Can a South Dakota county build an addition to the county 4-H building if the sole purpose of the addition is to rent space to federal agencies (ASCS, Soil Conservation Service, Farmers Home Administration)?
Plain-English summary
Moody County's commissioners wanted to expand the county 4-H building. The reason was not a 4-H program need; the addition would be built specifically to provide office space for federal agencies that wanted to rent in the county (Agricultural Stabilization and Conservation Service, Soil Conservation Service, Farmers Home Administration, and similar). The question came to AG Kermit Sande.
Sande compared the request to an earlier opinion (Official Opinion 72-62) that had approved a county renting existing courthouse space to the Soil Conservation Service. The earlier opinion read SDCL 1-24 (the joint-exercise-of-powers chapter) to authorize a county to cooperate with other public agencies, including by leasing existing space.
But Sande drew a line between renting existing space and building new space. The earlier opinion involved capacity the county already had; the Moody County proposal was construction undertaken specifically as a federal-agency landlord venture. That, Sande said, was not a joint exercise of powers in the sense the statute contemplated. Looking up "joint" in Webster's Seventh Collegiate, he noted that the word presumes two or more parties acting together. A county building a structure on its own, on its own land, with its own funds, for the purpose of renting to other agencies was not a joint exercise. SDCL 1-24-4 and 1-24-5 spelled out the expected joint structure: an agreement, joint control over the resulting agency and property.
The path forward, Sande said, was actual joint construction. If Moody County and the federal agencies agreed to a true joint venture, contributing money, sharing control, and following the SDCL 1-24 procedures, the construction would be permissible. The Mood County plan as described did not meet that standard.
Currency note
This opinion was issued during AG Kermit Sande's tenure in the late 1970s. 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. SDCL 1-24 has been amended; the federal agencies named in the opinion (notably ASCS, which has since merged into other USDA bodies) have been restructured.
What the opinion meant at the time
For Moody County, the immediate answer was a clean no on the proposal as structured. The commissioners would have to either drop the construction plan or restructure it as a genuine joint venture with federal participation in funding and control.
For other counties contemplating similar federal-landlord arrangements, the opinion drew a sharp distinction. Renting unused space in an existing county facility was fine. Constructing a new facility on the rental theory was not.
For federal agencies looking to office in rural South Dakota counties, the opinion redirected them toward joint-construction arrangements, where the federal agency commits to participate financially and operationally, not just contractually as a tenant.
Common questions
Q: What is the public-purpose theory behind this restriction?
A: South Dakota counties derive their powers from the legislature, and county funds and property must be used for county purposes. A county that builds a structure primarily as rental income is using its capital for a non-county purpose unless the rental fits within the joint-exercise-of-powers framework.
Q: Could the county build the addition to serve its own 4-H program, then incidentally rent surplus space?
A: That would be the proper structure if the rental was incidental rather than the primary purpose. The opinion did not address that scenario specifically, but the reasoning suggests it would be permissible if the construction was genuinely justified by county program needs.
Q: What does "joint" require under SDCL 1-24?
A: SDCL 1-24-4 requires an agreement specifying the joint terms. SDCL 1-24-5 requires provisions for joint control of the agency and property. So a true joint exercise involves shared formalities (a written agreement) and shared substance (joint control).
Q: Is this opinion limited to federal-agency tenants?
A: No. The same reasoning would apply to county construction undertaken solely as a landlord for state agencies, other counties, school districts, or private parties. The question is whether the construction served a county purpose, with rental as incidental, or rental as primary purpose.
Q: What enforcement mechanism backed up this restriction?
A: Several potential channels. A taxpayer or county resident could challenge the construction in court as ultra vires. The state's attorney could refuse to approve the project. The auditor could refuse warrants. A successor county commission could discontinue the project. The opinion did not specify but the framework provides multiple checks.
Background and statutory framework
South Dakota counties operate under the principle that their authority is statutory. They have only the powers expressly granted by statute or reasonably implied. Construction projects must serve a county purpose.
SDCL ch. 1-24 (joint exercise of powers) is the framework for intergovernmental cooperation. Two or more public agencies can pool their resources and exercise their powers jointly. The statute contemplates a defined joint structure: written agreement, shared funding, shared control. It is not a general permission slip for a single agency to act as a landlord for another.
The earlier Opinion 72-62 had read SDCL 1-24 generously enough to permit rental of existing space, treating that as a form of cooperation. Sande's 1978 opinion declined to extend that reading to new construction. The distinction was between using existing capacity and creating new capacity solely for the rental relationship.
Citations and references
Statutes:
- SDCL 1-24 (joint exercise of powers)
- SDCL 1-24-2 (joint exercise authority)
- SDCL 1-24-4 (agreement contents)
- SDCL 1-24-5 (control provisions)
Prior AG opinions:
- Official Opinion 72-62 (county may rent existing courthouse space to Soil Conservation Service)
Source
Original opinion text
County Commissioner may not build a building for the purpose of leasing to various United States Government agencies.
Dear Mr.:
You have requested an official opinion on the following factual situation:
The Board of County Commissioners of Moody County wants to erect an addition to the Moody County 4-H building. The only purpose in doing this is to lease the building to various governmental agencies including the A.S.C.S., Soil Conservation Service, Farmers Home Administration, and other federal agencies.
In connection with the above factual situation, you have asked the following question:
Can the County of Moody erect an addition to the Moody County 4-H building? The purpose of erecting the addition would be to lease the building to various Federal governmental agencies.
This office considered a similar question in Official Opinion No. 72-62. In that instance, the question was whether the Board of County Commissioners could rent out space in the courthouse to the Soil Conservation Service. That opinion stated that the county could rent space in the courthouse to the agency in light of SDCL 1-24 which gives authority to the counties to cooperate with other public agencies.
The question you asked is different, however, from that in Opinion No. 72-62. In that opinion, the space was available in an existing structure; in the present case, the county would have to build an entire new structure for the purpose of renting to the public agencies.
SDCL 1-24-2 states:
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, and jointly with any public agency of any other state or of the United States to the extent that the laws of such other state or of the United States permit such joint exercise or enjoyment. Any agency of South Dakota state government when acting jointly with any public agency may exercise and enjoy all of the powers, privileges, and authority conferred by §§ 1-24-2 to 1-24-9, inclusive, upon a public agency.
The key word in the section is jointly. Webster's Seventh Collegiate Dictionary defines the word "joint" as follows:
1: united, combined
2: common to two or more: as
a(1) involving the united activity of two or more
(2) constituting an activity, operation, or organization in which elements of more than one armed service participate
(3) constituting an action or expression of two or more governments
b shared by or affecting two or more
3: united, joined, or sharing with another
The clear meaning of the word is that it takes more than one to act jointly.
The building of the 4-H building would not be a joint act of governmental agencies under that definition.
When the statutes SDCL 1-24-2 to 1-24-9 are considered together, it is apparent that the Legislature intended the undertaking to be by agreement of two or more governmental agencies. SDCL 1-24-4 and 1-24-5 set out the contents of the agreement and the provisions for the control of the agency and property, respectively.
Therefore, the answer to your question is, NO, that the County Commissioners of Moody County cannot build a 4-H building for the sole purpose of renting it to other governmental agencies.
However, if the proper procedures are used and the construction of the building is a joint effort, including joint funding, etc., between the various public agencies, I would say that the construction would be proper.
Respectfully submitted,
Kermit A. Sande
Attorney General