May 12, 1976
Mr. Harvey M. Crow, Jr.
Deputy State's Attorney
Gettysburg, South Dakota 57442
OFFICIAL OPINION NO. 76-52
Interest of bank officials in public contracts
Dear Mr. Crow:
You have requested an opinion based on the following factual situation:
"A" is the President and a Director of a bank in Potter County. The bank is designated as a depository for county funds and, in addition, Potter County invests surplus funds in certificates of deposit with the bank. "A" has taken out a nominating petition for the office of county commissioner.
The specific questions you have asked are:
1. Is the investment of surplus funds by the county in certificates of deposit with "A's" bank a sufficient interest in contract to preclude "A" from becoming a county commissioner under SDCL 6-1-1 and SDCL 6-1-2(3)?
2. Does the word "depository" as used in SDCL 6-1-3 and SDCL 7-20-3 mean strictly a "demand account" as used in SDCL 7-20-9, or does the word include within its meaning "savings accounts" and "time deposits," and would the investment of surplus funds in certificates of deposit fall within the meaning of "depository"?
3. If the investment of surplus funds in certificates of deposit does not fall within the meaning of "depository," is "A" precluded from being elected as a county commissioner?
In my opinion, the answers to all your questions are found in SDCL 6-1-3 which provides:
A bank may be designated as the official depository of county, municipal, township or school district funds, notwithstanding that an officer, director, stockholder, or employee of a bank is an elected or appointed officer or treasurer of such county, municipality, township or school district.
The ordinary meaning of the term "depository" is "a place where something is deposited especially for safekeeping." WEBSTER'S NEW COLLEGIATE DICTIONARY, 1974 edition.
The specifics of depositing county funds are provided in SDCL 7-20. SDCL 7-20-9 states that the depository may accept funds for deposits in "demand accounts, savings accounts or time deposits." In SDCL 7-20-13, the county commissioners are authorized to designate one or more banks as "active depositories" for deposit and withdrawal of daily receipts and cash items.
Therefore, reasonable interpretation of all the above statutes is that an official depository, unless specifically designated as an "active depository" only, may accept time deposits as well as demand deposits. "Official depository" as used in SDCL 6-1-3 applies to banks handling all types of deposits authorized in SDCL 7-20.
In my opinion, the fact that the bank of which "A" is president is an official county depository does not preclude "A" from seeking the office of county commissioner.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
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