STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

September 12, 1968

Clayton E. Dettman
Reciprocity and Proration Division
Department of Highways
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 68-30

Refunding of fees under proration plan of licensing on units taken out of service

Dear Mr. Dettman:

You have requested an opinion regarding the correct interpretation of Section 29, Chapter 237, Session Laws of 1961, relating to proper refunding of license and compensation fees, particularly the underscored portion thereof. This section of the Statute reads as follows:

"Whenever a power unit operating under the provisions of this act is taken out of service for any reason or when ownership of such power unit has been or is hereafter transferred to another owner, or is otherwise transferred out of the State of South Dakota, upon surrender of the license plate assigned to such power unit to the administrator, the administrator shall refund that portion of the fee paid which represents the unused portion of the licensing period for such power unit; such refund shall, however, be only the excess of such fee paid above one-fourth of the amount of such fee;"

This is a new enactment adopted in the 1967 Session of the Legislature and relates to the refund made available on the power units operated under the reciprocity statute being Chapter 237, Laws of 1961. It is a new statute and is not in conflict with existing prior enactments and the same can be construed in harmony therewith. The key and central point involved is what is meant by the term "excess of such fee paid" above one-fourth thereof. A refund for that portion of the unused amount originally paid is the total yearly license fees, which excludes from eligibility for refund the sum of one-fourth thereof. It appears obvious that using the words "such fee paid" relates to the original amount paid by the owner of the motor equipment upon the initial or original payment of license and compensation fees. The license fee is for a unit licensed and compensated as a part of fleet vehicles under the reciprocity statute. This fee (total amount of such fee) is based on a term of one year.

A rather singular situation exists in that the compensation for the unusual use of the highways statute, being Chapter 40.04, Section 44.0421 to Section 44.0431, particularly Section 44.0428, relating to refunds for the unused portions of a year (an old Statute passed in 1943) employs the identical language found in Section 29 of Chapter 209 of Session Laws of 1967, the material part thereof reading as follows: "the amount due said person for the remaining months of that year, provided, however, such refund shall only be the excess of the fees paid above one-fourth of the amount of such fees."

It is the obvious intent and purpose by the use of this identical language in the old compensation for use of the highway statute in the new reciprocity statute, was to limit any refund to three-fourths of the original annual license fee collected on a particular unit. The retention of the one-fourth of the original amount of such fee is intended to reimburse the state for the initial cost of effectuating the registration and issuance of the plate or evidence thereof.

In the construction of the compensation for the unusual use of the highway statute, the language carried over into the new enactment, Chapter 209, Laws of 1967, has been construed and applied since 1943 uniformly through the state to always retain one-fourth of the original amount of the compensation fee paid for the unusual use of the highway. It therefore appears obvious to me that the same construction and application was intended by the Legislature to apply in making refunds upon power units when registered with the Director of Proration as a part of a fleet under the reciprocity statute.

It is therefore my opinion that any refund would be based upon three-fourths of the original fee collected and such refund would then be computed according to the time such power unit was in use during the year by the licensee.

Respectfully submitted,

Frank L. Farrar
Attorney General