STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL
December 18, 1972
Lynn V. Hanson
Director of Aeronautics
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 72-68
Gifts to state. How accepted, and used. Accounting for use of such gift. SDCL 5-24-12.
Dear Mr. Hanson:
You have requested my opinion in regard to the following factual situation:
For several years the South Dakota State Aeronautics Commission has participated in the Accident Prevention Program of the Federal Aviation Commission. South Dakota's participation in such program has been to re-receive and receipt for donation to this worthy program. Such donations have come from private sources. In the past, the moneys so donated have been used to award a prize or trophy and public recognition to the person or persons selected by the Aeronautics Commission and the Federal Aviation Administration as exemplifying the best in the promotion of aeronautics safety in South Dakota. Such designees are publicly designated as "Accident Prevention Counselors."
During 1972, several private associations have tendered cash donations, made payable to the South Dakota State Aeronautics Commission towards the support of the Accident Prevention Program of the Federal Aviation Administration. Certain fundamental problems have been raised by this tender of such donation.
In connection with this factual situation, you have presented the following questions:
1. Is it proper for the state or one of its agencies to accept this donation?
2. Who is empowered to accept such on behalf of the state?
3. What uses may be made of such donation if it is accepted?
4. Is there any special method of accounting that you may suggest to be used in connection with such donation?
5. In what funds do you suggest such donation be placed?
The South Dakota State Aeronautics Commission has specific authority to receive donat1ons and gifts from private sources to acquire, construct, improve, maintain and operate airports and other air navigation facilities. SDCL 50-4-4. I have been unable to find statutory authorization granting the Aeronautics Commission to accept donations for the purpose of supporting the named Federal program.
However, I do find that the State of South Dakota is authorized to accept such gift or donation. Fundamentally, the law is that any individual or entity having the capacity to accept and hold a gift is prima facie entitled to receive such a gift. The state has authority, and does, hold property. It has authority to accept gifts of personal property. Its right to so act was recognized by the United States Supreme Court in South Dakota v. North Carolina (1903) 192 U.S. 286, 24 S. Ct. 269, 48 L. Ed. 448.
The fundamental law in regard to gifts of property, real or personal, to the state originated in Chapter 134 of the Session Laws of 1901. This statute provides that the Goevrnor is directed to receive such gift on behalf of the state. He, however, cannot personally accept such gift; rather, he must report the receipt of such gift to the State Board of Finance for acceptance or rejection. When the Board of Finance accepts such gift, title to such property then passes to the state. The procedure is set forth with clarity on SDCL 5-24-12.
As you have advised, the donation tendered to you is in the form of a check made payable to the South Dakota State Aeronautics Commission. It is my opinion that to satisfy the requirements of SDCL 5-24-12, you accept the same as an agent acting on behalf of the Governor, for subsequent acceptance or rejection by the Board of Finance. You should notify the Governor of this proposed donation or gift, and the fact that you are holding the same as his agent. Of course, if he so desires, such proposed gift should be forwarded to him for his own safekeeping. He, in turn, should notify the Board of Finance of such gift, its receipt, and should ask such Board to determine whether or not such gift should be accepted or rejected. Upon the acceptance of such gift or donation by the Board of Finance, title thereto passes to the State. There appears to me no objection to the Governor appointing the Aeronautics Commission as his agent to deposit such check and receipt the same to the original donor. Upon the receipt for and the negotiation of such instrument, there appears no question that such proceeds must be deposited to some fund, either in the name of the Aeronautics Commission or in the person entitled to receive such donation or gift, it is his final decision as to where such donation or gift should be deposited, after the Board of Finance gives its final approval to the acceptance of such gift.
It appears to me that in the event the Board of Finance accepts, and the Governor appoints your department as his agent to take full title to such donation or gift that it is proper to deposit the proceeds thereof in the Special Aviation Fund, to be thereafter utilized for the Accident Prevention Program of the Federal Aviation Administration. I should further advise that it appears the program you have outlined is approved by such federal agency. This is natural as such federal agency participates in the selection of such "Accident Prevention Counselors." Therefore, the expenditure of such donation for the prizes or trophies annually awarded are proper, and consistent with the tenor of the gift.
Gifts, even to the state, are held in trust and are usable only for the expressed conditions of such gift. This was settled in Patrick v. Blake, 70 S.D. 494, 19 N.W. 2d 220.
As I have pointed out, the Governor may desire that he be in charge of this fund. As he is the only person who can receive such gift or donation on behalf of the state, this would be proper. However, he is subject to the rationale of Patrick v. Blake, and can direct the donation be used only for the purposes as specified therein. He, like your department, can direct such funds be used for the purposes you have above outlined.
The accounting for such gift, irrespective of where deposited, appears relatively simple. Such money should be identified as a donation to support the Accident Prevention Program of the Federal Aviation Administration. The proceeds thereof, when used, may be used only to such purpose. The accounting for expenditures therefrom must reflect such legitimate use of the funds.
Respectfully submitted,
Gordon Mydland
Attorney General
