Can a South Dakota legislator (or anyone from the public) see how many jobs a REDI Fund loan recipient created, what hourly wages those jobs pay, and what benefits are included?
Plain-English summary
Representative Koetzle wanted to track whether companies receiving REDI Fund loans were actually delivering on the jobs and wage commitments in their applications. He framed the request narrowly: not the company's full financial statements, just three things — jobs created to date, hourly wage paid, and whether benefits were included. The Governor's Office of Economic Development was treating that information as confidential under the REDI Fund's trade-secret statute, SDCL 1-16G-11.
The 1993 AG split the request. Job counts were public. Wage and benefit figures tied to a specific company were confidential. The split turned on whether the requested information qualified as "commercial or financial information regarding the operation of such business" under SDCL 1-16G-11. A bare headcount of jobs created does not, in ordinary usage, describe the financial operation of a business; wage and benefit figures plainly do. So the headcount fell outside the confidentiality clause, and the wage and benefit figures fell within it.
The AG added a workaround for transparency advocates. Aggregate wage data across the entire REDI portfolio, reported in a way that cannot be tied to any one company, does not violate SDCL 1-16G-11. The board could publish, for example, "REDI loans in FY1992 supported X jobs at an average wage of $Y per hour" without identifying any particular borrower. That is the kind of disclosure that already appears in the board's annual report under SDCL 1-16G-10. Doubts about whether an exemption applies should be resolved in favor of disclosure, citing State v. Peters.
Legislators got no special access under the opinion. SDCL 1-16G-11 contains no carve-out for legislators, and the AG declined to invent one. A legislator wanting more detail than the public can see has the same option as anyone else: change the statute.
Currency note
This opinion was issued in 1993. 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. The REDI Fund statutes in SDCL chapter 1-16G have been amended several times since 1993, and the Governor's Office of Economic Development has been reorganized into the Department of Tourism and the Governor's Office of Economic Development at different points. Modern open records analysis also draws on SDCL chapter 1-27 as amended.
What the opinion meant at the time
For South Dakota legislators in the 1990s, the opinion confirmed that legislative oversight of REDI loans had limits set by the same statute that created the program. Aggregate reporting was the path forward; demanding raw company-by-company financials was not.
For the Board of Economic Development and GOED staff, the opinion gave a defensible framework for responding to records requests. Job counts could be released. Company-specific wage data should be withheld. Aggregate data across the portfolio could be summarized.
For REDI Fund loan recipients, the opinion confirmed that the wage and benefit figures they submitted as part of their business plans would not be disclosed in a way that identified them individually, protecting competitive information.
For taxpayers and journalists tracking economic development subsidies, the opinion limited what was knowable about individual deals but kept the program's aggregate performance open to public scrutiny.
Common questions
Q: What is the REDI Fund?
A: The Revolving Economic Development and Initiative Fund, created in 1987 to make loans for economic development projects in South Dakota. The Board of Economic Development administers it.
Q: Why are some REDI loan records confidential?
A: SDCL 1-16G-11 exempts trade secrets and commercial or financial information about a business's operations from public disclosure. The Legislature judged that protecting that information was necessary to get companies to participate in the loan program.
Q: What can the public actually see about a REDI loan?
A: Per this opinion: the number of jobs the loan created at a specific company. The annual report also includes aggregate statistics across the portfolio.
Q: Can the press get average wage data across all REDI borrowers?
A: Yes, as long as the average cannot be reverse-engineered to identify a specific company. A single-borrower category in the aggregate would not satisfy that test.
Q: Does a legislator get any extra access?
A: Not under this opinion. The confidentiality clause applies to everyone equally. A legislator who wants more access has to change the statute.
Q: Does this opinion apply to all state-administered loan programs?
A: No. It interprets SDCL 1-16G-11 specifically. Other programs have their own confidentiality statutes that may be broader or narrower.
Background and statutory framework
The REDI Fund was a flagship 1980s-era economic development tool. South Dakota wanted to compete with neighboring states for business location and expansion, and the REDI Fund offered low-interest loans for projects that promised job creation. The application required a detailed business plan under SDCL 1-16G-8(3), including job descriptions, salary ranges, and projected employment. Post-loan, the company filed periodic reports under SDCL 1-16G-8(5).
The Legislature understood that companies would not share their internal compensation and operational details with the state unless those details would be kept confidential. SDCL 1-16G-11 was the statutory promise: trade secret and commercial or financial information about a business's operations would not be disclosed.
The general open records statute, SDCL 1-27-1, makes most government-held records open to public inspection. SDCL 1-27-3 carves out an exception for records that are "specifically enjoined to be held confidential or secret by the laws requiring them to be so kept." SDCL 1-16G-11 is one of those carve-outs.
The 1993 AG had to decide where exactly the line ran. Plain meaning was the touchstone. A bare job count is not, in ordinary usage, financial information. Wage data is. Benefit data is. The opinion stayed close to that distinction.
The opinion also recognized the South Dakota Supreme Court's pro-disclosure tilt in State v. Peters. Where an exemption is ambiguous, the records officer should resolve doubt in favor of disclosure, not against it.
Citations and references
Statutes:
- SDCL 1-16G-3 (creation of REDI Fund)
- SDCL 1-16G-8(3), 1-16G-8(5) (business plan and reporting requirements)
- SDCL 1-16G-10 (annual report)
- SDCL 1-16G-11 (confidentiality clause)
- SDCL 1-27-1, 1-27-3 (open records and exceptions)
- SDCL 2-14-1 (plain meaning)
- ARSD 68:02:01 (REDI Fund administrative rules)
Cases:
- American Rim and Brake Inc. v. Zoellner, 382 N.W.2d 421 (S.D. 1986)
- Border States Paving v. Department of Revenue, 437 N.W.2d 872 (S.D. 1989)
- State v. Peters, 334 N.W.2d 217 (S.D. 1983)
Source
Original opinion text
OFFICIAL OPINION NO. 93-10
Confidentiality of REDI Loan Information
Dear Representative Koetzle:
You have requested an official opinion from this Office concerning the following facts:
FACTS:
I am interested in gaining access to information submitted to the Governor's Office of Economic Development, in particular information on loans made from the REDI Fund. I understand the need for confidentiality when it comes to the finances of businesses in this state. The information I am requesting, however, is not of this nature. I am interested in the number of jobs that have been created to date, the hourly wage that is paid to employees and if there are any benefits included. My intent is to make sure that the company receiving the REDI Fund loan is living up to the mission, goals and objectives of the GOED and REDI Fund, without delving into the financial status of the company.
As a representative of the people of this state, and having their best interest in mind, I feel it is necessary to have this information made available. My purpose is to run checks and balances, if you will, to make sure that the various Boards and Commissions that have been created are accomplishing their goals. I believe that the public or at least the Legislature is entitled to all information dealing with job creation numbers and wages paid to employees.
Again, as a representative of the taxpayers of this state, I feel it is my obligation to see that the intent of the laws we as a Legislature pass are followed, especially when I receive a complaint. I feel it is important to remember that the REDI Fund loan money is the property of the taxpayers of this state, and it is to them that the correct and current information needs to be forwarded.
Based upon these facts, you have asked the following question:
QUESTION:
Does a member of the South Dakota Legislature have access to information submitted by the recipients of REDI Fund loans to the Governor's Office of Economic Development concerning the number of jobs created, the hourly wage paid to employees and if there are benefits included?
The Revolving Economic Development and Initiative Fund ("REDI Fund") was created by the Legislature in 1987 for the purpose of making loans for economic development. SDCL 1-16G-3. The Board of Economic Development is responsible for making loans from the Fund and has adopted administrative rules to implement statutes governing the loan program. SDCL §§ 1-16G-1; 1-16G-5; 1-16G-8; and ARSD 68:02:01. Applicants are to submit certain information, including business plans pursuant to SDCL 1-16G-8(3). A business plan includes information on job descriptions and salaries attendant to those jobs. Reporting systems also are established to monitor company performance in complying with its individual business plan. SDCL 1-16G-8(5).
SDCL 1-27-1 provides generally that where the keeping of a record, document or other instrument is required of a public officer or servant by statute, such records are open to inspection by the public. SDCL 1-27-3 goes on to provide, however, that "[s]ection 1-27-1 shall not apply to such records as are specifically enjoined to be held confidential or secret by the laws requiring them to be so kept." The Legislature has seen fit to provide that certain information submitted to or made by the Board of Economic Development or the Governor's Office of Economic Development in connection with REDI Fund loans is to remain confidential. SDCL 1-16G-11 provides as follows:
Any documentary material or data made or received by the board of economic development or Governor's office of economic development for the purpose of furnishing assistance to a business, to the extent that such material or data consists of trade secrets or commercial or financial information regarding the operation of such business, may not be considered public records, and is exempt from disclosure pursuant to the provisions of §§ 1-16G-3 to 1-16G-11, inclusive. Any discussion, consideration of, or action upon such trade secrets or commercial or financial information by the board of economic development may be done in executive session closed to the public, notwithstanding the provisions of the open meeting laws of this state.
Thus, the question is whether the type of information you are seeking 1) is "data made or received by the board . . . pursuant to the provisions of §§ 1-16G-3 to 1-16G-11," and 2) constitutes "commercial or financial information regarding the operation of such business." Resolution of this issue is a matter of statutory construction. The goal is to determine the intent of the Legislature not only from the words used in the statute at issue, but from other statutes on the subject as well. Words used in the statute are to be given their ordinary meaning, unless the context clearly requires otherwise. American Rim and Brake Inc. v. Zoellner, 382 N.W.2d 421 (S.D. 1986); Border States Paving v. Department of Revenue, 437 N.W.2d 872, 874 (S.D. 1989); SDCL 2-14-1.
Information concerning "job descriptions with attendant salary and wage information by job category" is part of the data businesses have to submit to the board in the form of a business plan pursuant to SDCL 1-16G-8(3). Specific information on jobs created is also required under board regulations. Job information is clearly data submitted to the board "for the purpose of furnishing assistance to the business" as required in SDCL 1-16G-11, and is data submitted "pursuant to §§ 1-16G-3 to 1-16G-11, inclusive."
Similarly, information on the hourly wage paid to employees and the benefits included in the wage package is "financial information regarding the operation of the business." The ordinary meaning of the word "financial" connotes fiscal matters, that is matters dealing with the use and distribution of money. Wages and benefits certainly fall within that meaning. That the Legislature considered such information to relate to the operation of the business is evident from the fact that it instructed that wage information be included in business plans submitted to the board pursuant to SDCL 1-16G-8(3).
Therefore, it is my opinion that information concerning the wages and benefits paid by a particular REDI Fund Loan applicant or recipient, as made or received by the board or GOED in the loan process, is confidential under SDCL 1-16G-11. I am also of the opinion, however, that information on the number of jobs created as a result of a particular loan would not be confidential information under that statute, assuming for the sake of argument that such information is data made or received by the board. The number of jobs created, without some reference to the amount of wages paid in relation to those jobs or some other financial data, does not fall within the ordinary meaning of either "commercial or financial information."
Our state courts have not had an opportunity to interpret these provisions. Public policy, however, dictates that public records should be accessible to the public. Exemptions should be strictly but reasonably construed to extend only so far as their language fairly warrants. Doubts should be resolved in favor of disclosure. See State v. Peters, 334 N.W.2d 217, 221-22 (S.D. 1983). In my opinion, disclosure of the number of jobs created by a particular business receiving a REDI Fund loan is not confidential under SDCL 1-16G-11.
Likewise, the board may summarize and disclose to the public data concerning the total number of jobs created and wages paid through the REDI Fund loan program. As long as the information provided does not identify particular companies, but instead relates to the entire portfolio, there would be no violation of SDCL 1-16G-11. For example, it would be permissible for the board to disclose that lending activity created x number of jobs in the last fiscal year and that the average wage was y dollars per hour. Although the wage information is financial in nature, if it cannot be tied to a particular business, the intent of the confidentiality statute would not be violated.
It is clear that information on job creation and wages is important to the REDI Fund program; it is information required by statute and by rule. It is the type of information one would expect to find in the board's annual report. SDCL 1-16G-10. Disclosure on a portfolio basis would strike a fair balance between the public's right to information and the need for confidentiality expressed by the Legislature in SDCL 1-16G-11.
I have considered SDCL 1-33-19.1, but that section does not call for a different answer. In my opinion, for REDI Fund loans, the specific language in SDCL 1-16G-11 controls over the general language of SDCL 1-33-19.1. SDCL 1-33-19.2 supports such a construction.
There is no statute that would afford to a legislator any greater right of access to this type of information than to the members of the public in general. In my opinion, then, a legislator would be entitled to information on the number of jobs created by a particular REDI loan, but information on the wages and benefits paid with relation to that loan would remain confidential. Furthermore, a legislator would be entitled information on the wages and benefits paid on a portfolio basis, if such information can be disclosed in such a manner that the information is not identifiable with specific companies.
Finally, I note that the REDI Fund is entirely a creature of legislative enactment. Therefore, what the Legislature has given in the way of confidentiality, it can take away. That, of course, is a policy issue for the Legislature.
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