August 4, 1988

Dennis A. Groff 
Pennington County State's Attorney 
300 Kansas City Street 
Rapid City, South Dakota 57701

Official Opinion No. 88-36

Distribution of fire insurance premium tax

Dear Mr. Groff:

You have requested an official opinion based upon the following facts:

FACTS: 

SDCL 10-44-9 provides that "[e]very insurance company doing fire insurance business in this state ... shall pay in addition to the tax set forth in § 10-44-2 one-half of one per centum of the gross premium receipts of such company on all fire insurance business done in this state during the year next preceding as shown in its annual statement." 

SDCL 10-44-9.1 provides that "[e]ach year, the General Appropriation Act shall contain a determination of the amount of fire insurance premiums tax available for distribution under the provisions of § § 10-44-2 and 10-44-9.  Notwithstanding any provision of this chapter or any other statute, each fire department receiving funds from the fire insurance premiums tax shall continue to receive an amount not less than the amount received on July 1, 1976." 

SDCL 10-44-9.4 through 10-44-9.6 provides that once the amount of funds to be distributed is determined, the funds are allocated on a valuation/population basis to each county.  The county auditor then allocates those funds to all certified fire departments within the county, under the same valuation/population formula. 

Historically, the legislature has not distributed all of the funds available.  The amount distributed to counties, and then the fire department, has been 45-50% of the total annual revenue awarded from such fire insurance  premiums tax.  The remaining funds have been retained in the state general fund.

Based upon the above facts you have asked the following question:

QUESTION: 

Whether SDCL 10-44-9.1 requires the annual distribution of all revenue generated by the fire insurance premiums tax implemented by SDCL 10-44-9.

The two statutes which answer your question are SDCL 10-44-9.1 and 10-44-9.4.

As you stated in your fact situation, SDCL 10-44-9.1 states that the  "General Appropriation Act shall contain a determination of the amount of fire insurance premiums tax available for distribution under the provisions of § § 10-44-2 and 10-44-9."  (emphasis added).  A word not defined statutorily is understood in its ordinary sense.  SDCL 2-14-1.  The dictionary may be used to determine the common meaning of a word.  American Mutual Liability Ins. Co. v. Fisher, 58 Wis.2d 299, 206 N.W.2d 152, 155 (1973).  The word available does not imply that all tax proceeds must be distributed, but that they are "suitable;  usable;  accessible;  obtainable; present or ready for immediate use."  Black's Law Dictionary, 123 (rev. 5th ed. 1979).  See also American Mutual, 206 N.W.2d at 155, Benzer v. Iowa  Mutual Tornado Ins. Ass'n., 216 N.W.2d 385, 389 (Iowa 1974) (discussion of available).

SDCL 10-44-9.4 states the manner in which the funds are to be distributed.  The section states that:  

[A]n amount equal to one-half of the amount appropriated pursuant to  §  10-44-9.1, times the ratio of the assessed valuation of the county to the assessed valuation of the state, plus one-half of the amount appropriated pursuant to §  10-44-9.1, times the ratio of the population of the county to the population of the state....

The statute clearly states that only one-half of the amount appropriated in section §  10-44-9.1 will be distributed, not the total amount of the premium taxes remitted.

Therefore, the answer to your question is "No."

Sincerely,

Roger A. Tellinghuisen
Attorney General