October 22, 1976
Mr. Max A. Gors, Secretary
Commerce and Consumer Affairs
State Capitol
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 76-101
Distribution of taxes imposed by Chapter 10-44
Dear Mr. Gors:
You have requested an opinion from this office based upon the following factual situation:
FACTS:
SDCL 10-44-2 sets out the requisite premium taxes on an insurance business done in the State of South Dakota. SDCL 10-44-9 levies an additional one-half of one percent of gross premium receipts of such company on all fire insurance business done in this state. SDCL 10-44-13 sets forth the manner of distribution of certain fire insurance tax proceeds to qualified fire departments.
Based on the above facts you ask:
QUESTION:
How is the section in SDCL 10-44-13 which provides "an amount equivalent to the entire tax collected under the provisions of this chapter" to be interpreted? In other words, does this portion of SDCL 10-44-13 require the distribution of proceeds from both SDCL 10-44-2 and 10-44-9 or only the tax proceeds from SDCL 10-44-9?
SDCL 10-44-13 provides:
The state auditor, on the first day of July of each year, shall issue and deliver to the treasurer in each city or town or to the clerk of each township, or, when two or more townships have acted together for the purpose of establishing a joint organized fire department, to the clerk of each such township which has filed the certificate provided for by section 10-44-11, having an organized fire department in actual existence eight months prior to the filing of said certificate and equipped during such period with at least one steam, hand or other fire engine, or hook and ladder truck, or hose cart and with a membership of at least fifteen persons during such period of eight months next preceding the filing of the certificate, his warrant upon the state treasurer for an amount equivalent to the entire tax collected under the provisions of this chapter by reasons of policies on property in such city, town or township meeting the above requirements issued by any fire insurance company, which warrants shall be numbered consecutively, and shall each specify the date of its issuance and to whom payable, and such warrants shall be paid by the state treasurer to the treasurer of any such city or town or township clerk upon presentation thereof.
In my opinion, the reference in the above-cited statute to "an amount equivalent to the entire tax collected under the provisions of this chapter by reasons of policies on property in such city, town or township meeting the above requirements issued by any fire insurance company" refers to the tax collected under SDCL 10-44-2 as well as the tax collected under SDCL 10-44-9 with respect to any insurance company which issues fire insurance. To imply that SDCL 10-44-13 applies only to the tax imposed by SDCL 10-44-9 would be to ignore the most obvious and reasonable meaning of the language which the Legislature used in SDCL 10-44-13. Obviously, the tax collected under SDCL 10-44-2 is also "collected under the provisions of this chapter." To the extent that the tax imposed by SDCL 10-44-2 is imposed on any company writing fire insurance, the amount of such tax would fall under the provisions of SDCL 10-44-13 and would be subject to distribution to the local fire departments pursuant to the provisions of chapter 10-44.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
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