have to get to refer school board decisions like property tax opt-outs, school start date, multidistrict centers, and school gunslingers. SB 66 sounds like a reasonable move for transparency and direct democracy.

The opposite of transparency comes in House Bill 1072, Speaker G. Mark Mickelson’s first bill in the hopper, 39 sections and 7,800 words adding to the arcanity of South Dakota’s trust laws to expand the ways rich people can hide their money in South Dakota. Section 2, for instance, seeks to ease the regulation and interpretation of trust activities with the following bolded word changes:

Section 2. That § 55-1-20 be amended to read:
55-1-20. Subject to the provisions of §§ 55-1-21 and 55-1-22, a trust may be performedSubdivisions 55-1-4(2) and 55-1-5(2) notwithstanding, a purpose trust may be performed pursuant to this section and sections 3 to 20, inclusive, of this Act if the trust is for a specific lawful noncharitable purpose or for lawful noncharitable purposes to be selected by the trustee. Any property may form a part or all of the trust estate, including some, all, or an interest in some or all of the property that is the subject or purpose of a purpose trust. A governing instrument of such a trust shall be liberally construed in favor of its validity to presume against the merely precatory or honorary nature of the disposition and to carry out the trustor’s intent. If necessary, extrinsic evidence is admissible to determine the trustor’s intent. Neither the common law rule against perpetuities, nor any rule restricting the accumulation of income, nor any common law rule limiting the duration of noncharitable purpose trusts is in force in this state [HB 1072, Section 2, posted 2018.01.11]. 

Section 3 expands a provision allowing trusts for the care of a designated animal (can we call that the “Fifi Fee Law”?) to allow rich folks to leave their money in “purpose trusts” to take care of multiple animals, to preserve or promote or further any other property, or to support “any other lawful noncharitable purpose or purposes.”

Section 12 makes clear that purpose trusts need do “no filings, reports, periodic accounting, separate maintenance of funds, appointment, or registration” unless ordered by the trust arrangement itself or a court.

Section 26 does protect critter trusts from closure by trustee if their value is less than $150,000 (let’s call that the “Fifi Wee Fee Clause”).

In minor language fun, Section 32 changes a reference in the list of folks who don’t need to be notified of or consent to trust proceedings from “unborn person” to “unborn individual” but then adds language referring to “an unborn or unascertained person.” Why change person to individual in one place, then one sentence later refer to an unborn person?

Section 34 does include a useful protection against abuse, excluding employees of institutions providing care for an incapacitated individual from representing that individual in trust matters.

But Section 37 seems to invite and excuse conflicts of interest by authorizing trustees to declare representatives’ real or potential conflicts of interest “immaterial”… much as Speaker Mickelson has watered down his governmental conflict-of-interest proposals to make sure state officials can excuse their pals’ conflicts of interest.

A lot of the other language may just be reordering and clean-up, but HB 1072 is an example of South Dakota laws written by the few, for the few. I recommend that true conservatives vote against HB 1072 until they can say that Speaker Mickelson or one of his rich lawyer friends has explained the practical effect of every line of his bill in crystal clear detail that every constituent back home would grasp.

Legislative Trivia: For conservative lawmakers, Senator Bolin and Speaker Mickelson are certainly hot to trot out new measures: in addition to being the first individual legislators out with original bills, they each posted the first resolutions for constitutional amendments to their respective houses.