STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

July 19, 1973

Don Barnhart
State Superintendent
of Public Instruction
State Capitol Building
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 73-27

Requirement for a public hearing on proposed installment contracts from capital outlay fund.

Dear Dr. Barnhart:

You have submitted the following factual information:

SDCL 13-16 was amended by Chapter 91, Session Laws 1973 (House Bill 846) and a portion of the statute which will become effective July 1, 1973, reads in part as follows:

Any proposed installment purchase contract authorized pursuant to §13-16-6 which will obligate the school district for future payments on the principal, the total of which will exceed one and one-half per cent of the assessed valuation of taxable property within the district .... (Emphasis supplied.)

School District "A" has an assessed valuation of $10,000,000 and the school district has on hand in the capital outlay fund as of July 1, 1973, an unobligated total of $150,000. School District "A" proposes a building project which will cost $250,000. By using the $150,000 on hand it will be necessary for the school district to enter into a proposed installment purchase contract for $100,000 in order to complete the project.

Based on the above factual situation you have requested an opinion on the following question:

Is the school board of school district "A" required to conduct a public hearing on the proposed installment purchase contract?

SDCL 13-16 as amended by Chapter 91, Session Laws 1973 (House Bill 846) reads in part as follows:

Any proposed installment purchase contract authorized pursuant to §13-16-6 which will obligate the school district for future payments on the principal, the total of which will exceed one and one-half per cent of the assessed valuation of taxable property within the district, shall not be entered into unless prior thereto the board shall have conducted a public hearing thereon after having given notice by publication at least twice in its official newspapar at least ten days prior to such hearing.

It is my opinion that the term "the total of" as used in the above statute refers specifically to the principal amount of a proposed contract plus the total accumulated unpaid principal balance of previous installment contract, and that any cash payment is excluded from such total.

It is my opinion that once the installment contract is entered into for $100,000 the unpaid principal balance of such contract must be added to any further proposed installment contract and if the total thereof will exceed one and one-half per cent of the assessed valuation of the taxable property within the district, then a public hearing will be required.

It is my opinion, however, that the answer to your specific question based upon the facts submitted is, NO, since the $100,000 proposed installment purchase contract does not exceed one and one-half per cent of the valuation of the taxable property within the district.

Respectfully submitted,

Kermit A. Sande
Attorney General