STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

July 7, 1969

Thomas Schultz
State Department of Health
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 69-63

Revenue bonds may not be issued for additions to county hospitals. SDC 27.19, as amended SDCL 1967 34-8

Dear Mr. Schultz:

You have requested my opinion in answer to this question:

"Can a county issue revenue bonds to add an addition to an existing county hospital?"

It is settled in South Dakota that no county of this state has any inherent authority. It has only such powers as are expressly conferred upon it by statute together with such powers as may be reasonably implied from those expressly granted. State ex rel Jacobsen v. Hansen, 75 SD 476, 68 NW 2d 480 and the cases therein cited.

A review of the South Dakota statutes concerning county hospitals, SDCL 1967 34-8, reveals that either bond issues or a tax levy may be resorted to, among other things, to establish or maintain a county hospital.

This office, in 1961-62 AGR 103, was presented this specific question as to whether or not the County Commissioners could levy a one mill tax for the purpose of raising a sinking fund to build an addition to the existing hospital building without a petition and vote of the electors as provided by SDC 27.19, as amended. The answer was NO. The raising of money for such new construction would have to be submitted to the approval of the electors. Likewise, it was also held that the County Commissioners could not divert moneys in the hospital maintenance fund to be used to construct such addition, as such would authorize the board to make such construction without the approval of the electors.

I appreciate that this opinion is not definitive of the question you have raised. However, it points out the patent fact that when an addition is needed to an existing county hospital, payment for such addition and equipping of the same, must be approved by the electors, and the moneys therefrom must come from a tax levy or a bond issue as though it were an original county hospital.

A part of SDCL 34-8-2 provides:

"No county shall issue its bonds under the provisions of this section in excess of two per cent of its assessed valuation of the taxable property therein for the year preceding that in which said indebtedness is incurred."

Such a limitation on a bond issuance, based upon assessed valuation of taxable property in the county is repugnant to the theory upon which revenue bonds are sustained as constitutional and legal.

Without extending this opinion further, there can be no other conclusion than that the Legislature has refused in direct language to authorize counties to issue revenue bonds either to originally construct, or to make additions to county hospitals. It has specifically permitted the issuance of general obligation bonds of the county for such purposes. The issuance of revenue bonds cannot be inferred from authority, to issue general obligation bonds.

The question you have submitted must be answered NO.

Respectfully submitted,

Gordon Mydland
Attorney General