March 30, 1978
Mr. Gene Paul Kean
Minnehaha County State's Attorney
Minnehaha County Courthouse
Sioux Falls, South Dakota 57102
Mr. Robert Haar
Turner County State's Attorney
Turner County Courthouse
Parker, South Dakota 57053
Official Opinion No. 78-13
County participation in private community action agency corporations
Dear Messrs. Kean and Haar:
You have requested an official opinion from this office based on the following factual situation:
FACTS:
Minnehaha and Turner Counties may soon be requested to endorse, participate in, contribute to, and appoint one board member to a private, nonprofit community action corporation. The envisioned corporation is designed to supplement those programs and services currently offered the poor by a local public community action agency, created pursuant to SDCL 1-24, as a delegate to the South Dakota Community Action Agency.
On February 1, 1974, by an Executive Order of the Governor, the South Dakota Community Action Agency, also sometimes referred to as the South Dakota CAP, was created. Prior thereto, Turner County and Minnehaha County, together with other counties in the region, were part of an agency known as the Southeastern Council of Governments (SECOG). After February 1, 1974, SECOG became a part of the South Dakota CAP.
It appears by way of the Executive Order of February 1, 1974, all counties within the State were given a specific time limit to accept the designation and to be included within the South Dakota CAP. The lack of any response within the thirty days was treated as a county acceptance. This thirty-day period was not part of the Executive Order of February 1, 1974, but instead was a requirement set forth by the federal act or regulations which initiated the Exective Order.
It appears that the Board of County Commissioners of Turner and Minnehaha Counties, together with the other counties in SECOG, did not take any formal action or enter into or accept any agreement or designation to be a part of the South Dakota Community Action Agency, i.e., South Dakota CAP.
Based on the above facts you ask the following questions:
QUESTIONS:
1. Is a county authorized to create or establish a private, nonprofit community action corporation?
2. Is a county authorized to become a party to or participate in a private, nonprofit community action corporation?
3. Is a county authorized to make financial contributions to a private, nonprofit community action corporation?
4. If appointed as a board member to a private, nonprofit community action corporation, in what capacity may the appointed county commissioners serve?
5. Can a board of county commissioners, in other words, a county, without formal action by the board, as a board, enter into or accept an agreement or designation to be a part of a state agency created by Executive Order of the Governor?
IN RE QUESTION NO. 1:
In responding to your first question, it is difficult to be specific because I am not certain what you mean by the term “create or establish.” The nonprofit corporation statutes are available for any citizen in South Dakota to use. If a nonprofit corporation structure could be of benefit to a county purpose, I see no reason why a corporation could not be set up by going through the separate steps of incorporating under Chapter 47-22.
People who happen to be county officials might act as incorporators or directors, but this does not mean that the county, in effect, “creates or establishes” the corporation.
A reading of 42 U.S.C.A. 2790 to 2797, inclusive, indicates that the United States Congress intended local government entities or private nonprofit agencies to be involved in implementing the provisions of the Economic Opportunity Act on a local level. Thus, I can see reasons for a private, nonprofit organization with a proper structure being available in order to implement this federal legislation. This does not mean, however, that counties could be the “creator” of these nonprofit organizations referred to above.
IN RE QUESTIONS NOS. 2 AND 3:
In reference to your second and third questions, I believe it is possible for county officers such as county commissioners to be involved in the nonprofit private community action corporation. I do not believe that the county as such can act as an incorporator or director. A county could, however, in my view be authorized to give support to such a properly structured nonprofit community action agency operating as a community action agency under 42 U.S.C.A. 2790 to 2979, inclusive. (See SDCL 7-32-9.)
IN RE QUESTION NO. 4:
As to your fourth question, it appears to me that a county commissioner who was appointed to a board of directors of a private, nonprofit community action corporation could serve on the board as a representative of the county for purposes of satisfying requirements of federal law that the private, nonprofit community action corporation have an administrative board that is composed in part of elected county officials. I do not believe, however, that the county commissioner sitting on this board could thereby individually bind the county to matters by his individual actions. Boyd v. Lake County, 72 S.D. 431, 36 N.W. 2d 384 (1949).
IN RE QUESTION NO. 5:
In response to the final question raised above, it is important to note that the Economic Opportunity Act of 1967, as amended, provided substantial amounts of federal monetary assistance to local governmental and private, nonprofit entities to combat the sources and effects of poverty on the people of this country. The thrust of the various programs of assistance in this legislation was to work through local community action agencies and projects. Pursuant to 42 U.S.C.A. § 2790, Executive Order 73-21 established the South Dakota Economic Opportunity Office as the official community action agency for the State of South Dakota (excluding reservation areas). This Executive Order was the implementation of the Governor's decision, after consulting with various advisory groups, to have one central state community action agency rather than numerous localized ones. Prior to this Executive Order, four multicounty private, nonprofit community action agencies had been established and were operative. After Executive Order 73-21 was issued, federal authorities withdrew recognition of these private, nonprofit agencies and recognized instead the state agency, i.e., the South Dakota Office of Economic Opportunity. Subsequent to this recognition, the State then recognized various “delegate” agencies including SECOG and the four multicounty nonprofit community action agencies which had been previously established.
The programs and structures of the Economic Opportunity Act were such that after the designation of the central state agency, all counties in the state were given the choice to be in or out of the programs made available under the Act. Counties were given thirty days to opt out at the beginning or the presumption would be that the counties did not wish to have the programs available under this legislation to be available in their counties. After the counties were “included” by this act of a failure to opt out, counties would still, however, have been able to get out if they wanted to. Under OEO Instruction 6302-2, it is clear that the option to “opt out” of the program was a continuing option of the county government.
Thus, in my view, a county as such did not need to choose to be included by any formal action by the county commissioners, since the county was not obligated or bound by this act of omission. The county became “involved” initially by virtue of federal requirements which presumed that counties wanted the federal assistance available in these programs unless they said no within thirty days or exercised the option later on to get out of the program. Based on this understanding of what has occurred, it does not appear to me that the sovereign powers of the county were violated or that the county government was thereby forced to improperly assume any 'obligations' without requisite formal action of the board of county commissioners.
Respectfully submitted,
William J. Janklow
Attorney General
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