March 11, 1980

Mr. Thomas Graslie 
Harding County State's Attorney 
Box 427 
Buffalo, South Dakota 57720

Official Opinion No. 80-18

Proper Distribution of Energy Mineral Severance Tax

Dear Mr. Graslie:

You have requested an opinion from this office based upon the following factual situation:

FACTS: 

The Department of Revenue of the State of South Dakota is charged with the responsibility of collecting the tax proceeds for the energy mineral severance tax pursuant to Chapter 10-39A of South Dakota Codified Laws. Acting under SDCL 10-39A-8 the Secretary of Revenue has determined that fourth quarter tax proceeds collected for 1979 are to be distributed one-half to the County in which the energy minerals or mineral products were severed, in this case, Harding County, and one-half shall be paid into the State Treasury and credited to the State Energy Development Impact Fund.  There are two sections to SDCL 10‑39A‑8 and the first section provides that the statute shall be effective through December 31, 1979 and that the tax proceeds are to be distributed two-thirds to the County and one-third to be paid into the State Treasury.  It is the contention of the Secretary of the Department of Revenue that since the taxes for the fourth quarter of 1979 were received in his office after January 1, 1980 the distribution is to be made one-half to the County and one-half to the State based on the second part of SDCL 10-39A-8 which became effective January 1, 1980.

Based on the above facts you ask the following question:

QUESTION: 

Does SDCL 10-39A-8 which is effective through December 31, 1979 apply to energy mineral severance taxes imposed in the fourth quarter of 1979 and received after January 1, 1980?

SDCL 10-39A-8 provides: 

(Effective through December 31, 1979).  All taxes, interest, and penalties imposed and collected by the secretary under this chapter shall be distributed as follows: 

(1)  Two-thirds shall be returned to the county in which the energy minerals were extracted or mineral products were severed; 

(2)  One-third shall be paid into the state treasury and credited to the energy development impact fund. 

(Effective January 1, 1980).  All taxes, interest and penalties imposed and collected by the secretary under this chapter shall be distributed as follows: 

(1)  One-half shall be returned to the county in which the energy minerals were extracted or mineral products were severed; 

(2)  One-half shall be paid into the state treasury and credited to the energy development impact fund.

The above statute provides that the taxes, interest and penalties must be imposed and collected.

In my opinion, taxes which have been imposed in the fourth quarter of 1979, but not collected by the Secretary of Revenue during the fourth quarter, would be distributed under the version of the statute effective January 1, 1980.  In my opinion that is what the literal language of the statute requires.

In the case of Chernotik v. Holter, 82 N.W.2d 509 the South Dakota Supreme Court stated: 

Accordingly, we hold that when the taxpayers paid money to the county treasurer under the circumstances stipulated by the parties, 1956 taxes had been collected in Charles Mix County within the meaning of the act.

Under the facts presented here the taxes were not collected during 1979.  This being so, the taxes collected on or after January 1, 1980, would be distributed according to the law in effect on that date.

Respectfully submitted,

Mark V. Meierhenry
Attorney General