STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

December 6, 1972

Charles A. Wolsky
States Attorney, Clay County
Vermillion, South Dakota 57069

OFFICIAL OPINION NO. 72-65

SDCL 4-5-6 authorizes purchase of Treasury Notes of more than 18 months' maturity.

Dear Mr. Wolsky:

You have requested an official opinion on the following factual situation:

The Clay County Treasurer purchased three (3) United States Treasury Notes, each of which the face value is $50,000, which purchases were made on April 18, 1972. The maturity date on the bonds is April 15, 1975; February 15, 1978; and August 15, 1981, respectively. The funds which were invested in these three bonds were neither permanent, trust, retirement nor building funds.

Relative to the above factual situation, you have asked the following question:

Pursuant to SDOL 4-5-6, was the Clay County Treasurer authorized by law to purchase said bonds?

What is now SDCL 4-5-6 reads as follows:

Any public funds which will not be needed for current operating expenses, may be invested in securities of the United States and securities guaranteed by the United States Government either directly or indirectly and redeemable within eighteen months from the date of purchase. The maturity date may exceed eighteen months. Provided, however, that permanent, trust, retirement and building funds may be invested in securities having a redeemable date beyond eighteen months. (Emphasis added).

The words emphasized in the foregoing statute were added by Chap. 237 of the 1967 Session Laws.

What is now SDCL 4-5-10 was also amended by the same Act. SDCL 4-5-10 now refers to redemption of "securities," but prior to the amendment, the language referred to the redemption of "bonds."

Among the basic principles of statutory construction is that the Legislature must be presumed to have some object in enacting a bill, and in interpreting it, the duty is to give effect to the object intended. Odson v. Rogers (1923) 47 S.D. 63, 195 N.W. 1019.

It is patent that the Legislature intended to extend the class of securities permitted to be purchased. United States Treasury Notes are guaranteed by the United States Government and may be sold on the open market at any time even though their maturity date may exceed eighteen months. As such, in my opinion, these investments are authorized by SDCL 4-5-6.

This opinion is written to give answer only to the question raised and is based upon the factual situation as described above. It should not be construed as approval of the judiciousness of such investments.

Respectfully submitted,

Gordon Mydland
Attorney General