January 23, 1985
Senator Leland Kleinsasser
Legislative Post Office
State Capitol
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 85-02
Collection of promotional fees on wheat harvested in South Dakota
Dear Senator Kleinsasser:
You have requested an official opinion based upon the following factual situation:
FACTS:
The South Dakota Legislature had established a Wheat Commission for the utilization, research and market development of wheat grown in South Dakota. The Legislature has also provided for the collection of promotional fees on wheat harvested in South Dakota. The promotional fee on wheat is remitted to the Wheat Commission and is deposited in accounts not in the state treasury.
Based upon the above facts, you ask the following questions:
QUESTIONS:
1. Is SDCL 38-10-22 being followed when the fee is remitted to the Wheat Commission instead of to the Department of Agriculture?
2. Are the funds collected 'public funds' and as such to be invested by the state investment officer?
IN RE QUESTION NO. 1:
The South Dakota Wheat Resources Act provides for the creation of a Wheat Commission. Specifically, SDCL 38-10-3.1 states:
The wheat utilization, research, and market development commission shall be administered under the direction and supervision of the department of agriculture and the secretary thereof, but shall retain the quasi-judicial, quasi-legislative, advisory, other non-administrative and special budgetary functions (as defined in § 1-32-1) otherwise vested in it and shall exercise those functions independently of the secretary of agriculture. (Emphasis added).
The South Dakota Legislature had defined a special budgetary function as follows:
. . . a category of administrative functions and means any statutory power, granted to an agency with respect to the receipt or the approval of budgets or the approval of budgets or allocations, or the disbursement and expenditure of special revenue funds . . . (Emphasis added).
You have requested an opinion regarding the scope of the Wheat Commission's special budgetary functions in the collection of promotional fees on wheat harvested in South Dakota.
SDCL 38-10-22 provides:
There is hereby assessed a promotional fee of five mills per bushel upon all wheat harvested in the State of South Dakota and sold through commercial channels. The fee is assessed and imposed on the grower at the time of sale or delivery, and shall be collected and remitted by the first purchaser to the department of agriculture. Under the provisions of this chapter, no wheat shall be subject to the fee more than once. (Emphasis added).
SDCL 32-10-38 further mandates:
All monies received on behalf of the wheat commission from the fees assessed in § 38-10-22, shall be deposited in a revolving fund and shall be disbursed by order of the commission. (Emphasis added).
The above statutory requirements provide for the collection of the fees by the Department of Agriculture (SDCL 38-10-22) and the disbursement of said fees by the Wheat Commission (SDCL 38-10-38).
This procedure is specifically authorized by statute. In order for an agency to exercise a special budgetary function, the legislature must specifically grant such power to the agency. Furthermore, the legislature has made perfectly clear, pursuant to SDCL 1-32-1(13), that an agency may statutorily be granted the power to receive fees, or approve budgets or allocations, or oversee the disbursement and expenditures of special revenue funds. The language clearly points out that the legislature may grant an agency any one, two or three of the above three powers.
Here, it is readily apparent the legislature has provided for the Department of Agriculture to collect promotional fees on wheat harvested in South Dakota. It has, however, granted the Wheat Commission authority to disburse those fees as it deems fit. Thus, only one of the three powers available to an agency through statutory delegation has actually been given to the Wheat Commission-- the disbursement of fees.
Therefore, in answer to your question, § 38-10-22 is not being followed when the fee is remitted to the Wheat Commission. The legislature specifically stated that the fees be submitted to the Department of Agriculture. Had it determined that said fees be submitted to the Wheat Commission it would have provided for such a procedure. It did not. Therefore, pursuant to SDCL 38-10-22 said fees must be submitted to the Department of Agriculture.
IN RE QUESTION NO. 2:
Public funds are defined under SDCL 4-4-2 as follows:
'State public funds' shall mean and shall include cash, checks, bills, notes, drafts, stocks, bonds, and all similar mediums of exchange which are received or disbursed under law, including rules and regulations, by a department, institution, commission, or any other agency of state government.
Pursuant to the above definition, it would appear the promotional fees collected under § 38-10-22 are public funds.
Furthermore, the term 'revolving fund' as provided for in § 38-10-35 has been determined to mean a 'special revenue fund' which is defined in § 4-4-4(2) as follows:
All revenues or other receipts of the state, or any agency thereof, specifically dedicated by law to defray the costs of a particular function, organization, activity or object of state government, shall be credited to the appropriate special revenue fund.
SDCL 4-4-4 sets out the state public fund structure, of which the special revenue fund is one aspect. Based upon the above, the collected promotional fees do fall within the category of public funds.
SDCL 4-5-23 provides for the investment of public funds by an investment officer. The statute mandates:
The state investment officer is responsible for the investment of the state public funds as defined in chapter 4-4. All functions, powers, and duties presently vested by law in any officer, official, employee, agency or commission which relates to the investment of the state public funds and accounts enumerated in this section are transferred to the state investment officer. The functions, powers and duties are advisory only with reference to permanent school and other education funds.
It is clear that the promotional fees collected fall under the definition of 'special revenue fund.' Thus, in answer to your question, the funds collected are 'public funds,' which are required to be invested by the state investment officer.
Respectfully submitted,
Mark V. Meierhenry
Attorney General
