December 14, 1995

Mary B. Edelen, Director
South Dakota State Historical Society
900 Governors Drive
Pierre, SD 57501-6041

OFFICIAL OPINION 95-07

Trusteeship of Agricultural Heritage Museum

Dear Ms. Edelen:

Based upon the following factual situation, you have requested an official opinion from this Office.

FACTS:

The Governor issued Executive Order 95-03, transferring administration of the State Agricultural Heritage Museum from the South Dakota Historical Society Office of History, part of the Department of Education and Cultural Affairs, to the South Dakota Board of Regents, South Dakota State University. SDCL 1-18-30.1 states that À ÀThe state historical society board of trustees shall be the trustee of the state for all property now or hereafter assigned to it and shall expend and apply all money received from the state to the uses and purposes directed by law. ÃÃIt shall hold all its collections and property for the state, and shall establish procedures for the review and disposition of its collections.ÀÀ(Emphasis added.)

The State Agricultural Heritage Museum, located on the campus of South Dakota State University in Brookings, South Dakota, was, prior to the referenced Executive Order, an official state museum under the administration, ownership, and trusteeship of the Department of Education and Cultural Affairs, South Dakota State Historical Society/Office of History. The operative paragraph of Executive Order 95-03 provides as follows:

The functions of the Agricultural Heritage Museum, located at Brookings, South Dakota, are transferred from the Department of Education and Cultural Affairs to the Board of Regents.

Based upon the foregoing factual situation, you have asked the following question:

QUESTION:

Does the South Dakota Historical Society Board of Trustees remain trustee of the collection of the South Dakota Agricultural Heritage Museum, or has this trusteeship been transferred by the Executive Order to the Board of Regents?

DISCUSSION:

Your opinion request concerns the effect the 1995 Executive Order has on the trusteeship of the South Dakota Agricultural Heritage Museum. Prior to this Order, the Historical Society, a state agency established at SDCL ch. 1-18, was the trustee of the state property at the museum. The Historical Society has no power to own property or receive gifts other than in the name of the State of South Dakota.

The provisions of SDCL ch. 1-32 control the applicability and definitions of Executive Reorganization Orders.

SDCL 1-32-1(7) provides as follows:

As used in chapters 1-32 to 1-47, inclusive:

(7) "Function" means any authority, power, responsibility, duty, program, or activity of an agency, whether or not specifically provided for by law.

The terms À Àauthority, power, responsibility, duty, program or activityÀÀ clearly include the trusteeship responsibilities of the South Dakota Historical Society Board of Trustees.

My general answer, therefore, is that the Governor's Executive Order transferred the trusteeship of the Agricultural Heritage Museum collection to the Board of Regents. Some specific objects or gifts in that collection, however, may ÃÃnot be so transferred due to restrictions on the gift or bequest itself.

A museum consists, for the most part, of a collection of cultural and historic documents and artifacts held by a trustee. The nature of the State's property rights in these items may vary greatly from item to item. Without a close examination of the documents by which each item was conveyed to the State, I would be unable to comment definitely on the nature of the State's ownership of any particular object, artifact, or document, or on the ability to change the trustee of that object, artifact, or document.

While most documents and artifacts were undoubtedly conveyed to the State without condition, a few may have been given specifically to the Historical Society or the Board of Trustees. Further, the original conveyance of a gift may require that it revert to the grantor if the gift ceases to be cared for by the Historical Society or the Board of Trustees, if the gift is not displayed as required by the terms of the conveyance, or if other conditions are not fulfilled.

In addition, if the terms of the conveyance of a particular gift restricted its transfer and the State took the gift with such conditions, the gift would need to be maintained under such conditions. These principles are set forth at Article VIII, Section 7 of the Constitution, which provides:

All lands, money or other property donated, granted or received from the United States or any other source for a university, agricultural college, normal schools ÃÃor other educational or charitable institution or purpose, and the proceeds of all such lands and other property so received from any source, shall be and remain perpetual funds, the interest and income of which, together with the rents of all such lands as may remain unsold, ÃÃshall be inviolably appropriated and applied to the specific objects of the original grants or gifts. The principal of every such fund may be increased, but shall never be diminished, and the interest and income only shall be used. Every such fund shall be deemed a trust fund held by the state, and the state shall make good all losses therefrom that shall in any manner occur. (Emphasis supplied.)

This provision and its impact on gifts to the State has been reviewed by the South Dakota Supreme Court. In ÃÃPatrick v. Blake, 70 S.D. 494, 19 N.W.2d 220 (1945), the Court held that the Soldiers and Sailors War Memorial Building could not be used for state offices. This decision was based in part on the fact that the gift of the involved property, which the State accepted, contained a reservation specifically indicating that the purpose of the property was for use as a Soldiers Memorial Building. ÃÃId. at 222. The Court described the general rule as follows:

There is a distinction between the control which the legislature may exercise over property held by a public corporation for public purposes and of property held by such corporations as trustee under private grant with restrictions imposed by the grant. In the former case the power of the legislature over the property is supreme; in the latter, it may prohibit the corporation from accepting the trust; but, when once accepted, the trust subject must be applied to the purposes to which it has been dedicated by the grantor.

Id. at 223. The Court reviewed a similar issue in ÃÃKanaly v. State, 368 N.W.2d 819 (S.D. 1987). The Court there held that the property at the University of South Dakota - Springfield, which had been given to the State for educational purposes and was held by the State's permanent educational trust fund, could not be transferred to the Board of Charities and Corrections for use as a prison unless the State trust fund was fully compensated. ÃÃId. at 824.

I conclude, therefore, that if there have been restrictions upon various private gifts given to the State for the museum, which require that the gifts be held by the Historical Society (as opposed to the State in general), then the trustee status of the Historical Society over those gifts may not be transferred to the Board of Regents without consent of the original grantors, their heirs, or court determination of the ramifications of the particular restrictive covenant. Absent consent or court ruling, these gifts may revert to their original grantors.

In addition, I note that regardless of which state agency is trustee, the State and its trustee must honor all terms of the original gifts. I am not aware of any provision of law that would prevent the Regents from honoring the general obligations of a trustee for the agricultural museum. However, if those terms are not honored, the gifts may revert to their original grantors.

MB:CME:nan