PIERRE, S.D. (KELO) — The South Dakota Legislature opened the state’s door to independent trust companies in 1995. Only one lawmaker from that session is still serving: Republican Sen. Lee Schoenbeck, who happens to have been one of the bill’s prime sponsors.

Schoenbeck said in a recent interview that he doesn’t really remember much about what happened back then. Perhaps that’s not unusual, given that it was 28 years ago. KELOLAND News recently spoke with him about what he could — and couldn’t — recall.

“If you’d have asked me, are you the prime sponsor of that trust bill, I’d have said, I don’t think so. And then I went back and looked, and I was the (Senate) prime,” Schoenbeck said. “And I have this vaguest recollection of somebody from the Janklow administration saying, Hey, will you prime this in the Senate? And, really, that’s it.”

HB-1262 had just two sponsors: then-Rep. Roger Hunt (who died in 2018) and Schoenbeck. It moved through the House of Representatives 57-12 on February 21. But Tom Adam, a Pierre lawyer representing the South Dakota Bankers Association, strongly opposed it; one reason was some bank officials worried their trust departments would lose business.

Six days later, a Senate committee amended the legislation, so that trust companies would have to pay annual taxes, based on their years in operation in South Dakota, regardless of their net income. Doug Hajek, a Sioux Falls lawyer working to get the bill approved, had suggested the changes during frequent negotiations with Adam.

The move worked. The bankers shifted their position. At the Senate hearing, Adam stayed in his chair, rather than testify as an opponent.

On March 1 the revised bill won the Senate’s backing, 34-1; the ‘no’ came from then-Sen. Kermit Staggers. Two days later, the House agreed to the Senate version 66-3; the nays came from Bob Drake, Jeff Monroe and Bill Napoli. Governor Bill Janklow signed it into law on March 16, 1995.

Looking back, Schoenbeck said, “The more interesting thing is, when we created this, nobody really perceived it as any big deal.” He smiled about what he said next: “I suppose in hindsight I should change my biography and say, I was the Senate sponsor to create this big industry, but nobody saw it that way.”

Big, indeed: Today, more than 100 trust companies are based in South Dakota. They employ about 500 lawyers, accountants and administrative staff. A tally compiled by the South Dakota Division of Banking last year showed they had more than $600 billion in assets — 100 times more than state government’s entire budget.

“Nobody has come up to me, ‘Hey you were the Senate prime on that trust thing, how do you feel about it?’ It was such a non-event when it happened,” Schoenbeck said. “I just got done telling somebody about some piece of legislation that surprised some it went through the Senate so easily, that the mark of a good leader is something good happens and nobody knows how the hell it happened — and I would say that about the trust industry thing.

“Obviously some thought went into it,” he continued. He said he could remember votes on several other big issues from back then. But on this one — no. “I do not remember the trust. It was a non-event.”