February 3, 1982

Mr. J. M. Leibel 
Prairie Village Attorney 
Post Office Box 406 
Madison, South Dakota 57042

Official Opinion No. 82-8

Taxation of Historical Municipality

Dear Mr. Leibel:

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

QUESTION: 

Does a county of the state of South Dakota have the authority to tax the real property of a 'historical municipality' given provisions of SDCL 9-3-22 through 9-3-27?

Chapter 55 of the Laws of 1970 provided for the establishment of a historical or educational municipality.  As now codified these permit any domestic corporation chartered for historical or educational purposes and being tax exempt, to form and name a municipal corporation without meeting minimum population requirements or other requirements for municipalities with the governing board being the officers of the corporation and the rules and regulations being those provided in the articles of incorporation bylaws.  A further restriction is that such municipality shall not be authorized to receive any state or local tax funds or any distribution from either state or local sources except certain funds specifically provided for tourist, educational or recreational activities.  Art. 9, §  1 of the South Dakota Constitution provides that the Legislature shall have plenary powers to organize and classify units of local government.  This the Legislature has done in SDCL 9-2-1 in three classifications:  first class cities, 5000 or over; second class cities, 500-5000; third class municipalities or towns, 500 or less.  By virtue of the exemption from the population requirements in 9-3-24, a  historical municipality if in fact it has less than 500 persons would be a municipality of the third class or a town.  Art. 11, §  5 of the South Dakota Constitution provides that the property of any municipal corporation is exempt from taxation.  This particular provision has been held to be self-executing as to the exemption it provides to municipal corporations and no further enabling legislation is necessary to carry out the same. Appeal of Black Hills Industrial Freeport, Inc., 268 N.W.2d 489 (1978).

The answer to your question is that property belonging to a duly organized and bona fide historical municipality is exempt from ad valorem taxation in South Dakota.

Respectfully submitted,

Mark V. Meierhenry
Attorney General