STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

August 18, 1972

Honorable Harold Schreier
South Dakota State Senator
Flandreau, South Dakota 57028

OFFICIAL OPINION NO. 72-40

Departmental receipts of Federal grants and of private gifts need not be approved by special legislative committee

Dear Honorable Schreier:

You have asked for an Official Opinion on the following factual situation:

Chapter 272, South Dakota Session Laws of 1972 (The General Appropriations Act) contains two sections which are principally the basis for this request:. The last sentence of Section 11 of Chapter 272 forbids any agency or department of state government to exceed the expenditure limits established within the Act for personal services and supplies except upon recommendation of the Governor and majority vote of the entire membership of the special legislative committee established at Section 13 of the Act.

Section 20 of the Act appropriates monies for programs or activities financed from monies or grants received from the Federal Government:. Such expenditures are authorized upon specific approval of the state budget officer and the governing board, commission, or agency.

The last sentence of Section 11 has already been the subject of an Official Opinion (No. 72-12), but under a different fact situation.

The specific questions you have asked are:

(1) If federal monies or grants are received by a state agency or department on behalf of a program or activity financed from such monies or grants, may such monies or grants be used to exceed the expenditure limits established by Section 11 of Chapter 272 for personal services and supplies, without the recommendation of the Governor and a majority vote of the special legislative committee created by Section 13 of Chapter 272?

(2) Does the authorization for accepting and expending appropriations made, or monies allotted to, South Dakota by the Federal Government bestowed upon the Governor by SDCL 4-8-17 take precedence over either the last sentence of Section 11 of Chapter 272, or Section 20 of Chapter 272, or both such sections?

Chapter 272 of the 1972 Session Laws, known as the General Appropriations Act, appropriates money for the various state agencies to operate on during the 1972-73 fiscal year. During the legislative session, agencies are required to justify their budget requests in appearances before the Joint Appropriations Committee, and at that time indicate to that committee what their anticipated federal grants will be. The General Appropriations Bill will then appropriate state moneys to the various agencies as well as federal grants which the aegncies indicated they would be receiving over the course of the next fiscal year. This opinion will not discuss the legislative process of appropriating federal funds, as the question has not been raised.

Section 11 of the General Appropriations Act provides:

All amounts herein appropriated shall be used for the specific purpose herein mentioned and no other. The state auditor shall issue warrants on itemized and approved vouchers filed in his office, but no warrants shall be issued to or for any person, department, or institution, or any fund for any department in excess of the appropriation specifically made herein, except as provided by the provisions of this Act and otherwise provided by law. *The expenditure limits established in this Act for personal services and supplies may not be changed except upon recommendation of the Governor and majority vote of the entire membership of the special committee established in section 13 of this Act.

I am aware that certain Legislators had a specific intent in mind when passing this section, however, the fundamental rule of statutory construction is to ascertain and, if possible, give effect to the intention or purpose of the Legislature as expressed in the statute, 82 C.J.S., Statutes §321. The intention of the Legislature is to be ascertained primarily from the language used in the statute. C.J.S. supra §322(b) (1). Where the language of a statute is plain and unambiguous there is no occasion for construction, and the statute must be given effect according to its plain and obvious meaning. C.J.S. supra §322(b) (2).

In construing the meaning of Section 11 of the General Appropriations Act, the express language of the statute provides that warrants shall not be issued in excess of the appropriations for personal services or supplies specifically made within the Act "except as provided by the provisions of (the) Act and otherwise provided by law." This means that an agency may not spend more than its listed appropriation for services or supplies, unless it can find an exception within the General Appropriations Act, or within the codified law of the state.

One exception within the General Appropriations Act is contained in Section 20, which provides:

The expenditures of monies for programs or activities financed from any monies or grants received from the United States and other funds in excess of the amounts herein anticipated are hereby appropriated and shall be authorized for expenditure upon specific approval of the state budget officer and the governing board, commission, or agency.

*The final sentence of this section was the basis of Attorney General's Opinion No. 72-12, which provided, in essence, that the Governor could not veto this sentence of the General Appropriations Act.

Section 20 clearly provides that moneys received from the United States or from other funds "in excess of the amounts herein anticipated are hereby appropriated ... " By specifically appropriating such additional grants and gifts by the wording in this section, the Legislature has removed these moneys from the ceiling placed on appropriations in the earlier part of the General Appropriations Act and has also removed them from the control of the special legislative committee created by Section 13 of the Act. Of course, a state department must go through the proper channels in order to receive federal or other moneys. These procedures were outlined in my Opinion No. 72-9, dated March 17, 1972, addressed to Robert T. Mullally.

However, moneys received from the United States or from other sources may only be spent for the specific purposes for which they were supplied to the state. The sentence in Section 11 which provides "all amounts herein appropriated shall be used for the specific purpose herein mentioned and no other" applies also to moneys received from gifts and appropriated by reference in Section 20. If the grant was made for, say, a specific study, it could not be used for the general day-to-day operations of a state department. If, on the other hand, the grant was made with such loose restrictions on it, that it would not violate the purpose of the grant for a state department to use it to help defray the day-to-day expenses for personal service or supplies, the gift or grant may be used in such a manner.

With this analysis as background, the answer to your first question is, YES. A state department may expend moneys and grants received from the Federal Government or from other sources without approval of the special legislative committee, even if such expenditures would cause the agency to exceed the expenditure limit set for it by the Legislature in the General Appropriations Act.

Your second question relates to SDCL 4-18-17, which provides:

The Governor is authorized and empowered to accept on behalf of the state any appropriations made or moneys allotted to the state by the United States of America, as well as the provisions of any act of Congress appropriating or allotting such funds to the state to be used in co-operation with departments of the federal government and appropriations and acts of Congress.

The funds received for the state of South Daokta pursuant to the provisions of this section shall be administered and expended under the immediate supervision of the Governor through such state departments as he shall designate for that purpose, and shall be deposited in the state treasury to be paid out by warrants drawn by the state auditor on vouchers approved by the Governor.

This statute is incorporated into the General Appropriations Act by the paragraph in Section 11 which provides: "No warrants shall be issued…in excess of the appropriation specifically made herein, except as …otherwise provided by law." As Section 4-8-17 is incorporated within the General Appropriations Act by reference, any increase in a department's appropriated budget caused by following the dictates of 4-8-17 would automatically increase the department's fund level and such increase would not be in violation of the specific expenditure limits set in the General Appropriations Act.

The answer to your Question No.2 is, therefore, YES.

Respectfully submitted,

Gordon Mydland
Attorney General