STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

April 7, 1972

Harvey Scharn, Chairman
Reciprocity Commission
Public Utilities Commission
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 72-13

Agreement of Reciprocity Commission not subject to Administrative Procedures Act

Dear Mr. Scharn:

We have received your request for an official opinion on four questions concerning the Reciprocity Commission.

QUESTION NO.1:

Are the reciprocity commission and the reciprocity and proration administrator created under the provisions of SDCL 32-10 required to follow the provisions of SDCL 1-26, being the Administrative Procedures Act, in entering into or revoking agreements contemplated under the provisions of said SDCL 32-10?

The Reciprocity Commission was created by the 1961 Legislature. It consists of the governing officers of five departments concerned with the use of motor vehicles. SDCL 32-10-3. The Commission has been given the authority to "enter into an agreement or arrangement with other jurisdictions for reciprocal exemptions of motor vehicle taxes and fees. SDCL 32-10-4.

The terms and conditions with which the agreements must comply are set out in 32-10-5 through 32-10-8. These conditions state generally that the agreements or arrangements made shall provide that vehicles registered or licensed in South Dakota shall receive exemption, benefits and privileges of the same kind and degree as are extended to the reciprocal jurisdictions vehicles when they are operated in South Dakota. There are specific instructions relating to the apportionment of fees based upon the miles traveled within each jurisdiction. The administrator of the Reciprocity Commission has the authority to adopt rules and regulations necessary to effectuate and administer the fees based upon any apportionment licensing. SDCL 32-10-9.

It is my opinion that the Reciprocity Commission does not have to follow the Administrative Procedures Act (SDCL 1-26) before entering into or revoking an agreement under SDCL 32-10-4. However, it would have to follow the Administrative Procedures Act if it promulgates rules and regulations necessary to administer an agreement or to effectuate or administer an arrange men t.

Subject to the constitutional provision (U.S. Constitution, Article I § 10) as to compacts between states, and the rule that the constitutional provision grants no power to enter into the compacts which violate the Federal or State Constitutions, and to the rule that it is not permissible to limit or surrender by such compact, the sovereign rights of the people, the states may enter into any agreement that they see fit. 81 C.J.S., State § l0a, pg. 904. Generally contracts between states are made by the acts of their respective legislatures, however, it has been held that a statute may authorize an administrative official to enter into reciprocal agreements with the authorities of another state and that such an agreement is valid if it does not conflict with the laws of the state. 81 C.J.S., States § l0b, pg. 905. A compact made between two states in a manner permitted by the Federal Constitution is a law, or, in legal effect, a contract binding on all the parties thereto, including the citizens of both states. 81 C.J .S., States § 10c, pg. 906.

In effect, an agreement which is authorized by Ch. 32-10, will, when properly executed, become binding upon the citizens of the state. South Dakota citizens will be required to abide by the terms of such an agreement in the same manner as if the terms therein were passed by the Legislature or were enacted in to regulation by an administrative body. I can find no legislation which would require the reciprocity commission to comply with the procedure set out by the Administrative Procedures Act, prior to enacting an interstate agreement.

If the agreement is not self-executing, but would require rules and regulations to implement it, or if an arrangement is planned between the two states, it is clear that the Administrative Procedures Act would be required to be followed before such a rule or arrangement could be binding upon the citizens of the state. SDCL Ch. 1-26.

QUESTION NO.2:

Is the reciprocity and proration administrator required to follow the provisions of SDCL 1-26 in adopting or repealing rules and regulations contemplated under SDCL 32-1 0-9?

It is my opinion that the administrator would be required to follow the provisions of SDCL 1-26 in adopting or repealing rules and regulations he is authorized to make by SDCL 32-10-0.

SDCL 1-26-1(1) defines agency so as to include the reciprocity and proration administrator. Accordingly, the administrator would be required to follow the procedure set forth therein. SDCL 1-26, insofar as rule making is concerned, was in tended to include all state agencies unless expressly excluded.

QUESTION NO.3:

Is the reciprocity and proration administrator, created under the provisions of SDCL 32-10 required to carry out the provisions of SDCL 1-26-2?

It is my opinion that the reciprocity and proration administrator would be required to carry out the provisions of SDCL 1-26-2. SDCL 1-26-2 imposes additional rule making requirements upon all state agencies and specifically state agencies shall adopt the additional specific regulations.

QUESTION NO.4:

Are the agreements contemplated under SDCL 32-10-2 and 32-10-4 thru 8 in violation of Article 1, Sec. 10 of the Constitution of the United States, which provides:

No state shall, without the consent of congress - enter into any agreement or compact with another state or with a foreign power. ..

It is my opinion that the said agreements are not in violation of Article 1, Sec. 10 of the Constitution of the United States. In the case of Gen. Expressway Inc. v. Iowa Reciprocity Board (1968) 163 N.W. 2d 413, the court said:

'(W)e are aware of defendants' contention that, because Congress has not approved this compact, the same is void. It is well settled that the constitutionality of interstate compacts in this regard is tested by whether the compact is a combination tending to increase the political power of the state which may encroach upon or interfere with the supremacy of the United States ... this being a purely fiscal interstate agreement which was intended to encourage rather than restrain commerce among the states, it is not the type of interstate contract which requires congressional consent. ... pg. 419.

Respectfully submitted,

Gordon Mydland
Attorney General