In South Dakota, can a candidate or officeholder pay for childcare or personal security out of their campaign account?

Plain-English summary

South Dakota Senator Liz Larson asked the AG whether candidates can pay for childcare and personal security out of campaign funds, when those costs come up because of campaigning or holding office. SDCL 12-27-50, the statute that lists permissible uses of campaign contributions, does not name childcare or security as allowed or disallowed.

Attorney General Marty Jackley concluded:

• The statute is ambiguous. A trier of fact could go either way.
• The cleanest rule is a "but for" test: would the candidate be paying this expense anyway, regardless of the campaign or office? If yes, it is a personal expense and the campaign account cannot pay for it. If the expense only exists because of the campaign or office, and is reasonably connected to campaign duties or officeholder duties, it is more likely permissible.
• Childcare and personal security incurred because of campaigning or because of the threat profile that comes with holding office probably qualify as permissible expenditures under SDCL 12-27-50(1) (campaign-related) or (2) (incident to being a public official). But the candidate needs a clear nexus, not just a label.
• Real clarity is for the Legislature, not the AG. Federal candidates have explicit FEC permission for childcare; fifteen states have written similar rules into statute. South Dakota has not. Until it does, the permissibility of any specific expense remains uncertain.

This is an unusually tentative AG opinion. It tells candidates the AG's view but warns them that a different fact-finder could reach a different result.

What this means for you

Candidates and officeholders

The opinion's bottom line: SDCL 12-27-50 does not list childcare or security as either permitted or prohibited, so neither is clearly allowed. The AG concluded that childcare and security expenses "directly incurred as a result of campaign activity or holding public office, which would not exist but for the campaign or officeholder duties, would likely be considered permissible expenditures," but only where there is a clear nexus to the campaign or office and the expense is not for personal benefit. The opinion is explicit that this is not a guarantee. It says a trier of fact could instead find the same expense a personal benefit and therefore prohibited, and it draws the dividing line at whether the cost would exist "irrespective of" or "but for" the campaign or officeholder duties.

Campaign treasurers and disclosure

The opinion identifies SDCL 12-27-24 as the source of the requirement that all expenditures be itemized on campaign finance disclosure statements, and SDCL 12-27-50 as the limit on permissible uses. It does not set out any documentation standard, itemization format, or safe harbor specific to childcare or security; it leaves the permissibility of each expense to the same nexus and personal-benefit analysis.

Campaign-finance attorneys

The opinion is unusually candid that the statute is ambiguous and that its "permissible if the nexus is clear" conclusion could be rejected by a trier of fact. The controlling personal-use principle it relies on is Matter of Discipline of Hopewell, 507 N.W.2d 911, 915 (S.D. 1993): a candidate may not use campaign contributions for the benefit of the candidate or the candidate's family. As an AG opinion it is persuasive authority, not binding on a court or a future Attorney General.

South Dakota legislators

The AG expressly left the question to the Legislature, stating it "has the power to create and revise statutes and has the duty to clarify the relevant statutes if desired." The opinion notes that the Federal Election Commission and fifteen states (including South Dakota's neighbors Minnesota and Montana) have adopted explicit childcare rules, and a smaller set (California, Louisiana, and Minnesota) explicit security rules, while South Dakota and its neighbors Iowa, Nebraska, and North Dakota have not.

Common questions

Q: Does SDCL 12-27-50 say anything about childcare or personal security?
A: No. It lists three permissible categories (campaign-related purposes, expenses incident to being a public official, donations to other candidates or charities) and leaves specific expense types unaddressed. The drafters in 2017 deliberately avoided enumerated categories out of concern they would miss legitimate expenses.

Q: How is South Dakota different from federal candidates?
A: The Federal Election Commission has explicitly approved childcare expenses for federal campaigns (when caused by the campaign), through advisory opinions and rule guidance. Federal candidates have a clearer rulebook than South Dakota candidates.

Q: Which states have explicit statutes allowing campaign-funded childcare?
A: The opinion lists fifteen: Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Minnesota, Montana, New Hampshire, New Jersey, New York, Rhode Island, Utah, and Washington. South Dakota neighbors Minnesota and Montana have such rules; Iowa, Nebraska, and North Dakota do not.

Q: Which states have explicit statutes allowing campaign-funded security?
A: Fewer. The opinion identifies California, Louisiana, and Minnesota.

Q: If a borderline expenditure is challenged, how does the opinion say it gets resolved?
A: The opinion frames it as a question for a trier of fact applying SDCL 12-27-50 to the specific expenditure. It says a fact-finder could go either way: treat the expense as a "purpose related to a candidate's campaign" or an expense "incident to being a public official," or instead treat it as a prohibited personal benefit. The AG's "but for" analysis is persuasive but, as the opinion notes, not binding.

Q: Does this opinion bind a court or a future AG?
A: No. South Dakota AG opinions are not binding precedent. They are persuasive authority, but the opinion itself acknowledges a trier of fact could reach a different result.

Background and statutory framework

SDCL 12-27-50 was rewritten as 2017 Senate Bill 54. The bill's proponent explicitly told the Senate committee that the drafters did not want enumerated lists, because any list would risk excluding categories that should be permissible. The result is a statute with three broad permissible categories and no specifics. This is normally a deliberate design choice in favor of flexibility; the cost is exactly the ambiguity at issue in this opinion.

The "but for" test the AG endorses tracks federal personal-use analysis under 11 C.F.R. § 113.1(g) and Matter of Discipline of Hopewell's rule that candidates may not use campaign contributions for personal benefit. The framework is: would the expense exist independent of the campaign or office. If yes, personal. If no, campaign or office-related.

For comparison, the opinion observes that the Federal Election Commission permits federal candidates to use campaign contributions for childcare incurred during a campaign, and that fifteen states (cited in the opinion by statute, including neighbors Minnesota and Montana) have enacted similar childcare rules. A smaller group (California, Louisiana, and Minnesota) has explicit security-expense statutes. South Dakota, like its neighbors Iowa, Nebraska, and North Dakota, has none, which is the gap the opinion says only the Legislature can close.

Citations and references

Statutes:
- SDCL 12-27-24 (campaign finance reporting)
- SDCL 12-27-50 (permissible uses of campaign contributions)

Cases:
- Matter of Discipline of Hopewell, 507 N.W.2d 911 (S.D. 1993) (no personal-benefit use of campaign funds)
- Farm Bureau Life Ins. v. Dolly, 2018 S.D. 28, 910 N.W.2d 196 (plain-language statutory interpretation)
- Magellan Pipeline Co. v. S.D. Dep't of Revenue & Reg., 2013 S.D. 68, 837 N.W.2d 402 (statutory interpretation)
- Moss v. Guttormson, 1996 S.D. 76, 551 N.W.2d 14 (statutory interpretation)

Comparative state statutes referenced by the opinion (childcare):
- Ark. Stat. Ann. § 7-6-203
- Cal. Govt. Code § 89513
- Colo. Rev. Stat. § 1-45-103.7
- Conn. Gen. Stat. §§ 9-601, 9-607
- Del. Code Ann. tit. 15, § 8020
- Hawaii Rev. Stat. § 11-381
- Ill. Rev. Stat. ch. 10, § 5/9-8.10
- Minn. Stat. § 10A.01
- Mont. Code Ann. § 13-1-101
- N.H. Rev. Stat. Ann. § 334:2
- N.J. Rev. Stat. § 19:44A-11.2
- N.Y. Election Law § 14-130
- R.I. Gen. Laws § 17-25-7.2
- Utah Code Ann. § 17-16-202
- Wash. Rev. Code § 42.17A.445

Comparative state statutes referenced by the opinion (security):
- Cal. Govt. Code § 89517.5
- La. R.S. § 18:1505.2
- Minn. Stat. § 10A.01

Source

• Landing page: https://atg.sd.gov/OurOffice/OfficialOpinions/opinionhtml.aspx?id=1773
• Original PDF: https://atg.sd.gov/OfficialOpinions/Official%20Opinion%2026-01.pdf

Original opinion text

OFFICIAL OPINION 26-01

Re: Official Opinion Concerning Campaign Expenditures for Childcare and Security Expenses

Dear Senator Larson,

In your capacity as a South Dakota Senator, you have requested an official opinion from the Attorney General on the following question:

QUESTION:

Are childcare expenses and security expenses, incurred as a direct result of campaign activity and/or holding public office, permissible expenditures of candidate campaign committee contributions?

ANSWER:

South Dakota statutes do not explicitly permit or forbid candidates from using campaign committee contributions for childcare or security expenses.

FACTS:

Current South Dakota law requires that candidates for public office abide by specific guidelines related to contributions to political campaigns. Candidates must maintain detailed records of all expenditures through campaign finance disclosure statements, and all expenditures must be itemized by specific expense categories. SDCL 12-27-24. There are limitations on the use of campaign committee contributions. SDCL 12-27-50. However, as you stated in your request, it is unclear whether childcare or security expenses incurred as a direct result of candidacy or public office are considered permissible expenditures of campaign contribution funds.

IN RE QUESTION:

Current law requires that contributions received by a candidate's campaign committee can be used only for:

• A purpose related to a candidate's campaign;
• Expenses incident to being a public official or former public official; or
• Donations to any other candidate, political committee, or nonprofit charitable organization.

SDCL 12-27-50. When reviewing statutes, we must "assume statutes mean what they say and that legislators have said what they meant." Farm Bureau Life Ins. v. Dolly, 2018 S.D. 28, ¶ 9, 910 N.W.2d 196, 199–200 (quoting In re Petition of Famous Brands, Inc., 347 N.W.2d 882, 885 (S.D. 1984)). "When interpreting a statute, we begin with the plain language and structure of the statute." Magellan Pipeline Co. v. S.D. Dep't of Revenue & Reg., 2013 S.D. 68, ¶ 9, 837 N.W.2d 402, 404. "When the language in a statute is clear, certain and unambiguous, there is no reason for construction, and the Court's only function is to declare the meaning of the statute as clearly expressed." Moss v. Guttormson, 1996 S.D. 76, ¶ 10, 551 N.W.2d 14, 17 (citations omitted).

The phrases "[a] purpose related to a candidate's campaign" and "incident to being a public official" are clear and unambiguous, but broad descriptions. Based on my research, it appears the exclusion of specific categories, such as advertising and mailings, in SDCL 12-27-50 was intentional. When it was initially introduced to the Legislature as 2017 Senate Bill 54, the bill's proponent stated they did not want to put specific expense categories in the statute for fear of possibly excluding a category that should be considered permissible. The result, however, is the issue you have now raised — the inability to know whether an expense which could be considered either campaign-related or personal is permitted or not.

South Dakota is in the majority of states that don't specifically permit childcare and security expenses as allowable campaign expenses. Our statutes, like those of our neighbors in Iowa, Nebraska, and North Dakota, do not specifically allow or forbid childcare or security expenses, so there is ambiguity on whether these expenses are permissible. Some jurisdictions, in contrast, have defined permissible expenditures with specificity. For example, as you correctly noted in your request, the Federal Election Commission explicitly permits candidates for federal office to use campaign contributions for childcare expenses incurred during the candidate's political campaign. As of the date of this letter, fifteen states have enacted similar laws. These states, including our neighbors Minnesota and Montana, permit a candidate to use campaign funds to pay reasonable and necessary childcare or dependent care expenses incurred because of the campaign. See Ark. Stat. Ann. § 7-6-203; Cal. Govt. Code § 89513; Colo. Rev. Stat. § 1-45-103.7; Conn. Gen. Stat. §§ 9-601, 9-607; Del. Code Ann. tit. 15, § 8020; Hawaii Rev. Stat. § 11-381; Ill. Rev. Stat. ch. 10, § 5/9-8.10; Minn. Stat. § 10A.01; Mont. Code Ann. § 13-1-101; N.H. Rev. Stat. Ann. § 334:2; N.J. Rev. Stat. § 19:44A-11.2; N.Y. Election Law § 14-130; R.I. Gen. Laws § 17-25-7.2; Utah Code Ann. § 17-16-202; and Wash. Rev. Code § 42.17A.445. A smaller number of states explicitly let candidates pay for security costs with their campaign funds. See Cal. Govt. Code § 89517.5; La. R.S. § 18:1505.2; Minn. Stat. § 10A.01.

When considering whether these are permissible expenditures, the key question is whether such expenses are considered a personal benefit or for personal use. Of course, "[a] candidate should not use or permit the use of campaign contributions for the benefit of himself or members of his family." Matter of Discipline of Hopewell, 507 N.W.2d 911, 915 (S.D. 1993). It is possible that a trier of fact could determine that childcare expenses are not for a political purpose related to the candidate's campaign. Similarly, they could determine that personal security detail are not related to the candidate's responsibilities as a public officeholder. Thus, these expenses would likely be considered a personal benefit and therefore prohibited.

On the other hand, a reasonable trier of fact could determine that childcare and security expenses incurred as a direct result of campaign activity may be considered a "purpose related to a candidate's campaign." SDCL 12-27-50(1). Similarly, they could be considered "expenses incident to being a public official." SDCL 12-27-50(2).

States with similar statutes that do not specifically grant permission for childcare and security expenses may prohibit the use of campaign committee contributions for these expenses, treating such as impermissible personal expenses rather than legitimate campaign or official duties expenditures. The critical distinction across jurisdictions appears to be whether the expense would exist "irrespective of" or "but for" the campaign or officeholder duties. Childcare payments, specifically, are considered impermissible personal expenses unless directly tied to campaign-related activities or officeholder duties, thus qualifying as prohibited personal use of campaign contributions. Courts uniformly emphasize the necessity of maintaining public confidence in the proper use of political contributions. So, while some jurisdictions consider these expenses nonpersonal if directly connected to campaign activity, the prevailing view requires a clear campaign or officeholder nexus to avoid classification as an impermissible personal expense.

In summary, SDCL 12-27-50 does not explicitly address or list these as allowable expenses. Thus, absent further legislative guidance, I conclude that childcare and security expenses directly incurred as a result of campaign activity or holding public office, which would not exist but for the campaign or officeholder duties, would likely be considered permissible expenditures so long as there is a clear nexus to the campaign or office and are not for personal benefit.

CONCLUSION

In my opinion and based on the plain reading of the statute, there is ambiguity on whether childcare and security expenses directly incurred as a result of campaign activity or holding public office are considered permissible expenditures, or whether they are a personal benefit and thus prohibited. Based on my research, childcare and security expenses directly incurred as a result of campaign activity or holding public office, which would not exist but for the campaign or officeholder duties, would be considered permissible expenditures so long as there is a clear nexus to the campaign or office and are not for personal benefit. The Legislature has the power to create and revise statutes and has the duty to clarify the relevant statutes if desired.

Sincerely,

Marty J. Jackley

ATTORNEY GENERAL

MJJ/SLT/dd