Did South Carolina’s Gift of Life Trust Fund have to invest only in state pooled funds?

Plain-English summary

A legislator asked whether South Carolina's Gift of Life Trust Fund had to put its money only into state-maintained pooled investment funds. The Attorney General said no. The board's enabling statute authorized it to invest trust money “including pooled investment funds maintained by the State,” language the opinion read as permitting that option rather than requiring it.

The AG also raised a separate constitutional issue for equity investments. The state constitution barred the state and its political subdivisions from becoming stockholders in a company. The Trust was organized as an eleemosynary corporation, and the opinion said it did not appear to be a state agency for that provision. But whether it was in fact a state agency required a factual determination the AG could not make in an advisory opinion. The attached earlier opinion used for that analysis is not reproduced in this PDF; its relevant conclusion is quoted in the text.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the statute require all Gift of Life Trust money to stay in state pooled funds?
A: No. The AG read pooled funds as one authorized investment option, not the only option.

Q: Did the opinion approve every equity investment?
A: No. It discussed the constitution's stockholder restriction and said the Trust's status as a state agency required a factual assessment beyond this opinion.

Q: What was the Trust's stated purpose?
A: The opinion described resources dedicated to organ and tissue donation, education and assistance to transplant recipients in South Carolina.

Background and statutory framework

The opinion interpreted § 44-43-1340(6)'s investment language and then considered Article X, Section 11's restriction on state stock ownership. It distinguished the Trust's nonprofit corporate form from a final answer about its status for constitutional purposes.

Citations and references

• § 44-43-1340(6), the board investment power quoted in the opinion.
• § 44-43-1310, the Trust's purpose and resources discussed in the opinion.
• Article X, Section 11 of the South Carolina Constitution, quoted on state stock ownership.

Official title

Asking whether the board of directors of the Gift of Life Trust Fund (hereinafter the “Trust”) is required by its enabling legislation to invest trust monies only in pooled investment funds maintained by the state.

Requester

The Honorable Robert E. Walker, Member, House of Representatives

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/august-21-1998/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/12/98aug21walker.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLES M. CONDON
ATIORNEY GENERAL

August 21, 1998

The Honorable Robert E. Walker
Member, House of Representatives
P.O. Box 159
Landrum, South Carolina 29356
Re:

Informal Opinion

Dear Representative Walker:
Your opinion request has been forwarded to me for reply. You have asked whether the board of directors of the Gift of Life Trust Fund (hereinafter the "Trust") is required by its enabling legislation to invest trust monies only in pooled investment funds maintained by the State. Your reading of the statute is that the Trust is authorized, but not required, to invest its monies in the pooled investment funds maintained by the State. The Trust is an eleemosynary corporation, the resources of which must be used to promote and encourage organ and tissue donation and education and to assess and assist with the needs of transplant recipients in South Carolina. S.C. Code Ann. § 44-43-1310. The trust fund may accept gifts, bequests, and grants from individuals, foundations, organizations, associations, and any other source. Id. The trust fund supplements and augments services provided by state agencies and does not take the place of these services. Id. The Trust is to be administered by a board of directors appointed by the Governor, with the advice and consent of the Senate. S.C. Code Ann. § 44-43-1320. Members of the board shall serve terms of four years and until successors are appointed and qualify. S.C. Code Ann. § 44-43-l 320(B). The powers of the board include, but are not limited to, the power to invest trust monies, including pooled investment funds maintained by the State. S.C. Code Ann. § 44-43-1340(6). The statute sets forth four permitted uses of

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Representative Walker
Page 2
August 21, 1998
funds credited to the Trust. However, the statute provides that the funds may be used for these purposes, but are not limited to these purposes. S.C. Code Ann. § 44-43-1370. Your question is based on Section 44-43-1340 of the Code and in particular subsection (6). This section provides in pertinent part: In administering this article, the board is authorized, but not limited to:

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(6)invest trust monies, including pooled investment funds maintained by the State; I agree with your reading of the statute. In my opinion, the aforementioned provision should not be read as a requirement that the board only invest trust monies in pooled investment funds maintained by the State, but as an investment option available to the board. The board is authorized, but not required, to make this investment decision. Having answered the question raised in your opinion request, I must now turn to the larger question present. That question being whether an equity investment by the Trust would violate Article X, Section 11 of the South Carolina Constitution. This Section of the Constitution provides in pertinent part as follows: Neither the State nor any of its political subdivisions shall become a joint owner of or stockholder in any company, association, or corporation. Thus, it must be determined whether the Trust is a state agency for purposes of Article X, Section 11. While the Trust was created as an eleemosynary corporation, courts sometimes look beyond an eleemosynary corporation's status as such to determine whether, in reality, the corporation is an "alter ego" of the State. In an opinion dated September 6, 1996, this Office addressed the question of whether the Carolina Capital Investment Corporation (a non-profit corporation established by JEDA), was a State Agency for purposes of Article X, Section 11. This opinion provided a very detailed examination of the law on this subject which, as I have attached a copy of this opinion for your review, I will not repeat herein. After reviewing the law, this opinion concluded: Of course, this Office, in a legal opinion cannot make factual determinations. Op.Atty.Gen., December 12, 1983. Ultimately, the conclusion of whether or not CCIC is a State agency is a factual question, applying all the criteria referenced above. Based upon the facts at hand, it appears that CCIC is a separate legal entity incorporated as a non-profit corporation, and is not a State agency. As noted above, this Office, in its

Representative Walker
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August 21, 1998

previous opinions, has generally presumed that an entity incorporated as a separate non-profit corporation is not a State agency. This is consistent with Section 41-43-240 which refers to the authority of JEDA to create either "profit or non-profit corporations as the authority considers necessary to carry out the purposes of this act." Likewise, it would not appear that CCIC is such "an integral part of State government as to come within regular patterns of administrative organization and structure." I am advised that there are interlocking directors serving on both the JEDA Board and the CCIC Board and that CCIC is deemed a "public procurement unit" pursuant to the State Procurement Code. See, Section 11-35-4610(5). Notwithstanding these attributes of a State agency, however, I am of the opinion, based upon the facts presented, and previous opinions of this Office, that CCIC is probably not a State agency for purposes of Article X,
§ 11. I must caution that you should review the various criteria contained in the authorities referenced herein, applying these criteria to all the facts, for any final resolution of this matter. Consistent the conclusion reached in the September 6, 1996 opm10n, and the authorities cited therein, it does not appear that the Trust is a State agency for purposes of Article X, Section 11. However, as previously stated, this Office cannot make factual determinations in a legal opinion and, ultimately, whether the Trust is a State agency is a factual question. This letter is an informal opinion only. It has been written by a designated assistant attorney general and represents the position of the undersigned attorney as to the specific questions asked. It has not, however, been personally scrutinized by the Attorney General nor officially published in the manner of a formal opinion. With kindest regards, I remain
~truly yours,

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Paul M. Koch
Assistant Attorney General