January 21, 1976
Representative Linda Lea Miller
2808 South Kiwanis
Sioux Falls, South Dakota 57105
OFFICIAL OPINION NO. 76-7
Legality of the rules of the Board of Trustees of the Retirement System
Dear Representative Miller:
You have requested an opinion from this office based upon the following factual situation:
I request an opinion of the Attorney General in regard to the legality of the Rules of the Board of Trustees of the Retirement System. My request is not as to the manner in which they were enacted, but as to whether the Board of Trustees may in fact elect the members of the Board of Trustees pursuant to proposed Rules ARSD 47:07:05.
My question relates to whether SDCL 3-12-49 requires an election of trustees from within the classifications set forth in SDCL 3-12-48. Presently, the Board, pursuant to the previously cited proposed rules, plans to elect their own successors and thus become a self-perpetuating board.
My specific question is whether ARSD 47:07:05 is a proper exercise of the Trustees power pursuant to SDCL 3-12-49. My second question is, does not SDCL 3-12-49 require an election of the Trustees by the groups set out under SDCL 3-12-48?
SDCL 3-12-48 provides:
There is hereby created a governing authority of the system to consist of a board of sixteen persons known as the board of trustees. Voting representation on the board shall be the following:
(1) Two state government members;
(2) Two teacher members;
(3) A participating municipality member;
(4) A participating county member;
(5) A state cement plant member;
(6) A state law enforcement member;
(7) A justice, judge or law trained magistrate;
(8) The commissioner of personnel;
(9) The director of insurance;
(10) A county commissioner of a participating county;
(11) A school district board member;
(12) An elected municipal official of a participating
municipality; and
(13) A retirant.
A representative of the state investment council shall serve as an ex officio nonvoting member.
SDCL 3-12-49 provides in part:
The trustees shall be elected in accordance with rules and regulations as the board of trustees shall from time to time adopt . . . .
In view of Official Opinion No. 75-176, the proposed rules of the Board of Trustees of the Retirement System were never finally adopted and put into effect. Since that time there has not to my knowledge been any further attempt on the part of the Retirement System to go through the necessary procedures to validly adopt the proposed rules you refer to.
The proposed rules of the Retirement Board, Chapter 47:07:05 which you refer to in your letter, provide that vacancies on the Board of Trustees are to be filled through an election process wherein the Board of Trustees by secret ballot elect a candidate to fill the vacancies caused due to expiration of a trustee's term of office. A vote of eight members of the Board of Trustees for anyone candidate shall constitute an election of such candidate.
Upon review of the language found in SDCL 3-12-48 and 3-12-49, cited above, it is my opinion that the election referred to in Section 49 is not intended to be a procedure whereby the present members of the Board do the "electing" and thereby become capable of becoming a self-perpetuating body.
In regard to your second question, it is my opinion that the proper interpretation of SDCL 3-12-49 is that groups referred to in SDCL 3-12-48 would need to be the ones electing their representatives pursuant to reasonable rules of the Board of Trustees adopted pursuant to Section 49. It appears to me that inasmuch as the members of the Board are specifically required to represent certain entities participating in the Retirement System, as vacancies develop and terms expire on the Board, the members of each respective area of representation, when applicable, are entitled to choose the individual or individuals who will represent them on the Board.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
WJJ:DOC:dk
