In the Matter of the Interpretation of S.D. Const. and State Law Re: Eligibility for Crf Grant Programs

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2020 S.D. 58

IN THE SUPREME COURT
OF THE

STATE OF SOUTH DAKOTA

Ke KK

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IN RE: THE REQUEST OF GOVERNOR KRISTI NOEM
FOR AN ADVISORY OPINION IN THE MATTER OF THE
INTERPRETATION OF SOUTH DAKOTA CONSTITUTION

AND STATE LAWS REGARDING ELIGIBILITY FOR
CRF GRANT PROGRAMS

kkk &

ORIGINAL PROCEEDING

REQUEST RECEIVED OCTOBER 13, 2020

OPINION FILED 10/22/2020
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ADVISORY OPINION
TO HER EXCELLENCY, KRISTI NOEM, THE GOVERNOR OF THE STATE

OF SOUTH DAKOTA.

[F1.] Pursuant to Article V, § 5 of the South Dakota Constitution,! you have
requested an advisory opinion from this Court on whether the South Dakota
Constitution or any state law prohibits a current state legislator from being eligible
to receive funds from coronavirus relief fund (CRF) Grant Programs.

A.
[{2.] Pursuant to § 5001 of the Coronavirus Aid, Relief, and Beonomic
Security Act (CARES Act), South Dakota received $1,250,000,000 in federal funds
(CRF funds) to cover necessary expenditures due to the COVID-19 public health
emergency. During a special session on October 5, 2020, the South Dakota
Legislature passed House Bill 1001 (HB 1001) and adopted Senate Concurrent
Resolution 601 (SCR 601) to address the expenditure of these funds.
[{3.] HB 1001 revised the general appropriations act to include federal
expenditure authority for the CRF funds. SCR 601 authorized expenditures made
prior to October 5, 2020, and for the unspent and unobligated CRF funds provided

recommended uses through grant programs administered by the Governor for:

1. South Dakota Article V, § 5 reads in part:

The Governor has authority to require opinions of the Supreme
Court upon important questions of law involved in the exercise of
his fsic] executive power and upon solemn occasions.
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businesses, health care providers, non-profits, and qualified individuals that have

been impacted by COVID-19.

["|4.] SDCL 4-8-17 provides:

The Governor is authorized and empowered to accept on behalf
of the state any appropriations made or moneys allotted to the
state by the United States of America, as well as the provisions
of any act of Congress appropriating or allotting such funds to
the state to be used in cooperation with departments of the
federal government and appropriations and acts of Congress.
The funds received for the State of South Dakota pursuant to
the provisions of this section shall be administered and
expended under the immediate supervision of the Governor
through such state departments as he [sic] shall designate for
that purpose, and shall be deposited in the state treasury to be

paid out by warrants drawn by the state auditor on vouchers
approved by the Governor.

[75.] Your request to this Court states that in administering the grant
programs described in SCR 601, an application agreeing to the terms of the
program is required. You further state that “A contract will be required in which
the recipient agrees, among other terms and conditions, to expend its grant in
accordance with the CARES Act and other restrictions provided for in federal! law.”
According to SCR 601, “Applications [are] proposed to open October 12, 2020, and
close on October 238, 2020.”
[6.] You have received inquiries from current state legislators as to their
eligibility to receive funds from one or more of the grant programs. You ask:
Assuming all other criteria is met to qualify, does the South
Dakota State Constitution or any state law prohibit a current

state legislator from being eligible to receive funds from a CRF
Grant Program.
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B.

[]7.] The Court must first determine whether it is appropriate to issue an
advisory opinion, You contend that this is an important issue of law involved in the
exercise of your executive power pursuant to SDCL 4-8-17. You also contend that
this 1s a solemn occasion because:

Both the current pandemic and the large allocation of federal ©

funds are unprecedented. Considering the proper expenditure of

public funds, the potential conflict of interest, and the doctrine

of separation of powers, this is a matter of great public

importance and of significant impact on state government.

(18.] While South Dakota Article V, § 5 is disjunctive and presents two

situations in which the Court can give an advisory opinion,” the Court agrees that
the question you pose raises both an important question of law involved in the
exercise of your executive power and a solemn occasion.

[{9.] Pursuant to SDCL 4-8-17, you, as Governor, have accepted
$1,250,000,000 in federal CRF funds and must administer and expend those funds
within certain time constraints. Whether current legislators who passed HB 1001
and adopted SCR 601 are eligible to receive a part of these funds is a question that
will “result in immediate consequences having an impact on the institutions of state
government” and involve a question “that cannot be answered expeditiously
through usual adversary proceedings.” In re Opinion of the Supreme Court Relative
to the Constitutionality of Chapter 289, Session Law of 1977, 257 N.W.2d 442, 447
(1977) (Wollman, J., concurring specially).

[%10.] In addition, the query you have posed presents a solemn occasion.

2. in re Daugaard, 2011 8.D. 44, § 4, 801 N.W.2d 438, 439.

-3.
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In determining whether a request for an advisory opinion
presents a solemn occasion, the Court weighs whether an
important question of law is presented, whether the question
presents issues pending before the Court, whether the matter
involves private rights or issues of general application, whether
alternative remedies exist, whether the facts and questions are
final or ripe for an advisory opinion, the urgency of the question,
whether the issue will have a significant impact on state
government or the public in general, and whether the Court has
been provided with an adequate amount of time to consider the
issue.

in re Daugaard, 2016 8.D. 27, § 13, 884 N.W.2d 168, 167 (citing In re
Janklow, 5380 N.W.2d 367, 369 (S.D. 1995)). The Court has determined that
you have presented an important question of law. /d. { 8-9, supra. The issue
is not pending before the Court. While the issue does involve private rights,
it also raises a broader conflict of interest question involving a legislator’s
entitlement to appropriated funds, which is an issue with significant impact
on State government and public perceptions associated with the distribution
of such an extraordinarily large sum of money. Because of the unprecedented
COVID-19 pandemic, the timeframe for administering and expending the
funds, the inadequate time to pursue alternative remedies, and the Court’s
timely ability to consider the request, a solemn occasion exists and the Court
will answer the question you pose.
C.

[q11.] Article IIT, § 12 of South Dakota’s Constitution provides:

No member of the Legislature shall, during the term for which

he [sic] was elected, be appointed or elected to any civil office in

the state which shall have been created, or the emoluments of

which shall have been increased during the term for which he -

[sic] was elected, nor shall any member receive any civil
appointment from the Governor, the Governor and senate, or

-4.
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[J12.]

from the Legislature during the term for which he [sic] shall
have been elected, and all such appointments and all votes given
for any such members for any such office or appointment shall
be void; nor shall any member of the Legislature during the term
for which he [sic] shall have been elected, or within one year
thereafter, be interested, directly or indirectly, in any contract
with the state or any county thereof, authorized by any law
passed during the term for which he jsic] shal] have been
elected. (Emphasis added).

In Pitts v. Larson, 2001 S.D. 151, § 18, 688 N.W.2d 254, 257, this Court

explicitly stated, “The meaning of this provision, however, is unambiguous.”

The language of the constitution is plain. Its meaning cannot be
mistaken. The purpose of [Article III, § 12] is apparent. It is
intended to preclude the possibility of any member deriving, _
directly or indirectly, any pecuniary benefit from legislation
enacted by the legislature of which he [sic] is a member. .... It
is intended to remove any suspicion which might otherwise
attach to the motives of the members who advocate the creation
of new offices or the expenditure of public funds. Palmer v.
State, 115.D. 78, 80-81, 75 N.W. 818, 819 (1898). Therefore,
“the language in the constitution must be applied as it reads.”
In re Janklow, 530 N.W.2d 367, 370 (S.D. 1995),

Id. (Emphasis added).?

[713.]

This Court strictly interprets the language of South Dakota Article III,

§ 12. Asphalt Surfacing Co. v. South Dakota Dep’t of Transp., 385 N.W.2d 115, 117

(S.D. 1986). Its prohibitions are broad in scope and extend to any contract between

a legislator and the State, including the General Appropriations Bill. fd. at 118.

“When Article III § 12 is violated, the ‘contract is wholly illegal, void, and against

public policy, and cannot be enforced in whole or in part on any theory of any kind.”

3. In Pitts, the plurality and the dissent agreed that it is a violation of South
Dakota Article HI, § 12 for a state legislator to enter into a contract with the
State during the same session in which s/he sat. 2001 S.D. 151, 688 N.W.2d

204.

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Pitts, 2001 S.D. 151, | 14, 638 N.W.2d at 258 (quoting Norbeck & Nicholson Co. v.
State, 32 S.D. 189, 203, 142 N.W. 847, 848 (1913).

[q14.] Therefore, South Dakota Article III, § 12 precludes a current state

legislator from contracting directly or indirectly with the State to receive funds from

CRF Grant Programs.

Respectfully submitted this 22"¢ day of October 2020.

CS pb te

David Gilbertson, Chief Justice

(sf Janene 1 Kern

Janiné M. Kern, Supreme Court Justice

Js} Mewes Ko Genter?

Steven R. Jensen, Suprdthe Court Justice

Stiviin DeVawnsre

Patricia J. DeVaney, Suprem¢ Court Justice

Justice Mark E. Salter deeming himself disqualified did not participate.