June 13, 1984

Mr. Don Barber, Manager 
Lower James Conservancy Subdistrict 
Box 344 
1315 North Main 
Mitchell, South Dakota 57301

OFFICIAL OPINION NO. 84-25

Dissolution of conservancy subdistricts

Dear Mr. Barber:

You have requested an official opinion from this office in regard to the  following factual situation:

FACTS: 

Conservancy subdistricts are required by statute and regulation to prepare a budget, hold public hearings on the proposed budget, and submit a proposed budget to the Board of Water and Natural Resources for review and approval by July 1, each year.  The Legislature at its recent special session, however, enacted Senate Bill 1, which becomes effective on August 2, 1984, and which dissolves the existing conservancy subdistricts effective December 31, 1984. On January 1, 1985, five (5) new water development districts become existing political subdivisions.  Some of the lands included in the water development districts will be the same as lands now included within the existing subdistricts, although there will be differences. 

The Board of Directors of the Lower James Conservancy Subdistrict questions the request that the subdistrict submit a budget for FY 85 (January 1, 1985 through December 31, 1985) in that the money will no longer be needed for subdistrict operation.  The Board of Directors feels that to budget for the administrative expenses of an agency that includes four counties that are not presently in the area taxed by the subdistrict does not fall within subdistrict law as it presently exists.

Based upon those facts, you have asked the following question:

QUESTION: 

Under present subdistrict law, is it legal to prepare a budget and submit a tax resolution to the counties of the Lower James Conservancy Subdistrict, anticipating that at least a portion of the funds requested will be collected and used by a different political subdivision?

The Legislature in the 1984 special session enacted Senate Bill 1, entitled  'An Act to provide for establishment of water development districts.'  Section 2 of that Act, which becomes effective August 2, 1984 (SDCL 2-14-16), dissolves existing conservancy subdistricts effective December 31, 1984. Section 1 of that Act provides as follows: 

That § §  46A-3-1 to 46A-3-68, inclusive, and 46A-3-72 be repealed effective December 31, 1984.  However, tax levys extended pursuant to § §  46A-3-66 and 46A-3-67 for the calendar year 1985 pursuant to 1984 tax resolutions shall remain in effect and shall be paid over to the board of water and natural resources for distribution pursuant to section 5 of this Act.

It is clear from that language that the Legislature contemplated that existing subdistricts should go through their usual budgeting process pursuant to SDCL Ch. 46A-3 and adopt a budget for fiscal 1985.  It is also clearly  contemplated that a tax resolution be adopted in 1984 to fund that budget, and that the tax levy would be extended pursuant thereto.

The purpose of so providing is evident from a reading of Section 3 of the Act.  The dissolution of conservancy subdistricts does not affect the validity of long-term contractual obligations of the subdistricts.  See 1961-62 AGR p. 100.  The tax revenues necessary to fulfill those contractual obligations must continue to be collected until those obligations are satisfied; the Legislature has designated that collection responsibility to the Board of Water and Natural Resources.

To accomplish that result for the next (1985) budget year, the Legislature obviously intended that the conservancy subdistricts carry through with their normal budgeting process as required by SDCL 46A-3-65.  That statute, together with SDCL 46A-3-44, put forth what factors are includable in the budgeting and taxation process; those statutes, together with SDCL 46A-3-66 and 46A-3-67 remain the law applicable to subdistricts until the repeal of those statutes effective December 31, 1984.  Accordingly it is my opinion that the conservancy subdistricts should go through their normal budget process as though dissolution of the subdistricts was not going to occur.

If that budgeting process generates funds not needed by the Board of Water and Natural Resources to satisfy subdistrict obligations, Section 5 of the Act specifies how those funds, together with remaining assets, are to be  distributed.  Obviously, that could result in some monies budgeted by the subdistricts for FY 85 finding its way into water development district accounts. However, I do not believe that affects the validity of the budgeting process required by SDCL 46A-3-65 as contemplated by the Act.

The crux of your inquiry appears to center upon the legality of the legislative direction, that a portion of the assets owned and monies budgeted by one political subdivison be transferred to and utilized by another political subdivision, which does not include the same geographic area.  It is my opinion that this is an action within the power of the Legislature.

The power of the Legislature over political subdivisions is plenary.  In Williams v. Book, 61 N.W.2d 290, 294 (S.D. 1953) the South Dakota Supreme Court held: 

In Hunter v. Pittsburg, 207 U.S. 161, 28 S.Ct. 40, 46, 52 L.Ed. 151, the Court answered the contention that taxpayers of a municipality could not be taxed for the benefit of a municipality with which it may be consolidated in this way: 

'The state . . . may take without compensation such property, hold it itself, or vest it in other agencies, expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the charter and destroy the corporation.  All this may be done, conditionally or unconditionally, with or without the consent of the citizens, or even  against their protest.  In all these respects the state is supreme, and its legislative body, conforming its action to the state Constitution, may do as it will, unrestrained by any provision of the Constitution of the United States.'

I have discovered no constitutional provision which would serve to curb that plenary power in this instance.  See Williams v. Book, supra; County of Tripp v. State of South Dakota, 264 N.W. 2d 213 (S.D. 1978); Douglas Independent School Dist. No. 3 v. Bell, 372 N.W.2d 25 (S.E. 1978).  Therefore, my answer to your question is YES.

Respectfully submitted,

Mark V. Meierhenry
Attorney General