August 24, 1976

Honorable Richard F. Kneip
Governor of South Dakota 
Capitol Building
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 76-79

State funding for grants under the Public Works and Economic Development Act of 1965

Dear Governor Kneip:

You have requested an opinion from this office based upon the following facts:

FACTS:

On January 19, 1976, the Office of the Governor received notifica­tion of the availability of federal funding for grants pursuant to Section 304 of the Public Works and Economic Development Act of 1965, as amended. The funds are to be used for the construction of public facilities and other projects needed to initiate or enhance long-term economic growth. The governors of the various states must select which projects are to be funded with the Section 304 monies allocated to their jurisdictions. The state must make a con­tribution equal to at least 25 per cent of the Section 304 funds used for the selected projects. The program is administered on the federal level by the Economic Development Administration.

The City of Clark notified the Governor by letter dated April 19, 1976, that it wished to apply for certain Section 304 funding for the extension of a water line to an industrial area on the east edge of the city. The proposed extension would provide fire protection for ex­isting industry and would serve an industrial park which is under development by the county and a local non-profit development cor­poration. The proposed extension is expected to cost approximately $54,750.

Based on the above facts, you ask:

QUESTIONS:

(l) Whether the Interim Appropriations Committee may allocate contingency funds to fulfill the state match requirements for federal grants authorized pursuant to Section 304 of the Public Works and Economic Development Act?

(2) Whether criteria must be developed for approval of projects to be financed by federal grants pursuant to Section 304 of the Public Works and Economic Development Act before matching funds can be allocated for projects which have already been deemed necessary by the Governor?

In regard to your first question, although I still adhere to the reservations I expressed in Official Opinion No. 75-200 with regard to the propriety of the "contingency fund" approach, I also recognize that the committee has and does continue to "allocate" such funds. If the proposed constitutional amendment to article III is passed by the electorate, then this problem will be taken care of. Until that time, however, I continue to have the reserva­tions expressed in No. 75-200.

Subject to the above reservations, the question then becomes whether there is a legitimate "contingency" involved here. In my opinion, there is such a legitimate contingency. The availability of the federal money was not known here until January 19, 1976. The deadline for the filing of individual bills for the 1976 legislative session is set by Rule 11-1 at the eighth legislative day (January 15, 1976). The deadline for filing committee bills is set at the ninth legislative day (January 16, 1976). Only by a hoghouse ap­proach could the Legislature have passed a special appropriation bill here. This being so, it is my view that the facts presented here justify the applica­tion of SDCL 4-8A. The decision of whether or not to allow its funding, of course, is a matter for the Interim Legislative Appropriations Committee.

I do not hereby withdraw from the views expressed in Official Opinion No. 75-200, but I do recognize that statutes must be presumed to be constitu­tional, In re Hinesley, 82 S.D. 552, 15O N.W. 2d 834 (1967), and that only the courts in South Dakota can ultimately make a determination that a statute is unconstitutional.

In response to your second question, it is my opinion that funds can, in some circumstances, be allocated for "contingency fund" projects before detailed criteria are established. The thrust of SDCL 4-8A is to deal with "contingencies," not "certainties." One cannot always have the luxury of time for planning and laying out detailed criteria before the unforeseen hap­pens. Contingencies demand response rather than detailed research and developing lists of criteria.

In view of the time lag here, however, between the present time and the original knowledge concerning the program (January 19, 1976), it would seem to me that there has been sufficient time to have developed criteria for this funding project. The immediacy of the situation is undoubtedly real at present, but there has been, in my opinion, a sufficient period of time that has elapsed so that the criteria for implementing the grants could have been developed and should be established before now allocating state matching funds under the program.

Respectfully submitted,

WILLIAM J. JANKLOW
ATTORNEY GENERAL

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