Constitution of South Dakota — Article XVII: ARTICLE XVII CORPORATIONS 1. Special corporation laws prohibited--State-controlled corporations excepted. 2. Invalidation of charters without bona fide organization and business. 3. Laws for benefit of corporation as conditioned on compliance with Constitutional provision. 4. Corporations subject to eminent domain--Police power. 5. Casting of votes for directors or managers. 6. Place of business and authorized agent required of foreign corporation. 7. Business to be expressed in charter--Real estate restricted. 8. Stocks and bonds--Indebtedness increase. 9. Legislature's power to alter, revise, or annul corporate charters--Creation, renewal, or extension. 10. Local consent required for grant of street railroad right. 11. Construction and maintenance of telegraph lines--Controlling interest in competing company prohibited. 12. Railroad corporations. 13. Movable property of railroad corporation considered personalty--Execution and sale. 14. Consolidation of railroad lines--Forfeiture of charter for evasion of provisions. 15. Railways and rail companies declared public highways and common carriers--Regulation of rates. 16. Right to construct and operate railroad--Passengers, tonnage, and cars. 17. Rate discrimination prevention. 18. Compensation for private property taken for public use--Assessment of damages. 19. Corporations defined. 20. Monopolies and trusts prohibited--Combinations in restraint of trade--Legislative powers. 21. Corporate or syndicate farming prohibited--Definitions--Restrictions. 22. Restrictions--Application. 23. Loss of qualification--Requalification or dissolution. 24. Annual report--Violations--Action and enforcement.

     § 2.   Invalidation of charters without bona fide organization and business. All existing charters, or grants of special or exclusive privileges under which a bona fide organization shall not have taken place and business been commenced in good faith at the time this Constitution takes effect, shall thereafter have no validity.

     § 3.   Laws for benefit of corporation as conditioned on compliance with Constitutional provision. The Legislature shall not remit the forfeiture of the charter of any corporation now existing nor alter or amend the same nor pass any other general or special law for the benefit of such corporation, except upon the condition that such corporation shall thereafter hold its charter subject to the provisions of this Constitution.

     § 4.   Corporations subject to eminent domain--Police power. The exercise of the right of eminent domain shall never be abridged or so construed as to prevent the Legislature from taking the property and franchises of incorporated companies and subjecting them to public use, the same as the property of individuals; and the exercise of the police power of the state shall never be abridged or so construed as to permit corporations to conduct their business in such manner as to infringe the equal rights of individuals or the general well-being of the state.

History: Repeal proposed by SL 1975, ch 3, rejected Nov. 2, 1976.

     § 6.   Place of business and authorized agent required of foreign corporation. No foreign corporation shall do any business in this state without having one or more known places of business and an authorized agent or agents in the same upon whom process may be served.

     § 7.   Business to be expressed in charter--Real estate restricted. No corporation shall engage in any business other than that expressly authorized in its charter, nor shall it take or hold any real estate except such as may be necessary and proper for its legitimate business.

     § 9.   Legislature's power to alter, revise, or annul corporate charters--Creation, renewal, or extension. The Legislature shall have the power to alter, revise or annul any charter of any corporation now existing and revocable at the taking effect of this Constitution, or any that may be created, whenever in their opinion it may be injurious to the citizens of this state, in such a manner, however, that no injustice shall be done to the incorporators. No law hereafter enacted shall create, renew or extend the charter of more than one corporation.

     § 10.   Local consent required for grant of street railroad right. No law shall be passed by the Legislature granting the right to construct and operate a street railroad within any city, town or incorporated village, without requiring the consent of the local authorities having the control of the street or highway proposed to be occupied by such street railroad.

     § 11.   Construction and maintenance of telegraph lines--Controlling interest in competing company prohibited. Any association or corporation organized for the purpose, or any individual, shall have the right to construct and maintain lines of telegraph in this state and to connect the same with other lines; and the Legislature shall by general law of uniform operation provide reasonable regulations to give full effect to this section. No telegraph company shall consolidate with or hold a controlling interest in the stock or bonds of any other telegraph company owning a competing line, or acquire by purchase or otherwise, any other competing line of telegraph.

     § 12.   Railroad corporations. Every railroad corporation organized or doing business in this state under the laws or authority thereof shall have and maintain a public office or place in this state for the transaction of its business, where transfers of its stock shall be made, and in which shall be kept for public inspection books in which shall be recorded the amount of capital stock subscribed, and by whom; the names of the owners of its stock, and the amount owned by them respectively; the amount of stock paid in, and by whom; the transfers of said stock; the amount of its assets and liabilities; and the names and place of residence of its officers. The directors of every railroad corporation shall annually make a report, under oath, to the auditor of public accounts or some officer or officers to be designated by law, of all their acts and doings, which report shall include such matters relating to railroads as may be prescribed by law, and the Legislature shall pass laws enforcing by suitable penalties the provisions of this section.

     § 13.   Movable property of railroad corporation considered personalty--Execution and sale. The rolling stock, and all other movable property belonging to any railroad company or corporation in this state shall be considered personal property, and shall be liable to execution and sale in the same manner as the personal property of individuals, and the Legislature shall pass no laws exempting such property from execution and sale.

     § 14.   Consolidation of railroad lines--Forfeiture of charter for evasion of provisions. No railroad corporation shall consolidate its stock, property or franchises with any other railroad corporation owning a parallel or competing line; and in no case shall any consolidation take place except upon public notice given out, at least sixty days to all stockholders, in such manner as may be provided by law. Any attempt to evade the provisions of this section, by any railroad corporation, by lease or otherwise, shall work a forfeiture of its charter.

     § 15.   Railways and rail companies declared public highways and common carriers--Regulation of rates. Railways heretofore constructed or that may hereafter be constructed, in this state are hereby declared public highways, and all railroad and transportation companies are declared to be common carriers and subject to legislative control; and the Legislature shall have power to enact laws regulating and controlling the rates of charges for the transportation of passengers and freight as such common carriers from one point to another in this state.

     § 16.   Right to construct and operate railroad--Passengers, tonnage, and cars. Any association or corporation organized for the purpose shall have the right to construct and operate a railroad between any points within this state, and to connect at the state line with railroads of other states. Every railroad company shall have the right with its road to intersect, connect with, or cross any other railroad, and shall receive and transport each the other's passengers, tonnage and cars, loaded or empty, without delay or discrimination.

     § 17.   Rate discrimination prevention. The Legislature shall pass laws to correct abuses and prevent discrimination and extortion in the rates of freight and passenger tariffs on the different railroads in this state, and enforce such laws by adequate penalties, to the extent, if necessary for that purpose, of forfeiture of their property and franchises.

     § 18.   Compensation for private property taken for public use--Assessment of damages. Municipal and other corporations and individuals invested with the privilege of taking private property for public use shall make just compensation for property taken, injured or destroyed, by the construction or enlargement of their works, highways or improvements, which compensation shall be paid or secured before such taking, injury or destruction. The Legislature is hereby prohibited from depriving any person of an appeal from any preliminary assessment of damages against any such corporation or individuals made by viewers or otherwise; and the amount of such damages in all cases of appeal shall, on the demand of either party, be determined by a jury as in other civil cases.

History: Repeal proposed by SL 1975, ch 3, rejected Nov. 2, 1976.

     § 20.   Monopolies and trusts prohibited--Combinations in restraint of trade--Legislative powers. Monopolies and trusts shall never be allowed in this state and no incorporated company, copartnership or association of persons in this state shall directly or indirectly combine or make any contract with any incorporated company, foreign or domestic, through their stockholders or the trustees or assigns of such stockholders, or with any copartnership or association of persons, or in any manner whatever to fix the prices, limit the production or regulate the transportation of any product or commodity so as to prevent competition in such prices, production or transportation or to establish excessive prices therefor.

     § 21.   Corporate or syndicate farming prohibited--Definitions--Restrictions. No corporation or syndicate may acquire, or otherwise obtain an interest, whether legal, beneficial, or otherwise, in any real estate used for farming in this state, or engage in farming. The term, corporation, means any corporation organized under the laws of any state of the United States or any country. The term, syndicate, includes any limited partnership, limited liability partnership, business trust, or limited liability company organized under the laws of any state of the United States or any country. A syndicate does not include general partnerships, except general partnerships in which nonfamily farm syndicates or nonfamily farm corporations are partners. The term, farming, means the cultivation of land for the production of agricultural crops, fruit, or other horticultural products, or the ownership, keeping, or feeding of animals for the production of livestock or livestock products.

History: Section proposed by initiated measure, ch 333, adopted Nov. 3, 1998.

     § 22.   Restrictions--Application. The restrictions in § 21 of Article XVII do not apply to:

     § 23.   Loss of qualification--Requalification or dissolution. If a family farm corporation or family farm syndicate that has qualified under all the requirements of a family farm corporation or a family farm syndicate ceases to meet the defined criteria, it has twenty years, if the ownership of the majority of the stock of such corporation, or the majority of the ownership interest of such syndicate, continues to be held by persons related to one another within the fourth degree of kinship or their spouses, and their land holdings are not increased, to either requalify as a family farm corporation or family farm syndicate or dissolve and return to personal ownership.

History: Section proposed by initiated measure, ch 333, adopted Nov. 3, 1998.

     § 24.   Annual report--Violations--Action and enforcement. Any corporation or syndicate that owns agricultural land or engages in farming is required to report information necessary for the enforcement of §§ 21 to 24, inclusive, of Article XVII to the secretary of state on an annual basis, under rules promulgated by the secretary pursuant to state law. The secretary of state shall monitor such reports and notify the attorney general of any possible violations, and any resident of the state may also notify the attorney general of any possible violations. If a corporation or syndicate violates any provision of §§ 21 to 24, inclusive, of Article XVII, the attorney general shall commence an action in circuit court to enjoin any pending illegal purchase of land or livestock, or to force divestiture of land or livestock held in violation of §§ 21 to 24, inclusive, of Article XVII. The court shall order any land held in violation of §§ 21 to 24, inclusive, of Article XVII to be divested within two years and any livestock to be divested within six months. If land so ordered by the court has not been divested within two years, the court shall declare the land escheated to the state. If the attorney general fails to bring an action in circuit court to enforce §§ 21 to 24, inclusive, of Article XVII, any resident of the state has standing in circuit court to sue for enforcement.

History: Section proposed by initiated measure, ch 333, adopted Nov. 3, 1998.