August 29, 1980

Senator William Grams 
848 La Zell Street 
Sturgis, South Dakota 57785 

Representative Larry Anderson 
Route 1 
Hudson, South Dakota 57034

Official Opinion No. 80-58

Limiting State Expenditures

Dear Senator Grams and Representative Anderson:

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

FACTS: 

Preliminary revenue projections from the Bureau of Finance and Management, provided to the interim Joint Committee on Appropriations on August 25, 1980, indicate that the projected revenues may be less than the projected expenditures for FY 81.  The Bureau of Finance and Management presented the possibility of the Governor limiting state expenditures in accordance with SDCL 4-8-23.  The question was raised relating to the term 'budget unit' as it appears in SDCL 4-8-23 and as defined in SDCL 4-7-1(9).  If 'budget unit' includes special appropriations bills, it is conceivable that the Governor could reduce a special appropriation.

Based on the above facts, you have asked the following question:

QUESTION: 

Does the definition of 'budget unit' as defined in SDCL 4-7-1(9) include special appropriations?

SDCL 4-8-23 provides: 

Should it appear to the commissioner of finance and management at any time that revenues of the state are substantially less than legislative estimates in making appropriations for expenditures by budget units, he shall immediately report the fact to the Governor, who shall thereupon investigate and may, if necessary, establish a rate of expenditures within all or any budget units, so that said expenditures shall be in proportion to such reduced revenues and will not result in the incurrence of state debt.

SDCL 4-7-1(1), (2), (3) and (9) provide: 

(1)  'Appropriation,' an authorization by the Legislature to a budget unit to expend, from public funds, a sum of money not in excess of the sum specified, for the purposes specified in the authorization and under the procedure described in this chapter. 

(2)  'General appropriations act,' an act of the Legislature which authorizes the expenditure of money from public funds for the ordinary current and capital expenditures of the executive, legislative and judicial departments of the state, as further defined by rules and regulations issued by the commissioner of finance and management. 

(3)  'Special appropriations act,' an act of the Legislature which authorizes the expenditure of money from public funds for any purpose other than those purposes enumerated in the definition of the general  appropriations act. 

(9)  'Budget unit,' a department, institution, commission, agency, board, examining board, or other unit of government for which separate appropriations, continuing appropriations or other dedications or earmarking of funds are made or which otherwise collects fees or funds of any nature under authority of any statute of this state.

In my opinion, the answer to your question is yes, the term budget unit as defined in SDCL 4-7-1(9) does include special appropriations.  Both special appropriations (SDCL 4-7-1(3)) and general appropriations (SDCL 4-7-1(2)) are appropriations as that term is defined in SDCL 4-7-1(1). Since an appropriation is 'an authorization by the Legislature to a budget unit,' it is clear that a special appropriation is an expenditure by a budget unit.

Insofar as SDCL 4-8-23 authorizes the Governor to establish a rate of expenditures within all or any budget units, it is my opinion that a Governor may apply the rate to either general and/or special appropriations.

It should be noted that for purposes of this opinion, SDCL 4‑‑23 is not presumed to be constitutionally valid.  I recognize, but will not address, a potential separation of powers issue.

Respectfully submitted,

Mark V. Meierhenry
Attorney General