Can the State of South Dakota accept a donated piece of equipment, like a heating system for a state fair building, from a private group, and if so what is the formal acceptance procedure?
Plain-English summary
A nonprofit association of Huron businessmen wanted to donate a heating system for the Hippodrome building at the South Dakota State Fair Grounds. The donation came with terms: the donor would pay for the equipment and the installation, the State Engineer would supervise and approve the work, the donor would get nothing in return (no priority rental access, no naming rights, no consideration), and title would pass to the state when installation was complete. The State Fair Board asked the AG whether the state could accept this gift, whether more conditions were needed, and exactly how the formal acceptance should be done.
The AG read SDC 1960 Supp. 55.1102, which set the procedure for the state to accept any gift, grant, devise, bequest, or donation of real or personal property. Under that statute, the Governor was the receiver. The Governor had to forward the gift to the State Board of Finance, which would either accept it or reject it. If the Board accepted, title passed to the state, and the state could even bring legal proceedings later to recover the property if necessary.
Applied to the Hippodrome heating offer, the AG saw nothing legally objectionable. The proposed terms made the gift absolute and unconditional. The state took on no future obligation, gave up nothing in exchange, and retained complete control over the building and any rental terms. The donor's incidental hope of getting more rental opportunities for the Hippodrome (because year-round use became possible with heat) did not turn the gift into a conditional exchange.
The AG recommended a paper trail. The donor association should prepare a document describing the equipment, listing the five conditions verbatim, and signed by the association. The State Engineer should first review and approve the equipment and the installation plan, and that written approval should be attached to the gift document. The State Fair Board should also formally approve acceptance and attach its written approval. Then the package, the gift document with the State Engineer's and State Fair Board's approvals attached, went to the requesting officer, who would report it to the Governor for transmittal to the State Board of Finance. Only after the Board of Finance formally accepted did installation begin.
Currency note
This opinion was issued in 1968. 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. SDC 1960 Supp. 55.1102 has been recodified into the current South Dakota Codified Laws, and the State Board of Finance was reorganized in subsequent decades. Anyone evaluating a present-day gift to the state should consult the current SDCL provisions governing acceptance of donations, the Bureau of Administration's policies on state property, and the current statutes governing the State Fair.
What the opinion meant at the time
For the State Fair Board, the opinion gave a clear yes to the underlying question and a step-by-step procedural roadmap to get the gift formally accepted before any work began. The Board's own approval was a required link in the chain even though the Board was not the final acceptor.
For the donor association of Huron businessmen, the opinion confirmed that the terms they had drafted were already adequate. No additional conditions were needed, and the donation could proceed if they followed the document-and-approvals process the AG laid out.
For state officials evaluating other gift offers in 1968, the opinion was a usable template. Any gift to the state, whether real or personal property, money, or a chose in action, ran through the same procedure: Governor receives, State Board of Finance accepts or rejects, title passes on acceptance. Larger or more complex gifts (with strings attached, ongoing obligations on the state, or potential public-purpose concerns) would have required closer scrutiny, but a clean unconditional gift of equipment for a state-owned building was straightforward.
For the State Engineer, the opinion underscored a gatekeeping role on any donated equipment installation. The Engineer's review and approval of the equipment specifications and installation method had to be attached to the gift package and completed before installation, not after.
Common questions
Q: Did the state have to accept every gift offered to it?
A: No. SDC 55.1102 expressly contemplated rejection. The State Board of Finance had discretion to "accept or reject" the gift after the Governor forwarded it. A gift with unwanted conditions, an unaffordable maintenance burden, or an unclear public purpose could be turned down.
Q: Could the donor association reserve any rental priority for the Hippodrome in exchange for the gift?
A: The terms in the actual donation document said no, and the opinion treated that as critical. A gift that locked in donor-favored rental priority would have started to look like a contract or a joint venture, not a gift, and would have raised separate legal questions about whether the state could enter that arrangement.
Q: Was the State Fair Board's own approval enough, or did the Board of Finance need to act?
A: The State Board of Finance had to act. The Fair Board's approval was a step in the package, but the legal acceptance was by the Board of Finance under SDC 55.1102.
Q: What was the State Engineer's role?
A: To review and approve the equipment specifications and the installation plan before the gift document was finalized. That approval, in writing, was attached to the gift document so the Board of Finance and the Governor could see that the state would be receiving fit-for-purpose equipment.
Q: When did title actually pass to the state?
A: When the State Board of Finance formally accepted the gift. The statute said: "when the State Board of Finance shall accept the same, the title thereto shall pass to the state."
Q: Could the state pursue legal action if the donor later tried to take the equipment back?
A: Yes. SDC 55.1102 expressly stated that "the state may, when necessary, commence proceedings for the recovery of such property." Once accepted, the equipment was state property.
Q: What if the donor wanted to install the equipment before formal acceptance?
A: The AG recommended against it. The opinion advised that the gift document, State Engineer approval, and Fair Board approval should all be in place, the package should be reported to the Governor, and the Board of Finance should accept it before any actual installation. That sequencing protected both sides from disputes if something went wrong in installation or if the gift was ultimately rejected.
Background and statutory framework
SDC 1960 Supp. 55.1102 was the general statute governing gifts to the State of South Dakota. It set up a uniform process so that no state agency could unilaterally take title to donated property: every gift, regardless of its destination, ran through the Governor and the State Board of Finance.
The statute used broad language ("grant, devise, bequest, donation, or gift, or assignment of money, or chose in action, of any property real or personal"). That sweep covered everything from a deed for a piece of land to a check from a private foundation. The same procedural channel applied to all of them, which simplified review and created a record of every state acquisition by gift.
The South Dakota State Fair Board administered the State Fair Grounds, including the Hippodrome. The Board could accept improvements to its facilities, but it could not by itself take title to donated property. The donation had to pass through the Governor and the Board of Finance for the title to vest in the state. A separate concurrence from the Fair Board, attached to the gift documents, gave the Board of Finance the comfort that the receiving agency wanted the gift.
The State Engineer's involvement was a sensible practical safeguard for any donation of equipment intended to become a building fixture. Heating equipment installed in the Hippodrome would become permanent state property and a recurring maintenance and energy expense. Approving the design and the installation method in advance let the state avoid a gift that would have created future liabilities or compatibility problems with other state-controlled improvements.
Citations and references
Statutes:
- SDC 1960 Supp. 55.1102 (procedure for state acceptance of gifts, grants, donations, devises, bequests, and assignments of property)
Source
Original opinion text
Fair Board. Acceptance of a gift by the State
You have requested an opinion on the following factual situation:
"The South Dakota State Fair Board has advised me that a nonprofit association of businessmen in the City of Huron has offered to present to the State a gift consisting of the installation of heating equipment for the Hippodrome on the State Fair Grounds. It is my understanding that this offer would include the following conditions and premises:
-
That equipment sufficient and necessary to heat the Hippodrome building would be installed at the sole expense of the association.
-
That the equipment as well as the installation thereof would be subject to the examination, supervision, and approval of the State Engineer.
-
That upon installation, the gift would be irrevocably and unconditionally the sole property of the state of South Dakota and a fixture of the building in which it had been installed.
-
That no conditions, premises, or consideration of any character would be given by the State Fair Board or the state of South Dakota to the donor therefor.
-
That sole and complete jurisdiction with respect to the use and rental of the Hippodrome building would remain the jurisdiction of the State Fair Board and that no priority with respect to such use or occupancy would be given either directly or indirectly to the donor as a result of their proposed gift.
It goes without saying that the installation of the heating equipment in the Hippodrome building would be a valuable asset and would permit the utilization of this structure throughout the entire year by means of lease agreements entered into by the State Fair Board. Lessees requesting periodic rental of the building would, undoubtedly, include the proposed donor."
You have asked the following question:
"May the State of South Dakota accept the proposed gift under the terms and conditions hereinbefore set forth?"
You have also requested advice on the following:
"If it is your belief that the imposition of further conditions or restrictions might cause such a gift to be proper and legal, I would likewise appreciate your indication as to the nature of such additional conditions or restrictions.
"In the event it might be your opinion that such a gift could be legally accepted by the state of South Dakota, would you kindly advise the exact and formal manner by which such acceptance should be made."
SDC 1960 Supp. 55.1102 reads as follows:
"Whenever any grant, devise, bequest, donation, or gift, or assignment of money, or chose in action, of any property real or personal, shall be made to this state, the Governor is directed to receive the same, and shall report the same to the State Board of Finance for acceptance or rejection; and when the State Board of Finance shall accept the same, the title thereto shall pass to the state, and the state may, when necessary, commence proceedings for the recovery of such property."
Under the conditions and premises you have set forth, it would appear that the gift of the heating equipment to the State of South Dakota is absolute without any encumbrances whatever, therefore, it is my opinion that the State of South Dakota may accept such gift.
It is also my opinion that conditions you have set forth are adequate and that no further conditions or restrictions are necessary.
It is recommended that a document be prepared setting forth the description of the equipment included in the gift with the conditions set forth above included in such document with such document executed by the Association.
It is also recommended that such Association obtain approval of the equipment of the proposed method of installation from the State Engineer prior to executing the gift document. A copy of such approval should be attached to the gift document.
It is also recommended that the State Fair Board approve and agree to accept the gift and a copy of their approval be attached to the gift document.
After the approval is accomplished, then the proposed gift with the approvals attached should be submitted to you, and you should then report the same to the State Board of Finance for acceptance or rejection. If the State Board of Finance accepts such gift, then such gift would become final. All of this should be accomplished before any actual installation is made.