STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

May 28, 1969

Riley W. Connelly
State's Attorney, Turner County
Parker, South Dakota 57053

OFFICIAL OPINION NO. 69-49

Voting privileges and bond levy liabilities when a portion of a school district becomes a part of another school district as the result of reorganization

Dear Mr. Connelly:

I have your letter of April 10, 1969, wherein you set out the following statement of facts:

"Two common school districts in Turner County conducted an election prior to March 1, 1969 to dissolve the districts and to have them attached to the Parker Independent School District, such election being conducted under the provisions of Chapter 15.2018(3). The results of the elections were in favor of such dissolution and attachment, and this has been approved by the Turner County Board of Education to be effective July 1, 1969.

"Since that time the Parker Independent School District has decided to submit a proposed bond issue to the electors of the district for their approval for the construction of a gymnasium and certain classrooms and other facilities at the school. To my knowledge the Turner County Board of Education has not at this time made an adjustment of the assets and liabilities of the districts."

I will answer your questions in the order in which they are asked:

1. Are the electors of the common school districts entitled to vote at the election called by the Parker Independent School District for approval of the bond issue, which election will be held prior to July 1, 1969?

Section 3(7) Chapter 38 of the Session Laws of 1965, effective December 5, 1968, provides as follows:

"The electors of any area to be included within the district as a result of any action taken under SDC 1960 Supp. Ch. 15.20, as amended, shall be privileged to participate in regular special elections of said district which occur between the date of such approval action and such effective date."

The answer to the question is YES, and your attention is also directed to the opinion of my predecessor which is dated October 19, 1965, addressed to M. F. Coddington, State Superintendent of Public Instruction, Pierre, South Dakota, which appears in AGR 1965-66 at page 205.

2. Will the electors within what was formerly the common school district be obligated to pay on the bonded indebtedness if such bond issue is approved?

In our opinion, this question should be answered in the AFFIRMATIVE. The Attorney General's Opinion quoted above, in AGR 1965-66 at page 205 holds that it is immaterial whether the bonds are issued prior to the effective date of the reorganization, which in this case will be July 1, 1969, or subsequent to such date. We are inclined to reaffirm that opinion for the reason that the voters of the annexed district are authorized by statute to vote in the bond election and the benefits of the funds expended from the sale of the bonds will inure to the entire new district.

If the voters were not allowed to vote in such bond election, and the bonds were issued prior to the effective date of the reorganization on July 1, 1969, it would seem that the decision of the Supreme Court of South Dakota in the recent case of Watertown Independent School District No. 1 v. Thyen, 159 NW 2d 122, would apply.

In that case, the bonds were issued on October 1, 1963. Thereafter, Lake Common School District of Codington County was, by order of the County Board of Education of Codington County, annexed to the Watertown Independent School District. On August 8, 1966, the county board made distribution of the assets and liabilities and adjustment between the districts and specifically declared that the property within Lake County Common School District was not to be taxed to pay a proportionate share of the bond indebtedness of the district to which annexed. Thereafter, an action was brought by the Watertown Independent School District NO.1 to require that the annexed property be made subject to taxation to discharge the bond indebtedness of the Independent District previously incurred, and existing at the time of annexation. The Watertown District contended that the provisions of SDC 1960 Supp. 15.2022, now amended by Ch. 42 Laws of 1968, did not apply to indebtedness of the district to which the new area was annexed; that is, the Watertown District, but did apply to the bonded indebtedness of a dissolved district.

The court found this contention to be untenable and ruled that the Lake County Common School District area was not liable for the bonded indebtedness of the Watertown District for bonds issued on October 1, 1964.

We believe the situation here can be clearly distinguished from the decision of the Court in Watertown Independent District v. Theyn, inasmuch as the voters in Lake County Common School District did not have a right to vote in the bond election in 1964 and further, for the reason that the County Board of Education clearly took into consideration in making adjustment of the assets and liabilities between the districts, the assets which arose by virtue of the October 1964 bond issue and the bonds were issued two years before the annexation was even contemplated.

3. If the answer to Question 2 is yes, would the answer be different if the County Board of Education had already made an adjustment of the assets and liabilities of the districts?

It is our opinion that the answer would not be different.

The responsibility for the equitable adjustment of assets and liabilities between the independent district and the common districts must be made by the County Board of Education of the county where the reorganization of the school districts takes place. The County Board of Education is required to consider the necessity for an equitable adjustment of assets and liabilities when any change in the school area or status of the school district occurs. If the bond issue is voted by the voters, a definite change in the financial status of the school district has occurred and the county board should consider whether or not another adjustment is necessary and make an equitable adjustment if such is indicated.

Respectfully submitted,

Gordon Mydland
Attorney General