An association of three South Dakota counties (Walworth, Edmunds, Brown) and some municipalities was trying to appropriate water from a state water source for its members' anticipated future water needs. Two questions: (1) Could the association use the future-needs water appropriation provision in SDCL 46-5-38, which was limited to 'state institution, facility or property, municipality or conservancy subdistrict'? (2) Did a new statute requiring legislative approval for appropriations over 10,000 acre-feet apply to an application filed before the new statute's effective date?
Plain-English summary
The Walworth, Edmunds, Brown Water Development Association was a multi-jurisdictional water-planning group formed by three counties in north-central South Dakota plus some municipalities. The Association wanted to file a water-rights appropriation for a large quantity of water to meet the future needs of its member jurisdictions. The mechanism was SDCL 46-5-38, which let "a state institution, facility or property, municipality or conservancy subdistrict" appropriate water for "contemplated future needs" rather than only current needs.
The Association's claim to use this future-needs mechanism relied on SDCL 1-24, the Joint Exercise of Powers Act, which allowed public agencies to band together to exercise jointly any power they each had individually. Since the member municipalities each had future-needs appropriation power, the Association argued it could exercise that power on their behalf.
The AG split the analysis.
On the joint-powers question: The AG agreed that municipalities, acting together under SDCL 1-24, could exercise the future-needs power, because each member municipality had it individually. But counties were a different story. The AG ruled that counties did not have future-needs appropriation power. The statute's terms ("state institution, facility or property, municipality or conservancy subdistrict") did not naturally include counties. A county is a creature of statute with only the powers expressly given by statute, plus those reasonably implied (citing State v. Hansen and a line of strict-construction cases on county powers). No statute had granted counties water-future-use appropriation power. The Legislature, when it gave conservancy subdistricts and municipalities the future-use power, had not given it to counties. Treating "state institution, facility or property" to include counties would have stretched the term beyond its accepted meaning of state proprietary functions, not governmental subdivisions.
Once the AG ruled that counties had no future-use appropriation power individually, SDCL 1-24's joint-exercise framework could not save the Association. The rule of joint exercise was that joint use requires individual capacity: two governmental units cannot band together to exercise a power that only one of them has. An association that contains a county thus contains a unit (the county) that does not individually have the future-use appropriation power, so the association cannot exercise it.
The Association did contain at least one county (probably all three), so its future-use application failed. The AG suggested in a passing comment that if the Association registered as an incorporated entity (it was claiming incorporation but had not registered with the Secretary of State), SDCL 1-24-5 still required joint-power compliance for unincorporated associations.
On the legislative-approval question: This was a timing question. The Association had filed its application on May 29, 1975. A new statute (S.B. 309, codified as SDCL 46-5-20.1) took effect July 1, 1975, requiring the Water Rights Commission to refer any application over 10,000 acre-feet annually to the Legislature for approval before the Commission could act on it. The Commission was not scheduled to meet until July 24, 1975. Did the new statute apply to the pre-July-1 application?
Yes, the AG said. Pending proceedings must comply with procedural statutes even if those statutes became effective after the proceeding started. Retrospective action that would destroy a vested right was not permitted, but a mere application (not yet granted) was not a vested right. The Association had only an inchoate interest, not a vested water right. The AG also reasoned that the new statute affected the Commission's own authority, not just the applicants', so the Commission was prohibited from acting on large applications without prior legislative submission. Unless a court ordered otherwise, the Commission would have to submit any pending qualifying application to the Legislature.
So the Association faced a double bar: counties could not appropriate for future use even through the association mechanism, and any application large enough to trigger SDCL 46-5-20.1 had to go to the Legislature for approval before the Water Rights Commission could act.
Currency note
This opinion was issued in 1975. 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. South Dakota's water rights code has been substantially restructured since 1975. The future-use appropriation rule, the joint-exercise-of-powers rules for water development, and the legislative-approval threshold for large appropriations have all been amended. The role of conservancy subdistricts and the formation rules for water development associations have also changed. Modern water-rights applicants should consult current SDCL Title 46 (Water Rights) and current Water Rights Commission regulations rather than this 1975 opinion.
What the opinion meant at the time
For water development associations forming across South Dakota in the mid-1970s, the opinion was a structural constraint. If the planned association included counties (which most did, because county-level water planning was administratively easier than purely municipal planning), the association could not appropriate water for future needs. Future-use planning was a municipalities-and-subdistricts game, and county participation in those entities had to be limited to non-future-use functions.
For the Walworth-Edmunds-Brown Association specifically, the future-use application was dead. The Association would have to reorganize as a municipalities-only or conservancy-subdistrict-only entity, or limit its appropriation to existing needs only (no future-use language), to proceed.
For the Water Rights Commission, the new 10,000-acre-foot legislative-approval threshold dramatically changed how large applications were processed. Any application over the threshold (water for industrial use, water for energy projects, water for irrigation associations) had to be routed through the Legislature before Commission action. The Commission's effective authority on large applications was reduced; the Legislature could veto by inaction or impose conditions.
For applicants whose pre-July-1, 1975 applications were over the threshold, the opinion said they could not get grandfather treatment by virtue of having filed before the effective date. Procedural rules applied prospectively to all pending applications. This was a significant retroactivity ruling that delayed many in-progress water development plans.
For municipalities and conservancy subdistricts (which retained future-use appropriation power), the opinion was a relative win. They could proceed without county partners or could partner with each other under SDCL 1-24 for joint future-use applications. Counties wanting to facilitate future-use water planning had to do so through a subdistrict or municipality structure rather than directly.
For counties, the opinion underscored the strict-construction principle that limits county powers to expressly granted or reasonably implied authority. The AG's reasoning paralleled State v. Hansen (county hospital case): counties had only the powers the Legislature gave them, and water-future-use appropriation was not on the list.
Common questions
Q: Could the Association have proceeded as a municipalities-only entity, leaving the counties out?
A: Yes, the AG's reasoning expressly contemplated this. "Since municipalities have the power to appropriate water for future use, any association of municipalities acting under SDCL 1-24 (Rev. 1974) may do the same." A municipalities-only association could have invoked the future-use rule. The challenge was that the Association apparently wanted county participation for governance and funding reasons that were independent of the future-use issue.
Q: What if the counties were re-characterized as something else (water districts, special-purpose entities)?
A: That depended on whether the re-characterized entity had future-use appropriation power. A water district set up under a statute that gave it future-use power would qualify. A general-purpose entity that was just a county under a different label would not, because the substance of the power, not the label, controlled.
Q: Why was a conservancy subdistrict treated differently from a county?
A: Conservancy subdistricts were special-purpose water entities formed under separate statutory authority. The Legislature had specifically given them future-use appropriation power as part of their water-management mission. Counties were general-purpose local governments without water-management as a core statutory function, so the Legislature had not extended future-use appropriation to them.
Q: Could the Association have re-filed its application after July 1, 1975 to take advantage of any later statutory change?
A: A re-filing would still face the future-use problem (counties cannot appropriate for future use) and the over-10,000-acre-feet legislative approval requirement. Re-filing did not solve the underlying structural issues; it would only have triggered the same analysis.
Q: Did the AG's opinion mean the counties could not get water at all?
A: No. Counties could buy water from municipalities or subdistricts that had appropriated it, or could contract for water supply, or could form different governance structures. The opinion was specifically about who could appropriate water under SDCL 46-5-38 for future needs, not about who could ultimately use water.
Q: Was the AG concerned about the Association's claim of incorporation?
A: The opinion noted that the Association "claims to be incorporated but is not registered with the Secretary of State." The AG flagged SDCL 1-24-5 (joint exercise by unincorporated associations) as an alternative pathway if incorporation was not actually completed. But the incorporation question did not change the underlying future-use ruling.
Q: What did the AG mean by "the statute affects not only applicants but also the Commission itself"?
A: The AG read SDCL 46-5-20.1 as constraining the Water Rights Commission's own jurisdiction. The statute said "any application . . . shall be presented by the Water Rights Commission to the Legislature for approval prior to the board's acting upon the application." That language imposed a duty on the Commission, not just a step for applicants to fulfill. So the Commission could not act on the application even if the Association did nothing.
Q: What was the "vested right" analysis the AG used for retroactivity?
A: The traditional rule was that procedural statutes apply to pending cases unless the new procedure destroys a substantive right that has already vested. Filing an application does not vest a right; the right vests when the Commission grants the application. Until then, the applicant has only an expectation. The legislative-approval requirement, applied to a pending unapproved application, did not destroy any vested right.
Background and statutory framework
South Dakota's water rights system in 1975 was built around prior appropriation. A water user obtained a water right by filing an application with the Water Rights Commission, which would approve or deny based on availability, beneficial use, and (for large appropriations) other factors. The right vested at approval.
SDCL Chapter 46-5 (Appropriation of Water) set the substantive standards. Section 46-5-38 allowed "future use" appropriations, where a state institution, municipality, or conservancy subdistrict could appropriate water for contemplated future needs rather than only present needs. This was an exception to the usual "beneficial use" requirement, which conditioned appropriation on present use. Future-use rights gave planners the ability to lock in water rights before infrastructure to use the water was built.
Conservancy subdistricts were sub-units of larger water conservancy districts, with statutory authority to plan and develop water resources within their boundaries. They were special-purpose entities specifically charged with water management.
Counties in South Dakota were general-purpose local governments. SDCL Title 7 (Counties) defined their powers, which historically focused on courts, public health, roads, and elections. Water management was not a core county function except where individual counties had been given specific water-management authority by statute (which Walworth, Edmunds, and Brown apparently had not).
The Joint Exercise of Powers Act (SDCL Chapter 1-24, with amendments through 1974) allowed governmental units to band together to exercise jointly any power they each had individually. The Act was a tool for intergovernmental cooperation but its language was strict: it required individual capacity for joint exercise. Two units that each lacked a power could not, by combining, create the power.
S.B. 309 of 1975 (later codified as SDCL 46-5-20.1) was a legislative response to controversy over large water appropriations. The Legislature wanted political review of significant water diversions before the Commission acted. The statute imposed a mandatory legislative-referral step for any appropriation over 10,000 acre-feet annually and denied eminent domain to any common carrier appropriating that much water without prior legislative approval.
The Walworth-Edmunds-Brown Water Development Association's application apparently fell over the 10,000-acre-foot threshold (the opinion does not say so explicitly, but the question's posture would have been pointless otherwise). So the Association faced both the structural problem (counties cannot appropriate for future use) and the procedural problem (large applications must be referred to the Legislature, even if filed before the new statute's effective date).
Attorney General William Janklow signed the opinion (later Governor and U.S. Representative of South Dakota). Janklow's tenure was marked by activist AG interpretations of water and natural resources statutes. This opinion is representative.
Citations and references
South Dakota statutes:
- SDCL 46-5-38 (1967) (future-needs water appropriation by state institutions, municipalities, conservancy subdistricts)
- SDCL 1-24-2 (Rev. 1972) (joint exercise of governmental powers)
- SDCL 1-24-5 (Rev. 1974) (joint exercise by unincorporated associations)
- SDCL 1-24 generally (Joint Exercise of Powers Act)
- SDCL 34-16B-20 (Rev. 1972) (solid waste disposal, counties expressly granted power)
- SDCL 46-5-20.1 (Supp. 1975) (legislative approval for water appropriations over 10,000 acre-feet; loss of eminent domain for common carriers without prior legislative approval)
South Dakota Supreme Court cases (cited for strict construction of county powers):
- State v. Hansen, 75 S.D. 476, 68 N.W.2d 480 (1955) (county hospital bond authority limited to statutorily-named purposes)
- State v. Bd. of County Commissioners of Beadle County, 68 S.D. 237, 300 N.W. 832 (1941)
- South Dakota Employees Protective Association v. Poage, 65 S.D. 198, 272 N.W. 806 (1937)
- Pearson v. Johnson, 59 S.D. 163, 238 N.W. 644 (1931)
Out-of-state cases (cited on retroactivity of procedural statutes):
- Koga v. Ball, 497 F.2d 702 (4th Cir. 1974)
- Frame v. Marlin Firearms Company, Inc., 514 S.W.2d 728 (Tenn. 1974)
Source
Original opinion text
Appropriation of water for future needs by the Walworth, Edmunds, Brown Water Development Association
Dear Mr. Butler:
Your letter dated June 26, 1975 posed two questions:
1) Can the Walworth, Edmunds, Brown Water Development Association appropriate water for future needs under SDCL 46-5-38 (1967)?
2) Does S.B. 309 (now SDCL 46-5-20.1 (Supp. 1975)) require legislative approval of this water development association's request prior to any action by the Water Rights Commission?
My answer to the first question is no and yes to the second.
1) SDCL 46-5-38 (1967) states:
A state institution, facility or property, municipality or conservancy subdistrict may appropriate water for its contemplated future needs in the manner above provided for appropriations for existing needs.
The Water Development Association, from the information you have provided me, is a conglomeration of municipalities and counties attempting to provide water for their individual needs through a unified effort. Admittedly, the Association is not one of those entities entitled to appropriate for future needs under SDCL 46-5-38 (1967). SDCL 1-24-2 (Rev. 1972), however, states in part that
Any power or powers, privileges or authority exercised or capable of exercise by a public agency of this state may be exercised and enjoyed jointly with any other public agency of this state having such power or powers, privilege or authority ...
The plain meaning of this statute is that anything two or more municipalities can do individually they can also do in concert. In contradistinction, however, no public agencies can jointly exercise a power that each does not have individually. That is, two governmental units cannot band together to use a governmental power belonging to only one of them.
Since municipalities have the power to appropriate water for future use, any association of municipalities acting under SDCL 1-24 (Rev. 1974) may do the same.
The question still remains, however, of whether the inclusion of counties in this association is an attempt to give those counties power to appropriate for future use that they do not possess individually. Is a county a "state institution, facility or property, municipality or conservancy subdistrict"?
My opinion is that a county may not appropriate for future use. Clearly, a county cannot be classified as either a conservancy subdistrict or a municipality. Their separate powers are too well delineated in the statute for the Legislature to have meant county when it said municipality and conservancy subdistrict. Furthermore, my research has found no statute granting counties the exercise of water distribution powers normally belonging to municipalities and subdistricts such as was done with solid waste disposal in SDCL 34-16B-20 (Rev. 1972).
Nor do I believe the Legislature intended the terms "state institution, facility or property" to include counties. Our courts have uniformly construed statutes dealing with county powers very strictly. For example, in State v. Hansen, 75 S.D. 476, 68 N.W. 2d 480 (1955), the South Dakota Supreme Court construed a statute authorizing a county to "establish and maintain a county hospital" and to issue bonds "for the purpose of purchasing a site for such hospital and for the erection, equipment, and maintenance thereof . . ." The court held that the Tripp County Commissioners were certainly authorized to purchase a hospital already built, but that the statute prohibited them from issuing bonds to facilitate that purchase. Bonds were only to be used to purchase a vacant site, to erect a new hospital on that site and to equip and maintain that new hospital. In other words, if the Legislature had wished to make the authority to sell bonds as broad as the authority to establish and maintain a hospital it should have said so explicitly. As the Court said:
A county in this state is a creature of statute and has no inherent authority. It has only such powers as are expressly conferred upon it by statute and such as may be reasonably implied from those expressly granted. Hansen, supra, 68 N. W. 2d at 481.
See also State v. Bd. of County Commissioners of Beadle County, 68 S.D. 237, 300 N.W. 832 (1941); South Dakota Employees Protective Association v. Poage, 65 S.D. 198, 272 N. W. 806 (1937); Pearson v. Johnson, 59 S.D. 163, 238 N.W. 644 (1931).
This judicial adherence to strict construction of statutory powers and the fact that the terms "state institution, facility or property" are generally accepted as referring to state proprietary functions rather than governmental subdivisions mandate the conclusion that counties are not entitled to appropriate water for future use under SDCL 46-5-38 (1967).
It necessarily follows from this that an association of counties and municipalities is also prohibited from future use appropriation. To rule otherwise would allow the counties to exercise powers they do not possess thereby violating SDCL 1-24 (Rev. 1974).
Your letter states that this association claims to be incorporated but is not registered with the Secretary of State. I would only comment in passing by citing you to SDCL 1-24-5 (Rev. 1974) which explicitly provides for the joint exercise of governmental powers by unincorporated associations if there is compliance with that section.
In summary, if this association contains governmental units other than those specifically mentioned in SDCL 46-5-38 (1967), it may not appropriate water for future use.
2) Your second question deals with the construction of SDCL 46-5-20.1 (Supp. 1975). That statute states:
Any application for appropriation of water, pursuant to this chapter, in excess of ten thousand acre feet annually shall be presented by the Water Rights Commission to the Legislature for approval prior to the board's acting upon the application and all powers of eminent domain shall be denied any common carrier appropriating over ten thousand acre feet of water per annum which has not obtained such prior legislative approval.
Your question is raised by the fact that the present application was filed on May 29, 1975, the new statute was effective on July 1, 1975, and the Commission will not meet until July 24, 1975, and you are wondering whether an application that predates the statute must be referred to the Legislature.
The general law is that pending proceedings must comply with procedural statutes even though the statute does not become effective until after the proceeding has started. Retrospective action will not be allowed if it will destroy a vested right. No right here is, as yet, vested; only the application to receive a vested right is involved. See Koga v. Ball, 497 F. 2d 702 (4th Cir. 1974); Frame v. Marlin Firearms Company, Inc., 514 S. W. 2d 728 (Tenn. 1974).
Furthermore, it is my opinion as attorney for the Commission, that the statute affects not only applicants for water appropriations but also the Commission itself. The Commission is prohibited from acting on applications for more than 10,000 acre feet/year without prior submission to the Legislature. My advice is that unless directed otherwise by court order the Commission must now submit all appropriate applications to the Legislature.
For these reasons, I answer your second question in the affirmative.
Sincerely,
William Janklow
Attorney General
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