July 23, 2003
Thomas H. Harmon
Attorney at Law
P.O. Box 550
Pierre, SD 57501-0550
OFFICIAL OPINION 03-04
School Reorganization Incentive Payments
Dear Mr. Harmon:
On behalf of the Cresbard, Faulkton, Northwestern, and Ipswich School Districts, you have requested an official opinion from this office regarding the following fact situation:
FACTS
The Cresbard, Faulkton, Northwestern, and Ipswich School Districts are contemplating a possible reorganization plan pursuant to SDCL ch. 13-6. The tentative plan currently under consideration would result in four existing districts being reduced to three districts. The Faulkton and a portion of the Cresbard district would consolidate forming a new district entity with a new name. The reorganization plan would further result in consolidation of the Northwestern District with part of the former Cresbard District and the Ipswich District with part of the former Cresbard District, into two other new districts. This plan must be approved by all four school boards, approved by the Secretary of the Department of Education, and ultimately approved by the voters in all four districts.
Under the plan a substantial portion of the former Cresbard School District territory would combine with the former Faulkton School District territory to create a new district. Further, a significant portion of the former Cresbard District would consolidate with the Northwestern District. The remaining portion of the former Cresbard School District, far more than can be accommodated by a minor boundary change, would consolidate with the Ipswich District. There may also be some minor boundary changes to the Hoven and perhaps Edmunds Central Districts; however, neither Hoven nor Edmunds Central would be involved in the reorganization plan and thus they would not be newly consolidated districts.
At the present time, the districts are contemplating, as part of the reorganization plan, to provide for what is known as "former school district representation areas" as provided in SDCL 13‑6‑13.1. Since that statute requires that consideration be given to the population variance as established by judicial precedent under the "one person one vote" concept, it is not anticipated that such provision would be made in the Ipswich/Cresbard consolidation. The numbers do appear to be appropriate for such consideration in the Northwestern/Cresbard consolidation and the Cresbard/Faulkton merger. These facts show that a true restructuring of the governance of these districts is contemplated. While not critical to my opinion, the very fact that all four districts can make fundamental changes in their governmental structure in this type of multi-district reorganization serves to support the notion that this is not a mere rearrangement of boundaries as is allowed under other statutes. See SDCL 13‑6‑84.
Assuming a plan along the lines discussed above is adopted, approved by the Department of Education and its Secretary, and approved by the voters in all four districts, you raise an issue of statutory interpretation upon which you request guidance.
Based on the above facts, you have raised the following question:
QUESTION
Would the provisions of SDCL 13‑6‑92 relating to reorganization incentive funding apply to all of the students in all four districts, assuming that the reorganization incentive money would be limited to a maximum of four hundred students for any single district reorganized under the plan and that no student would be counted twice?
ANSWER:
The answer to your question is "yes."
My answer is based upon statutory interpretation. While my Office is not judicial in nature the principles of statutory interpretation developed by the courts constrain my interpretive function as well. The South Dakota Supreme Court has set out rules for statutory interpretation in several cases. The purpose of statutory construction is to discover the true meaning of the law, which is to be ascertained primarily from the language expressed in the statute. The intent of a statute is determined from what the Legislature said, and the interpretation must confine itself to the language used. Words and phrases in a statute must be given their plain meaning and effect. When the language in a statute is clear, certain and unambiguous, there is no reason for construction, and the courts' only function is to declare the meaning of the statute as clearly expressed. Since statutes must be construed according to their intent, the intent must be determined from the statute as a whole as well as enactments relating to the same subject. State v. Lorenz, 2001 S.D. 17, ¶ 12, 622 N.W.2d 243, 245-46 (quoting Dahn v. Trownsell, 1998 S.D. 36, ¶ 14, 576 N.W.2d 535, 539) (further quoting Moss v. Guttormson, 1996 S.D. 76, ¶ 10, 551 N.W.2d 14, 17). In addition to the above rules, the Legislature in SDCL ch. 2‑14 enacted rules of construction. SDCL 2‑14‑6 provides: "Words used in the singular number include the plural, and the plural, the singular, except where a contrary intention plainly appears."
With this background, the present statutes can be analyzed. SDCL 13‑6‑92 provides as follows:
Consolidated school districts entitled to additional funds. If two or more school districts consolidate after July 1, 2001, the new school district is entitled to an additional three hundred dollars per average daily membership as defined in § 13-13-10.1, up to a maximum of four hundred average daily membership from each school district or partial school district as it existed prior to consolidation for the first year after consolidation. If two or more school districts consolidate after July 1, 2001, the new school district is entitled to an additional two hundred dollars per average daily membership as defined in § 13-13-10.1, up to a maximum of four hundred average daily membership from each school district or partial school district as it existed prior to consolidation for the second year after consolidation. If two or more school districts consolidate after July 1, 2001, the new school district is entitled to an additional one hundred dollars per average daily membership as defined in § 13-13-10.1, up to a maximum of four hundred average daily membership from each school district or partial school district as it existed prior to consolidation for the third year after consolidation.
The plain language of SDCL 13‑6‑92 clearly provides incentive money to the new school district to be formed out of Faulkton and Cresbard. It is further my opinion that the other two new school districts formed out of Northwestern and Cresbard, and Ipswich and Cresbard are entitled to the incentive money. SDCL 13-6-92 provides that "If two or more school districts consolidate . . . the new school district is entitled . . . ." The first question is whether the statute envisions a situation in which there is a consolidation, and more than one "new school district" is created. The answer which follows from standard rules of construction, and especially SDCL 2-14-6, is yes. The latter statute provides that "Words used in the singular number include the plural . . . except where a contrary intention plainly appears." Thus, unless a contrary intention plainly appears from the statutory arrangement, it is legitimate to read SDCL 13-6-92 as "If two or more school districts consolidate . . . the new school district, [or districts are] entitled . . . ."
Second, the question arises whether the entities resulting from the consolidation are in fact "new school districts." There is no controversy about whether the "new school district" formed by the combination of Faulkton and Cresbard is qualified. Two school boards will cease to exist and a new board will be created.
The more difficult question is whether Northwestern and Ipswich are "new school districts" by virtue of their participation in the overall consolidation plan and their acquisition of significant portions of the former Cresbard district. My answer is yes. In both cases we understand that the amount or area transferred would constitute more than a "minor boundary change" under SDCL 13-6-85. SDCL 13-6-13 provides that the plan for reorganization applicable to Northwestern and Ipswich must be a comprehensive plan. This implies that what is being created is "new" and not merely enlarged. SDCL 13-6-67, in turn, refers directly to the "new district or districts" formed when all of the area of the reorganized school district has been transferred.
In addition, there is a clear legislative indication that, while involvement in an overall consolidation plan and acquisition of a significant portion of a consolidated district would qualify a district as a "new district" entitled to funds, mere involvement in an overall consolidation plan and acquisition of only an insignificant amount of area would not. If the amount of area acquired were insignificant, i.e., less than two percent of the area of the school district from which the area is taken, the transaction is a mere "minor boundary change." SDCL 13-6-85. As contemplated in SDCL 13‑5‑13(12), districts acquiring or losing territory through boundary changes are not part of the "comprehensive reorganization plan." Thus the Legislature has provided that participation in a consolidation plan requires absorption of a significant amount of area that will not qualify as a boundary change under 13-6-85.
Third, SDCL 13‑6‑92 states that reorganization incentive funds extend to "a maximum of four hundred average daily membership from each school district or partial school district as it existed prior to consolidation for the first year after consolidation." (Emphasis supplied). These words indicate that any school district that is reorganized as a result of the plan is also entitled to the reorganization incentive funds. The amount is determined by the size of each school's reorganized district as it existed prior to consolidation. This can only mean that all ADM from all districts participating in the reorganization will be entitled to the incentive money, but only if the involved districts actually reorganize by following the provisions of SDCL 13-6-13 and are not merely making minor boundary changes pursuant to SDCL 13-6-85. Consistent with this opinion, under the facts you have provided, neither the Hoven nor Edmunds Central Districts would be entitled to incentive money.
Fourth, the transaction as outlined in this opinion qualifies as a "consolidation," and as such incentive money would be available to all three new districts. This interpretation arises from SDCL 13‑6‑1(7), which was amended in 2003 to provide that "'consolidation,' is defined as the combining of two or more districts in which a new district and school board are created." Since this plan calls for the four school districts to be consolidated to three and that no existing district would survive as it existed previous to the consolidation, the plan meets the condition precedent set forth in SDCL 13-6-92. If all four districts were to survive, or no new school boards created (only boundaries changing), there could be no incentive money since the formation requirement of the SDCL 13-6-1(7) would not have been met.
It is my further opinion that this interpretation does not lead to an absurd result in conflict with the manifest intension of the statute, see State v. Davis, 1999 S.D. 98, ¶¶ 7-8, 598 N.W.2d 535, 537-38. Public policy, expressed in SDCL 13‑6‑92, is that consolidation is to be encouraged. The Legislature has chosen to do this by offering a generous reorganization incentive. The money is distributed in the first, second, and third years following consolidation.
Each of the school districts must understand that the statutes discussed in this opinion do not create a guaranteed entitlement to the incentive funds. SDCL 13-6-94 requires the Department to pay the incentive funds only out of money appropriated for the incentive fund statute by the Legislature. Accordingly, if the result obtained here is not the result intended, the Legislature may be able to address the situation as it sees fit.
Respectfully submitted,
LAWRENCE E. LONG
ATTORNEY GENERAL
LEL/CME/jmm
