August 17, 1982
Mr. S. J. Axtman, Director
Central Services
State Capitol
Pierre, South Dakota 57501
Official Opinion No. 82-43
Eligibility to Receive Federal Surplus Property
Dear Mr. Axtman:
You have requested an official opinion from this office in regard to the following factual situation:
FACTS:
Hanson Rural Water System, Inc. is incorporated pursuant to the provisions of the South Dakota Non-Profit Corporation Act as evidenced by their Certificate of Incorporation duly signed by Secretary of State Lorna Herseth on April 11, 1978. Duplicate originals of the Articles of Incorporation of Hanson Rural Water System, Inc. were filed with the Secretary of State on April 11, 1978.
Article II of the Articles of Incorporation show that Hanson Rural Water is located within the State of South Dakota at Alexandria in Hanson County.
Article XIII, section 6 of the Articles of Incorporation state that 'no part of the net earnings of this corporation shall inure to the benefit of any private person or individual within the meaning of Section 501(c)3 of the Internal Revenue Code of 1954 as now in force or afterward amended.'
A letter from the District Director of the Internal Revenue Service dated October 22, 1980, states that Hanson Water System, Inc. is tax exempt under the provisions of Section 501 of the Internal Revenue Code of 1954.
A letter from the South Dakota Department of Water and Natural Resources dated April 12, 1982, shows approval of the Hanson Rural Water System, Inc. Such approval is deemed to meet the requirement of 'recognition and approval by the State department of education, State department of health, or other appropriate authority.'
A letter from the Denver Regional Office of the U.S. Environmental Protection Agency lends further evidence of recognition and approval to Hanson Rural Water System, Inc. showing that all established Primary Drinking Water Standards are met by the water proposed for use in the system and that EPA supports the project.
Article IV of the Articles of Incorporation show that Hanson Rural Water System, Inc. exists to operate a water transmission system to provide clean water.
Based on the above facts, you have asked the following question:
QUESTION:
Is the Hanson Rural Water System, Inc. eligible to receive federal surplus property from the South Dakota Federal Property Agency?
Section 101-44.207 a(19) defines public health as 'a program or programs printed in the Federal Register, Vol 42, No. 203--Thursday, October 22, 1977, spells out eligibility requirements for participation in the federal surplus personal property donation program. Part C of that section deals specifically with eligibility of non-profit institutions and organizations. Part C clearly states that private organizations must be 'non-profit educational or public health institutions or organizations, as defined in this section, with the State' to be eligible.
Section 101-44.207 a(17) defines a non-profit institution as one in which 'no part of the net earnings inures or may lawfully inure to the benefits of any private shareholder or individual and,' further, 'which is held to be tax exempt under the provisions of section 501 of the Internal Revenue Service Code of 1954.'
Section 101-44.207 a(19) defines public health as 'a program or programs to promote, maintain, and conserve the public's health by providing health services to individuals' . . .. 'Public health services may include but are not limited to' . . . 'water purification and distribution' . . ..
Section 101-44.207 f(1)(iv) states that a current record for each eligible donee shall include 'evidence that the applicant is approved, accredited, or licensed, when it is a requirement of one or more of the applicant's programs.' Section 101-44.207 a(2) defines approved as 'recognition and approval by the State department of education, State department of health, or other appropriate authority.'
In view of the foregoing regulations, it is my opinion that the answer to your question is YES.
Respectfully submitted,
Mark V. Meierhenry
Attorney General
